IFAD Warns El Niño Could Cost $11 Trillion, Threaten Global Food Security

A severe El Niño event could cost the global economy up to $11 trillion over the next five to six years, with significant consequences for agriculture, food security and rural livelihoods, according to a new report released by the International Fund for Agricultural Development (IFAD) and Türkiye's Ministry of Agriculture and Forestry at COP31 on 9 November 2026. The estimate includes agricultural losses, infrastructure damage and wider economic impacts that could spread through international food prices, commodity markets and global trade.

The report, Food Systems Under Stress: Building Resilience from the First Mile, warns that small-scale farmers face increasing exposure to overlapping climate and economic disruptions. Droughts, rising energy and fertilizer prices, and disruptions to food supply chains can occur simultaneously, making recovery more difficult. IFAD estimates that small-scale farmers produce approximately one-third of the world's food, placing their resilience at the center of global food security.

 

El Niño Could Trigger Long-Term Economic and Food Security Losses

 

El Niño, a climate phenomenon associated with unusually warm waters in the tropical Pacific, can alter rainfall patterns and intensify droughts, flooding, and extreme temperatures across different regions. IFAD's $11 trillion estimate represents a potential cumulative economic loss under a severe scenario, rather than a confirmed cost of the current event. The analysis considers how agricultural disruptions can affect infrastructure, food prices, international trade, and economic demand over several years.

The report also highlights how rising fertilizer and energy costs can compound climate-related production losses. During 2026, these pressures affected food systems from cultivation and processing to transportation and distribution. Farmers with limited savings, insurance or access to affordable credit are particularly exposed, as one disruption can reduce their ability to prepare for subsequent shocks.

 

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Combined Climate Adaptation Investments Could Nearly Double Protection

 

IFAD's modeling suggests that combining investments in agricultural inputs, market access and financial services offers substantially greater protection than relying on individual interventions. Under a scenario involving simultaneous drought and price shocks, finance-focused measures such as insurance reduce potential farm-income losses by 9.8%. When support is combined across inputs, markets and finance, the reduction increases to 18.7%, nearly twice the protection.

Alvaro Lario, President of IFAD, said, "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."

 

Evidence From Kenya, Bangladesh and Türkiye

 

The report draws on IFAD-supported agricultural development programs to demonstrate how integrated climate adaptation measures can protect rural livelihoods. In Kenya, combining fertilizer micro-dosing and agroforestry training with improved access to seeds, fertilizers, drought insurance and bulk grain buyers reportedly doubled farmers' resilience to drought conditions.

In Bangladesh, investments in solar-powered irrigation, vermicomposting training, access to credit and food-safety certification helped reduce production costs and connect farmers to higher-value markets, contributing to a 50% increase in household incomes. Similar interventions in Türkiye, including solar irrigation, greenhouse development, orchard establishment, grants and improved agricultural processing facilities, were associated with a 40% increase in farmers' incomes.

 

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Climate Finance Must Address Interconnected Agricultural Risks

 

The report calls for governments, development institutions and investors to rethink agricultural climate adaptation financing by supporting connected investments rather than isolated projects. This includes improving access to climate-resilient technologies, affordable inputs, agricultural insurance, credit, storage facilities and reliable markets, allowing farmers to maintain production and recover more effectively from economic and environmental disruptions.

Ibrahim Yumakli, Türkiye's Minister of Agriculture and Forestry, said, "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."

The findings place agricultural resilience among the important climate finance priorities being discussed at COP31 in Antalya. While the $11 trillion scenario illustrates the potential scale of economic exposure, IFAD's evidence suggests that better-coordinated adaptation investments could reduce losses and strengthen food systems. The challenge for governments and financial institutions will be translating these approaches into programs that reach vulnerable farming communities before multiple shocks occur.

 

Source: The International Fund for Agricultural Development (IFAD)