The Ministry of Agriculture recommended that farmers apply for commercial short-term loans to prevent the failure of the sowing campaign.
According to Kommersant, the ministry plans to publish a new draft resolution providing for a reduction in subsidizing the interest rate on new preferential loans from 80-100% to 70% of the Central Bank's key rate. In addition, the Bank of Russia further limited commercial lending for agriculture by raising the key rate to 9.5%.
Alexander Arsky, Deputy Director of the Institute of Management and Agribusiness of the Moscow State University of Food Production, noted that the transformation of state support measures may be due to macroeconomic factors, such as inflation, the need to meet pent-up demand for agricultural products.
“Measures of state support are always, and in all cases, differentiated,” he stressed.
According to Elizaveta Utkina, a leading analyst for corporate ratings at Expert RA, the agro-industrial complex is quite strongly supported by the state, and there areas of state support, preferential loans are not the only one, but one of the main ones.
“Loans of less than 5% for farmers at market rates of more than 10% are very significant, especially for small agricultural firms that calculate their entire economy on the basis of low interest rates,” she said.
Head of the Departmentrepreneurship and Logistics of the PRUE Plekhanov Dmitry Zavyalov noted that the funding limits for this program were exhausted extremely in an extremely unfortunate - spring field work is on the nose. He believes that commercial loans will be at least 2.5-3 times more expensive than concessional loans, and, consequently, the cost of producers may increase by 4-6%.
As Lazar Badalov, Associate Professor of the Department of World Finance at the Financial University under the Government of the Russian Federation, noted, it is more difficult for farmers to get an ordinary loan from a bank, because the risks in this business are very high and banks are trying to compensate for this with high interest rates. The expert stressed that farmers cannot provide anything worthwhile in security.
“The increase in interest payments will lead to an increase in the cost of production, and as a result, will provoke an increase in food prices. In addition, an increase in interest expenses will reduce the amount of free money that could be directed by agribusiness companies to implement investment projects, which could negatively affect the development of the industry,” explains Utkina.
At the same time, according to her, the terms of lending on existing loans should not change, and the possibility of issuing new loans by banks will depend on the actual limits of concessional lending. It is likely that the limits will be increased, but if they are not enough, farmers will have to borrow money at market rates.
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