Global warming and predictions of rapid climate change, however, are likely to mean more pain and challenges for Australia's grain, grazing and irrigation industries, says Mark Howden of the Commonwealth Scientific and Industrial Research Organisation's (CSIRO) Sustainable Ecosystems division.

"There will be winners and losers but it depends on where you are," said Howden, a senior researcher at CSIRO. For example, there has been a sharp decline in rainfall since the 1970s in Western Australia, where about 40 percent of Australia's wheat crop is grown.

Climate models show rainfall in the wheat-belt of southwest of Western Australia is likely to fall further in coming decades as well as an overall trend for less rain across much of southern Australia, particularly during the winter.

Farmers rely on rains during this season to recharge the moisture in the soil to plant wheat crops, which are then harvested in warmer, drier months.

"The sharp drop in rainfall for southern Western Australia is essentially like moving the desert to the coast and we are already pushing cropping to the margins. So a big drop in rainfall would make these areas unviable," he said.

Farmers would then move to the next most profitable source of income, in most cases grazing.

"There will be pain and suffering and there will be people who walk off the land but there will be people who replace them as they always have," he said.

"The issue isn't so much change but how that change is managed."

STING IN THE TAIL

He predicts farmers will adapt by changing crops and planting times, using different varieties, using water more efficiently and changing land use.

For example, Howden believes wheat growing will extend into the high-rainfall grazing land of the tablelands along the east coast, while graziers will occupy more of the dry zone.

But he thinks irrigated water users will generally be losers in a warmer and drier Australia as cotton, vegetable and other growers compete for dwindling water supplies in rivers and aquifers.

The big unknown, however, is how much more extreme Australia's notoriously fickle climate will become.

"The other sting in the tail of the climate change story is that climate variability might increase in terms of droughts and floods. Depending on how much that variability increases will impact on the viability of farming economies," Howden said.

Peter McBride, a spokesman for the Australian Wheat Board, says the nation's top grain asset manager is worried about the challenges from climate change and is helping promote new plant varieties and more efficient farming practices.

He believes there could be a trend for a slight increase in wheat production in the future but says forecasting future harvests based on climate model scenarios is a bit like "crystal-balling".

He pointed to the wild swings in wheat output of recent years, with Australia producing 9.7 million tonnes in 2002/03 because of severe drought to a record 25.2 million tonnes in 2003/04.

In the short term, Howden believes higher levels of the greenhouse gas carbon dioxide will be beneficial to plants such as wheat, which need the gas, along with water and light to produce organic compounds. The more CO2 in the air, the more productive many plants are likely to become.

But in a paper presented to a climate and water forum this week he said such benefits are likely to be offset by the stress of lower rainfall and higher temperatures, leaving overall production from wheat plants little changed.