The provisional losses caused to Latvian farmers by this summer's prolonged drought amount to 359 million euros, a figure the Ministry of Agriculture (ZM) officially communicated to the European Commission (EC) on Wednesday, 22 August, according to the ZM.
The scale of the losses will be clarified in the autumn. The EC had requested all European Union member states to submit information by 30 August regarding the current situation and the overall impact of the drought on production.
Due to the prolonged drought this spring and early summer, grassland development was delayed across the entirety of Latvia, the ZM noted. Farms have completed their first cuts, with yields across the country averaging 54% lower than the last three years. Furthermore, additional costs are being incurred as reduced green mass yields necessitate repeated cuttings until the autumn, and the low grass yields require much larger areas to be harvested.
The ZM explained that additional costs are associated with supplemental fertilizer for grasslands to stimulate growth for subsequent cuts. Furthermore, because of the need to perform repeated cuts over larger areas than in previous years, extra costs are arising from fuel purchases, machinery maintenance, and labour. Normally, Latvian farmers prepare fodder on-site, but this year they will be forced to purchase at least a third of their required fodder on the market. It should be noted that fodder purchase prices have more than doubled this year compared to standard market equilibrium, leading to a significant increase in additional costs.
Consequently, the ZM projects that the impact of the prolonged drought will bring the additional costs of fodder preparation and purchase in Latvia to 100.5 million euros this year, or 80% more than the average of the previous three years.
The ZM forecasts that the drought-related decline in revenue from cereal and rapeseed sales this year could reach 137.2 million euros, or 27% compared to the average revenue volume of the previous three years.
“Even the increase in export prices for grain and rapeseed this year cannot compensate for the drop in revenue caused by lower harvests, changes in crop patterns, and the forced necessity of sowing lower-yielding crops. It should be noted that this year's farmer income is also affected by the need to adjust sowing structures due to last year's excessively wet conditions in the autumn, which prevented the planting of planned winter crop areas,” the ZM indicated.
The Ministry forecasts that the impact of the drought on revenue from fruit, berry, vegetable, and potato sales could reach 28.4 million euros this year, or 44% compared to the average revenue of the previous three years. Following last year's spring frosts and heavy autumn rains, Latvian fruit growers suffered significant losses that repeatedly reduced planned yields, while the cold and wet summer of 2017 hampered the normal formation of flower buds for the following year's crop.
In forestry, forest fires caused by the prolonged drought, as well as dead young stands, account for total losses of 92.9 million euros.
The ZM reported that it is currently impossible to precisely state the number of affected farms, as the impact varies significantly between regions and at the individual farm level.