Technical report on climate change adaption in agriculture

Published by the Department of Environment and Primary Industries' Future Farming Systems Research Division in February 2013.

Executive summary

This report summarises knowledge on risks to key agricultural sectors and regions in Victoria from climate variability and change to 2030 and beyond. The sectors considered are grains, horticulture (pome and stone fruit), dairy and livestock. Non-climate drivers are also included. Knowledge is sourced from over 200 peer reviewed papers and (inter)national reports. The report was written for decision-makers in research and policy.

Observed and expected climate

Australia's climate is highly variable by global standards. Within this variability, the historical record shows that since the 1950s, Victoria has experienced a steady increase in average annual temperature and a complex but consistent decrease in average annual rainfall. Most of this rainfall decline has been in autumn. 

Climate projections based on 23 different general circulation models (GCMs) of the earth's atmosphere and ocean system suggest that these historical warming, drying trends are likely to continue to 2030 and beyond. Victoria is likely to see shorter winters, longer summers and less winter/spring rainfall. The historical record shows evidence of a step change in rainfall, so the possibility of sudden change remains. Model uncertainty in climate projections is high. This stems from assumptions used in the Intergovernmental Panel on Climate Change (IPCC) scenarios and gaps in our understanding of the factors driving the earth's climate system.

The magnitude and frequency of climate extremes is likely to increase.  Global temperature extremes are likely to increase (with 99%-100% probability), the length, frequency and intensity of heat waves is likely to increase (90%-100% probability) and frequency of heavy rainfall is likely to increase (66%-100% probability) even in regions with reducing rainfall such as Victoria (medium confidence). Extremes are important to agriculture because damage effects are non-linear, ie a small increase in temperature at a critical time can be the difference between losing part or all of a crop. Higher and more frequent temperature extremes have already been observed globally. Higher intensity and more frequent heavy rainfall has been observed in the USA, China and Europe but not Australia. Climate science does not fully understand the factors producing weather extremes. This knowledge gap limits our modelling capability and is likely to continue for decades. 

Expected impacts of climate on key sectors

Grains

Global temperature is tracking the IPCC A1FI climate projection.  Biophysical modelling based on A1FI indicates that average grain yields in the Wimmera/Mallee are expected to decrease by up to 10 per cent to 20 per cent by 2050. Yields in South West Victoria are likely to increase by 10 per cent to 20 per cent and hold until 2070. Yield projections reflect full adaptation, ie they incorporate optimised planting times for all current cultivars, weather variability (not just future average temperature and rainfall) and the effects of CO2 enhancement. Fundamental gaps in the science mean that we are unable to model yield impacts associated with future climate extremes, pests and pathogens or the impacts on grain quality of rising CO2 levels. The Department of Economic Development, Jobs, Transport, and Resources' (DEDJTR) world-class capability in grains has been facilitated by international collaboration in the Free-Air CO2 Enrichment (FACE) research program, the Global Crop Modelling Project (GCMP) and sophisticated landscape-scale crop and water balance modelling capability within the Catchment Analysis Tools (CAT) suite.

Horticulture (pome and stone fruit)

Increased temperatures will reduce chilling, increase likelihood of pests and pathogens, accelerate phenological development, reduce irrigation water availability and increase temperature and rainfall extremes. While we have a good understanding of these effects, quantitative modelling of their expected yield and quality impacts is not yet available for Victorian horticulture.

Livestock and dairy

Models of pasture growth under a warmer, drier climate indicate regionally variable change. We are likely to see reduced stocking rates in north-west / north-east Victoria and West Gippsland, increased stocking rates in South West Victoria and South Gippsland with minimal change in East Gippsland. This will have regionally variable impacts on supplementary feed costs. As climate becomes more severe, productivity of all current pasture species will be compromised (-15%) while C4 grasses such as kikuyu will be advantaged. Temperature-humidity index (THI) modelling indicates that animal heat stress days are likely to double over most of Victoria by 2070 under an A1FI scenario. Existing research, development and extension by DEDJTR on profitable adaptation options (such as choice of pasture/forage species for current and future climate conditions and water availability) is in train and needs to be continued. Quantification of the impacts of climate extremes, pests and pathogens on pasture/forage production is not yet feasible.

Water availability

Increased temperature and reduced rainfall is expected to reduce stream flow and therefore water availability in the southern Murray-Darling Basin (MDB) (northern Victoria) by an average of 13 per cent to 14 per cent by 2030 under a median climate scenario. Given that global temperatures are currently tracking A1FI, future stream flow yield reductions may be significantly higher. Work by DEDJTR suggests stream flow reductions of 10 per cent to 25 per cent in the north east CMA region under A1FI by 2030, however uncertainty is high. Policy deliberations on the volume of water to be allocated to the environment and irrigation under the MDB Plan are ongoing. This climate/policy nexus means that irrigated agriculture will have considerably less water in the future.

Economic impact assessment

Analysing the economic impacts of climate change on a given region and sector is challenging.  Agricultural systems are diverse, climate change is global and effects occur at decadal time scales. The availability of data with the necessary geographic detail for Victorian farms and interstate/overseas competitors is limited. Uncertainty in the nature of technological change, economic activity and society in the distant future is high, and may be intractable.

Case studies suggest that if current farming systems are continued with limited adaptation, then the steady onset of climate change would see Victorian farmers facing increased business risk. This would be reflected in lower average and more variable profits, more years of uneconomic returns, with economic impacts for a given industry and region consistent with the underlying biophysical impacts.  This reflects the case of limited adaptation in farm technology and practice. Economic adjustments which would enhance sectoral flexibility and adaptability have also not been considered.  Such adaptations would serve to minimise the negative effects of climate.

On the down-side, the effects of extreme weather events are also not included – so, uncertainty in these economic assessments is high.  Productivity growth is often overlooked. Gradual climate change may allow farmers sufficient time to adapt. In the Mallee, for example, total factor productivity growth (total resources used per unit of output) in the order of 0.5 per cent per annum is required to overcome the projected 20 per cent decline in wheat yields by 2050 and maintain farmers' real incomes. Although productivity growth has slowed in past decades, growth rates well in excess of 0.5 per cent have been achieved in the past. Further, anticipated growth in real (inflation adjusted) commodity prices due to an increase in global food demand may ameliorate climate impacts on farmers' incomes. This may reduce adjustment pressure and boost supply by encouraging farmers to intensify production.

The uncertainty in these findings is high. It highlights the necessity for fundamentals such as investment in agricultural teaching and research, development and extension (including farm management) to enable ongoing productivity gains; removing remaining impediments to structural change to encourage self-sufficiency; removing barriers to effective functioning of water markets to encourage land use change in irrigated areas; off-farm income to enhance debt servicing capacity; and enhanced understanding and management of business and financial risk.

Non-climate drivers, adaptation and risk

In addition to climate, agriculture responds to drivers such as global economic conditions, mitigation policy, market prices and input costs.  A whole-of-system approach to research, development and extension is required to deal with this complexity. Uncertainty in the operating environment is on-going.  Guidelines for robust decision-making under ongoing uncertainty at both the policy and farm level are not routinely available. Agriculture is also underpinned by strong links to community, business and infrastructure. If agriculture is impacted by climate, then whole-of-system (interdepartmental) impacts on regional communities will also be produced.

Most on-farm and research development and extension effort is currently focused on incremental adaptation. The need for transformational research development and extension will depend on how quickly the expected increase in the magnitude and frequency of climate extremes unfolds. In addition, the factors underlying on-farm adaptation decision-making in a complex operating environment are not well understood. This suggests that a program of integrated social and biophysical research into on-farm adaptation decision-making is required.

Traditional risk assessment (probability x consequences (or impacts)) is suitable for static systems. In systems with adaptive properties (such as agriculture), impact assessment is necessary but not sufficient for a comprehensive analysis of risk. A more appropriate assessment is that of vulnerability, expressed as the level of exposure to perturbation, sensitivity to that exposure (impact) and adaptive capacity of the system. Methods to integrate biophysical impact modelling with social research on adaptive capacity to provide a more complete picture of vulnerability are not routinely available.

Future directions

This report highlights that DEDJTR is at the forefront of understanding and modelling the biophysical impacts of climate variability and change on Victorian agriculture. In terms of new directions, it highlights that processes to better understand and deal with system complexity and ongoing uncertainty are new frontiers for research development and extension. In addition to the specific knowledge gaps in biophysical and economic modelling defined in Sections 3-6 of this report, two inter-related research themes emerge:

Understanding and preparing agriculture for increased climate variability and extremes;

Integrating biophysical and social research.  This will provide a better understanding of factors affecting on-farm adaptation decision making, adaptive capacity and regional vulnerability.

These themes are consistent with national and international research directions. Ongoing research development and extension with collaborative links to primary producers and strategic research partners, will enable Victorian agriculture to respond productively, competitively and sustainably to future climate variability and change.

Report editors

• Leon Soste
• Brendan Christy
• Garry O'Leary
• Ian Goodwin
• Jean Philippe Aurambout
• Esther Liu
• Kerry Stott
• Glenn Morrison

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