The seriousness of Australia’s drought was underlined on Monday when the government said it was considering increasing emergency aid to farmers to almost A$2bn (US$1.5bn, €1.2bn, £800m) and Graincorp, a big grain handler, issued a profits warning.

John Howard, prime minister, announced a further A$350m in support for farmers hit by the drought, the worst on record in some areas, and said the government would consider other measures in the coming days. Together, the initiatives could be worth as much as A$750m on top of the A$1.2bn already spent on drought relief since 2001.