Agricultural producers are expected to receive approximately 34 billion rubles from the Russian government in the near future.
Russian Prime Minister Mikhail Mishustin recently promised to finance the allocation of another 34 billion rubles in subsidized loans for farmers.
He believes this is necessary to help the industry become more technologically advanced, in accordance with the president’s instructions.
«One of the most important tools for achieving this goal is subsidized lending to agricultural producers.
This allows them to take out loans for both short terms, including for seasonal fieldwork, and longer periods for large investment projects,» the prime minister noted.
The allocated funds are expected to subsidize nearly 40,000 loans, a very significant amount for this industry. These funds will be used, among other things, for the production and processing of agricultural products, as well as the manufacture of medicines for animals and poultry.
The allocation of new funds to finance subsidized loans proved necessary due to the high demand for this instrument among agricultural producers.
As a result, the allocated funds are being used quite quickly.
According to the Ministry of Agriculture, as of October 28, the remaining funds available for subsidizing subsidized loans amounted to only 4 billion rubles. This effectively meant that this type of support would soon cease, and farmers would have to take out loans on market terms.
Currently, given the Central Bank’s interest rate at 16.5%, these loans are significantly less favorable and simply unaffordable for many companies.
For this reason, experts note, continuing subsidized lending is vital to ensure that companies can continue their operations without reducing production volumes, leaving the market, or raising prices for final products for consumers.
Central Bank of Russia Governor Elvira Nabiullina recently stated that the agricultural sector has a total of 5.4 trillion rubles in outstanding loans.
This, in her opinion, is a good sign: banks are willing to lend to companies in this industry due to their strong payment discipline and the very low percentage of problem loans in this sector.
At the same time, a significant portion of such borrowings are concessional loans. Therefore, experts believe that for the industry’s further development, their funding must be maintained and even increased.
