Almost two-thirds of agricultural businesses are concerned about climate volatility, ranking it as their biggest risk concern in 2024 — up from 45% in 2023.
This is according to the 2024—2025 Santam Insurance Barometer Report, a biennial study tracking emerging risks across SA.
But while extreme weather remains a leading concern, farmers are increasingly being squeezed by other structural and operational challenges, said Daniel Stevens, Executive Head of Santam Agriculture Crop & Heavy Haulage.
“While climate change and weather volatility remain a significant concern among agricultural businesses, increasing infrastructure degradation, a widening critical skills gap as well as sustained input costs are increasingly keeping farmers awake at night.”
The marked uptick in concern around climate volatility reflects both the growing unpredictability of rainfall and extreme weather events such as hailstorms.
Santam data shows 57% of farmers now have crop insurance. Many large commercial operations are also diversifying by planting different crops in multiple geographies or are opting to “self-insure”.
Yet, it is not just the weather that is shifting. The report notes increased uncertainty about seasonal patterns, which complicates planting decisions and exposes farmers to higher risk of crop loss and lower yields.
A quarter of farmers surveyed also cited infrastructure degradation as a growing risk. Especially in rural areas, deteriorating roads and transport routes delay the delivery of produce to silos, processors and ports, raising spoilage and costs.
“In some instances, farming communities have been forced to step in and repair unusable main roads themselves, adding to their already high input costs,” Stevens said.
Electricity supply remained unreliable in 2024 despite an easing of load-shedding. Farmers dependent on irrigation, cold storage and processing facilities continue to experience losses in produce and machinery due to power surges and outages. In response, many have invested in backup generators or solar power systems, but this has opened new avenues of risk, such as fuel theft and generator failure claims.
Water infrastructure is another stress point: almost 10% of respondents reported being concerned about interruptions to water supply. Though most commercial irrigation farms have sufficient access, the quality of water — often polluted due to municipal failures — is emerging as another threat, particularly for crops like maize, soybean and wheat.
Stevens also highlighted how sustained input cost inflation continues to erode profitability.
“Farmers feel the pinch immediately when inflation rises or production costs like fertiliser, fuel and labour go up. These increases — which show no signs of easing — are largely driven by global geopolitical factors, including the Russia-Ukraine conflict and the latest international trade tariffs imposed by the US.”
Uncertainty surrounding the future of the African Growth and Opportunity Act (Agoa) between SA and the US adds another layer of pressure.
While the US just accounts for about 4% of SA’s R230bn of annual agricultural exports, producers of citrus, wine and nuts could be forced to pivot quickly to other markets should Agoa lapse or trade tariffs increase.
“To counter the US-SA trade challenge, producers will need to explore new trade partners with the support of the government. The Brics countries present opportunities, particularly China and Saudi Arabia, though it can take the government years to open up new export markets,” Stevens said.
One of the most pressing challenges is a shortage of skilled labour — specifically in farm management, agritech adoption, precision agriculture and data-driven farming.
An ageing workforce, youths increasingly heading for cities in search of work and a lag in agritech education are converging to threaten the sector’s productivity, Stevens said.
“Without the right skills, farms are unable to fully realise the productivity and sustainability benefits these tech innovations offer.
“Farmers cannot influence the arrival of a hailstorm, the timing of rainfall, or the fallout from geopolitical developments that raise input costs or close off export opportunities. That is precisely why access to reliable, well-priced risk transfer remains critical for SA’s commercial farmers.”
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