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BEIT AL-MASAJIDI, Yemen (Reuters) - As men and women pick corn and roll up the withered stalks in the fields of their tiny village near Sanaa, Humeid al-Masajidi says goodbye to a way of life his family will abandon forever.
"Starting next year there won't be any farmland here. This is the last time this land will be harvested. We've all sold the land," the 35-year-old farmer said, pointing to the fields around the village of Beit al-Masajidi, nestled beneath mountain peaks and dotted with scraggy sheep.
Yemen is grappling with an increasingly dry climate and a booming population. Harvests are shrinking as rainfall declines and groundwater dries up.
Farmers, 70 percent of the population, can no longer subsist on their own crops. Youths are flocking from the countryside to the cities in search of jobs to provide for their families.
"Food is not going from country to city here, but from city to country," said Gerhard Lichtentaeler of the German development agency GTZ, adding water shortages had made it impossible to sustain farming in many areas. The water table is falling one to five meters a year due to over-extraction.
One in three of Yemen's 23 million people struggle with food insecurity, according to the International Food Policy Research Institute (IFPRI), which is advising the government.
More will go hungry in future, with the population growing at 3 percent a year and water running out. Sanaa is set to be the first capital city to run dry, by 2050, experts predict.
By then, IFPRI expects global cereal prices to have risen 39 to 62 percent even without the impact of climate change, which may raise prices by an extra 32 to 111 percent. Yemen imports at least 70 percent of its food.
"The problem is we (villagers) are already relying now on imported wheat," Masajidi said. "Corn is just for basic needs."
Wheat costs Yemenis up to $250 per tonne and rising prices will raise tensions in a heavily armed society where almost half the population lives on $2 a day or less.
Climate change is one more strain on the Arabian Peninsula state. The cash-strapped government has to cope with a southern secessionist movement, preserve a shaky truce with northern Shi'ite rebels and fight a resurgent wing of al Qaeda.
Unemployment is soaring in Yemen's oil-export based economy and oil resources ebbing.
"This (food shortage) could cause regime collapse and state failure ... The government will lose its advantage of providing food and economic support to the people," said Ibrahim Sharqieh, a Yemen expert at the Brookings Center in Doha.
The government has set out a plan to improve agriculture, which accounts for 90 percent of water use, and diversify it away from cultivation of qat, a mild narcotic leaf which dominates life in Yemen.
But Lichtentaeler, who calls drought-resistant qat a "coping crop" for poor farmers struggling to make ends meet, worries that while qat growing should be discouraged, agricultural diversification may take Yemen in the wrong direction.
"We (GTZ) are actually asking them to reduce their agriculture. They need to create jobs," he said.
Experts agree Yemen will never be able to grow all its own food. And farming diverts precious water resources -- already a source of conflict between Yemenis -- which will be vital for household and industrial use in the future.
"It isn't necessarily a good thing to think about producing more food. The population is rising so fast there's no way to create food self-sufficiency. We need to create a diversified economy," Lichtentaeler said.
Food security, experts say, can be attained by developing an economy that generates enough income to pay for food imports. Manufacturing and mining have been suggested as alternatives to farming. Tourism in Yemen, with its traditional architecture and jagged mountains, could also generate jobs and hard currency earnings.
But such plans, which need heavy private investment, can seem fanciful in the face of Yemen's daunting security problems.
One option that requires no investment, but carries high risks for politicians, is cutting fuel subsidies that are among the highest in the world, says Clemens Breisinger of IFPRI.
Fuel subsidies cost the government about $150 per Yemeni per year, Breisinger said.
"You can imagine that if you just give that money to every Yemeni, particularly those with food security concerns, you would have eradicated part of the problem already," he said.
Without a change in strategy, Lichtentaeler warns, Yemen could face food riots or violence: "If they don't diversify, people will become poorer and poorer. Then it's a disaster."
Yemeni cities are swollen with young rural migrants trying to scrape together a living for families back home.
Mohammed Shajoun, 16, from the western province of Hodaida, works as a newspaper boy in Sanaa and dreams of returning to his village. But his family relies on his monthly pay of 7,000 rials ($33) because their crops are not enough to feed them.
"It's hard working under this hot sun in Sanaa. The weather on my farm used to be beautiful," Shajoun said. "I wish the rain would come back so I could leave this job and go to the farm."
Additional reporting and writing by Erika Solomon; editing by Alistair Lyon and Janet Lawrence