Federated Farmers says improving water storage would boost productivity for the country as a whole.
A Ministry of Agriculture and Forestry report has put the cost of the 2007/2008 drought to the New Zealand economy at $2.8 billion.
Federated Farmers president Don Nicolson describes the Government's $5.7 million community irrigation fund as a ridiculous contribution.
He says irrigation can generate about $8 for every dollar invested, so better water storage should be considered as part of the Government's push to boost productivity and create jobs and wealth.
Mr Nicolson says the Resource Management Act and other problems remain an impediment to making the most of New Zealand's rainfall.