Climate change and recurrent climateevents are making water-scarce countries like Tunisia andits agricultural lands drier and more vulnerable to drought.These recurrent climate events are also known asteleconnections and include natural climatic events such asthe El Niño Southern oscillation (ENSO), the North Atlanticoscillation (NAO), and the Mediterranean oscillation (MO).These climate phenomena contribute to droughts, whichnegatively affect key rain-fed crops, suchas wheat andbarley, and livestock. As a result, farmers are becomingmore vulnerable as climate change and teleconnections maketemperatures rise and rainfall become more sporadic.Agriculture is important for rural communities and theoverall Tunisian economy. Twenty percent of the populationis employed in agriculture, which accounts for 10 percent ofthe country’s gross domestic product (GDP) and 10 to 12percent of total exports, on average. Wheat and otherrainfedcrops are critical to food security and livestocksurvival and are the crops most affected by climatevariability. Climate change’s adverse impacts on agricultureare a contingent liability for the Tunisian economy,including for the country’s GDP, trade balance, and balanceof payments. As agricultural and agro-industrial outputsfall, food and fodder imports must rise to meet domesticdemand. Therefore, this report suggests additional action onimplementing integrated drought management (IDM) on top ofwhat the government is already doing. Food and agriculturevalue chains are affected by climate events. This reportincludes detailed analyses of two key value chains, namelywheat and dairy. The analyses were done in representativelagging regions, including Jendouba for the dairy valuechain and Siliana and Beja for the wheat valuechain.Currently, wheat and dairy are the main subsectors inthe lagging regions, and in the short term, strengtheningthese subsectors will increase jobs, incomes, and foodsecurity. This study finds that the El Niño Southernoscillation (ENSO) was a less important contributor to the2015–16 drought in Tunisia than other teleconnections. ENSOdrought impacts are more pronounced in other parts of theworld than in the Middle East and North Africa (MENA)region. This report also examines wheat and dairyagriculture to determine how well they are adapting toclimate change and climate variability. Current adaptationpathways to increase agricultural incomes andproductivityfocus on increasing tree crops, which generallyare more resilient to drought than field crops. Still,improving water management is also an essential part of thisadaptation plan.