Kučinskis willing to pay farmers for dry spell losses

Take note – story published 6 years ago

Prime Minister Māris Kučinskis told Latvian Radio June 21 he was prepared in principle to pay cash to farmers as a result of a period of dry weather this spring and summer, if it would save them from bankruptcy.

Agriculture Minister Janis Dukļavs has been pushing for the move, after winning compensation for farmers last year after a period of heavy rainfall in summer, and the issue will be discussed today, Kučinskis said.

Duklavs wants a state of emergency declared - a move that sounds dramatic but is in effect just a way of getting access to special reserves of cash. A state of emergency has also been declared in the past for reasons of the spread of African swine fever in pigs, for example.

"If it is possible to help with an emergency and this would be the basis for the farmers to be able to at least normalize this year, not to have losses and be bankrupted in this situation, I think that this should be done," said Kučinskis.

The announcement of an emergency would allow "changing some approaches" for Structural Fund cash disbursement and collection, projects and loans. In his opinion, banks also need to be on board because it has been a difficult year for farmers.

Payments would not be compensation for missed profits, but financial assistance to prevent businesses going bust and to pay creditors, Kučinskis said.

"Our main purpose is to make sure farmers are still around next year and the year after that," Kučinskis said.

Though unstated by the PM, both his and Dūklavs' election popularity may also be at stake among the farming community that traditionally gives strong backing to the Greens and Farmers Union of which they are both members.

However, Kučinskis did point out that it would be helpful to promote insurance in agriculture to cover similar situations in future instead of declaring a state of emergency every six months. At present, a very small percentage of farmers are insured, so insurance premiums are high. He compared the situation with Compulsory Motor Third Party Liability Insurance (OCTA) for motorists, where fees are lower because everyone is insured.

May this year was characterized by almost unbroken sunshine and warm weather. While this has meant a boom for some industries, farmers have said it has dried up various crops and have been lobbying for financial assistance from government.

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