LATVIA: Over EUR 7 million paid to farmers for crop losses

26 October 2022 —
Although the summer of 2022 was the third warmest on record since 1924, the largest crop insurance claims from farmers were for rain and storm damage, mostly veld, rather than drought damage.

In general, insurers have paid out EUR 7.01 million for crop losses in the summer season of 2022, according to data collected by the Latvian Insurers Association (LAA) from 3 insurance companies-members that provide this service.

This year's compensations are significantly higher than in 2021, when they reached EUR 4.94 million. Last year, farmers received much more compensation for the losses caused by drought.

According to data provided by LAA members, 95% of compensation was paid out for the damage caused by rain and storm, and 5% - for the damage caused by hail.

"Insuring seeds and other agricultural crops is a good and promising direction that is of interest to both parties. For farmers, this is a good way of risk management, which allows them reduce losses and not ask the government for compensation after every natural disaster. On the other hand, it is good, as it means wide field of work for insurers", says Janis Abasins, president of LAA. As for the future, he pointed out two things. First of all, the wider use of technology in the operation of insurers - like a possibility of using satellite data in rural monitoring before insurance and loss settlement, as well as the use of drones in rural surveying, which is being actively studied. Second, from a policy-making point of view, it would be important not to reduce the state support for purchase of insurance policies, considering the general increase in costs, as this threatens ability of farmers to purchase policies, relegating it to a less important expenditure position that may pay off heavily in the future, as he explained.