The Ministry of Industry and Trade is preparing the allocation of another 3.2 billion rubles. to subsidize the demand for agricultural machinery “under the 1432 program”

The Ministry of Industry and Trade is preparing for 3.2 billion rubles. increase the budget of the state program, under which farmers receive discounts on local agricultural machinery, to 5.2 billion rubles. The funds will be used primarily to subsidize the sales of tractors, which initially this year, like the rest of the self-propelled equipment, were not included in the state program. Theoretically, the additional funding could offset the expected rise in tractor prices due to the sharp increase in salvage fees since the second half of the year. Analysts suggest extending state support to other types of equipment, given the worsening conditions for farmers.

The Ministry of Industry and Trade is preparing the allocation of another 3.2 billion rubles. to subsidize the demand for agricultural machinery “under the 1432 program,” Kommersant was told at the ministry. We are talking about financing discounts of 10-15% on domestic agricultural machinery. The program budget now amounts to 2 billion rubles, which is several times less than even in the crisis year 2022 (8 billion rubles), while in 2021 10 billion rubles were allocated for subsidies, in 2020 – 12 billion rubles. In addition, self-propelled equipment – tractors and combines – was excluded from the program this year.

The Ministry of Industry and Trade notes that, together with the Ministry of Agriculture, a plan was approved for the purchase of more than 2.1 thousand agricultural tractors at fixed prices, taking into account discounts from the current market value. “In order to implement this plan, work is currently underway to allocate additional funding in the amount of 3.2 billion rubles for Decree 1432 in 2023,” the ministry said.

Rosspetsmash calls the plan for the purchase of tractors a timely measure aimed at supporting farmers and developing the production of agricultural machinery. Additional funds should spur demand for tractors, however, “in order to maintain the necessary pace of modernization of the agro-industrial complex, the amount of funding should be at least 15 billion rubles. per year, and discounts should be extended to all domestic agricultural equipment,” the association believes.

Deputy Prime Minister Victoria Abramchenko, who oversees the agro-industrial complex, already said in June that subsidies for equipment should be increased. “As for support measures under Decree 1432, according to the Ministry of Agriculture, we need 8 billion rubles for these purposes. in year. If there is no such support, the equipment will grow in price and will be inaccessible to farmers,” she said in an interview with RIA Novosti. “When this equipment has grown in price by 80%, no one will be able to buy it,” she added. In early June, the co-owner of Rostselmash, Konstantin Babkin, said that machine builders are constantly criticized for high prices, but the problem lies in expensive domestic components. “We are constantly looking for the cheapest components, and practice shows that buying them in China – and earlier it was possible to buy in Germany – turns out to be 30% cheaper than buying components in Russia,” he noted. “Not only buy, but also manufacture in Russia, the components are more expensive. Fundamentally, the cost of their production is more expensive in Russia than in other countries” (quote from Interfax).

However, the main reason for the reduction in the renewal of the agricultural machinery fleet is the fall in farmers’ incomes. The fact that the market is in a state of investment pause was discussed in the association of agricultural machinery dealers ASHOD at the end of 2022 (see Kommersant dated November 3, 2022). In the spring, Rosspetsmash proposed to abolish the export duty on grain for five years in order to improve the profitability of farmers (see Kommersant on March 27), however, as Victoria Abramchenko said on June 14, “the duties have not been canceled yet.”

Agrarians told Kommersant that in difficult conditions they switched to more affordable and sufficiently meeting the technical parameters of supplies from friendly countries – China, Turkey, India. However, the government decided to complicate imports by raising the salvage tax on tractors from July 1. The fee will grow the most for tractors with a capacity of 90–130 hp. s. – 4.8 times, almost up to 1.3 million rubles. In general, the collection indexation affected tractors with power from 30 to 340 hp. with., and the effective rate of collection will increase from two to 4.8 times.

Dmitry Babansky from SBS Consulting positively assesses the increase in subsidies and the introduction of discounts for tractors. However, the analyst also believes it is right to extend subsidies to all self-propelled vehicles, given the scale of the problems that farmers have faced this year – low grain prices, export duties, rising costs of consumables and reduced availability of seeds.

Olga Nikitina