It has also called for the vaccination of equestrian horses in all states if the outbreak has not been brought under control by November.
"The horse flu virus is destroying the Australian equestrian industry and urgent additional government injections of cash and other support is required," said EFA president Geoff Sinclair.
The EFA outlined the action it believed was necessary to revive the equestrian industry in a national plan which it has sent to Federal and State Governments and other stakeholders.
"At stake is the future of more than 14,000 equestrian businesses, employing 30,000 staff," Mr Sinclair said.
"Also under threat is our standing as a leading equestrian nation - the three Olympic equestrian sports and Paralympic competitions in Australia are now at risk, especially for the 2008 Games and beyond."
Mr Sinclair said events are the lifeblood of the industry and without them the sport and individuals and businesses that make a living from the horse industry will suffer long-term damage.
"We have proposed a $A20 million government-funded 'Back in the Saddle' (BITS) programme to kick-start horse participation from grass roots to Olympic and Paralympic level after the cancellation of thousands of local, state, national and international events, shows and rallies since August."
Mr Sinclair, in calling for a vaccination programme, said: "Over 30,000 horses are held up in infected areas and this number grows daily. Without assistance, 250,000 horses and riders could disappear from the sport."
Mr Sinclair said other key elements of the EFA plan are: