The Ministry of Agriculture has drafted a bill that, if adopted, could change the rules for providing preferential loans.
Agriculturalists are not particularly happy about the changes that could occur in the foreseeable future, experts say.
According to the document, currently submitted for public discussion, most investment projects will be eligible for reimbursement of only half of the Bank of Russia’s key interest rate.
Full compensation will be retained only for a narrow segment—producers of specialized therapeutic nutrition. Most other sectors of the agricultural sector will be subsidized under the new rules.
In particular, this includes the construction and reconstruction of breeding and genetic centers, seed production facilities, livestock farms, feed additive production facilities, as well as dairy farming projects, protected banana production, and the purchase of certain types of agricultural machinery.
Therefore, preferential loans will effectively become half as useful for agricultural sector representatives.
Analysts note that this is one of the most popular support measures currently provided to farmers. Its partial cancellation could worsen the current situation of many agricultural enterprises.
Genetics and plant breeders are particularly concerned about these potential innovations. Representatives of this sector note that their work is inherently complex, as the investment cycle extends over years, and the return on investment is very slow.
The absence or reduction of funding will directly impact the ability of Russian plant breeders to fulfill their mission and bring competitive seeds and hybrids to market.
This increases the risk of technological lag and continued dependence on imported genetic material.
Businessmen involved in dairy farming are also not thrilled.
While they were previously provided with preferential loans with a higher subsidy level—70% of the key interest rate—a reduction of this threshold to 50% could be catastrophic for the industry, as many of its enterprises are already operating at break-even.
At the same time, the government, facing a budget deficit, appears to have no other option but to cut funding, including to the agricultural sector.
However, this could lead to a slowdown in agricultural development in Russia, and only those companies with sufficient funds will be able to develop innovations.
