The announcement covers parts of Otago, Canterbury and Marlborough, all of which have experienced their driest conditions in 43 years.

Dairy farmers have been hit particularly hard since they are already struggling with a low milk price.

Minister Guy said there would be supports in the form of grants and tax breaks for farmers suffering as a result of the dry conditions. He added that farmers will also be eligible for work and income benefits as required.

"If you look at what's happening with rural fires," he said, "they're just popping up all over the place at the moment. It's a real concern. We've taken into account all the economic and social factors, and feed availability."

Ivon Hurst, president of Federated Farmers South Canterbury, said that farmers welcome the financial support announced by the government at this time. Drought was last declared in 2013.

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