With the economy already in recession, concerns are growing about the threat posed by another summer drought.
The Government yesterday said it was monitoring the situation closely and Federated Farmers has warned farmers to watch stock numbers.
Agriculture Minister David Carter said the eastern coasts of both islands
were very dry, with Gisborne, Hawkes Bay, coastal Marlborough, north-mid-Canterbury and Otago rapidly approaching drought status, while other relatively dry areas included Waikato, the Bay of Plenty, Wairarapa and Manawatu.
Because of the country's reliance on agricultural exports, droughts have the potential to knock billions of dollars off GDP - something which would seriously worsen the impact of the global credit crunch.
"The economic impact of a drought is not just felt by farmers, but by all New Zealanders," Carter said. "From my experience, the advice I would give to farmers is to review their farm management practices and be prepared to act early."
The Ministry of Agriculture and Forestry's Situation and Outlook for New Zealand Agriculture and Forestry 2008 report said gross domestic product was expected to fall from 3.1 per cent in the year ending March to 1.5 per cent the following year because of drought, high interest rates, falling house prices, higher petrol and food prices.
MAF earlier in the year estimated last summer's drought would cut $1.24 billion from the farmgate.
The Government was keeping a close eye on conditions and would consider drought assistance for farming communities if required, Carter said.
Federated Farmers president Don Nicolson said some areas were heading into the fourth year of dry conditions.
"The indications are that we should be quite worried about drought," Nicolson said.
Farms in drier areas should try to build up buffers of feed, he said.
"Of course if you've had three or four of them [dry years] in a row [it's] very hard to keep that buffer."
