Hawke's Bay Regional Council chairman Fenton Wilson says the region is as dry as it has been for at least 50 years.
A meeting of agriculture industry leaders in Napier on Tuesday agreed to follow Northland and Waikato in asking the Government to declare the region a drought zone.
Mr Wilson said council statistics on the flow of water in rivers, along with the level in the aquifer which has led to a shortage of water for irrigation, are the basis for the application to the Minister for Primary Industries.
"In the life of the regional council - which started in 1989 - this is as bad as it has been," said Mr Wilson, who farms near Wairoa in Northern Hawke's Bay.
It is a prudent and practical decision to get an application underway, he said.
Banks are already preparing to provide interest-only loans and similar opportunities for farmers once a formal declaration of drought is made.
The Ministry for Primary Industries said the latest advice from the National Institute for Water and Atmospheric Research does not offer much respite.
Spokesperson Stuart Anderson told Radio New Zealand's Morning Report programme a large part of the North Island is in drought or is getting close to drought conditions.
The Rural Support Trust says the drought is insidious because it has crept up later than usual and is widespread.
Trust representative Mike Barham said there is some feed available, but the biggest problem is many farmers are in the same situation and there are few places to send stock, or to buy feed from.
Mr Barham said the Rural Support network can help farmers who are not coping with seeing their stock not being fed properly.
audio]http://www.radionz.co.nz/national/programmes/morningreport/audio/2548269/north-island-could-soon-be-in-full-drought-says-mpi.asx Listen to Stuart Anderson on Morning Report