El Niño could cost global economy up to $11 trillion, warns IFAD

The El Niño extreme weather pattern could cost the global economy up to $11 trillion and seriously impact food security, the International Fund for Agricultural Development (IFAD) warned on Monday, 9 November 2026, according to UN News. The new IFAD report identifies El Niño as one of several overlapping climate and economic shocks affecting small-scale food producers and rural economies. It warns that agricultural disruptions can ripple through the wider economy. The findings were released at COP31 together with Türkiye’s Ministry of Agriculture and Forestry. The report highlights long-lasting consequences for food security and rural livelihoods.

In 2026 alone, global energy and fertiliser shocks drove up costs across food systems within a single planting season. The impact was felt from production and processing to transport and distribution. The report frames El Niño within a context of overlapping shocks hitting rural economies. Small-scale food producers are described as particularly exposed. Rural livelihoods are flagged as a key concern.

To strengthen rural economies’ resilience, the report calls for bundled investments that help farmers access markets, agricultural inputs, technologies, and financial services, including credit and weather insurance. IFAD modelling shows that combining these measures is nearly twice as effective at protecting farm incomes when drought and price shocks strike simultaneously. Financial support alone, such as insurance, reduces farm-income losses by 9.8 per cent. Combining investments in inputs, markets and finance cuts losses by 18.7 per cent. The approach is presented as a comprehensive protection strategy.

“Resilience is not built by investing in single interventions, but by connecting investments in inputs, markets and finance so that gains in one area are not lost in another,” said Alvaro Lario, President of the International Fund for Agricultural Development.

The statement underscores the report’s central recommendation. It frames resilience as a connected system rather than isolated actions. Lario’s remarks accompany the data released at COP31. The quote reinforces IFAD’s call for integrated investment.

The report positions bundled investment as a pathway to shield rural incomes from compounding climate and economic shocks. It links agricultural disruption directly to wider economic risks. IFAD’s modelling provides the evidence base for its recommendations. The findings were presented jointly with Türkiye’s Ministry of Agriculture and Forestry. The conclusions aim to inform discussions on food systems resilience at COP31.