The nationwide drought between the spring of 2007 and autumn last year cost the New Zealand economy $2.8 billion, Agriculture Minister David Carter said on Friday.
A ministry report outlining the effects of the drought showed the on-farm cost was $1.9 billion and the off-farm cost was $900 million.
The report, titled Regional and National Impacts of the 2008 Drought, compared forecast budgets with actual outcomes.
Waikato was the worst affected region, followed by Manawatu/Wanganui and Taranaki.
"The sheer size of the economic impact of this drought reflects just how important the primary sector is to the New Zealand economy," Carter said.
Major impacts of the drought included reduced quality of stock going into the 2008/09 breeding season, reduced quantity of milk from dairy farms and increases costs from buying supplementary feed.
Carter said that with extreme weather patterns increasing, farmers needed to plan for drought recovery and should familiarise themselves with the assistance available for adverse events.
"Not having a plan is planning to do nothing," he said.
