INTRODUCTION Contributed by: Domicio dos Santos Neto and Frederico Favacho, Santos Neto Advogados
tal demands – especially in export-oriented production chains, with the creation of incentive mechanisms for producers, such as full traceability, less emission-inten- sive techniques, or qualification to operate in the car- bon 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 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 incen- tives and shaping risk allocation. Toolkits commonly include credit lines and guarantees, premium subsi- dies for insurance, fiscal signals and multi-year plan- ning frameworks. Some jurisdictions prioritise produc- tivity and infrastructure; others emphasise biodiversity, water stewardship or labour standards. Divergent definitions, supervisory mandates and approval pro- cesses 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 in order to meet domes- tic 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 solu- tions, 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. Con- sistent ESG implementation tends to raise productivity and open premium markets, provided targets, metrics and monitoring are transparent and verifiable. Outlook The agribusiness sector will still be under great pres- sure, from the increasing world population growth, the climatic emergency or geopolitics. Some important movements will happen in the coming 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 consoli- dation (or not) of the BRICS alliance, China’s invest- ments in Latin America, and Trump’s tariffs policy, among others. Several of these developments have already materialised and are reshaping the competi- tive landscape for agribusiness globally in ways that demand urgent attention from producers, investors and legal advisers alike. The paragraphs below examine the principal drivers: • the impact of armed conflicts on input costs and producer margins worldwide; • the new geopolitical architecture of trade agree- ments and the tensions it generates between mar- ket opening and unilateral regulatory action; • China’s structural pivot toward protein self-suffi- ciency and its consequences for global soybean flows; and • the emerging opportunities in the biofuels and bioinputs economy as the energy transition reshapes demand for agricultural commodities. The impact of armed conflicts The US–Iran war, the Strait of Hormuz crisis and the compression of agricultural margins worldwide The most immediate shock to the cost structure of global agribusiness in 2026 has come from an armed conflict far from most of the world’s principal farm- ing regions. On 28 February 2026, the United States and Israel launched co-ordinated military operations against Iran, triggering a closure of the Strait of Hor- muz that has constituted the largest disruption to global energy supply since the 1970s energy crisis.
6 A GRICULTURA L LAW 20 26
CHAMBERS.COM
Powered by FlippingBook