Various climate-related risks, such as spring frost, drought, rains, and hail, have caused increasing losses to farms. Vita Baumane, head of farmland insurance at the grain Co-op Latraps, said that currently only 30% of the areas are insured in Latvia:
"If there are approximately 900 thousand hectares of sowing areas in Latvia, only a third of them are insured. This is not just a question of insurance supply, but also of financial literacy of farms, how each farm plans its development and future operations."
Juris Lazdiņš of the Farmers' Saeima referred to last year as the year of adaptation. According to the farmers' organization, grain yields were 20-30% lower last year.
Lazdiņš cited the unstable and unpredictable state support for insurance policies as one of the reasons for the sluggish insurance activity. Previously, the aid intensity was 70%, currently 50%.
Meanwhile Agriculture Minister Armands Krauze (Union of Greens and Farmers) to participants of the conference that it is also necessary to revisit the discussion on the establishment of the Agricultural Risk Fund:
“It's impossible for the country to support different industries all the time and in most cases insurance works and I see that's how it has to stay, too, but we need to think more about those areas where insurance is very difficult or actually not working in reality - fruit farming, vegetable farming, grassland and maize.
“And here, very seriously, we have to go back to the historic discussion of setting up a risk fund - a national mutual fund that both farmers themselves and we could also use for the administration of European funding. But we need a background that helps farmers where insurance companies will never go or very rarely get involved right now. ”
Data from the Latvian Association of Insurers shows that in 2022 altogether EUR 9 million was paid to farmers for losses on sowing and plantings, while last year in only 8 months EUR 16 million was paid.
Association chief Jānis Abāšins said last year's total statistics are still coming, however, he believes as much as EUR 20 million may have been paid in reimbursements for the whole year: “There's some progress. If you look five or seven years ago, around 10% of the area was insured, it's now about 30%, but of course, you'd like that figure to be even higher [..].”
The association estimates that areas insured rose to 350 thousand hectares last year, up 100 thousand hectares from a year earlier.
