Growth or stop: what will happen to the decline in the forecast for agriculture
In 2025, agricultural production in Russia may grow by only 2.2%, which is twice lower than the April forecast of 4.4%. Such data is contained in the macro forecast of the Ministry of Economic Development for 2025-2028, which is being considered by the government, a source in the Cabinet of Ministers confirmed to Izvestia. Experts and representatives of the agricultural sector assessed the reasons for the slowdown for Izvestia and analyzed which industries will become growth drivers and which ones will become "brakes". Details can be found in the Izvestia article.
Why is the growth of agricultural production declining
Adverse weather conditions were among the key factors that influenced the Ministry of Economy's revision of the forecast for growth rates in the industry. This year, spring frosts and summer drought have caused serious damage to crops in the southern regions.
The forecast had to be changed due to climate risks, confirms the professor of the Russian State Agricultural Academy. Timiryazeva Lyudmila Khoruzhy.
"First, frosts and then drought led to the death of a significant part of winter crops in the Krasnodar and Stavropol territories, the main suppliers of grain to the Russian market," the expert emphasizes.
The high key rate (and, accordingly, the bank loan rate) did not allow farmers to use borrowed money to purchase capital goods, and inflation affected the cost of consumables and equipment, Lyudmila Khoruzhiy notes.
Viktor Khlystun, member of the Presidium of the Russian Academy of Sciences, Academician of the Russian Academy of Sciences, agrees with this point of view.
— The forecast for the growth of agricultural production in 2025 was clearly overestimated: in the prevailing conditions by the beginning of the year, it could not exceed 2.5–3%. High climate risks, reduced profitability of agricultural organizations and reduced opportunities for the purchase of machinery and seeds did not allow us to expect higher rates," says Viktor Khlystun.
According to the academician, significant growth in the agro-industrial complex (AIC) is possible only in the case of an accelerated transition of a significant part of the regions to the cultivation of drought-resistant crops and the introduction of soil protection technologies.
Anatoly Tikhonov, Director of the Center for International Agribusiness and Food Security at the RANEPA Higher School of Economics, sums up that the current situation is part of a new complex reality.
"The forecast adjustment from 4.4% to 2.2% is a signal of the industry's transition to a new phase, where extensive growth is giving way to work under structural constraints related to sanctions pressure, shortages of seeds and machinery, as well as the need for deep technological modernization and import substitution," says Tikhonov.
He warns that a slowdown will inevitably create pressure on the consumer market, but it is more about the risk of a moderate price increase rather than a shortage.
The impact of cuts in agriculture on prices and food security
The slowdown in agricultural production is naturally causing controversy about the impact on prices and the country's food supply.
"The results of this year will not negatively affect the country's food security, but will even improve its performance in fruits and vegetables," said Academician Khlystun. — The price increase will not exceed the inflation rate, only a seasonal increase in the price of certain categories of goods is possible due to sanctions and import volumes.
At the same time, according to Professor Nikolai Khozhainov of Moscow State University, the increase in food prices is more dependent on the policy of trade margins.
— Despite the undesirable situation in agriculture, there should be no spike in food prices. The price increase is determined not so much by the harvest as by trade margins, which are now greatly overestimated," Khozhainov believes.
Expert "SF.Analytics" Stanislav Sankeev stressed that Russia is fully self-sufficient in most key products, which means that the current situation will not have a serious impact on the overall picture.
At the same time, he is an associate professor at the Russian University of Economics. Plekhanova Dmitry Osyanin does not rule out a moderate rise in the price of some products.
"The impact on consumers may manifest itself in a moderate increase in prices for products, especially those that depend on yield, but there is no threat to food security due to stocks and self—sufficiency," says Osyanin. — The government will continue to maintain price stability through regulatory mechanisms.
The Ministry of Agriculture is authorized to declare
The press service of the Ministry of Agriculture told Izvestia that in 2025, the production of agricultural products meets most of the indicators of the Food Security Doctrine.
"By the end of the year, it is planned to increase self-sufficiency in the main types of products: milk and dairy products, potatoes, vegetables and melons, fruits and berries, seeds. Russia will be provided with grain, sugar, vegetable oil, meat and fish in reserve," the Ministry of Agriculture emphasized.
The harvesting campaign is taking place despite unfavorable weather conditions in the southern regions, which allows us to count on a decent harvest.
"At the moment, the forecast remains at 135 million tons of grain in net weight, including about 90 million tons of wheat. A significant increase in yields is observed for sugar beet, rapeseed, potatoes and other crops. This year, the harvest of oilseeds is expected to reach 31.5 million tons, sugar beet — 48.1 million tons, vegetables and potatoes — 7.6 million tons each, fruits and berries — 2.1 million tons, including 1.9 million tons," the press service of the Ministry of Agriculture said.
Positive dynamics is also expected in animal husbandry: livestock and poultry production will increase by 0.4%, milk — by 0.8%, and eggs — by 1.7%. Overall, by the end of the year, production volumes will meet domestic needs and maintain good export potential.
"In order to further increase production volumes, a set of measures is being implemented aimed at supporting producers and achieving the technological sovereignty of the industry," the Ministry of Agriculture said in a statement.
Drivers and obstacles for agriculture
What are the prospects and drivers of growth in the context of the updated forecast? Experts see them in specific sectors of the agro-industrial complex.
"In the medium term, livestock, vegetable growing and fruit production will become the main drivers," says Viktor Khlystun, drawing attention to the potential for developing unused agricultural land in the non—Chernozem zone for dairy and beef cattle breeding.
Industries with a short production cycle — poultry and pig farming — will be the growth drivers, Lyudmila Khoruzhy clarifies.
Sergey Kiselyov, Head of the Department of Agroeconomics at the Moscow State University Faculty of Economics, adds oilseeds to these industries.
"However, market volatility and staff shortages are serious challenges," the expert warns.
Andrey Neduzhko, CEO of the Steppe agricultural holding, is confident that animal husbandry looks like a more stable industry.
"Crop production and horticulture are very sensitive to weather anomalies, whereas animal husbandry, despite its dependence on the feed base, is more stable," he says. — Government support remains an important component of growth.
Greenhouse vegetable and poultry farming will become drivers due to a high degree of automation and less dependence on nature, adds Dmitry Osyanin, pedaling on technological potential.
Structural challenges and security risks
The slowdown in growth is accompanied by structural challenges for the agricultural sector.
— It is necessary to pay attention to the growing dominance of large agricultural holdings and the reduction of small farms, — says Maria Antonova, Doctor of Agricultural Economics.
Professor of the Department of General Agriculture and Agroecology, Moscow State University. Lomonosov Dmitry Khomyakov highlights the importance of climate and geopolitical risks.
"The agro—industrial complex depends on natural disasters and global climate change, and the processes of aridization and desertification in the Southern Federal District are reaching a critical level," he notes. — In addition, the current conjuncture of the global agricultural market and tariff regulation indicate the need for constant adaptation.
The main risks for animal husbandry are associated with the rising cost of imported genetics, veterinary drugs and feed protein, which requires priority attention, Anatoly Tikhonov reasonably recalls.
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