The government will allocate another 10 billion rubles for preferential loans to farmers

The government will allocate an additional 10 billion rubles. for the program of preferential lending to agricultural producers, such an order signed Prime Minister Mikhail Mishustin.

The allocated funds will be used to subsidize loans at a rate of 5%, which are provided to agricultural enterprises for the production and processing of agricultural products.

At a meeting with deputy prime ministers, Mishustin notedthat in 2022 alone, over 28,000 loan agreements were concluded, but due to the increase in the Central Bank rate to 13%, the issuance of these loans was suspended.

“In order to resume accepting applications for preferential loans as soon as possible, we will provide additional support to the agricultural sector,” he said.

The Cabinet of Ministers, he recalled, has already approved allocation of 45 billion rubles. for these purposes, thus the total amount of support will be 55 billion rubles, this will make it possible to subsidize at least 40,000 preferential loans in 2023.

“The decisions taken will help not only to service the existing obligations of farmers, but also to implement new projects, increase the volume of production of agricultural raw materials and food, and preserve a wide selection of high-quality Russian products for our citizens,” the prime minister concluded.

On August 15, the Bank of Russia raised the key rate by 3.5 percentage points to 12%. The regulator explained this decision by increased inflationary pressure and inflationary expectations, which are pressured by the dynamics of the exchange rate. At a meeting on September 15, the regulator raised the key rate by 1 percentage point to 13%.

A preferential loan program for farmers has been in effect since 2017. Within its framework, agricultural producers can take out a short-term or investment loan at a rate of up to 5% for the development of crop and livestock production, as well as for the construction, reconstruction or modernization of enterprises for processing agricultural raw materials. A preferential short-term loan is issued for a period of up to 1 year, an investment loan – from 2 to 15 years.

In July 2023, President of the Russian Union of Industrialists and Entrepreneurs Alexander Shokhin appealed to the Minister of Agriculture Dmitry Patrushev with a request not to increase rates on preferential short-term and investment loans. This happened after the Ministry of Agriculture published a draft resolution providing for an increase in the rate to 7% from January 1, 2024.