Grain production is expected to total around 40 million tonnes this year, said federation deputy Adalbert Kienle in Berlin at the presentation of a preliminary report on crop estimates.

He said that early estimates put the damage so far at around one billion euros (1.13 billion dollars) and that some farms could see their harvests drop by as much as 80 percent.

Grain crops were already lower in 2002 because of severe flooding that hit the east and southern parts of Germany last summer.

Worst effected areas this year where the southern states of Baden-Wuerttemberg and Bavaria, and Brandenburg and Saxony in the east.

Federation chief Gerd Sonnleitner told the Rheinischer Merkur newspaper that he was expecting the price of fruit and vegetables to rise because of the drought but thought that bread, milk and meat prices would remain stable.

Agriculture Minister Renate Kuenast said last week that the German government could offer financial help to farmers hit by the drought and could also seek assistance from the European Union.

Under the constitution, Germany's states are responsible for disbursing aid to farmers, but "the federal government could not sit back in the face of such problems" if they get out of control, Kuenast told ZDF public television.

She said that once data from the latest harvests was in, the federal government and the states "would decide whether there will be a special programme."

TERRA.WIRE