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Water security features prominently among the grand challenges of humanity in a quest for sustainable future. Southern European countries, Italy in particular, are highly vulnerable to droughts. In this article we estimate the drought-related losses in agriculture in terms of reduced yield and output for the selected, most important crops; and social impacts of droughts in the Po River Basin District (PRBD). To do this we first explore the regional impact assessment techniques based on production data collected or estimated at provincial (NUTS3) and lower (agricultural region, RA) spatial scale and then use partial equilibrium approach to modelling drought impacts in terms of yield, net revenue and employment.