But these accords also bring more pressure to bear on farmers to adapt to weather and market changes, they added.

"Our mind has been focused on how to trim the economy's vulnerability to farming. We have not so much looked at measures to cut the vulnerability of agriculture to climate change," economist Larabi Jaidi said.

The independent thinktank Centre Marocain de Conjoncture said in a rare report that Morocco must ready its farming system to shifting weather patterns.

"The droughts in the 1970s were experienced as exceptional events. Those of the 1980s and especially the 1990s and 2000, were seen as reflecting a likely 'climate change' and rising frequence of these 'anomalies'," the report added.

The government expects drought will slash this season's cereals harvest to 2.05 million tonnes versus 9.3 million tonnes in the previous crop -- the highest in 10 years.

Economists say they expect drought will cut by about 40 percent agriculture share of GDP and cost the government subisidies of more than 2 billion Moroccan dirhams (US$240.1 million) to help farmers, especially cattle breeders.

Agriculture provides an income for 40 percent of Morocco's 30 million population, 40 percent of total jobs and accounts of up to 17 percent of its US$53 billion gross domestic product.

The government embarked on a plan in 2005 stretching over several years to modernise agriculture, focusing on ways to rationalise the use of scarce water resources and aiming to replacing 52,000 hectares usually sown to cereals each year with olive oil and other fruit trees, which use less water.

WATER USE

"We want to have a diversified agriculture that mobilises its comparative advantages. We have scarce resources, particularly water," said Hassan Serghini Idrissi, planning director at the Agriculture Ministry.

"We have to answer the following question: What is the production that brings us the most dollars when we use that water in that farm production?" Idrissi added.

Other government officials said more frequent droughts as well as the fragile fabric of agriculture made it an uphill battle for the government to push for the transformation needed to re-tool the farming sector.

Half of Morocco's 1.5 million farmers own an average of five hectares, most of the land is planted to cereals in the most arid of the country's regions.

Some 800,000 of the kingdom's farmers are not eligible for normal bank loans, according to official figures.

Non-irrigated farming represents more than 90 percent of the total arable land, of which 5.5 million hectares are planted in cereals.

Idrissi sees a need to change the government's policy towards the key cereals farming, including the phasing out of subsidies and import tariffs to focus on investment incentives.

"The trade agreements with US, Egypt, Jordan and Tunisia and the free trade agreement on agriculture with EU which is being negotiated will put the cereals sector under fierce competition," he said.

Idrissi said Morocco must anticipate the impact of the competition.