Rise in imports of agricultural machinery from the West

The First Deputy Prime Minister of the Russian Federation, Viktor Zubkov stated that in 2010 imports of agricultural machinery went up by 57.4 %. At the same time, the demand for Russian agricultural machinery dropped by 5.5 %. Based on these figures, the market for agricultural machinery grew by 14.8 % in 2010 and its growth dynamics continue to look good.
‘According to the forecasts by agricultural machinery manufacturers, demand for Russian agricultural machinery could go up by more than 7.5% this year. Given this situation, it is vital to secure state subsidies for this year,’ said Zubkov.
Zubkov spoke too about the need to modernize the machinery test stations and about ongoing developments. He also talked about various methods and criteria that would enhance effectiveness and about the quality of services for the agricultural sector.

Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 7(1002) date 22 February 2011

State subsidies for agricultural  leasing
With immediate effect, the agricultural machinery on hand at Rosagroleasing is now up for sale or leasing at 50% of the acquisition cost – this message was conveyed by Russia’s Prime Minister Vladimir Putin at the 12th Convention of the Association of Private Farms and Agricultural Cooperatives in Tambov on 2 March 2011. At present, the Rosagroleasing depot has more than 5.5 thousand agricultural machines on its books. ‘After two difficult years, and especially last summer’s drought, not many farming enterprises have the financial resources they need to buy new machines,’ said Putin. ‘This is why it was decided to subsidize Rosagroleasing at an additional cost to the state of 4 billion roubles. Given the growth rates in the Russian economy overall, the budget situation and the precarious situation on the food market, we are obliged to back the seed campaign and help farmers buy in new technology.’ Russia’s Head of Cabinet expressed his hope that this move would also secure a good harvest.
Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 9 dated 09 March 2011

Credit restrictions for Rosselkhozbank lifted
Russia’s Prime Minister, Vladimir Putin, stated that the government has given the Russian Agricultural Bank, Rosselkhozbank, the go-ahead to extend loans for the purchase of Western agricultural machinery. Banks such as Vneshtorgbank (VTB) and Sberbank were already authorized to do this in the past, but the time has now come to lift these restrictions on Rosselkhozbank. At the same time, however, Putin pointed out that these loans would not be subsidized by the state.
Source:  lenta.ru/news/2011/03/02/rshb/

Western Manufacturers build up production plants in Russia
In his speech at the 12th Convention of the Association of Private Farms and Agricultural Cooperatives in Tambov on 2 March 2001, Russia’s Prime Minister Vladimir Putin declared that the state would no longer subsidize imports of agricultural machinery. He did emphasize however, that – in line with the automotive plants now in existence - the government would create favourable framework conditions for Western companies wishing to set up assembly plants in Russia directly. ‘This will mean certain limitations for the import of finished products. We want state-of-the-art technology to be produced in our country,’ said Putin. At the same time, the Prime Minister explained that the credit restrictions for purchasing Western technology that are currently in force at the Russian Agricultural Bank, Rosselkhozbank, will be lifted. Putin proposed developing a programme to stimulate the production of high-tech Western agricultural machinery in Russian plants. According to Putin, it is high time that Russia renewed its fleet of agricultural machinery. Western manufacturers are now gradually responding to this new situation and opening plants in Russia.
Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 9(1004) dated 09 March 2011

Favorable loans for the upcoming seed campaign
According to a Rosselkhozbank press release, restrictions have been lifted with regard to certain seeds that were accepted as security for seeding operations. As of today, farmers can deposit any type of seed as collateral.
This decision was made in order to extend credit options. Furthermore, farmers can now put up the future harvest as collateral instead of being obliged to use other property, even if the loan is taken out before the seed campaign. The value of the deposit is now determined by the ongoing market prices, whereby the maximum loan granted can be up to 100% of the deposit value as opposed to 60% before. As reported earlier, the Russian Agricultural Bank, Rosselkhozbank, has earmarked 105 billion roubles from its credit resources to conduct the seed campaign.
Rosselkhozbank has lowered its loan interest rate for the seed campaign, too. The bank states that, depending on the term of the credit, the annual interest rate should be somewhere between 7.5 % to 10 %. Rosselkhozbank also stated that in November it already lowered it interest rates for seasonal campaigns by 9 to 11 %. This move made it easier for farmers to access loans and shortened the amount of time involved in processing loan requests. The objective of this second drop in interest rates is to support the upcoming seed campaign and to stabilize the financial status of those farming enterprises affected by the drought in 2010.
Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 8 (1004), dated 02 March 2011