Agriculture is no stranger to disruption. Droughts, volatile commodity prices, supply shortages and geopolitical shocks have repeatedly tested the sector’s ability to keep producing food.
The challenge today is that several of these pressures are arriving at the same time, raising a familiar question: has agriculture learnt enough from previous crises to withstand the next one?
The sector has faced a similar combination of pressures before.
Lessons from the 1970s
In August 1971, US President Richard Nixon announced that the United States would stop converting dollars into gold. The decision marked the beginning of the end of the Bretton Woods era and sent currencies into a period of adjustment.
For developing economies, the consequences were particularly difficult as import costs could change dramatically because of decisions made beyond their borders.
Two years later, amid another devaluation of the dollar and the upheaval surrounding the Arab-Israeli war, oil-producing countries pushed crude prices sharply higher. The export price index rose from 196 to 641, making oil vastly more expensive in the space of a year.
Agriculture was particularly exposed.
Modern food production had become heavily reliant on fertiliser, whose manufacture consumed large amounts of energy. Petroleum also powered much of the agricultural value chain, from machinery working the land to transport moving crops to market.
Fertiliser prices tripled and, in some cases, quadrupled over the course of a year, adding significantly to the cost of producing food.
There are clear parallels with the current environment. Conflict and disrupted trade routes are again unsettling supply chains, while protectionist measures are adding to uncertainty and putting pressure on the cost of fuel and fertiliser.
Food security under pressure
Food security has consequently moved higher up the agenda across much of Africa.
Affordability is a major part of the concern. Inflation can put pressure on consumers at the same time as it raises the cost of producing food, leaving agriculture exposed at both ends of the value chain.
The 2022 Global Food Security Index placed sub-Saharan Africa at 47.0, compared with a global average of 62.2.
Food security ultimately depends on whether the agricultural value chain can continue functioning all the way back to the producer.
Across much of Africa, millions of small-scale farmers rely not only on rainfall and markets, but also on access to technology, finance, inputs and information to remain productive.
Technology can play a role in improving that resilience. Drought-tolerant seed, precision equipment and irrigation sensors can help farmers use inputs more efficiently and manage changing conditions.
Digital platforms can also improve access to finance, inputs and markets.
Resilience starts with the balance sheet
The pressure on agriculture also changes how businesses need to think about financial resilience.
The value of an agricultural business does not always sit neatly in fixed assets. Consider a wheat miller that buys grain once a year and needs to hold enough stock to keep operating for months.
The grain in the silo may be worth more than the company's fixed assets. A balance sheet viewed too narrowly can therefore give a misleading picture of a business whose underlying economics remain sound.
A poor production year also does not give an agricultural business the option of simply stepping away from the next season. Production has to continue, and capital has to go back into the system before the effects of the previous season have necessarily cleared.
That makes it important to distinguish between pressure caused by a difficult sector-wide cycle and problems originating within an individual operation.
The response will be different in each case.
Where the pressure is sector-wide, businesses need to protect their balance sheets, avoid overcommitting to capital expenditure and preserve sufficient cash flow to absorb another disruption.
Relationships matter when supply tightens
Financial resilience is only part of the equation. Commercial relationships can also become important when supply comes under pressure.
The fertiliser shortages that followed Russia’s invasion of Ukraine provided a recent example.
When supply became uncertain, some suppliers prioritised long-standing customers with whom they had established relationships over many years. Businesses that had treated suppliers largely as interchangeable based on price did not necessarily have the same position when stock became scarce.
The lesson is broader than fertiliser.
Agriculture has always had to operate with uncertainty, but the frequency and reach of recent shocks have made the cost of being financially and commercially unprepared harder to absorb.
The next test
The turmoil of the 1970s prompted efforts to keep agriculture functioning, including measures aimed at ensuring producers could access the inputs and finance needed to continue producing when markets tightened.
Fifty years later, the circumstances are different, but the underlying lesson remains relevant.
Agriculture is better equipped to absorb shocks when the financial and commercial capacity to keep producing has been built before the crisis arrives.
The next test could come from weather.
El Niño is expected to intensify through the second half of 2026, with different parts of the continent potentially experiencing very different effects. For some agricultural markets, that could mean drought; for others, excessive rainfall and flooding.
Either way, the sector's ability to withstand the next disruption will depend not only on what happens to the weather or commodity markets, but on how much resilience has been built before it arrives.
