Christianne Glossop was speaking at the Royal Welsh Show
Compensation paid to Welsh farmers over the spread of bovine TB could cost £80m a year by 2013, according to the Welsh Assembly Government.
Chief veterinary officer Christianne Glossop hopes powers to cull badgers as part of a plan to eradicate the disease could be in place by the autumn.
Payments have risen by nearly £10m in the past year to almost £25m.
Those opposed to a cull said the rise was due to unrestricted movement of infected cattle and increased testing.
They said a cull would make "no meaningful contribution" to the control of TB in cattle.
In April 2008 Rural Affairs Minister Elin Jones announced a "targeted cull" of badgers.
The details of the plan are out to public consultation, but this ends on 30 July.
Dr Glossop said: "We're out to consultation at the moment about the powers needed to solve this problem and we're hoping the legislation will be in place by the autumn."
A Welsh Assembly Government spokeswoman added the legislation would be laid before the assembly later this year, and officials hoped there would be new powers by October.
She said the financial cost of the disease was rising sharply as an increasing number of animals with TB were slaughtered.
The assembly government said 7,905 were killed in 2007-08, costing the taxpayer £15.9m in compensation payments.
For the period 2008-09, 12,043 animals were slaughtered at a cost of almost £25m.
If the disease continues to rise at its present rate of 28% per year then by 2013-14 compensation payments will be £80m, officials claimed.
Dr Glossop, speaking at the Royal Welsh Show, said that was not the total cost of TB.
"That is what the farmer gets when the animal is removed and does not take into account laboratory fees, testing and the cost to the industry of farmers not being able to trade," she added.
"This is all the more reason to tackle this disease.
"By the end of this year we will have a clearer picture of the extent of the disease and then we'll develop a strategy on a regional basis, because regions in Wales are being affected differently."
But Steve Clark of the Badger Trust in Wales claimed the present rate of infection was a direct result of the unrestricted movement of infected cattle after the foot-and mouth epidemic.
"The current programme of testing all herds across Wales has disclosed 77 additional breakdown herds that would not have been identified otherwise for some years," he added.
"The failure to apply stringent testing regimes over several decades has now manifested itself in the high levels of TB farmers are currently experiencing."
He said in making the decision to go for a targeted cull Ms Jones "ignored" a 10-year study by the Independent Scientific Group which concluded "badger culling will make no meaningful contribution to the control of cattle TB".
In response the assembly government said its TB eradication programme was comprehensive and was aimed at tackling all sources of the disease in cattle. It added that testing would become tighter.