The Russian Ministry of Agriculture has initiated a major revision of the rules for subsidizing preferential loans for the agricultural sector.
The corresponding draft resolution, posted on the regulatory legal acts portal, opens up new opportunities for businesses under sanctions, but simultaneously tightens controls over the targeted use of budget funds.
Force Majeure Protection and New Rates
The key innovation will be protecting farmers from natural disasters.
Banks will receive the official right to unilaterally freeze the accrual and collection of interest on loans for borrowers affected by natural emergencies.
Furthermore, credit institutions will be able to repay such loans from their own funds.
The rules of the interest rate game are also changing.
For contracts concluded before the end of 2023, the rate will remain within the usual range of 1% to 5% for the period through April 30, 2026.
However, starting May 1, 2026, the formula will become more complex: the minimum threshold will be 1%, and the maximum will be calculated as the difference between the Central Bank’s key rate and the subsidy amount, plus 2%.
Priority to deep processing and import substitution
The agency clearly sets state priorities, directing primary resources toward technological sovereignty.
Investors developing deep processing of agricultural raw materials and domestic production of critical feed and food additives (amino acids, enzymes, vitamins, and organic acids) are guaranteed to receive subsidies equal to 70% of the Central Bank’s key rate.
Moreover, such strategic investment projects are provided with unprecedented concessions in the event of anti-Russian sanctions that impede the purchase of imported equipment.
If the project’s cost increases by 30% or more, or the launch date is delayed by at least one year, businesses will be able to extend the agreement, postpone the commissioning of the facility, and increase the preferential loan limit by up to 36 months.
Strict Control and New Deadlines
Regulatory concessions are followed by increased oversight.
Recipients of investment loans will now be required to provide detailed documentation for each stage of construction, modernization, or reconstruction, and the commissioning of the facility itself cannot exceed the terms of the loan agreement.
Financial administration deadlines are also being shifted.
If the Ministry of Agriculture temporarily lacks budget limits, subsidies can now be transferred to banks until the end of December of the year following the reporting year (previously, only until the end of the current financial year).
Accordingly, banks will also be able to transfer borrowers to commercial rates due to the shortfall in government subsidies much later.
And for extended short-term loans in 2024–2025, decisions on repayments in 2026–2027 will be made second, only after the main obligations under other agreements have been fulfilled.
