Modern age risks reshape rapidly evolving agricultural landscape

South Africa’s agricultural sector is under growing pressure to produce more food with fewer resources, rising input costs, infrastructure strain, and climate volatility reshaping the risk commercial farming landscape.

According to Ryno de Kock, Head of Distribution at PSG Insure, as margins tighten and operational buffers shrink, farming businesses are becoming increasingly exposed to production, financial and market vulnerabilities. “Pushing land and water resources to their productive limits also strips away the natural buffers that once gave operations room to withstand disruption. Unpredictable events such as drought, flooding or pest outbreaks compound the risks and impact,” says de Kock.

Technology improves efficiency, but introduces new risks
Maintaining yields on increasingly depleted soils forces a heavy reliance on precision agriculture technologies such as drone surveillance, automated irrigation systems, GPS-guided machinery and cloud-based farm management platforms. While these technologies improve oversight and operational efficiency, they also introduce an emerging category of risk exposure.

“Systems that rely heavily on connectivity are vulnerable to network outages, hardware failures and software errors. Of greater concern is the escalating threat of deliberate cyberattacks. Agricultural operations are being increasingly targeted given that digital integration in our current times has increased while cyber defences in the sector have often lagged,” de Kock explains.

The consequences of a cyber incident or system failure on a modern farm extend well beyond the loss of data or temporary loss of connectivity. “A compromised automated feeding or watering system, for example, could place livestock welfare at risk within hours. Likewise, disruptions to cold-storage facilities or logistics systems may compromise food safety, create liability exposure and result in significant financial loss.” he says.

According to de Kock, as farming operations become more technologically sophisticated, cyber risk on farms is no longer theoretical; it is an operational exposure that warrants the same considered attention as any other insurable risk.

Climate and people-related risks continue to intensify
For South African farmers, the effects of climate change are not a matter of future projection; they are a present operational reality. Prolonged droughts, unpredictable rainfall patterns, extreme heat and storms are already affecting day-to-day operations and worker safety.

In addition, farm workers performing physically demanding outdoor tasks during periods of extreme heat face health risks, while flooding can cut off access roads and delay emergency response times. Storm damage to worker accommodation can also create immediate welfare obligations for farm owners.

“Importantly, the duty of care extends beyond productivity. Where workers are harmed by conditions that a reasonable employer should have foreseen and mitigated, farm owners may face legal and financial exposure,” says de Kock.

Extreme weather events can also create broader third-party liability risks. Fires may spread rapidly to neighbouring farms, while flooding can damage shared infrastructure or contaminate communal water sources. In these situations, a single incident can trigger extensive liability claims involving neighbouring landowners, local communities or public infrastructure.

Why specialised cover matters
Given the complexity of today’s agricultural risk environment, generic insurance solutions are rarely sufficient. A properly structured agricultural insurance portfolio should be layered to address the full range of exposures facing modern farming businesses.

Property and asset cover forms the foundation, protecting crops, livestock, machinery and infrastructure against risks such as fire, theft, storm damage and accidental loss. Employers’ liability and workers’ compensation cover remain essential in labour-intensive environments, while public and product liability insurance can protect against third-party claims arising from farm operations or produce entering the market.

For farms using precision agriculture technologies, cyber liability insurance has become crucial. “Business interruption cover also plays a critical role by helping farmers to meet their financial obligations during periods of enforced downtime caused by insurable events,” says de Kock.

Insurers are also paying closer attention to Environmental, Social and Governance (ESG) considerations when assessing agricultural risk. Farms that demonstrate responsible environmental stewardship, strong labour practices and sound governance are increasingly viewed as lower-risk operations.

In a rapidly evolving agricultural landscape, working with an adviser who understands the sector is critical. “A solution tailored to the specific nature, scale and operational realities of the farming business will always provide more meaningful protection than a generic policy that fails to account for the complexity of modern agricultural risks,” he concludes.