In agriculture

€1 Billion in Drought Damage to Agriculture

The ongoing drought has caused record-breaking damage to the Austrian agricultural sector.(Bild: Österreichische Hagelversicherung)

As the Austrian Hail Insurance Company announced on Monday morning, the extreme heat waves and the ongoing drought have caused record-breaking damage. Nationwide, the total damage is estimated at one billion euros! The hail insurance company covers 400 million euros of this amount.

The catastrophic drought damage is leading to massive crop losses and a shortage of feed for livestock. Across all federal states, there have been massive precipitation deficits in recent weeks and months. In some regions, precipitation since June 15 has been more than 75 percent below the ten-year average (2016–2025). Added to this are an unprecedented number of hot days (days with temperatures above 30 degrees): 42 hot days as of the cutoff date of August 10, measured in downtown Vienna.

One billion euros in total damage
Due to these record figures, drought damage is at an all-time high: total damage to agriculture amounts to one billion euros. The entire country is affected, as are all crops—particularly pastureland, corn, potatoes, sugar beets, pumpkins, and soybeans—as well as grains in certain regions.

Whereas drought damage used to occur once every ten years, we are now faced with major damage every two to three years—with a sad record set this year. This shows us that agriculture is affected by climate change more than any other sector. If the high temperatures persist through the end of August and rainfall fails to materialize, the extent of the damage will increase even more significantly.

Insured farmers have a legal right to compensation
The good news is: Farmers have taken extensive precautions against risk. 80 percent of arable land and 40 percent of grassland are insured against the risk of drought. Insured farms therefore have a legal right to compensation,” said Dr. Kurt Weinberger, CEO of Österreichische Hagelversicherung, in his opening remarks at a joint press conference with Prof. Dr. Anders Levermann, head of the Complexity Research Department at the Potsdam Institute for Climate Impact Research.

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A Threat to Society and the Economy
“The physical fundamentals have long been known and confirmed by countless studies: Climate change is man-made. What is often underestimated, however, is the dynamic that still lies ahead of us. The climate system does not respond linearly—extreme weather events are increasing dramatically, and there are also critical thresholds. Once these are crossed, processes are triggered that can no longer be reversed,” according to the Austrian Hail Insurance Company.

Heat waves like the one this year are expected to occur more frequently in the future
Some of these thresholds have already been crossed. This means that heat waves like the ones we’re experiencing this year will occur with increasing frequency in the future. However, this does not mean that affected systems—such as melting glaciers or thawing permafrost—will collapse immediately. These processes will unfold over decades, which means we will live through a period of increasing instability for several generations, with more extreme weather events and greater fluctuations than we have been accustomed to so far.

That is why we must act now, and not wait until further tipping points have been crossed.

Anders Levermann vom Potsdam-Institut für Klimafolgenforschung

“That is why we must act now, and not wait until further tipping points have been crossed. Climate protection is directly linked to security of supply, competitiveness, and geopolitical independence. The economic costs of inaction are enormous; they far exceed the costs of a consistent transition. We must finally take this seriously,” said expert Anders Levermann of the Potsdam Institute for Climate Impact Research.

Drought Dominates Damage Assessment: Insured farms have a legal right to compensation—damages are leading to a decline in self-sufficiency “From today’s perspective, the total damage to Austrian agriculture due to the drought stands at one billion euros, with an additional 80 million euros resulting from frost, hail, storms, and flooding,” said Weinberger regarding the current damage assessment. “We pay out quickly. We are a reliable partner,” emphasized Weinberger. The company has 36 reinsurance policies worldwide.

He continued: “These figures clearly illustrate three things: No other economic sector is as vulnerable as location-dependent agriculture, with its open-air ‘workshop.’ About 80 percent of the yield depends directly on the weather. Many farms are massively threatened by human-induced climate change. The constant worry about their livelihood places an enormous psychological strain on the affected farmers.

Hail Insurance Assessment Forms Basis for Aid Package
According to Agriculture Minister Norbert Totschnig (ÖVP), the hail insurance assessment of drought damage is “a key basis” for further decisions by the federal government and the states regarding the planned aid package for farmers. On Monday afternoon, Totschnig will host a roundtable discussion to discuss next steps