Preferential loans to farmers now issued at increased rates

“It's very difficult to do without loans at all”

Dinar Sarguzin, a young farmer from the village of Avdeevo in the Aznakaevsky district, raises steers for slaughter and engaged in crop production. The young man admits that it is very difficult for agricultural producers, especially small and medium-sized farms, to do without loans at all, and today, despite the high cost of borrowed money, many resort to this service.

Currently, the farm has about 400 hectares of land for growing crops. The farmer is preparing for the sowing season. According to him, the difficulties arise primarily with technology:

“It is impossible to constantly work on old equipment, it must be updated. That's why we applied to participate in the leasing program for the purchase of a new seeder. Now we are waiting for approval. All our equipment is of domestic production, and this year we have chosen a seeder, the price of which has not risen much in recent years, now it costs 1 million 150 thousand rubles.

“Few people can afford to buy equipment now”

The Embulatovo agricultural cooperative was able to refuse loans, including preferential ones. The farm is also actively preparing for the sowing campaign. Sunflower, sugar beet, corn, spring wheat, and barley are planted here every year.

“Our farm has 2,600 hectares of land. We prepare wheat and barley seeds ourselves, leaving the material purchased last year for the next year. However, sunflower, beet and corn seeds cannot be stored, they need to be bought anew every year. For example, we buy seeds for sowing sugar beet in Voronezh. We are talking about imported raw materials. Seeds are imported into our country under a quota, and the price has more than doubled compared to last year. Last year, we paid 9,000 rubles for one sowing unit, and this year we paid 19,000 rubles. And for sowing 1 hectare of land, 1.2 sown units are required," said Almaz Faskhutdinov, the deputy chairman of the company for economics and finance.

Since last year, farmers have been advised to buy Russian-made sugar beet seeds. “We must admit that the yield of such beets is slightly inferior to their foreign counterparts, but the price is more acceptable. We have never planted such seeds ourselves, but we have observed how other farms do it. We are not planning to introduce new experience ourselves yet," the source told the publication.

According to him, in conditions of high inflation, it is necessary to save money. For example, the equipment has become much more expensive.

“This year we bought one Kirovets K-700 tractor, manufactured by the St. Petersburg Tractor Plant. It cost us 17.5 million rubles. The price has risen a lot, compared to 2021, the increase is about 70%. For certain types of equipment, the cost increase reaches 180%, for example, for combine harvesters. Both Russian and foreign equipment, including spare parts, are becoming more expensive. It is very difficult to buy imported equipment now, offers are only individual and very expensive," Almaz Faskhutdinov complained.

In addition, the company was able to purchase an Akros combine harvester, its price exceeded 23 million rubles. “Few people can afford to buy equipment for that kind of money now, and leasing programs and subsidies from the national budget certainly help, when 30% of the cost of equipment is compensated. I am glad that this program is also in effect this year," says the agrarian. However, the funds, according to him, arrive about two years late. For example, in 2024, the farm received subsidies for 2022, and this year it is awaiting subsidies for 2023.

At the same time, the prices of agricultural products sold by farmers, in their opinion, remain not at the proper level:

“We have no problems with the sale of products, but the price leaves much to be desired. For full-fledged development and planned reproduction, for the purchase of new equipment and the renewal of seed, the purchase of a sufficient amount of fertiliser, the current price of grain, established on the market, does not suit anyone.”

Now the farm is trying to solve the personnel shortage problem. The shortage of personnel in rural areas is acute. This is primarily due to the outflow of the population to cities and regional centres, the farm highlights: “With our margin, we cannot maintain the same salary level as in the cities. For example, in the warehouses of large marketplaces they pay 10,000 rubles a day, but we can pay 3,000-4,000 rubles at most during the season.” The greatest need is for livestock breeders, machine operators and tractor drivers.

Farmers are also concerned about the weather. There is very little snow this year, which can damage winter crops.

“We recently inspected our fields, at that time there was still a 5 cm layer of snow, but a few days ago, as you know, it was very warm, there were above-zero temperatures and rains, so the snow melted again. If frosts hit again now, winter crops may die. What will happen to the crops is now a very big question, no one can give an answer. They say there hasn't been such weather for a hundred years," Faskhutdinov said.

“People should be at the forefront, not production”

Kamiyar Baytemirov, the chairman of the Association of Farmers and Peasant Farms of the Republic of Tatarstan, believes that an increase in the interest rate on preferential loans negatively affects the development of farms.

Recently, Tatarstan farms, according to him, began to switch from Rosselkhoznadzor to Sberbank, but in January, Sberbank decided to stop issuing preferential loans to farmers. “Banks say they don't want to gamble with the government. However, Sberbank changed its decision a few days ago and announced that it would remain in the program on the same terms in 2025," the speaker said.

According to the head of the Association, the tightening of credit policy in the agro-industrial complex negatively affects the quality of preparation for sowing. On the one hand, farmers are facing extraordinary weather-related problems, they need to preserve winter crops planted in 2024, and save crops, and this requires additional funds. On the other hand, financial difficulties have arisen.

“The income of agricultural producers depends on the pricing of products, so we need to think about it seriously. I believe that this issue should be resolved at the government level. Farmers should have profitability, and it can only be achieved through proper pricing. The ministry should solve this problem together with processors and producers," he stressed.

There are also issues regarding the allocation of subsidies. Farmers are allocated a limited amount of funds. If you take 100% of all financial aid, they account for only about 16%. Most of the support goes to large agricultural holdings, Baitemirov complained: “Therefore, it is not surprising that there is a tendency to reduce farms. Over the past few years, about 15-20% of farmers have switched to another organisational and legal form and have become private farms. We conducted a survey on this issue, and farmers said that they were tortured by all kinds of inspections, and inspection bodies do not go to their personal subsidiary farms very often. I think we should make efforts to stop this trend.”

According to him, one can talk about this topic for a long time, but it is necessary to understand which direction the state chooses: let only strong agricultural holdings remain and farms close or not. If we talk about the need to preserve the village, develop rural entrepreneurship, and increase the number of livestock, then people should be at the forefront, not production, the expert is convinced.

Priority in granting preferential loans — for sowing

According to the ministry of agriculture of the Republic of Tatarstan, today the republic continues to receive state support in the form of preferential loans, under which agricultural producers receive preferential loans annually. They are issued to borrowers for the development of crop production, animal husbandry, dairy cattle breeding and processing of agricultural products.

“Due to the high key rate of the Central Bank, this year the ministry of agriculture of Russia has amended the rules for granting preferential loans at a floating rate. Previously, the rate ranged from 1% to 5%, but now it depends on the key rate of the Bank of Russia and varies according to its size. Currently, at a key rate of 21% per annum, concessional loans are issued at a rate of 12.5%, and loans to small businesses are issued at 8.3% per annum.”

This year, the Russian ministry of agriculture has decided to include dairy cattle breeding and seasonal field work among the priority areas of preferential loans. Borrowers receive preferential loans in such areas at 8.3% instead of 12.5%. The rate reduction applies to newly issued concessional short-term and investment loans.

“The rate reduction will affect newly issued concessional short-term and investment loans. Priority in granting preferential loans in the first half of the year will be given to agricultural producers for sowing," the ministry stressed.