Ministry of Economic Development forecast: agricultural production in Russia is expected to grow by 4% in 2025, but a decrease is projected for the current year.

During the period from 2025 to 2027, the Ministry of Economic Development predicts a positive dynamics of agricultural production in Russia. According to the ministry's forecast, in the base scenario, growth is expected in the range of 1.7-4%. In 2025, agricultural production is expected to increase by 4%, and in 2026 and 2027 by 1.7%.

However, a slight decrease is expected in the current year - by 1.9%. In the conservative scenario, growth is forecasted at 3.8% in 2025 and 1.5% in the following years. However, this year, within this scenario, a decrease in production by 2.1% is possible.

According to Denis Ternovsky, a scientific researcher at the Institute for Agricultural Economics of the RANEPA, the Ministry of Economic Development's forecast is realistic. The 4% increase in agricultural production in 2025 will offset the projected decline in 2023-2024.

Further growth at the rate of 1.7% annually represents the average growth of Russian agriculture in previous years, except for the record growth in 2022. The expert notes that internal demand is unlikely to sustain such production growth, so industry growth should be export-oriented.

Denis Ternovsky also notes that much will depend on the dynamics of global prices and export duty parameters. There is growth potential in animal husbandry. The Ministry of Economic Development's forecast does not account for a possible strengthening of the ruble, so exporters may maintain competitive prices.

Analyst Ignat Ivanov from Finam claims that weather conditions are one of the determining factors for the success of agriculture in this and other years. Despite the expected hotter summer than usual, weather conditions will not significantly impact the harvest. Government subsidies are also an important factor for agriculture, and their volume is not expected to decrease in 2024. However, the structure of benefits and subsidies for farmers has worsened.

According to analyst Ignat Ivanov, the current state of agriculture cannot be unequivocally described but rather as a negative trend. On one hand, in recent years, Russia has harvested record amounts, and in 2024, a lower but still high harvest is expected.

However, industry enterprises face a shortage of imported machinery, breeding and genetic materials, as well as a lack of storage facilities. These factors, combined with low prices for products and regulatory pressure, negatively affect the profitability of agriculture.

In 2023, agricultural production in Russia increased by 2.9%. By 2030, the volume of output should increase by at least 25% compared to 2021, and the export of products should increase by one and a half times. These goals were set by Putin at the end of winter.

With subsidies, the profitability of agriculture decreased to 18.9% last year, while in 2022 it was 20.3%. Without subsidies, profitability was 15.5%. Prices for agricultural products are rising more slowly than production costs. Deputy Minister of Agriculture Elena Fastova predicted that profitability in 2024 is unlikely to increase and emphasized the need to maintain this indicator at no less than 20%.