Monitoring agricultural and economic drought: the Australian Agricultural Drought Indicators (AADI)

Abstract

Drought events can have significant agricultural and economic impacts, and in many parts of the world their intensity appears to be increasing with climate change. However, drought measurement remains a highly contested space, with a multitude of indicators across both research and operational settings. This article presents a new drought monitoring and forecasting system: the Australian Agricultural Drought Indicators (AADI). Rather than use common meteorological indicators, AADI attempts to estimate specific agricultural and economic drought impacts. An integrated bio-physical and economic modelling system is developed, which translates gridded climate observations and forecasts into outcome-based indicators of crop yields, pasture growth and farm business profits. These indicators are validated against a range of ground-truth data drawn from survey and administrative sources. Results confirm the benefits of the outcome-based approach with the AADI showing higher correlation with both agricultural (crop yield, fodder demand) and economic outcomes (farm profits, regional incomes) compared with rainfall measures. The novel farm profit indicator also shows promise as a predictor of drought-induced financial stress and flow-on socio-economic impacts.