Climate Change, Water and Agriculture: Challenges and Adaptation Strategies

Climate change is expected to have numerous and complex impacts on water resources, with consequences for agricultural production through changes in crop water requirements; the availability and quality of water; and increases in the frequency and severity of extreme weather events such as droughts and floods. Although there is substantial uncertainty about the magnitude of impacts, especially at the local level, this does not call for inaction. On the basis of the recent work undertaken by OECD in this area, we identify and discuss three main dimensions for a comprehensive adaptation strategy for agricultural water management: i) creating an enabling environment to foster on-farm adaptive capacities through policies targeted at innovation, education, and advisory and extension services; ii) improving agricultural water management through the development of flexible and robust instruments, such as water pricing and water markets, to deal with both short-run water shortages and long-run water stress; iii) developing and improving risk management tools for droughts and floods to ensure that the true cost of risks is signalled to farmers while at the same time improving the efficiency of risk allocation. We highlight the importance of policy coherence in recognising the linkages between climate change adaptation and mitigation.