Forbes explained the unprofitability of the Russian agricultural business.

Analysts from Forbes Russia in one of their recent articles named the reasons for the unprofitability of the domestic agricultural business.

First and foremost, experts explained this by rising costs for most production components. In particular, labor costs have increased by 10-12 percent, fuel and other combustibles have gone up by 20-25 percent, as well as logistic services, and by 30 percent - equipment and spare parts. Also, according to them, problems are exacerbated by loans becoming too expensive due to the sharp increase in the Central Bank's key rate and "exchange rate" duties on agricultural products. Speaking of the latter, it is impossible not to mention flexible export duties on certain agricultural products. In particular, it should be reminded that farmers have been particularly complaining about such market restrictions regarding grains recently. According to them, this measure reduces the competitiveness of grain without increasing its profitability. Another complaint they have is about using export duties as emergency subsidies, which, according to agrarians, are not fully returned to them.

Also, the analysts from the publication evaluated the profitability of agriculture in the country for the past year. Overall, according to their data, it decreased to 18.9 percent with subsidies, which is 1.4% less than in 2022. Without taking them into account, the indicator dropped to 15.5. The profitability of crop production was 18 percent, although it was at the level of 40-50 in 2020-2021. Among individual agricultural crops, it was best for rice (59 percent), oilseeds (40 for soybeans, 34-36 for sunflower and rapeseed), and sugar beets (38%).

The lowest figures, surprisingly, are for key grain crops. In particular, for wheat, they dropped from 34.3% in 2022 to 22-23, and for corn and barley they reached 15 and 10 respectively. Probably, the same mentioned customs restrictions played a role here. The profitability was also 10% in greenhouse vegetable growing. Data on other fruit and vegetable products and potatoes are not provided.

In this regard, experts fear that some players engaged in this industry may leave the market in the near future. In their opinion, the problem could be solved by improving production efficiency. However, they note that this is mainly within the capabilities of large agroholdings. The situation turned out to be more promising in animal husbandry. In particular, pig farming was noted with the highest figure - 50%. It reached 26 percent in meat processing. Even for small players, it stands at slightly over 18 percent in poultry farming, and for large ones, it is even higher.

Experts attribute the reasons for such success to the growth in meat consumption in the country and the inclusion of some of its positions in the consumer basket. However, even in this industry, there were unprofitable directions. In particular, in beef cattle farming and sheep farming, government support accounted for only six and eight percent respectively. Meanwhile, for example, in dairy animal husbandry, as told by the head of the analytical department of "Soyuzmoloko" Alexey Voronin, cases of negative profitability are even recorded.