Prime Minister John Key is in favour of the Ruataniwha dam, saying water storage facilities are "very important" to Hawke's Bay.
Speaking from Hastings' Royal Show today, Mr Key said the region was extremely productive and "produced some of the greatest agricultural products in the country".
He expressed concern over potential drought in the wake of the expected El Nino conditions.
The dam is yet to complete an advisory process which Mr Key said would need all "farmers to hold hands" for it to go ahead.
"We've certainly been supportive of water storage schemes and irrigation schemes and we think Ruataniwha is very important."
The Prime Minister also spoke about the recent controversy around gun laws. He said a review of the laws was still underway but for now the alterations were sensible.
The gun purchasing laws were tightened this week after a New Zealand journalist purchased a gun using false identification.
Mr Key said that of all the incidents police attended in New Zealand only one 1 and a half of them include a firearm. This left a "vast overwhelming bulk" of cases that do not involve guns.