New forms of state support for agriculture are required

15 september 2017

“Current achievements in the import substitution are mainly due to investments within the state program for the agriculture development,” said Gleb Pokatovich, Deputy Head of the Analytical Center, speaking at the National Forum Import Substitution 2017. “It can hardly be said that they were the result of the food import embargo, since 3 years are a relatively short period, and long-term investment cycles are typical for most agricultural sectors.”

According to Mr. Pokatovich, the increase in the loan debt burden on the sectors of the Agro-Industrial Complex (AIC), growth of the overdue debt and reduction of fixed capital expenditures place Russian agriculture in a difficult position today. To maintain the current growth rates, a shift in the state support focus from subsidizing interest rates on loans to measures related to direct payments to producers may be required for the industry – reimbursement of incurred costs, subsidies per unit of output, etc.

Another problem of the Russian AIC is a significant number of territories with limited opportunities for carrying out economically-viable agricultural business. From the point of view of the AIC state support, the requirements for different territories are the same, as a result, it is concentrated in the most productive but few regions, and about 40 entities receive no more than 1% of the total subsidies from year to year.

At the same time, we cannot fail to take into account the social role of agriculture (maintenance of traditional employment, income level of the population, and decrease in the outflow of the rural population) even in such regions where it is less developed. Therefore, it is reasonable to develop different approaches and criteria for providing agricultural producers with the state support in regions with favorable and unfavorable conditions for carrying out the agricultural activities.