Rome/Antalya//-El Niño could ultimately cost the global economy up to US$11 trillion and will have substantial and long-lasting consequences on food security, warns new analysis released today by the International Fund for Agricultural Development (IFAD) and Türkiye Ministry of Agriculture and Forestry.
The report, Food Systems Under Stress: Building Resilience from the First Mile identifies El Niño as one of many overlapping climate and economic shocks hitting small-scale food producers and rural economies.
In 2026 alone, global energy and fertilizer shocks rippled through entire food systems within a single planting season, raising costs from production and processing to transport and distribution, and hitting especially hard the small-scale farmers who produce a third of the world’s food.
“Preparedness means acting before a crisis strikes. Farmers’ resilience is determined by the steps taken beforehand: access to water, affordable inputs, finance and insurance and reliable links to markets. When these elements move together, food producers stand far stronger in the face of shocks,” said Ibrahim Yumakli, Minister of Agriculture and Forestry of the Republic of Türkiye.
Drawing on evidence from across IFAD’s investment portfolio, the report shows that rural communities are much more resilient when investments ensure farmers can maintain production through shocks, access markets to protect the value of what they produce, and draw on finance that allows them to invest, manage risk and recover.
IFAD modelling in the report shows the effectiveness of this approach when drought and price shocks hit at the same time. When farmers receive a finance-focused intervention, such as insurance, farm-income losses are reduced by 9.8 per cent. But when interventions are bundled across inputs, market access and finance, income losses are reduced by 18.7 per cent, nearly twice as much.
The report provides several examples of IFAD bundled interventions across different contexts. In Kenya, bundling a training in fertilizer micro-dosing and agroforestry with access to seeds, fertilizers and drought insurance, along with links to bulk grain buyers doubled farmers’ resilience to droughts.
In Bangladesh, solar irrigation, vermicomposting trainings, access to credit and food-safety certification cut production costs and opened access to premium markets, with households’ incomes rising by 50 per cent.
In this new reality of interconnected shocks, the report lays out how to build rural economies’ long-term resilience to compounding pressures: bundled investments that simultaneously strengthen farmers’ access to agricultural inputs and technologies, markets and financial services such as credit or weather insurance.
“This report makes an important argument based on evidence from our IFAD investments: 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,” said Alvaro Lario, President of IFAD. “Where we have invested in these pillars together, the results are transformational: incomes have increased more than 40 per cent, nearly all households report gains, and technology adoption is up by three-quarters.”
In Türkiye, grants to farmers, paired with solar powered irrigation, greenhouse and orchard establishment to cut water and energy costs, and new or upgraded market, storage and processing facilities led to a 40 per cent income growth for farmers.
