Consequences of global climate change are predicted to increase risks to crop production in the future. However, the possible broader impact of climate change on social-ecological systems still needs to be evaluated. Therefore, the present study focuses on one such globally important agricultural social-ecological system referred to as the Village Tank Cascade System (VTCS) in the dry zone of Sri Lanka. The VTCS has considerable potential to withstand seasonal climate variability mainly through continuous supply of water by the village tank storage throughout the year. The current study aimed to investigate trends of climate variability and possible impacts on paddy production in the North and North-central VTCS zone. Observed and projected rainfall and temperature data were analysed to evaluate the past variability trends (1970 to 2020) and model future (up to 2100) scenarios of climate variability and trends. Long-term observed rainfall and temperature data (1946 to 2020) were analysed to identify possible anomalies. The Maximum Entropy (MaxEnt) model has been used to predict the situation of future paddy farming (2050 and 2070) under two climate scenarios (RCP4.5 and RCP8.5) of the Intergovernmental Panel on Climate Change (IPCC). Six variables that would affect paddy growth and yield quality were used alongside the average monthly rainfall and temperature of two Global Climate Models (MIROC5 and MPI-ESM-LR). Climate suitability for two paddy cultivation seasons (Yala and Maha) were predicted for current and future climate scenarios. The findings revealed that observed and projected climate changes show considerable deviation of expected rainfall and temperature trends across the VTCS zone. Temperature exhibits warming of approximately 1.0 °C during the declared Global Warming Period (1970 to 2020) in the study area. In addition, there is a trend of significant warming by 0.02 °C/year, RCP4.5 and 0.03 °C/year, RCP8.5 from 1950 to 2100. Rainfall (1970–2020) shows high interannual variability but trends were not significant and less discernible. However, long-term projected rainfall data (1950–2100) analysis detected a significant (p = 0) upward trend (2.0 mm/year, RCP4.5 and 2.9 mm/year, RCP8.5), which is expected to continue up to the end of this century. Further, the study revealed some shifts in temperature towards higher values and positive anomalies in rainfall affecting seasonality and the likelihood of more extreme occurrences in the future, especially during the Maha cultivation season. The MaxEnt model predicts the following under future climate scenarios: (i) spatio-temporal shifts (conversions) in climate suitability for paddy farming in the VTCS zone; (ii) substantial low and moderate suitability areas that are currently suitable will remain unchanged; (iii) up to 96% of highly suitable and 38% of moderately suitable paddy growing areas in the VTCS zone will be at risk due to a decline in future climate suitability; and (iv) expansion of lower suitability areas by approximately 22% to 37%, due to conversion from moderate suitability areas. The study provides evidence that the continuous warming trend with increasing variability in rainfall and shifting seasonality could increase the vulnerability of future paddy farming in the VTCS. Thus, findings of this study will help planners to make more targeted solutions to improve adaptive capacity and regain the resilience to adjust the paddy farming pattern to deal with predicted climate variability and change.