Russia wants to save its agricultural machinery industry with subsidies.

The agricultural machinery market in Russia is struggling, with domestic brands being less sought after. Moscow is now looking to increase subsidies for preferential loans when purchasing agricultural machinery.

The Russian Ministry of Agriculture aims to further promote the purchase of domestic agricultural machinery by providing increased financial support for loans. A newly presented draft regulation proposes raising the subsidy for preferential loans when buying agricultural machinery from 50% to 70% of the Central Bank's key rate. This is intended to reduce farmers' loan costs from around 12.5% to 7%. Approximately €110 million is allocated in the ministry's budget for the state program supporting the purchase of domestic brands this year.

Russian farmers are facing financial challenges. According to the newspaper "Kommersant," the sale of agricultural machinery and equipment in Russia decreased significantly last year, with about 20% fewer tractors and harvesters being purchased compared to 2023. This trend has continued this year.

The Association of Manufacturers of Special Machinery and Equipment (Rosspetsmash) reported a 33% decrease in deliveries of domestically produced agricultural machinery to the domestic market in the first quarter compared to the same period last year, amounting to 38 billion rubles (€430 million).

Rosspetsmash is urging the swift implementation of the increased state support. The association is concerned that farmers may postpone the planned purchase of agricultural machinery in anticipation of more favorable conditions, leading to a further decline in demand. It is essential not only to lower interest rates for preferential loans but also to ensure that agricultural enterprises can actually obtain loans from banks in the current financially challenging situation.