El Niño could cost global economy $11tn — IFAD

The International Fund for Agricultural Development (IFAD) has warned that El Niño could trigger losses of up to $11 trillion in the global economy, urging governments to strengthen agricultural resilience to protect food security and rural livelihoods.

The warning was contained in a report titled Food Systems Under Stress: Building Resilience from the First Mile, released at the ongoing COP31 climate conference in Antalya, Türkiye, in collaboration with the country's Ministry of Agriculture and Forestry.

The report identified El Niño, alongside climate-related and economic disruptions, as a growing threat to small-scale food producers and rural economies.
It noted that global energy and fertiliser shocks in 2026 had spread through food systems within a single planting season, raising costs across production, processing, transportation and distribution.

The report said small-scale farmers, who produce about one-third of the world's food, were particularly vulnerable to the overlapping crises.
IFAD called for coordinated investments in agricultural inputs, technology, market access and financial services, including credit and weather insurance, rather than isolated interventions.

The organisation's President, Alvaro Lario, said farmers were better protected when support systems were connected.
"Resilience is not built by investing in single interventions, but by connecting investments in inputs, markets and finance so that gains in one area are not lost in another," Lario said.

He explained that evidence from IFAD's investments showed that when the three areas were addressed together, farmers' incomes increased by more than 40 per cent, while technology adoption rose by three-quarters.
The report also highlighted the financial benefits of combining agricultural support measures, noting that farmers faced lower losses when climate and price shocks occurred simultaneously.

According to IFAD, finance-focused interventions such as insurance reduced farm-income losses by 9.8 per cent.
However, combining access to inputs, markets and finance reduced losses by 18.7 per cent, nearly twice the protection achieved through finance-focused interventions alone.

Türkiye's Minister of Agriculture and Forestry, Ibrahim Yumakli, also stressed the importance of preparing farmers before climate-related emergencies occur.
He said farmers' ability to withstand disruptions depended on access to water, affordable agricultural inputs, finance, insurance and dependable markets.

The report cited examples from Kenya, Bangladesh and Türkiye to demonstrate the impact of integrated agricultural investments.
In Kenya, combining training in fertiliser micro-dosing and agroforestry with access to seeds, fertilisers, drought insurance and bulk grain buyers reportedly doubled farmers' resilience to drought.

In Bangladesh, solar-powered irrigation, vermicomposting training, credit facilities and food-safety certification helped farmers lower production costs and access premium markets, resulting in a 50 per cent increase in household incomes.

Similarly, in Türkiye, grants for solar-powered irrigation, greenhouse and orchard development, alongside improved storage, processing and market facilities, contributed to a 40 per cent increase in farmers' incomes.

IFAD said the findings underscored the need for agricultural investments that would enable farmers to maintain production during climate shocks, preserve the value of their produce through market access and secure financing to manage risks and recover from disruptions.