TABLE 17 State aid programs relevant for agricultural risk management in Latvia Million euros, 2014-2024

A substantial public subsidy, delivered primarily through the CAP framework, makes premiums more affordable. This premium support is the main agricultural risk management tool in Latvia and continues a tradition that preceded the EU risk management toolkit. Under the Rural Development Plan (Measure 17.1), the government reimburses 50-65 percent of farmers' insurance premiums. During 2014-2022, the implemented to spread limited budget funds further as more farmers sign up. Even at 50 percent, Latvia's continuing the insurance premium subsidies, Latvia has also earmarked funds under CAP 2023-2027 to explore new tools, such as a national disaster fund or mutual fund for catastrophic losses, allowed under Article 76 of the CAP. However, progress is slow because stakeholders have concerns about feasibility and there's low enthusiasm for mutual insurance mechanisms. In addition to premium subsidies, the government supports insurance via education and regula- tory measures. For instance, training programs in risk management are offered (CAP Measure M01) to raise awareness. The state also provides a legal framework for insurers to receive subsidy reimbursements efficiently. It also liaises with the Latvian Insurers' Association to refine products and definitions (e.g. what qualifies as “drought damage"), and to develop a comprehensive crop loss database. This responds to a farmers concern that risk definitions are ambiguous in policy terms, and to a call for a more transpar- instances include the 2017 floods, when torrential rain destroyed crops and the state paid EUR 18.4 million in 2017 from its emergency fund. Similarly, after the 2018 drought (one of the worst in decades), a relief package of about EUR 2.1 million was disbursed by late 2018 to crop and livestock farms. Earlier, in 2014- compensated for unsold produce. Another EU-funded market support came in 2016, when Latvian dairy farmers received EUR 9.3 million from an EU milk sector aid package. These one-off aids are smaller rel- ative to CAP flows, but vital for crisis recovery. By 2019, Latvia deliberately shifted away from routine ad-hoc bailouts. The agricultural contingency bud- fewer disaster payments - for example, no direct state compensation was paid for the moderate droughts of 2019 and 2021 (the government declined a 2021 drought payout), focusing on insurance claims instead.