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There will also be exclusion zones for identified critical industry clusters, such as horse breeders and wine producers.
But a meeting of 70 farmers from around NSW in Sydney on Tuesday accused Mr O'Farrell of failing to value stretches of farm land the same as residential and other industries.
They are calling for a consistent approach for the entire agriculture sector as well as urban areas, vineyards and horse studs.
"We believe there are places in this state that are too priceless to put at risk through mining and gas activities," NSW Farmers President Fiona Simson said in a statement.
"The O'Farrell government has reached the same conclusion but hasn't extended that to our food and fibre producing lands.
"We think nothing should be more important."
At the meeting, the farmers passed a motion in support of the premier's decision to take a tougher stand on CSG compliance but called on the government to improve it by applying the 2km buffer to farm land and water resources.
Federal Independent MP Tony Windsor said the NSW government was driven by politics rather than sound policy and failed to understand the issue.
"This announcement is designed to appease horse-breeders and wine makers in the Hunter Valley and residents of Western Sydney, but it does nothing for farmers," he said.
"Why does the two-kilometre exclusion zone apply to urban areas with more than a thousand residents but not to farmers or rural-residential areas?
"Where is the science in that approach?"
Mr Windsor said the mining approvals process should be based on independent, scientific risk assessments - "not a collection of random thought bubbles masquerading as policy".
"This announcement is a knee-jerk reaction from a government that just weeks ago was insisting it had the strictest CSG regulations in the country," the member for New England said in a statement.
As part of the measures, the government announced that chief scientist and engineer Mary O'Kane would review all CSG activity in NSW, including the effect on water catchments.
But Mr Windsor described it as "a vague promise" designed to "fob off" people with legitimate concerns and called on the federal government to intervene.
"The only way to ensure our water resources are protected for future generations is to have the commonwealth intervene under the powers of the Environment Protection Biodiversity and Conservation Act," he said.
Greens MP Jeremy Buckingham described the move as a cynical ploy to win marginal western Sydney seats in the federal election later this year.
"Tony Abbott is worried about losing those seats because coal seam gas is a massive issue," he told reporters.
Mr Buckingham accused National Party MPs of sitting on their hands and failing to stick up for farmers.
"They have done nothing to bring around regulation and control of this industry in our farmlands," he said.
"If it's unsafe near a thousands homes near Campbelltown, it's unsafe near one home in Boggabri.
"This is the first recognition from the highest levels, the premier himself, that this industry is unsafe, unwarranted and unnecessary and he should rule this industry out across the state."
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