When Manuel Montesa takes sheep out to forage in mountains in northern Spain, he must bring water for them because streams near his town have run dry.

Like the rest of Spain, his home region of Aragon is suffering its worst drought in decades. It has left crops struggling to grow, caused pastures to dry up and forced farmers to leave land untilled.

"If there is no pasture, we don't know where we are going to get grass or some other type of feed, and at what price," said the 27-year-old farmer who usually takes his sheep to graze in lands near the town of Sarinena.

Farmers in Aragon -- which includes the provinces of Huesca, Teruel and Zaragoza -- will lose around 1.3 billion euros ($1.7 billion) this season due to the lack of rain, according to farmers' association ASAJA.

The drought has also caused habitual summer forest fires to come early: they have already ravaged hundreds of hectares in the north.

The commission that regulates water used for irrigation in Aragon warned in December that the region's reservoirs had only one quarter of the water needed for a "normal" growing season.

The Sotonera reservoir, one of the biggest in the region, has dropped to 40 percent of its capacity.

Local authorities have already limited irrigation.

"I am 50 and I have never seen anything like this. It has not rained since October," said Fernando Regano, a farmer who is also from Sarinena in the province of Huesca, as he stood in his field under a clear blue sky.

He points to small, yellowing sprouts of barley and green peas which should be standing tall by this time but which have been stunted by the lack of rain.

The average consumption of water per hectare of land should be between 7,500 and 8,000 cubic metres but this year it has been just 2,100 cubic metres per hectare, he said.

"In this plot, if we had the 8,000 cubic metres of water I would for sure be able to raise 20 tonnes of barley and corn but I am going to have just four or five tonnes in the entire 70 hectare field," he said.

Regano said he left 30 hectares of land uncultivated this year because of the lack of rain. He estimates farmers in the region will see drops in production this season of around 80 percent.

The lack of rain has also pushed up production costs for farmers, which have outpaced any gains in prices for their crops and livestock.

Production costs for livestock growers have risen by 20 percent because the lack of grazing has forced them to buy expensive feed for their animals, according to Spain's Union of Small Farmers (UPA).

"In the 1990s a lamb could cost 40 euros, now the price is around 60 or 70 euros while the price of diesel has doubled in the last eight years," said Montesa.

"This is why there are no livestock farmers any more."

The number of livestock breeders in his region has dropped to five from 40 in recent years and the number of livestock has fallen to 4,000 from 12,000, said Montesa.

"Livestock rearing has decreased sharply because it pays very little for the work it involves," added Montesa's 59-year-old father Jesus who also raises sheep.

The drought has affected the entire country.

The previous three months -- December, January and February -- have been the driest in Spain since at least the 1940s, according to the national weather office.

Authorities are already talking about subsidies for farmers hurt by the drought but according to Regano what is needed is good water control and new dams to better harness river water.

"It has to rain now. I have the hope that one day it will rain," said Montesa before climbing back on board his tractor.