Cars came to the defense of the peasants – Newspaper Kommersant No. 51 (7496) of 03/27/2023

Against the backdrop of falling demand for agricultural machinery, Rosspetsmash calls on the government to increase the amount of subsidies for its supplies and cancel the export duty on grain for five years in order to improve the profitability of farmers. Agricultural producers confirm the decline in purchases of machinery. They note a serious increase in prices and a limited range of Russian factories against the backdrop of promising proposals from China, Turkey and India.

“Kommersant” got acquainted with the letter of the Association “Rosspetsmash” dated March 24 to Prime Minister Mikhail Mishustin. The document contains proposals for state support for the production and renewal of the agricultural machinery fleet in the Russian Federation. In particular, we are talking about the abolition of the export duty on grain from April 1 for at least five years, as well as an increase in subsidizing tariffs for the transportation of agricultural products from Siberia and under the “program 1432” (10-15% discount on the purchase of equipment). The government confirmed the receipt of the letter to Kommersant.

In 2022, the output of tractors and combines in Russia (in units of equipment) decreased by 1% and 23%, respectively (see “Kommersant” dated February 1). In a letter to the prime minister, machine builders note that in January-February, production began to fall already in monetary terms – by 11%.

The reasons in Rosspetsmash are the reduction in the profitability of farmers and the decrease in investments in the renewal of the park. In addition, they add to the associations, state support for the industry has been reduced: only 2 billion rubles have been allocated for the “1432 program” in 2023, and “tractors and combines are completely excluded from it and are sold without a discount.” The additional need for subsidies in the association is estimated at 15 billion rubles.

In 2022, 8 billion rubles were allocated, about 8.7 thousand units of agricultural machinery and equipment were delivered, the Ministry of Industry and Trade specified.

Machine builders also note their own problems. Thus, high-tech components for agricultural machinery in the Russian Federation are produced “in insufficient quantities,” the document says, and “the high level of credit rates and taxes, the cost and narrow range of rolled metal in the Russian Federation, the low level of customs protection for component manufacturers have led to the fact that it is unprofitable for factories to invest in the development of production – foreign components of comparable quality are 30% cheaper than Russian ones. Therefore, the association is asked to allocate 10 billion rubles. in the form of grants for the production of components.

The Ministry of Agriculture clarified that state support measures for the renewal of the agricultural machinery fleet continue to operate. Through the Ministry of Industry and Trade, this is the “program 1432”, and the key instrument of the Ministry of Agriculture remains the programs of Rosagroleasing, including preferential ones, under which 12.7 thousand units of machinery and equipment were delivered to farmers in 2022 (the plan for 2023 is 13 thousand .). The Ministry of Agriculture explains the decline in purchases of new equipment by the departure of large foreign manufacturers, disruption of logistics and a “significant increase in prices” for domestic products.

Andrey Neduzhko, CEO of the Steppe agricultural holding, agrees that “in the context of changing market conditions and rising prices for means of production, farmers need additional support measures.”

“In general, in the market, against the backdrop of difficult conditions, the pace of renewal of the agricultural machinery fleet has slowed down – in about 30% of cases, farmers postpone investments in it,” confirms a Kommersant source among farmers. “On average, the increase in prices for equipment is 30%, but for some items comes up to 70%. It is still difficult to judge whether the current situation is a market reality or is of a speculative nature. The proposed support measures are absolutely adequate.”

An employee of a large agricultural holding connects the decline in demand for agricultural machinery both with the uncertain financial and economic conditions in which market participants are now, and with a reorientation to more affordable supplies that sufficiently meet the technical parameters from friendly countries – China, Turkey, India.

The lack of resources for updating the model ranges of domestic manufacturers is associated with the import of spare parts, the lack of the necessary technologies and capacities for the production of equipment that Russian farmers are used to, adds the interlocutor of Kommersant. In addition, according to him, the pace of renewal is slowed down by more complicated customs procedures and the registration of self-propelled vehicles: a large number of vehicles stand idle for months due to difficulties with electronic passports. Now, the Kommersant source believes, it is necessary to pay attention not only to the issues of fleet renewal, but also to the problem of maintaining the existing one.

Experts’ forecasts for the future are also far from optimistic. This year, a decrease in the harvest is expected, explains Dmitry Babansky from SBS Consulting, which, together with falling prices, will lead to a deterioration in the financial condition of farmers. At the same time, the analyst clarifies, the prices for the necessary materials (plant protection products, seeds, etc.) have not decreased to the levels of 2021, the cost of equipment is growing, so they will purchase components for the repair of the current fleet, and not new cars.

Olga Nikitina, Anatoly Kostyrev