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Abstract. Drought events in the Mediterranean are likely to increase in frequency, duration and intensity due to climate change, thereby affecting crop production. Information about drought is valuable for river basin authorities and the farmers affected by their decisions. The economic value of this information and the resulting decisions are of interest to these two stakeholder groups and to the information providers. Understanding the dynamics of extreme events, including droughts, in future climate scenarios for the Mediterranean is being improved continuously. This paper analyses the economic value of information on drought events taking into account the risk aversion of water managers. We consider the effects of drought management plans on rice production in the Ebro river basin. This enables us to compute the willingness to compensate the river basin authority for more accurate information allowing for better decision-making. If runoff is reduced, river basin planners can consider the reduction of water allocation for irrigation in order to eliminate the risk of water scarcity. Alternately, river basin planners may decide to maintain water allocation and accept a reduction of water supply reliability, leaving farmers exposed to drought events. These two alternatives offer different risk levels for crop production and farmers' incomes which determine the value of this information to the river basin authority. The information is relevant for the revision of River Basin Management Plans of the Water Framework Directive (WFD) within the context of climate change.

Climate change inevitably leads to large regional variations in risks and opportunities and is likely to affect most farmers in the Mediterranean in the next decades. The interpretation of climate projections to determine appropriate policy responses is not without difficulties, such as understanding local uncertainty and responses of specific crops to sets of conditions. Here we analyse the potential impacts of climate on agriculture in the Mediterranean -a region that exemplifies other regions of the world that are prone to drought and are likely to experience increased frequency and intensity of droughts in the future. Our analysis relies on understanding the sources of uncertainty derived from climate scenarios, agricultural systems, impact responses and risk levels to support informed decisions for planned agricultural adaptation. We generated multiple projections of impacts based on different models of climate change and crop response in order to capture uncertainties. We used statistical models of yield response and projections of climate change generated from 16 climate scenarios to address the likelihood of projected impacts on traditional Mediterranean farming systems, represented in this study by cereals, grapes, olives and citrus. Results show that uncertainty varies widely by crop and location, and adaptation priorities will therefore depend on the risk focus of adaptation plans.

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