In recent years, the global landscape has been marked by an increasing prominence of risks, seemingly multiplying within our own borders. Agriculture, in particular, stands out as a sector uniquely burdened with a myriad of risks.
The ever-changing dynamics in markets, weather patterns, and costs, coupled with a rapidly shifting political landscape, make decision-making a difficult task for those in the agricultural sector.
Recent events, such as the tariffs imposed by President Trump, have had a profound impact on global financial and commodity markets. The retaliatory measures taken by various countries have only added to the volatility. Just as the pendulum of stability begins to swing back, another event shocks the world, further destabilising our economic and business environment. Within days, the Rand / US dollar has depreciated beyond the R19.00 level following reciprocal tariff announcements and the aftermath of the budget framework, compounded by the nervousness surrounding an unstable Government of National Unity (GNU).
For the agricultural sector, a weaker exchange rate can be a double-edged sword. While it may support commodity prices, it also increases input costs, as many essential items like fertilisers, chemicals, and energy-related raw materials are imported. The COVID-19 pandemic and the Russia-Ukraine war have significantly impacted global agricultural input costs. These events caused unprecedented spikes in energy prices, including gas and crude oil, and led to rapid increases in freight rates (BFAP, 2024). Consequently, costs of inputs like fertilisers, chemicals and fuel also surged.
By February 2025, the cost of many agricultural inputs had significantly decreased from their peak levels, with both urea and herbicide prices falling by nearly 50%. Despite the declines, prices remain significantly higher than pre-COVID levels. Globally, urea prices are still 80% higher than in 2019, while local urea prices are 60% higher (BFAP & Grain SA, 2025). Diesel costs have increased by more than 35%. While the costs of agricultural inputs are decreasing, they are doing so at a slower rate compared to commodity prices. In 2024, global maize prices fell by more than 20% compared to 2023 (FAO, 2025), even reaching levels last seen in 2019 at certain points. Similarly, soybean prices showed declines exceeding 20%.
From a weather perspective, the 2024 drought in the summer crop season is still fresh in our minds, and the start of the 2025 season has been anything but smooth. Initial rains in October provided some hope, but extreme heat and dry weather in November and December followed. Then, as if to catch up, many areas experienced floods. Despite these challenges, we are grateful for how the season has panned out, with many areas showing promising crops.
In the context of these examples, it is fair to say that the complexity of decision-making for farmers and agribusinesses has increased substantially, with ever-growing risk elements across the value chain. Yet, agriculture has consistently demonstrated its resilience and ability to bounce back after tough years, remaining a key contributor to economic growth and a vital provider of jobs in rural areas.
To effectively handle these risks and steer through challenging times, farmers require assistance in managing these uncertainties. This support can come in the form of timely and accurate information to aid decision-making, partnerships in risk management, risk mitigation strategies, and, crucially, insurance solutions.
At AEGIS, we approach risk with purpose, offering tailored risk management and insurance solutions for the agricultural- and commercial sectors in South Africa. Our mission is grounded in the belief that a broker should add meaningful value to its clients. We combine an in-depth understanding of insurance law with expertise in agricultural economics to provide valuable tools in a world characterised by severe volatility, uncertainty and risk.
Our vision is to redefine insurance brokerage by changing the perception of insurance through the addition of real value. We believe that insurance solutions can indeed be redefined and made innovative, unlocking more value for our clients. Establishing a solid basis of trust is crucial, and we achieve this by approaching risk with purpose. This approach is rooted in a deep understanding that agricultural businesses are not just enterprises but livelihoods that require the utmost care and attention.
AEGIS specialises in comprehensive short-term commercial insurance solutions tailored to the unique nature of your business. Our clients have access to legal expertise in structuring insurance policies, legal support during the claims process, in-depth farm-level and agricultural industry insights, and top insurance providers. From safeguarding your assets with specialised coverage for buildings, machinery, and vehicles to offering expert advice and support in specialist areas like agriculture, aviation, and manufacturing, we ensure your business is protected against a wide range of risks. Our agricultural insurance covers property, crops, livestock, liability, business interruption, equipment breakdown, cyber, marine, trade credit, aviation/drones, and more. We also offer specialist coverage for commercial assets, group personal accident, commercial crime, and various liability products.
In the coming three months, AEGIS experts will provide insights on various topics, including agricultural sector trends, market dynamics and its impact on profitability, agricultural risks, innovative insurance solutions like parametric or index insurance, and self-insurance options and considerations.
To get more information on AEGIS, please visit our website at www.aegisrisk.io or get in touch with us via mail: This email address is being protected from spambots. You need JavaScript enabled to view it..
