Agribusiness 2025

Agribusiness in a Changing Global Economy

Challenges for agribusiness worldwide

In the current global scenario of growing climatic, geopolitical and economic challenges, the world is turning with concern to the issue of food security in its various fundamental aspects: availability, access, utilisation and stability.

Malnutrition is defined by the Food and Agriculture Organization as insufficient energy intake (calories) without regard to dietary quality or diversity, and has worsened in recent years in virtually all regions of the globe. Africa has the highest rates, especially in the sub-Saharan region, with more than 45% of the population being malnourished in certain areas. Asia presents a heterogeneous situation, with countries like China and Japan having considerably lower rates than India and Pakistan. Latin America and the Caribbean also present diversity, with countries like Mexico and Argentina having low incidences of malnutrition, in contrast to Haiti and Venezuela.

This insecurity has been exacerbated by the COVID-19 crisis and the escalation of regional conflicts such as the wars in Ukraine and the Middle East, which have displaced large numbers of people and destroyed important infrastructure resources, impacting food production and distribution.

Combating this situation means seeking greater food production at lower costs and ensuring access to it for an increasingly large portion of the world's population. However, this necessary effort faces an unexpected challenge: a process we can call “deglobalisation” stemming from a growing wave of neoprotectionism, a crisis of multilateralism, leading to a weakening of the role of the World Trade Organization, hindering the global integration of food chains, and resulting in higher costs for end consumers while reducing producers' profits.

According to data from the World Trade Organization, in 2022 approximately 10% of total global trade was affected by import restriction measures, a significant increase compared to the 0.9% recorded by the organisation in 2009. In 2025, these numbers are expected to be even more significant due to the new tariff policy imposed by the second Trump administration.

Neoprotectionism has also manifested itself in the form of non-tariff barriers, sometimes disguised as countries' concerns about environmental issues. These barriers are particularly evident in the case of GMOs. In some markets, such as China, the average time for the biosafety assessment process and approval of new varieties can exceed nine years, even when these technologies have already been extensively tested and approved in other countries. In contrast, in Brazil, the National Technical Commission on Biosafety (CTNBio) has an average approval time of approximately one year.

Despite these difficulties, the challenge of food security remains central as the global population continues to grow, and millions of people remain vulnerable.

With a particular focus on tropical agriculture, new technologies capable of increasing productivity are becoming indispensable. However, despite technological advances, the challenge of balancing sustainability and economic viability persists. Emerging environmental demands – especially in export-oriented production chains, with the creation of incentive mechanisms for producers, such as full traceability, less emission-intensive techniques, or qualification to operate in the carbon market – often impose high implementation costs and, without adequate market compensation, may only serve to create more pressure and lower income for producers while exacerbating regional inequalities.

Dealing with the challenges

As we have seen, growing demand, climate shocks and shifting trade patterns are redefining how agribusiness scales. Around the world, producers aim to decouple output growth from land expansion by investing in efficiency, better inputs and data-driven agronomy. At the same time, trade disruptions and logistical bottlenecks have encouraged supply chain diversification, exposing concentration risks in products and destinations that affect resilience and the cost of capital.

Therefore, public policies are key for setting incentives and shaping risk allocation. Toolkits commonly include credit lines and guarantees, premium subsidies for insurance, fiscal signals and multi-year planning frameworks. Some jurisdictions prioritise productivity and infrastructure; others emphasise biodiversity, water stewardship or labour standards. Divergent definitions, supervisory mandates and approval processes can create friction for cross-border operators, making early policy mapping essential to bankability.

Land use, environmental permitting and water rights have moved from backdrop to decisive investment variables. Projects increasingly need to evidence compliance and traceability to meet domestic rules and the expectations of trade partners and financiers. Ownership, tenure and access restrictions – particularly for non-residents – can affect feasibility, security packages and valuation. Water governance adds another layer: in many jurisdictions, allocation, quality and scarcity risks directly influence project design, operating costs and long-term resilience.

ESG considerations now shape market access and the cost of capital. Buyers and lenders seek auditable policies that connect production to nature-based solutions, lower emissions and credible social safeguards. Taxonomies, disclosure regimes and sustainability-linked covenants increasingly condition pricing and eligibility for transactions, while climate-related trade requirements can create de facto entry barriers. Consistent ESG implementation tends to raise productivity and open premium markets, provided targets, metrics and monitoring are transparent and verifiable.

Technology, data and the future of agribusiness

Agriculture is often perceived as a traditional, archaic activity, with farmers being attached to traditional and antiquated techniques. Nothing is more far from the truth. Not only have the agricultural techniques changed and improved in the past 50 years or so, but the machinery at the disposal of farmers has evolved to be absolutely technological to the point of operating within IoT ecosystems.

Digital tools are also redefining performance and compliance. Remote sensing supports monitoring, reporting and verification; data-driven agronomy improves input efficiency; and smart-contract logistics enhances traceability.

Tokenised receivables and embedded finance models may broaden access to credit for smaller producers, provided regulatory frameworks can accommodate digital evidence, consent and transfer. Ultimately, data governance and interoperability standards will determine the pace and scale of adoption.

It’s a brave new world for farmers and workers, with new specialisations, capabilities and skills, which are driving the interest of the new generations towards rural areas and farms.

The role of legal advisers

In this complex and challenging scenario, legal advisers must maintain a plethora of capacities to accommodate the needs of agribusiness stakeholders.

As institutional intermediaries in agribusiness finance, for instance, their analysis anchors eligibility, due diligence and documentation standards upon which investors and rating agencies rely. Opinions clarify definitions and enforceability; checklists and playbooks drive consistent execution across portfolios and time. In a market where definitions, pathways to permits and enforcement mechanics vary widely, early legal engagement often decides whether a structure is genuinely bankable.

In the area of litigation and dispute resolution, legal advisers are still essential. The mix between litigation and arbitration shapes predictability and price, especially in the international market. Where specialised forums, clear interim measures and reliable recognition of awards are available, perceived recovery risk tends to fall. Conversely, uncertainty around procedural timelines, priority or asset protection often leads to tighter covenants, additional credit enhancement or a migration toward simpler instruments.

Outlook

The agribusiness sector will still be under great pressure, from either the increasing world population growth, the climatic emergency or geopolitics. Some important movements will be happening in the next months and years that may shape the future, such as the entry into force of the European Union Deforestation Regulation, the EU-Mercosul Partnership Agreement, the consolidation (or not) of the BRICS alliance, China’s investments in Latin America, and Trump’s tariffs policy, among others.

The sector is moving toward clearer definitions, more transparent structures and measurable sustainability outcomes. Regulatory dialogue and targeted harmonisation can reduce friction while preserving policy objectives.

The market will continue to reward issuers who evidence compliance, manage data well and align incentives across the chain – pairing innovation with legal clarity to support food security and climate goals.