Agriculture Minister Tony Burke said Australia's farmers needed to face up to climate change, foreshadowing major changes to drought relief payments worth billions of dollars.

Burke said Prime Minister Kevin Rudd's recently-elected government wanted to improve farmers' ability to deal with climate change, rather than simply propping them up as they struggled through the worst drought in a century.

"What I don't want to see is situations where some people can go onto the system of relief and have no incentive during that time to actually improve the property to better deal with climate change," Burke told commercial radio.

Questioned later on public radio about what farmers could do to help make their properties more drought-resistant, Burke said the centre-left Labor government was considering genetically modified crops as a possible solution.

"There's some answers that may well be provided through genetically modified crops in different parts of the country," he said.

"There'll be some places where there'll be specific water strategies, where there can be changes in ploughing methods."

His comments came as the official Bureau of Meteorology said temperatures in 2007 were 0.67 degrees Celsius above the historical average, making it the sixth hottest year since national records began in 1910.

The bureau said areas of southern Australia, including the Murray-Darling Basin agricultural heartland and the heaviest populated states of New South Wales and Victoria, had the hottest year on record.

"A grim feature of the year (was) extremely low water availability across parts of Australia," it said. "Despite promising rains during the first half of the year, July to October was particularly dry."

Deputy Prime Minister Julia Gillard said the data showed the need for urgent action on climate change.

Parts of Australia have suffered from drought for more than seven years, slashing crop sizes and forcing many farmers to leave the land.

Australia's federal government has committed more than three billion dollars (2.64 billion US) to drought relief since 2001.

But the Australian newspaper reported Thursday that the Rudd government did not want taxpayers to subsidise farms that were not viable in the long term.

Burke said individual farmers, not the government, would decide which areas of the country were suitable for sustainable farming.

"We certainly won't be in the business of telling farmers what they can and can't grow on their properties," he said.

The National Farmers Federation (NFF) welcomed Burke's comments, saying it had pushed climate change initiatives for more than two years but received little support from the previous conservative government headed by John Howard.

Federation spokesman Brett Heffernan said climate change was likely to alter the face of Australian farming but pointed out that the agricultural sector had already changed in the past two decades as it adopted green farming methods.

He said many farmers would embrace genetically modified crops if they flourished with less water than conventional crops in higher temperatures.

"The jury's in as far as genetically modified crops go, they've been around for more than 10 years and there's been no adverse events," he told AFP.

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