Latvia still needs to explore options for creating a risk fund into which farmers would contribute to cover losses from natural disasters and other risks, Agriculture Minister Armands Krauze (ZZS) told the LETA news agency.
The minister noted that he had previously encouraged farmers to establish such a risk fund and still believes it is necessary.
He also stated that the European Commission (EC) has unofficially started expressing reluctance to compensate member state farmers for their losses year after year, and is gradually promoting the idea that countries should take responsibility for managing climate-related risks themselves, including by establishing risk funds.
“There are early indications that the EC wants member states to take responsibility and plan such risk funds,” said Krauze.
As previously reported by LETA, in response to the severe storm and heavy rains at the end of July last year, Krauze called on farmers to agree on the creation of a risk fund to improve resilience in the face of natural disasters and other risks. However, the matter was postponed at the end of November due to significant disagreements among farmers on how to finance the fund.
Guntis Gūtmanis, Chairman of the Board of the Council of Cooperation of Agricultural Organizations (LOSP), noted at the time that there was no consensus among farmers about who should contribute to the Risk Fund and how much the contributions should be. To be functional, the fund would require significant contributions.
According to Gūtmanis, there are two possible solutions: either each farmer contributes, for example, five euros per hectare per year – a proposal that farmers did not support – or the funds could be drawn from an EU support payment by reducing direct payments by five euros per hectare, but this option was also rejected by farmers.
He also pointed out that farmers had concerns about disrupting segments where insurance works well. Farmers who had insurance believed the risk fund was unnecessary, while those without access to insurance felt it was essential.
As reported, heavy rainfall in May this year caused flooding across Latvia, inundating fields and gardens and potentially destroying this year’s harvest. Additionally, spring frosts have caused severe losses to Latvian fruit growers.
Krauze has instructed experts from the Ministry of Agriculture (MoA), in cooperation with the Rural Support Service (RSS), the Latvian Rural Advisory and Training Centre (LLKC), and the State Plant Protection Service (VAAD), to assess the damage caused by the late-May rains and spring frosts in crops, vegetable fields, and orchards.
Following the damage assessment and calculation of losses, the Ministry of Agriculture will approach the European Commission with a proposal to provide emergency EU aid to Latvian farmers affected by the floods and frosts.