Drought and irrigation requirements: Adaptation strategies and economic impacts on Italian arable farms under different first-pillar CAP scenarios

Under drought conditions, the growing demand for irrigation water, coupled with its declining availability, poses serious risks to agricultural productivity. Meanwhile, European farmers operate within a policy framework that requires the agricultural sector not only to adapt to climate change impacts, such as drought, but also to contribute to their mitigation through the sustainable management of natural resources. In this context, this study aims to assess how drought pressure interacts with the EU Common Agricultural Policy (CAP) in shaping the adaptation strategies of Italian arable farms, with a particular focus on land use, economic outcomes, and irrigation water use. By integrating high-resolution climatic data with the AGRITALIM agro-supply economic model and a Farm Accountancy Data Network sample of 3089 Italian farms, this study estimates crop irrigation requirements and simulates drought scenarios affecting increasingly large areas of the country. Results show that northern regions are especially exposed to drought, with farms responding in the short term by relying more on groundwater and reducing irrigated area. Adaptation strategies are strongly influenced by CAP frameworks: under the CAP 2014–2022 first-pillar reform, farms tend to expand rainfed cereal areas, while the 2023–2027 reform promotes the expansion of legumes and oilseeds and reduces the area under cereals such as wheat. The current CAP reform partially offsets income losses for small farms through internal convergence and redistributive payments, while increasing pressure on larger ones. Overall, these findings highlight the need for targeted policies capable of balancing climate adaptation, productivity, and equity in the distribution of support.