The Russian Ministry of Economic Development has significantly revised downward its expectations for the agricultural sector’s growth this year.
While the ministry’s September forecast projected agricultural production growth in 2026 at 3.9%, its baseline scenario now assumes a decline of 1.4%.
It’s important to note that last year, the industry posted a solid 4.9% increase. Thus, a clear negative trend is evident.
Nevertheless, the Ministry of Agriculture does not believe the current negative trend will persist.
This is confirmed by the ministry’s significantly more optimistic outlook for future years. For example, the forecast for 2027 has been increased from 2% to 2.5%, for 2028 from 2.8% to 4.3%, and for 2029, growth of 3.2% is expected.
Some experts believe that agricultural production growth is possible even this year. However, it will likely be modest: up to 0.7%, and will be driven solely by crop production.
At the same time, even optimistic analysts acknowledge that achieving growth this season will be challenging. Specifically, as of mid-May, the sowing of barley, sunflower, and soybeans is lagging behind by approximately 7 million hectares.
Catching up on this gap will be extremely difficult.
To achieve this, farmers will have to make a significant effort, but the results are still not guaranteed, as much depends on local weather conditions in each individual region where sowing is taking place.
Based on all of the above, it must be acknowledged that the Ministry of Economic Development’s negative forecast is generally objective.
While crop production is facing objective difficulties due to delays in sowing, livestock production has been stagnating for a long time.
Moreover, economic factors cannot be discounted. For example, export duties and a strong ruble are creating significant pressure on farmers, preferential lending has been significantly curtailed, and market rates are high.
As a result, companies lack sufficient working capital, which is a clear factor that could negatively impact future results and harvests.
At the same time, a number of analysts point to last year’s high base. A decline from previous levels can be considered not a catastrophe, but a minor adjustment.
Therefore, a shortage of certain types of products within the country appears extremely unlikely: Russia remains fully self-sufficient in basic food products.
