Academy (Kaunas district). Although farmers can insure their crops against most risks, there is no way to do so due to the unpredictable agricultural policy, says the chairman of the Lithuanian Agricultural Council (LŽŪT), chairman of the Radviliškis Region Farmers’ Union and farmer Ignas Hofmanas.
“Unfortunately, a big risk that we cannot hedge against today is the unpredictable agricultural policy. I would like it to be predictable and not cause harm to farmers”, I. Hofman shared these thoughts during the seminar “Crop insurance – an important instrument of sustainable development” held at the exhibition “Ką pasėsi… 2024”.
As a result, according to him, farmers should insure at least what they can – their crops. Because sometimes it can almost completely minimize losses or even help to avoid them.
“Several farmers in my district have suffered damage due to hail. After receiving insurance payments and harvesting the rest of the crop, about 30-40 percent, they calculated that they received almost as much as they would have earned if they had successfully harvested the crop,” said I. Hofman.
The farmer himself has been withholding crops since the fall of 2020. That year there was a very poor harvest of summer crops, it was clear that the seeds of these plants would become more expensive in the spring, so after assessing this risk, he decided to insure himself.
“So that if it freezes, after receiving insurance compensation, I could at least sow the fields without additional costs,” explained I. Hofman, adding that in four years his farm did not suffer any major damage, there were several frosts that damaged up to 30 hectares in total.
However, not everyone is so lucky. The farmer said that last year in the Radviliškis district, according to farmers’ calculations, about 12 thousand trees were destroyed due to the drought. ha of crops.
Other examples prove that cataclysms are only increasing. Last year, due to the prevailing drought, the employees of the Lithuanian branch of the German crop mutual insurance fund “Vereinigte Hagel” VH Lietuva had to inspect and evaluate as many as 93 thousand. ha of fields, mostly in Central Lithuania.
According to the head of the branch’s administration, Martynos Rusteikas, in 2023, the mutual insurance fund received more than 45 thousand people throughout Europe. reports on one or another loss. And this number is constantly growing.
Last year, all 8 prohibited risks occurred in the Baltic States. Hail alone hit 58,000 people. ha area. “We are only talking about those who are insured. And how many more losses were suffered by those who did not insure their crops”, wondered M. Rusteika.
Crop insurance is an instrument of sustainable development
Crop insurance can definitely be called an instrument of sustainable development. “When we talk about sustainable development, we have three areas: economic, social and environmental. From the farmer’s side, we are talking about financial resources, without which it would be difficult for him to implement social and environmental goals. And the farmer in the region is not only a resident, but also, probably, a community leader, the biggest sponsor of events and an employer.
Last year, when the hailstorm passed, I introduced myself to the mayor of Joniškis as the biggest investor in Joniškis – last year we invested more than 6 million in Joniškis. euros. I’m talking about big insurance payouts. So Joniškis would be the same Sahara without agriculture. When we talk about regional politics, we perfectly understand what farmers mean,” said M. Rusteika.
The greatest contribution of crop insurance to the implementation of sustainable development goals is climate change management. By withholding crops, farmers protect themselves from the effects of climate change.
According to I. Hofman, the fact that the ban helps to adapt to climate change is almost the most important thing: “All strategic documents, even the National Climate Change Management Agenda, state that it is important not only to reduce climate change, but also to adapt to it.” So, when it comes to agriculture, insurance is almost the main tool.”
The popularity is due to reimbursement of premiums
M. Rusteika presented brief statistics: in Europe, the crop insurance system works best in Germany, Holland, Austria, Spain, globally – in Japan, Thailand. Nevertheless, China and India are the main insurance contributors, as they contribute so much to the crop insurance systemboth at the municipal and municipal levels.
“The experience of foreign countries shows that the greatest success of insurance is determined by public support provided through insurance premium subsidies. If there were some forms that would work better, they would have been found by now. However, there are none,” said the head of the branch’s administration.
And here I. Hofman remembered the times when the concept of “crop insurance” did not really exist and, when natural phenomena struck, farmers turned to the authorities, asking the Ministry of Agriculture to compensate for the damage suffered.
“The state took the right path when it introduced the ban. This took some of the burden off his shoulders. (…) They say – there is insurance, we reimburse part of the premiums, please take insurance. If you are not insured, you have to take the risks yourself and the state will not save you.
I’d say it’s not a bad strategy at all, but it’s a shame that sometimes there are rumors that such compensation may not be available. Let’s admit that 50-70 percent compensation of premiums is a big help for farmers”, said the farmer and added that crop insurance would probably not be so popular if farmers had to pay for it only out of their own pockets.
“Vice-minister, be our guarantor, at least for this day, that the compensation will remain in the future,” I. Hofmanas addressed Vice-minister Vytenės Tomkės.
The vice-minister assured that he is in favor of banning crops and simplifying this process: “We are glad that the trend is increasing. (…) The amount of money may not always be planned as much as needed, but we try to increase the funds and make their use as simple as possible.”
And that preparation and submission of documents in order to take advantage of support for crop insurance has become a real headache for farmers, M. Rusteiki, I. Hofmanas and other farmers who participated in the seminar testified.
More funds are allocated in Lithuania every year
According to Regina Voverytė-Šimiekė, head of the Department of Crop Production and Green Technologies of the Ministry of Agriculture (ŽŪM), crop insurance premiums have been compensated for ten years in our country.
Both the state and the EU (initially, when this instrument was created, only national funds were allocated), the total amount of support paid out in 2014-2023 amounts to 50.26 million. EUR, of which 28.56 million Eur amounted to Lithuania, 21.73 million. Eur – EU funds.
This year, it is planned to allocate 5.86 million from Lithuanian funds to compensate crop insurance premiums. euros. 2025 and 2026 the amounts are even higher – 6.446 and 7.091 million, respectively. euros.
As for the Strategic Plan, in it 2024-2027 11.95 mln. euros. This amount includes animal insurance premiums, but, according to the ŽűM representative, this measure is not very popular – up to 500,000 is paid out per year. EUR support.
R. Voverytė-Šimiekė stated that she understands that such amounts are perhaps too small, but assured that redistribution and adjustment of funds is definitely possible.
“According to the Strategic Plan, the intensity of support is up to 70 percent. A lot of passions are caused by the provision of the rules that support can be reduced if more applications are collected than allocated for the call for funds. However, until now (…) this provision has not been used, because funds are always added to compensate all those who apply for support up to 70 percent”, added the representative of the Ministry of Agriculture.
Author: Eulalija Jonuškiene
Tags: farm Crop insurance political decisions remain uninsurable risk
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