ESTIMATING AGRICULTURAL DAMAGE IN POLAND AMID GROWINGCLIMATE RISKS: TRADITIONAL, INSURANCE-BASED, AND TECHNOLOGICALMETHODS

Abstract

Agriculture is one of those sectors of the economy where the risk of
conducting business is particularly strongly linked to the impact of natural, climatic, and biological factors. Unlike many other sectors, where the entrepreneur can largely control the production process, agricultural production remains dependent on weather conditions, soil quality, water availability, the course of the growing season, the occurrence of plant and animal diseases, and pressure from game animals. For this reason, damage in agriculture should not be equated solely with the physical destruction of a specific asset, but also with the loss of expected production output, a decline in crop quality, a reduction in farm income, or the necessity of incurring additional expenses to restore production to a state that allows for its
continuation (Lipińska, 2014).

The problem of estimating agricultural damage takes on particular significance amid the increasing frequency and intensity of adverse weather events. Drought, hail, flooding, spring frosts, torrential rains, hurricanes, or the adverse effects of overwintering can lead to
losses of a highly varied nature, ranging from local damage, limited to a single farm or plantation, to mass events affecting significant areas of agricultural production. The literature emphasises that climate risks are among the primary categories of threats on farms, and their 2
significance is growing as weather conditions change and crop production becomes more variable (Czekaj, 2016). A specific example of this type of risk is the adverse effects of overwintering, which may not become apparent until the start of the next growing season, making it difficult to unequivocally determine the moment the damage occurred and its actual
extent (Gawrońska, 2014).

Accurate determination of the extent of the damage is of fundamental importance for both the agricultural producer and the entities involved in the loss compensation process. For the farmer, the outcome of the assessment determines the amount of compensation due, the
possibility of obtaining public aid, the ability to maintain financial liquidity, and the ability to continue production in the next season. For an insurance company, an accurate assessment of damage is a prerequisite for maintaining a balance between the protective function of insurance
and the economic stability of its portfolio. For public administration and aid agencies, however, it serves as the basis for rationally directing funds to those farms that have actually suffered losses requiring support. In this sense, agricultural damage assessment is not only technical
but also economic, legal, and social

The traditional model of damage assessment is based primarily on reporting the damage, conducting an on-site inspection, determining the area affected by the loss, assessing the extent of crop damage, and preparing documentation that serves as the basis for payment
of compensation or another form of compensation. This type of procedure remains particularly important in cases of individual and localized damage, especially wildlife damage, where it is necessary to establish a link between the animals’ actions and the specific damage to the crop (Flis, 2019). At the same time, the practice of assessing damage caused by animals to
agricultural crops shows that this process can give rise to numerous disputes regarding the timing of the damage report, the extent of the damage, the amount of the potential harvest, and the liability of the entity obligated to pay compensation (Flis, 2019).

A separate but closely related issue to damage assessment is the functioning of agricultural insurance. Crop and livestock insurance constitute one of the fundamental tools for mitigating the effects of production risks on farms; however, their effectiveness depends on
the scope of coverage, the affordability of premiums, the level of public subsidies, the structure of the contract, and the method of claims settlement (Kozak & Weremczuk, 2019). In the Polish context, subsidized insurance plays a significant role, as it is intended to increase the prevalence of insurance coverage in agriculture; however, the literature indicates that this system continues to face barriers related, among other things, to limited coverage, the problem of drought risk, and insufficient interest among some agricultural producers (Janowicz-Lomott & 3 Łyskawa, 2016). This means that the mere existence of an insurance system does not eliminate the problem of damage assessment; on the contrary, it makes the quality of this process a condition for the effectiveness of the entire loss compensation mechanism.

In recent years, increasing attention has been paid to the potential to supplement traditional damage assessment methods with index-based and technological approaches. Index-based insurance, especially with regard to drought, is based on the assumption that the payment of benefits can be linked to a specific parameter, such as precipitation levels,
temperature, soil moisture, or another indicator reflecting production conditions, rather than an individual assessment of damage on each farm (Kaczała & Łyskawa, 2012). This approach can reduce claims-settlement costs, accelerate benefit payments, and minimise disputes, though
it also raises the issue of basis risk—that is, the discrepancy between the index value and the actual loss incurred by a specific farmer (Kaczała, 2017). At the same time, methods that utilize drones, satellite imagery, vegetation indices, and geographic information systems are being developed, enabling more objective and faster assessment of losses across large areas
(Iwahashi et al., 2023). Equally important are solutions utilizing radar and optical data as well as spatial analysis tools in the assessment of flood damage in agriculture (Nazir et al., 2025).

The aim of this article is to present and evaluate selected methods for estimating agricultural damage in Poland, with particular emphasis on crop damage, hunting damage, the crop insurance system, and the potential for using modern index-based and remote sensing tools. This objective stems from the need to view damage assessment not as a single technical
activity, but as a complex decision-making process in which the interests of farmers, insurers, public administration, and institutions responsible for agricultural risk management intersect.

The main research problem of the article can be formulated as a question: are traditional methods of agricultural damage assessment sufficient in the context of the growing scale of climate risks, or do they need to be supplemented with index-based, digital, and remote sensing methods? The thesis adopted is that reliable estimation of agricultural damage is a
prerequisite for fair compensation for losses, the effective functioning of agricultural insurance, and the rational allocation of public aid; however, in the context of increasing climate risks, traditional visual inspection methods should be supplemented with index-based and technological solutions.

The article employs a literature review, a regulatory-institutional analysis, and a comparative method. The literature review helps clarify the concept of agricultural damage, the types of risk, and the basic mechanisms for loss compensation. The regulatory and institutional analysis facilitates a discussion of the importance of agricultural insurance and 4 damage assessment procedures, while the comparative method contrasts the traditional visual inspection model with index-based and technological solutions. The structure of the article follows this framework: the first part discusses the concept, types, and causes of agricultural damage; the second presents traditional and insurance-based methods for estimating such damage; and the third identifies practical problems and modern trends in the development of the loss assessment system.