According to recent data, the government has compiled and approved a list of economic sectors requiring priority state support.
Food and agricultural machinery producers are included in the list of economic sectors deemed by the Russian government to require priority state support.
This means that these industries are currently in crisis, experts note, and without state assistance, they have little chance of overcoming it on their own.
The government is currently planning to begin monitoring the status of all industries included in the aforementioned list on an ongoing basis. The current situation will be discussed weekly at government commission meetings.
At the same time, regarding the production of Russian agricultural machinery, the Ministry of Industry and Trade expects demand for it to increase this year.
This should reverse the negative trend of last year, during which all key industry indicators were largely in decline.
This result should be achieved, in part, thanks to the state support measures provided to this industry.
Another factor driving potential growth is pent-up demand. This was likely due to the low volume of agricultural machinery purchases by agricultural enterprises over the past two years.
This may have been due to the high Central Bank of the Russian Federation interest rate, which made it nearly impossible to obtain affordable loans. Given its reduction, there’s a chance that the Russian agricultural machinery fleet will now begin to be updated and expanded.
However, the Central Bank interest rate remains high, experts note.
At the same time, the industry faces a new challenge: an increase in VAT, which further increases the cost of production.
Consequently, the final price of the equipment is also rising, which is not conducive to increased demand.
Under the current conditions, some manufacturers are already considering switching their businesses to a four-day workweek, as there’s no point in producing equipment in large quantities if there are difficulties selling it.
Nevertheless, despite all the difficulties that arise, domestic producers currently occupy the lion’s share of the Russian agricultural machinery market – approximately 57%.
The government plans to increase this figure in the future thanks to state support measures.
