The cost of climate change in agriculture

The cost of climate change in agriculture

SurEconomics staff, August 2026

In the last three years alone, the most severe drought recorded in a century in the Río de la Plata basin wiped out $19.5 billion in agricultural exports from Argentina, Brazil and Uruguay.

To grasp the scale of the disaster: that sum is equal to financing the total education budget of three mid-sized countries for five years.

Climate has ceased to be a matter of weather forecasts and has become the most volatile variable in national budgets, especially in countries that depend on the land. Indeed, a change that could well become a genuine systemic risk in the region.

Agriculture and livestock account for 22% of all the foreign currency that enters America's trade balance. Yet 84% of small and medium-sized agricultural producers in Latin America operate without any insurance against extreme weather events.

When rains fail or frosts out of season destroy entire coffee or grain harvests, producers go permanently bankrupt, accelerating distress sales of land to large global agribusiness conglomerates and pushing the rural population into urban poverty belts.

Sources

·       Inter-American Institute for Cooperation on Agriculture (IICA). State of Agriculture in Latin America, 2025.

·       World Bank. Economic Losses from Climate Events in Latin American Agriculture, 2025.

·       Clarín. "The Impact of Extreme Climate on Southern Cone Exports," July 9, 2026.