PARIS, June 8 (Reuters) - Aid for French farmers hit by the driest spring in 50 years could cost the state some 700 million euros (${esc.dollar}1.03 billion), a member of parliament quoted President Nicolas Sarkozy as saying on Wednesday.
Sarkozy, who is due to announce support for drought-stricken farmers on Thursday during a visit to the Charente region in western France, told a meeting of the ruling UMP party that his government was already working on compensation.
"It is going to cost us 700 million euros," Sarkozy told the meeting, according to one UMP legislator who was present but asked not to be identified.
Agriculture Minister Bruno Le Maire said in May the government would have to pay out several hundred million euros to compensate farmers, mainly livestock breeders who face dwindling supplies and rising costs for animal feed.
France has an agricultural disaster fund to compensate farmers when they face sharp losses but Le Maire had said in May the government was considering whether additional aid would be necessary.
He also said French bank Credit Agricole <CAGR.PA> had agreed to provide 700 million euros in loans to help struggling livestock farmers at a preferential interest rate of 2 percent, with 1.5 percent for young farmers.
Ahead of rains in the last week, the March-May period in France was the driest in the last 50 years and the hottest since at least 1900, public weather service Meteo France has said.
More than half of France&${esc.hash}39;s administrative departments imposed water restrictions, including irrigation curbs in the worst-affected areas, according to environment ministry data. (Reporting by Emile Picy; Writing by Daniel Flynn; Editing by Sybille de la Hamaide and Muriel Boselli, editing by Anthony Barker)
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