"We now have to implement direct national support for the farmers," Fillon told the Senate. "It is nearly a billion euros that the nation will have to commit to our farmers."
Limits on water use are in place in more than half of France's administrative departments after weeks of warm weather.
A national disaster fund for farmers has been set up and has already made available 200 million euros for "the most urgent cases" but this sum is likely to be "largely exceeded," Fillon said.
The one-billion-euro estimate "is not a very exact one because it depends on the requests of the farmers," he added.
President Nicolas Sarkozy earlier Thursday unveiled a plan to help the farmers, offering them relief on tax and loan repayments.
He stressed the government would avoid giving the kind of direct state subsidies that would break European Union rules.