"My Fair Lady's" Prof. Higgins may say it rains on the Spanish plain but the people who live on Iberia's central plateau, the meseta, know it has not rained for a long time.

Catholic churchmen have had to resurrect half-forgotten ceremonies to pray for an end to a drought that officials readily admit is "catastrophic."

The city reservoir of Ciudad Real, in the heart of the La Mancha region, has run dry. In the region's villages, immortalized by the travels of Don Quixote, farmers have had to deepen their wells, in addition to following the rain processions of the parish priest, to find water that will reach their livestock and minimally irrigate their crops.

An Agriculture Ministry spokesman estimated the loss to farmers so far this year at $1 billion. Another official said that gross agricultural production in 1981 would drop from a 2 percent shortfall against last year, as was estimated after sparse spring rain, to something nearer 10 percent since the fall rains had failed to materialize.

Compounding the cost, figures from the Industry Ministry revealed that the low level of hydroelectric reservoirs would add $445 million to this year's imported oil bill.

Spanish meteorologists are divided over whether the drought is the worst for a hundred years and therefore the worst recorded. Data for the first part of this century is unreliable.

The fact is that outside the North Atlantic coastline, many areas had their last significant rainfall in 1979, and Spaniards are shocked by the consequences. It does not take a practiced agricultural eye to see, traveling through central and southern Spain, that the land is baked hard, that crops do not stand a chance and that goats, sheep and cattle are visibly undernourished.

In Seville, the chief city in the southern Andalusia region with 1.5 million inhabitants, water supply for domestic use has been cut to seven hours a day. At least 20 villages in the neighboring province of Huelva have been put on what the administration terms a "red alert" and receive only two hours of water daily. In the western region of Extremadura, the scrubland where the conquistadors of Latin America grew up, the Army has been called in to distribute water to outlying hamlets.

Officials are chiefly concerned about the livestock and contingency plans being prepared by the Agriculture Ministry, including a stepped-up network of cistern distribution as well as a supply of dry fodder.

Agriculture Ministry concern, after the livestock, centers on the olive oil sector where harvesting is beginning this month in Andalusia, in the south and continues through to February in central and northern Spain. Official projections estimate a 280 billion-ton overall crop, 70 billion tons below last year. The greatest olive shortfall is in Andalusia, where the olive harvest is a primary source of income for the mass of landless laborers dependent on seasonal employment.

The third area of concern is the fate of the 1982 crops that depend on irrigation. Aside from the hydroelectric dams, reservoirs on average are at 25 percent of their capacity nationwide against 57 percent at this time last year.

Sophisticated urban dwellers were astonished to hear participants in a village religious procession for rain tell a Madrid radio interviewer that the drought was a punishment for Spain's secular democratic Constitution and for the divorce law introduced during the summer. "Scratch this country and it's Iran," said a Madrid high school teacher.