Next Food Crisis . Why Credit Intelligence Will Determine Who Survives It.

The global food system is about to be tested again — and the institutions responsible for protecting the world's most vulnerable farmers are flying blind.

The Strait of Hormuz has been effectively closed since late February. Nearly two million tonnes of fertiliser are stuck behind a blockade that shows no signs of lifting. The blockaded region accounts for roughly 30% of globally traded fertiliser, 20% of liquefied natural gas — a key feedstock in fertiliser production — and 15% of global oil supply. Urea spot prices have surged over 30% since the conflict began. The FAO has warned that the window to prevent a full-scale food crisis is measured in weeks, not months.

Layered on top of this is a strengthening El Niño pattern that threatens to compound the supply shock with a climate shock. The last major El Niño, in 2023–24, brought the worst drought in a century to southern Africa. Crops failed. Thousands of livestock died. Over 30 million people required food assistance. The coming event will stack on top of accelerating global warming, intensifying droughts where farmers can least afford them and flooding where infrastructure is weakest.

The UN World Food Programme has warned that if the strait remains closed through mid-year, the 300 million people already struggling to feed themselves could be joined by another 45 million.

This is not a distant risk. It is happening now. And the question that governments, development agencies, and microfinance institutions across Asia and Africa should be asking is not whether the shock will arrive — it is whether they have the intelligence infrastructure to manage it when it does.

The Problem With Crisis Without Data

When a supply shock hits smallholder agriculture, the consequences cascade in a predictable sequence. Input prices rise. Farmers who cannot afford fertiliser at the new price either skip application — reducing yields — or borrow at punishing rates to buy it. Yields fall. Income falls. Loan repayments are missed. MFI portfolios deteriorate. Government subsidy programmes are overwhelmed. Development agency interventions arrive too late to prevent damage and too unfocused to target effectively.

Every step in this cascade is made worse by the same underlying problem: the institutions responsible for responding do not know which farmers are most at risk, which are most resilient, and which interventions will have the highest return.

A government trying to distribute emergency fertiliser subsidies faces a targeting problem. With millions of smallholder farmers, who should receive support first? The farmer who has been consistently productive and will generate the highest yield per kilogram of subsidised fertiliser? Or the farmer who is already in decline and needs humanitarian rather than agricultural support? Without systematic data on farmer behaviour and production history, every allocation decision is a guess.

An MFI managing an agricultural loan portfolio faces a different version of the same problem. When input costs spike and yields are expected to fall, which borrowers are likely to default? Which have demonstrated the kind of disciplined production management that suggests they will weather the shock? Which need loan restructuring now, before they are forced into informal borrowing that compounds their vulnerability? Without behavioural credit intelligence, MFIs cannot distinguish between borrowers who need forbearance and those who need acceleration — so they either tighten lending across the board, starving productive farmers of working capital at the worst possible moment, or maintain exposure blind, absorbing losses they could have mitigated.

A development agency deploying climate adaptation funds faces the same information vacuum. Which farming communities have the institutional capacity to adopt drought-resistant varieties? Which cooperatives have the production discipline to justify investment in irrigation infrastructure? Which regions will generate the highest food security return per dollar of adaptation spending? Without farmer-level performance data, programme design relies on demographic proxies and geographic averages — tools that are directionally useful but operationally imprecise.

What Changes When You Can See the Farmer

Credit intelligence changes the calculus at every level of crisis response.

When a government has access to systematic, behavioural data on farmer performance — production consistency, input usage patterns, cooperative participation, seasonal management discipline — it can target subsidies with precision. Emergency fertiliser does not go to every registered farmer equally. It goes first to the farmers whose production history suggests they will convert that input into the highest yield. That is not triage by wealth or political connection. It is triage by evidence.

When an MFI has credit scores built on actual farming behaviour, it can segment its portfolio before a crisis hits. Borrowers with strong production track records and high engagement scores can be offered bridge financing — additional working capital to purchase inputs at elevated prices, with repayment terms calibrated to expected harvest timing. Borrowers showing early signs of distress — declining activity, missed engagement milestones, deteriorating production metrics — can be flagged for early intervention rather than discovered at default. The portfolio is managed dynamically, not reactively.

When a development agency has farmer-level credit intelligence, it can design programmes that are both targeted and measurable. Climate adaptation investments can be directed to communities where behavioural data suggests the highest probability of adoption and the greatest production uplift. Programme outcomes can be tracked not through periodic surveys but through continuous scoring — a living measure of whether an intervention is working at the individual farmer level.

The Hormuz Crisis Is a Preview, Not an Exception

The fertiliser blockade and the approaching El Niño are not black swan events. They are the latest instances of a pattern that has become structural: geopolitical disruption, climate volatility, and commodity price shocks hitting smallholder agriculture with increasing frequency and compounding severity.

The 2022 Ukraine war demonstrated what happens when a breadbasket is disrupted. Fertiliser prices tripled. Food prices spiked. An estimated additional tens of millions of people were pushed into hunger — many of them farmers themselves. The Hormuz crisis demonstrates what happens when the inputs that make breadbaskets productive are disrupted. Both crises share a common feature: the countries and institutions that suffered most were those with the least visibility into their own farming populations.

This will keep happening. El Niño events will recur. Geopolitical shocks will recur. Commodity supply chains will be disrupted again. The question is whether the institutions that serve smallholder farmers — governments, development agencies, MFIs — will face the next crisis with the same information vacuum they face today, or whether they will have built the data infrastructure to respond with precision.

Where AGXL Fits

AGXL exists to close this gap. We build credit intelligence infrastructure — the OrganicCreditScore™ — that generates farmer-level creditworthiness and performance profiles from real farming behaviour across crop and livestock systems.

For governments facing acute input shocks, our platform enables evidence-based subsidy targeting — directing scarce resources to the farmers most likely to convert them into food security outcomes.

For MFIs managing agricultural portfolios through volatility, we provide the behavioural scoring that enables dynamic portfolio management — early warning, borrower segmentation, and crisis-calibrated lending decisions.

For development agencies deploying climate adaptation and food security funding, we provide the farmer-level data layer that makes programme targeting precise and programme outcomes measurable.

The Strait of Hormuz will eventually reopen. The El Niño will eventually subside. But the structural vulnerability of smallholder agriculture to supply and climate shocks will not resolve itself. The only durable response is better information — credit intelligence built from the ground up, farmer by farmer, season by season.

The next crisis is already here. The one after it is coming. The question is whether we will face it with data or without it.