Indices for monitoring climate variability and the impacts of drought have long been used as the basis for planning and assessing the need for domestic and international aid to affected populations. Associated with this has been ongoing debate as to which indices are the most reliable and appropriate to aid decisions by government and private agencies on when and where to provide financial assistance. The simplest indices measure meteorological drought, the effects of which are measured in terms of agricultural, hydrological, and socioeconomic drought. Even though lack of rain is the primary cause of agricultural drought, rainfall data alone are frequently insufficient to assess the effect of drought on agricultural productivity. In this study we consider a range of seasonal indices in terms of how they relate to the impact of drought on rural Australia. This includes reviewing available and prospective indices that could aid government decision makers, in terms of when and where to intervene, in developing and implementing their policies. Clear and consistent policy helps agricultural managers to determine their production and financial targets and strategies, how much physical and financial risk they and their farms will be exposed to, and even whether they should continue to remain in farming. The significance of policy in considering triggers for government intervention is that it alters the level of risk that farmers are exposed to, which in turn influences the management strategies and tactics that farmers are likely to adopt. Minimising the risk to the biophysical resource base of every farm is also of paramount importance. We conclude that indices may provide effective summaries of droughts provided the purpose is clearly and precisely defined: in terms of activity, location and timing. However, given the important role of context in evidence-based decision-making, which in this case covers a range of industries, management systems, types of droughts, and seasons across Australia, it is likely that no single index could be effective for widespread, general usage in monitoring climate variability.

SUMMARYDespite a highly variable climate and fragile soils, dryland farming systems in Australia continue to be productive and viable. This review nominates the farming practices, and their development through investment in science and technology, that have helped sustain dryland farming systems in Australia. It sets the context for dryland agriculture in Australia and specifically examines the risks and returns from technological innovations over the past 30 years. It then examines possible sources of productivity gains in the next 20 years.Australian dryland farming systems have performed favourably compared to the agricultural sectors in most other countries over the past 30 years. Australian Research, Development and Extension (RD&E) has been a significant contributor to the realized agricultural productivity growth over this period. However, growth in the productivity of agriculture appears to have slowed down in the last 10 years: this is partly a result of extended dry conditions and declining growth in public investment in RD&E. It is reflected in slowing rates of technology adoption on broadacre farms and changes in investment confidence of farm owners.Future productivity gains will require continued strong investment in RD&E to meet current and emerging challenges. Future technologies and policies will help improve productivity by removing inefficiencies, increasing the efficiency of resource use and developing breakthrough innovations.As evidenced by Australia's success in productivity growth, meeting the global challenge to produce more food in the future will depend partly on investments in RD&E, risk management systems, farmer skill and human capital and policies that encourage efficiency gains.

Australian agriculture has operated successfully in one of the world's most hostile environments for two centuries. However, climate change is posing serious challenges to its ongoing success. Determining what might constitute dangerous climate change for Australian agriculture is not an easy task, as most climate-related risks are associated with changes in the highly uncertain hydrological cycle rather than directly to more predictable changes in temperature. In addition, the adaptive capacity of Australian producers is generally high, as they have had to cope with a highly variable climate in which periodic, severe droughts are the norm. As the underlying global trends in climate interact with the continent's patterns of natural variability, producers can generally deal with gradual changes in climate but are most concerned about high rates of change in regional and local climates and with abrupt, unexpected shifts in climate patterns. Perhaps the best indicator of dangerous climate change for Australian agriculture is the persistence, or not, of the drying trends in many of the Country's most productive regions and the strength of the linkage between these trends and global climate change.

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