Agroforestry systems can be an effective means of stabilizing or even enhancing crop yields under climate change. Although trees compete with crops for soil resources in agroforestry,they can also improve crops' growing conditions, especially, by providing shade under drought. They can promote higher crop yields and higher harvest quality in the drylands. However, the beneficial effect of tree shade may depend on the seasonal pattern of rainfall, which determines the compensation between yield components. In this study, we evaluated two annual crops (durum wheat and faba bean) in olive agroforestry in northern Morocco. We manipulated water supply in a field experiment to span the high inter-annual rainfall variability at the site and tested whether olive trees reduce or improve crop yields. We assessed the effect of water addition on crop growth, yield components, and final yields and estimated the land equivalent ratio of olive agroforestry. Agroforestry limited crop growth and yield whatever the water regime. The magnitude of grain yield reduction was around 50 % for both crops in 2018, probably due to shade. The number of grains per unit area was the most impacted yield component in both 2018 and 2019. In contrast, water addition only had limited effects on faba bean yield, although it enhanced wheat grain yield by 11 % and the number of wheat spikes by 13 %. Agroforestry improved individual grain weight by 39 % for wheat and 17 % for faba bean, and enhanced the protein content of wheat grains and straw by 4 % and 9 %. However, improvements in grain weight and in protein content were not sufficient to compensate for yield loss due to shade. Despite lower crop yields, we show that agroforestry systems are still more land productive than sole crops and trees, even under arid conditions. We show how changing water supply may impact the performance of olive agroforestry in a drier future.