The rising cost of storms and what it means for South African farmers

Recent severe weather events across South Africa have once again highlighted the agricultural sector's growing exposure to climate-related risks.

While hail has historically been one of the most visible threats, farmers are increasingly facing a combination of hazards, including strong winds, heavy rainfall, localised flooding, and unseasonal weather patterns, often within the same production cycle.

This shift is not only increasing the frequency of losses but also their complexity. During the 2025/26 season alone, Santam recorded insured crop losses exceeding R1 billion, reflecting one of the most active claims environments in over a decade. In the previous season, hail-related claims alone reached approximately R170 million, illustrating the continued severity of individual events within a broader pattern of increasing climate volatility.

For farmers, these events are not isolated disruptions. They form part of a changing risk landscape where historical weather patterns are no longer reliable predictors of future outcomes. The system is becoming more volatile, not only in intensity but in timing and overlap. As a result, climate risk is no longer a seasonal consideration; it is now embedded in day-to-day operational and financial decision-making.

The impact of these events extends beyond direct crop losses. Damage to infrastructure such as irrigation systems, netting, packhouses, and access roads can disrupt production cycles and delay harvesting and distribution. In high-value horticultural sectors, even minor cosmetic damage from hail or wind can downgrade produce, reducing market value, export revenues, and profitability.

These disruptions ripple throughout the agricultural value chain. Reduced volumes can leave packhouses operating below capacity, affecting employment and efficiency. At the same time, damaged infrastructure and logistical bottlenecks place additional strain on already pressured supply chains. Over time, this contributes to increased price volatility and broader food security concerns, particularly for lower-income households.

While regions such as the Highveld and Eastern Free State have traditionally been associated with hail risk, recent weather patterns suggest that risk is becoming less predictable and more geographically dispersed. Areas not typically considered high-risk are experiencing more frequent severe weather events, while established hotspots are seeing changes in intensity and timing.

At the same time, there is growing evidence that climate variability is affecting the timing of key agricultural seasons. Farmers are increasingly experiencing extreme weather events outside of traditional windows, with potentially severe consequences for crops at critical growth stages. For example, maize remains highly vulnerable during flowering and pollination, when a single storm can significantly reduce yields or cause complete crop failure.

In response to these challenges, farmers are adapting their operations in several ways. Many are investing in improved water management systems, protective infrastructure such as hail nets, and precision agriculture technologies that allow for more responsive decision-making. Tools such as satellite monitoring and soil moisture tracking are enabling farmers to manage risk at the field level better, while seasonal forecasts and early warning systems are helping improve preparedness.

However, adaptation comes at a cost. Rising input prices, infrastructure investments, and the need for ongoing technological upgrades are placing increasing financial pressure on farming operations. When combined with repeated weather-related losses, this can significantly constrain cash flow and limit the ability to reinvest in future production.

In this environment, crop insurance plays a critical role. Beyond providing financial protection after an event, it enables farmers to recover, maintain production continuity, and access financing. By transferring a portion of the risk to a broader pool, insurance helps stabilise the agricultural system and supports long-term sustainability.

Despite its value, there are still misconceptions around agricultural insurance. Some view it as unaffordable or unreliable, while others underestimate the importance of compliance with policy requirements. In reality, many delays in claims settlement are due to incomplete documentation, late reporting, or deviations from agreed production practices. Working closely with brokers and maintaining accurate records for example can significantly improve outcomes.

As climate volatility intensifies, the role of risk management in agriculture will continue to evolve. Farmers are no longer optimising for stable, predictable seasons, but rather building systems that can withstand repeated disruption. This requires a combination of operational adaptation, technological investment, and financial resilience.

Insurance will increasingly form part of this broader resilience strategy - not as a standalone solution, but as an enabler of recovery and continued investment.

Santam Agri Crop's national footprint and technical expertise continue to support farmers across the country through these increasingly complex conditions. In an environment where climate risk is now a constant, the ability to recover is just as important as the ability to produce.

Santam is an authorised financial services provider (FSP 3416), a licensed non-life insurer and controlling company for its group companies.