From abundance to investment drought: what awaits the agro-industrial complex with a high key rate

Catching up with Krasnodar

The year 2024 turned out to be far from the best in terms of climatic conditions, but Tatarstan farmers were able to rise from fifth to third place in terms of gross output, passing ahead of the Krasnodar Krai and the Rostov region. With this important achievement, the head of the Ministry of Agriculture of Tatarstan, Marat Zyabbarov, began a report on the annual board of the Ministry of Agriculture and Food of Tatarstan.

It was the first time that we managed to get close to the strongest southern regions of the country, Rustam Minnikhanov noted upon arrival at Kazan Expo. Since early morning, the rais of Tatarstan, together with the new Deputy Minister of Agriculture of the Russian Federation Maxim Borov, leisurely inspected the Kazan Agro exposition, after which he conducted a reporting board in a good mood.

Investment groundwork

There is something to be proud of. Investments in the agro-industrial complex of the republic amounted to 165 billion rubles, said Rustam Minnikhanov. Previously, the investment burden was perceived as a debt burden, but after the key rate increase it turned into an advantage. Without these investments, it would be problematic to “squeeze” more grain, milk, and meat out of the agro-industrial complex at the level of southern competitors.

By the results of 2024, the gross volume of agricultural products increased by 10% and amounted to 341.3 billion rubles, the head of the Ministry of Agriculture of the Republic of Tatarstan said. The Krasnodar Krai was ahead with revenue of 599.2 billion rubles and the Rostov region with 380.6 billion rubles. 2.3 million tonnes of milk, 508 thousand tonnes of meat, 1.6 billion eggs were produced.

“The revenue of agricultural enterprises against the background of rising purchase prices will exceed 200 billion rubles for the first time, and profitability will reach 10%,” Zyabbarov said. However, these figures do not inspire optimism, since against the background of high inflation, farmers “do not generate sufficient profits for expanded reproduction," he noted.

“In addition, the investment burden has a serious impact on the financial results of the industry. The republic accounts for more than 25% of all capital investments in the Volga Federal District," the minister said.

On average, investors invested up to 30 billion rubles annually. Last year, six dairy complexes for 8,600 heads were put into operation. Six more investment projects for 13.2 thousand cows are at different stages of implementation.

3 key agricultural projects

“Projects in poultry farming are very important to us: Ak Bars Holding is building in Apastovsky and Pestrechinsky districts (poultry meat), and Chistopolye is building in Leninogorsk district (turkey meat). This will result in an increase of 19,000 tonnes of poultry meat and 650 million eggs," emphasised Marat Zyabbarov.

Against this background, government support does not look impressive. Last year, farmers received 5.7 billion rubles, this year it will affect only livestock farmers. Four billion rubles are provided for them. The republic provides another 2 billion rubles for land reclamation, which began to revive last year. In addition, federal subsidies are provided to exporters to compensate for transportation costs.

But this year, the investment flow is likely to decline, fears the head of the Ministry of Agriculture and Food of the Republic of Tatarstan.

“As the cost of loans increases, a decrease in planned investments may become a separate risk,” said Marat Zyabbarov. Against this background, the growth of agricultural products is planned to be modest: by 10% by 2030. Milk production will increase from 2.3 to 2.6 million tonnes, cattle meat — from 508 to 558 thousand tonnes, eggs — from 1.6 to 1.9 billion pieces, and largely due to record investments in recent years.

“But maybe Tatarstan will agree to increase the parameters," Maxim Borovoy, the deputy minister of agriculture of the Russian Federation, tried to persuade, but did not receive a positive response.

Investment projects are not expected

“The investment course will depend on the position of the Russian government. Money is very expensive today, so this year we are focused on improving the efficiency of existing ones... Nail Zalakov, the director general of the Chistopolye agricultural company, later explained. “It's too early to talk about investments. I think that this year, with such expensive money, our main focus will be on current production. We will continue the series of projects that we announced last year. We are not planning any freezing, but we will not promise large-scale investments either. And the turkey production project will be launched closer to the summer.

Krasny Vostok Group also has no plans to launch new projects. According to Adel Khairullin, this year it is planned to invest 1 billion rubles in the purchase of machinery and the construction of feeding centres — that's all.

“We build at the expense of our own sources. We don't take loans at these rates," he snapped. Other projects are continuing due to investments from previous years. In May, they plan to start construction of a dairy plant in Kukmor for 3 billion rubles, Sergey Dimitriev, the head of the Kukmor district, told Realnoe Vremya. In Apastovo, they are waiting for the start of construction of a poultry farm for the production of eggs without fear. Farmers are most concerned about the summer drought. Or rather, fair payments under insurance contracts.

“Agricultural insurance is a new tool in Russia, but it is understandable all over the world. Of course, there are positive aspects in agricultural insurance, and this tool is being improved. Tatarstan lost 3 billion rubles last year due to bad weather, which is the damage caused by the lost harvest. And the payout is 100 million. Ladies, maybe we're not working well. We are going into such programs, but we would like to diversify," Nail Zalakov said.