Australia is a major food exporting country. Recent droughts reduced dryland farming production and the volume of water allocated to irrigated agriculture, with a resulting decline in aggregate agricultural production and exports. This paper analyses the possible impact of increased water scarcity on Australian agricultural production and the magnitude of subsequent impacts on global food security. Using the Australian Bureau of Statistics (ABS) data on land and water use coupled with a hydro-economic stochastic modelling approach, the impacts of reduced agricultural production in the southern Murray-Darling Basin, and more generally for Australia, are analysed. Changes in agricultural activity, reduction in agricultural exports and altered composition of products exported attributed to the severe 2000-2009 drought are also analysed to highlight the implications for global food security. The impact of climate change on food production is examined.
The analysis shows that climate change, when modelled as the extreme case, along with other factors such as land use, will impact Australian food exports. Despite its relatively small contribution to total global food supply, Australia's contribution to international trade in wheat, meat and dairy products is substantial and could affect global food prices. Furthermore, Australia's agricultural exports are of disproportionate importance within the South- and South-East Asian and Oceania region, both in terms of volume and for strategic reasons. Adaptation along with investment in agriculture production is needed to maintain Australian agricultural production and enhance global food security.