Although climate change and erratic weather patterns remain the dominant risks for South Africa’s farmers, a new report warns that collapsing infrastructure, soaring input costs and a critical shortage of skilled labour are fast becoming equally pressing threats.
By Lebogang Mashala, Editor at African Farming
According to Daniel Stevens, Executive Head for Santam Agriculture Crop & Heavy Haulage, the 2024–2025 Santam Insurance Barometer Report, a biennial study tracking emerging risks across South Africa, found that 64% of agricultural businesses ranked climate volatility as their number one concern, up sharply from 45% in 2023.“Typically, insurers offer agri-crop policies alongside general commercial cover to help farmers mitigate risk,” says Stevens. “While agricultural commercial insurance covers buildings, machinery, vehicles, business interruption and liability, crop insurance is designed to protect against adverse weather, especially hail damage.”
“Typically, insurers offer agri-crop policies alongside general commercial cover to help farmers mitigate risk,” says Stevens. “While agricultural commercial insurance covers buildings, machinery, vehicles, business interruption and liability, crop insurance is designed to protect against adverse weather, especially hail damage.”
Although 57% of surveyed agricultural businesses purchased crop cover, a growing number of large commercial farmers are opting to self-insure or diversify by planting multiple crops in different geographic regions.
Heavy seasonal rainfall has added fuel to industry-wide debates on broader weather cycle trends. The timing and distribution of rainfall are becoming increasingly unpredictable, disrupting planting seasons and forcing farmers to adapt rapidly to changing conditions.
Infrastructure Decay Deepens Rural Challenges
Beyond the weather, farmers face a complex web of interlinked risks. A quarter of respondents flagged infrastructure degradation, from roads and rail to water systems, as a growing obstacle.
Poor road maintenance in rural areas, where potholes are rife, hampers the movement of crops to silos and export hubs. In some cases, farming communities have taken road repairs into their own hands, adding to already steep input costs.
Electricity supply remains another sore point. While the immediate threat of load-shedding has eased since the 2022-2023 reporting period, energy disruptions continue to impact irrigation, cold storage and processing facilities,raising spoilage rates and damaging sensitive equipment. Many farmers have invested in solar and diesel generators, but this has led to a spike in fuel theft and generator failures.
Water infrastructure is also under strain. Nearly 10% of commercial respondents expressed concern over interruptions to supply, with irrigation farmers particularly worried about water quality, as river pollution from poor municipal service delivery poses an emerging risk to crop production.
Rising Input Costs Squeeze Margins
The report warns that persistent increases in fertiliser, fuel and labour costs,driven by global geopolitical tensions such as the Russia-Ukraine conflict and new US trade tariffs, are eroding farm profitability.
The uncertainty over the renewal of the African Growth and Opportunity Act (AGOA) agreement between South Africa and the US has added to the pressure. Although the US accounts for only about 4% of South Africa’s $13 billion in annual agricultural exports, mostly citrus, nuts and wine, the loss of preferential trade terms could force producers to seek alternative markets.
Stevens notes that BRICS markets, particularly China and Saudi Arabia, present growth opportunities, but cautions that opening new trade channels is often a slow, bureaucratic process.
Skills Gap Threatens Future Growth
The shortage of skilled labour, both locally and globally, is emerging as one of agriculture’s most urgent long-term risks. Specialised expertise in farm management, agri-tech, precision agriculture and data-driven farming is in short supply, with an ageing workforce and limited new entrants exacerbating the problem.
Although farming is becoming increasingly tech-driven, relying on drones, sensors, automation and AI-powered tools, many workers lack the training to use these technologies effectively. This limits productivity gains and undermines efforts to make farming more sustainable.
Stevens warns that agricultural education and training programmes are struggling to keep pace with rapid technological change, making industry-wide skills development a priority.
Also read: ‘Insurance is no longer a luxury; it’s a lifeline’
Adapting Risk Management for a Changing Landscape
Farmers cannot control the arrival of hailstorms, the erratic timing of rainfall or global conflicts that push up production costs. That’s why Stevens believes reliable, affordable risk transfer,through tools such as advanced geocoding, parametric insurance solutions and deeper collaboration with co-ops and brokers, remains essential.
“Our focus at Santam is on ensuring sustainable, well-structured crop insurance,” he says. “But insurance alone isn’t enough. The industry must address the growing skills shortage to secure the future of South African farming.”
Read the full report here.
