Agriculture Secretary Richard E. Lyng declared yesterday that 66 of the 95 Virginia counties, including Loudoun and Fauquier, are eligible for federal drought disaster aid in the form of low-interest loans to farmers.

Losses this year are estimated at $114 million in the state's 41 hardest-hit counties, an average of 42 percent below expected income, said Roy E. Seward, assistant to the state commissioner of agriculture.

"With our fifth drought in seven years the situation for the grain and row-crop producers has been very difficult," said Seward. The drought has "ruined the corn crop, affected soy beans and pasture. We had moisture in the spring, so we did have a hay crop," he said

In Fauquier County, losses are estimated at $6.3 million this year, a 39 percent drop in expected income, according to a state damage assessment. Losses in Loudoun County are estimated at $5.9 million, 40 percent less income than expected.

Along with crops such as wheat and barley, about one-third of the Christmas trees being grown for sale in Loudoun County have died, according to the state.

Farmers in the 66 counties declared eligible for aid can apply for loans that carry interest rates of about 4.5 percent, said John Miller, a spokesman for Sen. Paul S. Trible Jr. (R-Va.), who announced Lyng's finding.

Under Lyng's declaration, 30 counties were designated as primary disaster areas. Farmers in 36 contiguous counties are also eligible for drought assistance, Miller said.

Virginia Gov. Gerald L. Baliles asked last week that an additional 11 counties be declared disaster areas, Seward said.

Despite the drought, there are bright spots in state agriculture. Income from poultry and livestock will rise from $1.16 billion to $1.26 billion, according to Berkwood Farmer, the state's chief agricultural economist.

Farmer, quoted by United Press International, said tobacco income is expected to rise because of higher crop prices. He said that potato prices also are strong.

"The Virginia farm economy is still very mixed," said Farmer. "A lot of farmers are still in serious trouble."