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Abstract
A number of Australian governments have established or planned programs to assist farmers
in adapting to climate change. This paper considers a potential range of policy responses that
may be appropriate for climate change adaptation in agriculture. It discusses the extent to
which different policy responses may be justified on the basis of market-failure and the
likelihood of positive net benefits. While research and extension have the potential to
generate significant benefits, there is a need to carefully consider their rationales and
emphases. Given the characteristics of climate change (slow, highly uncertain, small relative
to climate variability, spatially heterogeneous), the value of information from research and
extension to guide farmers’ decision making about adaptation is likely to be low for decisions
about farming practices and land uses. Such information would be more valuable for
decisions that are larger and indivisible, such as land purchase or the decision to exit from
agriculture. Policy options that appear likely to generate relatively large benefits are
technology development, quarantine/eradication/containment of pests and weeds, and water
market reform. This assessment is not consistent with the emphasis of existing government
programs.