Kremlin planning to cut support for agricultural sector amid budget crisis, intel reports
According to Ukrinform, this was reported by the Foreign Intelligence Service of Ukraine.
The Ministry of Agriculture of the Russian Federation has prepared a draft resolution that reshapes the logic of subsidizing the sector toward strict austerity.
The document provides for the reduction or complete elimination of subsidies for agricultural technology work, the scaling back of funding for soil conservation and environmental safety measures, as well as the cessation of support for deep processing projects for grain and milk.
A separate condition for receiving subsidies in livestock farming, horticulture, and dairy production would be mandatory agricultural insurance – a requirement that effectively excludes a significant share of small producers unable to bear additional costs.
A telling example is the fate of the industry development and technical modernization of the agro-industrial complex program: in 2027, its funding is to be cut by 28%, from $438 million to $316 million.
About $25 million of the freed-up funds are expected to be redirected to breeding and seed production – a move industry associations present as a response to the critical dependence on foreign seeds for sugar beet, sunflower, and corn, which reaches 70-90%.
However, even this “compensation” has a clearly redistributive nature: according to experts, the main beneficiaries of the reallocated funds will be large research centers and agricultural holdings with their own laboratory base. For small and medium-sized farms, this means further reduced access to state support amid already growing financial pressure.
In a broader context, the reduction in agricultural spending reflects the systemic fiscal crisis Russia is facing: limited access to external financial resources and an inflated military budget are leaving less and less room to support civilian sectors.
The consequences of this choice – declining investment activity in agriculture, reduced production volumes, and a widening gap between large players and the rest of the market – are expected to become evident in the short term.
As previously reported, experts predict that up to one-third of small and medium-sized businesses in Russia may shut down in the near future due to a deep economic crisis.
Illustrative photo
