Agricultural Development

The number of people facing crisis-level or worse acute food insecurity has nearly doubled over the past 5 years, to encompass 300 million people. During the same period, however, funding for humanitarian assistance has almost halved. While these opposing trends have put humanitarian agencies in deficit and struggling to respond to urgent global needs, there is also the question of whether we know how much food assistance is actually needed to prevent starvation. Existing early warning systems for food crises merely identify the number of people in need of food assistance.

Key takeaways •Reduced traffic through the Strait of Hormuz is squeezing farmers. Energy and fertilizer prices are climbing faster than food prices, eroding producer profitability.•Mexico is highly exposed to fertilizer import shocks. Heavy reliance on imported nitrogen and potash makes the sector vulnerable to external disruptions like the Iran crisis.•High-value and staple crops face different pressures.

Key takeaways

•Shipping restrictions in the Strait of Hormuz have already driven sharp increases in fertilizer and energy prices.
•Higher prices could reduce fertilizer use and lower crop yields if the disruption persists, posing significant food security risks.
•Most vulnerable are countries heavily dependent on Persian Gulf fertilizer and natural gas—especially in Africa and South Asia.

Latin America and the Caribbean (LAC) stands as a vital supplier to the global food system, yet its agricultural sector faces intensified disruptions from rising temperatures and shifting rainfall patterns. In their book chapter on “Adapting to a Changing Climate: Strategies for Productive and Resilient Agrifood Systems” the authors looked at how factors like yield shocks, water constraints, and heat stress introduce new push-and-pull forces that alter crop viability and regional advantages.

Reducing greenhouse gas emissions and climate change impacts is a core element of global agrifood system transformation. Yet, while it represents an important opportunity for capital markets and investors, climate finance focused on agrifood systems has thus far been limited. In 2022, $95 billion of global climate finance funding was dedicated to agrifood industries and practices, with 22% coming from private sources.