LATVIA: only a third of the sowing area is insured in Latvia

7 February 2024 — Marina MAGNAVAL

In Latvia, only a third of the sowing area is currently insured. Although the amount of insured land increased last year, farmers are still very reluctant to insure their fields. In addition, the past year caused great losses to agriculture precisely because of weather conditions, wrote.

The market specialists note that state support for agroinsurance is unstable, and creation of an agricultural risk fund should be discussed. Last year, insurers could have paid around EUR 20 million to farmers for losses.​

"If there are around 900 thousand hectares of arable land in Latvia, then only about a third of them are insured. This is not only a question of an insurance offer, but also a question of the financial literacy of farms, how each farm plans its development and future operations", said Vita Baumane, head of seed insurance of grain cooperative "Latraps" at an international conference of representatives from the agricultural industry, held last week.

As one of the reasons for sluggish insurance activity, Juris Lazdins, the leader of "Zemnieku Saeima", mentioned the unstable and unpredictable state support for agoinsurance. Previously, the support was at 70%, now it is at 50%.

"The ideal option we see is that this program works open all year round, but at the moment it is not the case. This year, an additional EUR 10 million has been allocated to this program. This is good, but it is only one year, and for the year 2025 there is no such funding, and we don't know if there will be", said Juris Lazdins.

On the other hand, the Minister of Agriculture Armands Krauze emphasized the importance of creation of a risk fund.

Data from the Association of Latvian Insurers show that in 2022, EUR 9 million were paid to farmers for losses, while last year, EUR 16 million were already paid in just 8 months. The head of the association, Janis Abasins, stated: "There is some progress. If you look at five or seven years ago, around 10% of the sowing area was insured, now it is already a third, but, of course, we would like this number to be even higher”, he said.