Climate change is already having an affect on the bottom line of farmers, reducing profits by more than 30 per cent in the past two decades.
The agriculture sector needs to take practical steps to become more resilient in a rapidly changing climate if it is to reach its $100 billion goal by 2050, ABARES chief executive Stephen Hatfield-Dodds told the Outlook conference.
"The average product of farmers are taking a hit of more than 20 per cent," he said.
"So that a farm operating today compared to what that farm would have been able to achieve with its current management technologies and the previous climate, you're making 20 per cent less.
"If you're a cropping farm you're making 34 per cent less. The good news is 34 per cent less, is because cropping farms are already adapting.
"If they weren't adjusting, hadn't adapted, the impact would be nearly 50 per cent."
Mr Hatfield-Dodds said into the future, drought and agricultural policies would have to focus on building climate resilience and risk management.
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"We know Australian farmers manage very high levels of variability in agriculture output - your rainfall is among the most variable in the world," he said.
"The science suggests that the outlook ahead is going to be challenging. The future is not going to be like the past.
"We can use that sort of information to help identify which types of farms, which sectors and which regions face the biggest adaptation challenges and the biggest pressures."