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The entire North Island has been declared a drought zone this morning.
Primary Industries Minister Nathan Guy made the announcement this morning on a Kimbolton farm in northern Manawatu.
Guy returned from a trade trip to Latin America last night and said he had been monitoring the situation while he was away.
"This is recognition that farmers across the North Island are facing extremely difficult conditions," he said.
A drought declaration offers farmers more flexibility around tax payments, allows them to get the equivalent of an unemployment benefit and means some funds are made available to Rural Trusts to help stressed residents.
Drought had already been declared last month in Northland, followed earlier this month by declarations in South Auckland, Waikato, Bay of Plenty and Hawke's Bay.
Farmers in Manawatu, Rangitikei, Taranaki and Wairarapa were anticipating the declaration in their regions but Guy went further, declaring a drought over the entire island.
Guy said today's announcement would mean extra government funding would be available to Rural Support Trusts.
"These organisations work closely with farmers, providing support and guidance in what is a very tough time.
"I realise these can be stressful times for rural families, and they need to know who to turn to for support.
"There will also be Rural Assistance Payments available from Work and Income, through the Ministry of Social Development. These are equivalent to the unemployment benefit and are available to those in extreme hardship.
"It's great to see that banks are offering flexible finance options in these tough times as well."
Tararua farmer Garth Coleman said this week a drought declaration would give rural communities a boost.
"It's good for our morale that the rest of the country recognises we are in a difficult situation.
"It's depressing looking at your paddocks, which are brown and have no grass, and your stock, wondering what exactly they're eating."
The rural industry was notorious for keeping quiet but Coleman said people were facing tough times.
"They tend to bottle things up, they have decisions that need to be made, and it's the same with anyone really, the pressure is there."
Urban areas have not missed an impact from the long spell of dry weather with water restrictions in place over most of the North Island.
Regarding the West Coast, Guy said his understanding was that rain "is coming for that area but I will be keeping an eye on it over the coming weeks".
When asked why the whole of the North Island was included in the drought declaration, Guy said: "I flew down from Auckland this morning and I spent most of my time looking out the window. It's dry everywhere. What you are seeing is pretty much all of the North Island on drought."
Guy said his trip to Brazil had no impact on the timing of the drought announcement.
"I am also looking closely at the top of the South Island and seeing what needs to be done there," he said.
"What this is going to take is a significant amount of rain to turn this operation around."
Guy said it had been 30 years since New Zealand had a drought this significant.
Farmers in the North Island will be able to head into Work and Income and apply for the unemployment benefit, and can also get help from rural support services, he said.
"This is a serious event but we have to remember, farmers are tough, farmers are resilient, they have battled through drought and snowstorms and all sorts before and they will get through this."
SHOWERS ON THE WAY
A brief spell of showers is forecast to hit the country this weekend but it is expected to bring little relief.
The remnants of tropical ex-cyclone Sandra are expected to move over New Zealand from Sunday.
MetService meteorologist Daniel Corbett said rain would arrive in most places over the weekend, but strong winds would also follow.
He said how much rain fell in drought stricken areas would depend on how the tropical air interacted with the approaching upper trough, and depended on how quickly the systems passed over New Zealand.
"It looks like the heaviest falls will be on the West Coast of the South Island with much more modest amounts likely over the North Island.
"The expected rainfall will not be enough to make up the large rainfall deficits in many places but it will be a good step in the right direction."
Corbett said rain would be followed by lighter showers from Monday in some places. A cooler southerly was expected to spread over the country.
From later next week, an anti-cyclone would be back in place over New Zealand.
IMPACT ON THE ECONOMY
Earlier this week, Finance Minister Bill English said recent financial forecasts had looked better than expected, but the drought would bring this back.
"Generally the outlook was looking a bit more positive than expected and the drought will peg it back, but we're not quite sure how far."
Treasury would be watching closely the impact of the drought as it prepares for the May 16 Budget, but Mr English did not expect the impact to be "dramatic".
"Where we thought we might get a bit of room to move that's probably not going to be the case, and it'll continue to be a tight Budget."
He did not believe it would derail the Government's target of reaching a budget surplus by 2014-15.
"We're aiming for surplus and we'll see what the forecasts tell us. I would expect though that we'll still be able to achieve surplus."
The Government has signalled that this year's Budget could include $800 million of new spending, a figure English did not expect to be reduced.
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