The Ministry of Industry and Trade wants to increase the recycling rate for agricultural machinery

As Kommersant learned, the Ministry of Industry and Trade again wants to increase the recycling fee for agricultural machinery by 5–10 times, despite the reduction in the profitability of farmers. As a result, the cost of powerful imported tractors and combines may increase by 5–10 million rubles. a piece. Farmers and agricultural machinery dealers are calling on the Ministry of Industry and Trade and the Ministry of Agriculture to abandon this idea, pointing out the risks of rising prices for products and calling for support for Russian machine builders in other ways.

Associations of farmers of the Russian Federation (Russian Grain Union, Potato Union, National Meat Association, Rusprodsoyuz and others), as well as the Association of Agricultural Equipment Dealers ASHOD on February 14 appealed to the head of the Ministry of Industry and Trade Denis Manturov with a request to take into account the position of the agricultural industry and refrain from increasing the recycling fee for the main types of agricultural equipment . A similar letter was sent to the head of the Ministry of Agriculture Dmitry Patrushev.

According to letters (available to Kommersant), we are talking about increasing the recycling collection for self-propelled agricultural machinery (powerful tractors, combines and sprayers) by 5–10 times. Kommersant sources call the Ministry of Industry and Trade the initiator, noting that indexation will be adopted after the presidential elections of the Russian Federation. The Ministry of Industry and Trade confirmed receipt of the letter, noting that they are monitoring changes in the agricultural machinery market, including its imports. “Depending on further changes in the situation, appropriate decisions will be made,” the ministry said, noting that “final decisions” on increasing the fee have not been made. The Ministry of Agriculture told Kommersant that such a project has not yet been submitted.

The recycling collection for agricultural machinery was last increased in 2023 – for tractors with a capacity of 31–340 hp. With. Then “the increase took place without any consultation with market participants, who learned about the decision after the fact,” recalls the associations’ appeals. Manufacture of tractors 118–131 l. With. was not available in the country, and imported equipment went up in price by 1.3 million rubles. The project to increase recycling collection has not been publicly published since 2021.

An increase in the fee could completely deprive farmers of financial resources for development and investment, and will also lead to an increase in the cost of all basic food products, the appeal says.

A top manager of one of the agricultural holdings believes that if recycling collection increases fivefold, its share in the cost of equipment will increase from 10% to 40%. The impact of increasing recycling collection on the cost of agricultural products in crop production can reach 5–7%, in livestock farming – 2–5%, Kommersant’s source concludes.

The appeals contain calculations that, for example, increasing the tax on a tractor by 340–380 liters. With. five times will lead to an increase in the cost of equipment by 4.6 million rubles, ten times – by 10.4 million rubles; for a combine harvester 256–325 l. pp.—by 4.5 million rubles. and 10.1 million rubles. respectively; for forage harvester 296–401 l. pp.—by 6.3 million rubles. and 14.3 million rubles.

Chairman of the Board of ASHOD Alexander Altynov points out that the industry should be familiar with the data on the basis of which decisions are made on the size of increases in specific niches. In addition, with a prohibitive barrier to imports, some dealers may cease operations or significantly reduce operations and staff, he notes: as a result, technical expertise and supply chains for spare parts will be lost. The appeal states that the demand for imported equipment remains high, and in many segments, full-fledged domestic analogues of equipment are either absent or are produced in insufficient quantity and quality.

Rosspetsmash (unites machine builders of the Russian Federation) is also aware of plans to increase recycling collection. They say that the increase in rates should not apply to segments in which Russian equipment is not produced or is insufficiently produced. The decision itself, according to Rosspetsmash, is aimed at protecting against aggressive imports, developing mechanical engineering and increasing its competitiveness and will not lead to increased costs for farmers when purchasing equipment produced in the Russian Federation and Belarus.

General Director of the Steppe agricultural holding Andrei Neduzhko agrees that in the event of an increase, the costs of farmers using imported equipment will increase significantly, but the measure will help support machine builders of the Russian Federation.

According to him, compared to last year, spare parts for Russian agricultural machinery have risen in price by about 5-10%, and for imported ones – by 30-40%. Today, over 80% of the equipment in the Steppe park is made in the Russian Federation, says Mr. Neduzhko.

Most farmers are skeptical. Artem Vartanyan, an expert at the Union of Potato and Vegetable Market Participants, notes that profitability in agriculture in Russia has already decreased in 2023, and increasing recycling collection will become an additional burden. Vice President for Regional Development and GR of Damate Group of Companies Andrey Grigorashchenko says that the company is wary of the initiative to increase the fee, since it will reduce the ability to renew parks, which have already been reduced due to the increase in the key rate of the Central Bank.

ABH Miratorg believes that the increase in the cost of imported equipment must be accompanied by an increase in the production of equipment in the Russian Federation, so that equipment manufacturers increase production and compete with each other. “If the conditions for the production of equipment are not created, then other than increasing the costs of agricultural producers, this will lead to nothing,” the holding says. The Cherkizovo group noted that an increase in the recycling fee rate may lead to a refusal to purchase some vehicles planned for this year. According to the group, from 2023 there will be an increase in prices for equipment from 7% to 10%.

Dmitry Babansky from SBS Consulting believes that now is “not the optimal time to increase recycling collection.”

As Kommersant wrote on February 1the agricultural machinery market fell by about 20% in 2023 and may decline by another 10% in 2024.

As an alternative, the farmers propose that the Ministry of Industry and Trade support Russian machine builders by directing “existing funds to develop the production of components.” In response to this, Rosspetsmash noted that state support for factories producing components should not be considered as an alternative to indexation of recycling collection.

However, according to Kommersant, the funds from the increase in recycling collection will not be used for components. The Ministry of Industry and Trade plans to use them to finance the “1432 program” (a discount on equipment produced in the Russian Federation) due to a lack of funding, says a Kommersant source among top managers of agricultural holdings. The lack of funding for the program has been actively discussed at Rosspetsmash in recent years. At the same time, Alexander Altynov notes that with a sharp reduction in import supplies, the financial base for the “1432 program” may not be formed. A top manager of one of the agricultural holdings also believes that revenues from recycling collection will not increase, since the demand for equipment will drop significantly.

Olga Nikitina, Anatoly Kostyrev