SUSTAINABILITY| 14.09.2021

Climate change becomes agriculture’s archenemy

Redacción MAPFRE

The increase in extreme weather events is taking its toll on the agricultural sector, where the loss experience has increased considerably.

Not only does climate change affect the health of many ecosystems, but it is also one of the main reasons why the agricultural sector is facing more environmental disasters than ever before.

And not only does this trend mean that temperatures are rising more quickly, but this increase in temperatures goes hand in hand with extreme weather events, such as droughts, flooding caused by stormwater, cold spells and hurricanes, to name just a few examples.

These all obviously pose problems for farmers around the world who have seen their loss ratio multiply, in a sector where productivity has fallen by up to 20.8 percent since 1961.

Less productive agriculture with climate change

The worrying figure of 20.8 percent does not mean that less is being produced compared to 60 years ago as, since then, production has only grown, just like the world’s population. In fact, six decades ago, there were under 3 billion people living on Earth, while now in 2021, there are over 7.8 billion. So the notion that there would be less area under cultivation is unthinkable.

However, according to a study conducted by scientists at the American universities of Cornell, Maryland and Stanford, climate change has led to the equivalent of a seven-year loss in productivity, i.e. the figures we are seeing now would have been achieved in 2013 if it weren’t for climate change. It also explains that the warmest regions have been hit the hardest by this situation: Africa (by up to 30 percent) and Latin America and the Caribbean (by up to 25.9 percent).

Significant economic damage from climate change in agriculture

This lack of productivity is closely linked to the economic losses and damage that the various disasters have caused over the last few decades, especially in the twenty-first century. This can be seen in an analysis by the Food and Agriculture Organization of the United Nations, better known as FAO.

According to this study, natural hazards (large fires), extreme weather events and even the coronavirus pandemic have caused considerable damage that is particularly affecting the agricultural sector, so much so that up to 63 percent of the impact of these disasters is on agriculture. This severely affects local communities in particular—which are put under strain by major economic losses—and it also has a big impact at the national and international level more generally.

The worst conclusion of this analysis by the United Nations is that the annual occurrence has increased considerably, and is now more than three times that of the 1970s and 1980s. Furthermore, as is often the case when it comes to weather disasters, the countries with the least resources are most affected. In fact, it is estimated that losses in crop and livestock production in these countries between 2008 and 2018 amounted to 108 billion dollars.

Finally, this study revealed that the main and most feared weather event was drought. A lack of water for irrigation resulted in losses of up to 37 billion dollars. The study also cited other disasters such as flooding and storms, pests and forest fires.

Europe and Spain: Examples of losses in the agricultural sector

Although the biggest losses occur in the warmest regions and in countries with less economic resources, it is important to note that not one part of the globe is spared by this growing problem. Take the European Union, for example.

According to a study by Environmental Research Letters, in the last five decades, losses related to droughts and heatwaves have tripled in Europe, causing profits to plummet by up to 6.9 percent.

And that’s not all. Global warming has caused cereal production, which accounts for 65 percent of the EU’s area under cultivation, to fall by 7 percent.

Likewise, it is estimated that Spain, whose agriculture accounts for 13 percent of European production, must also brace itself for a situation that is likely to deteriorate. This is not without reason, if you bear in mind the report Impactos y riesgos derivados del cambio climático en España 2021 (2021 impacts and risks from climate change in Spain) that was published by the Spanish Ministry for the Ecological Transition and the fact that the number of very hot days, with temperatures over 25°C (77°F), are due to increase over the next three decades, which will have a direct impact on agricultural productivity, causing the disappearance or radical decline of some irrigated crops.

The loss experience in the agricultural sector is skyrocketing

A lack of productivity is not the only problem caused by the extreme weather events due to climate change. As previously mentioned, farmers are also experiencing significant economic losses. This has led to an increase in loss experience to the point that it is now reaching unprecedented levels.

According to the Spanish newspaper El País, this reached 800 million euros in Spain in the first half of 2021, considerably more than the 600 million euros from the two previous fiscal years. This has resulted in a total of 638 million euros in risk premiums, a situation that resulted in funds being requested from the country’s national compensation body Consorcio de Compensación. The biggest problem is that this is the eighth time that this has happened in the last ten years.

Although this is data for Spain, the same situation can be seen in many other parts of the world. The national and supranational authorities must therefore get to work in order to prevent, insofar as possible, these disasters from having such a catastrophic impact on the agricultural sector.

FAO even presented a methodology with which it is possible to assess the damage and loss from disasters in agriculture in Latin American and Caribbean countries. The aim is to manage all the data and centralize the information, thereby achieving a small-, medium- and large-scale assessment.