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- Straining your strength in the struggles: what is the threat to Russian farmers in the race for grain export records
Straining your strength in the struggles: what is the threat to Russian farmers in the race for grain export records
Russia is preparing to record its third-ever export of grain and legumes, but reaching the target of 61.8 million tons reveals systemic contradictions in logistics, income distribution and environmental sustainability of the industry. What are the positive and, possibly, negative consequences of record grain exports for the Russian Federation and what long—term consequences for Russian agriculture as a whole a concentrated focus on a serious increase in supplies can have - in the Izvestia material.
Export growth: there is demand, but the infrastructure does not keep up
According to Igor Pavensky, head of the Rusagrotrans analytical center and head of the expert committee of the Union of Grain Exporters, who made a statement at the All-Russian Grain Forum, Russia will complete the current agricultural season of 2025-2026 with 61.8 million tons of grain and leguminous exports. This is significantly more than 53.36 million tons a year earlier. This growth is due to high demand on the global market: Russia accounts for about 20% of all wheat supplies, and the geography of supplies covers more than 100 countries, according to the Ministry of Agriculture of the Russian Federation.
The influx of foreign currency from exports helps to develop domestic agricultural machinery and modernize grain elevators. However, the rapid growth in volumes has revealed weaknesses in logistics. Up to 40% of the final cost of grain is transportation costs — such data is contained in the analytical report of the Business Profile Group (DP), made at the request of Izvestia. During peak shipping periods, ports and railways are operating at their maximum capacity.
The current floating export duty mechanism takes up to 70% of the difference between the global and base price to the budget, the company says. This stabilizes government revenues, but reduces the incentives for farmers to produce higher-quality grain.
United Grain Company JSC is confident: "the current record figures of grain exports clearly prove that the Russian agro-industrial complex has become a powerful, high-tech and independent sector of the economy, capable not only of guaranteeing domestic food security, but also of strengthening the country's position in the global market."
"High export volumes ensure a stable inflow of foreign exchange earnings into the country and stimulate further investments in production modernization," the UGC stressed.
Raw Material bias: Why it's not just quantity that matters
If the industry continues to focus only on increasing tons, Russia risks becoming a mere supplier of raw materials. In this case, the potential for agricultural exports may stop at around $50 billion, although the targets for 2030 suggest $55-70 billion, the Business Profile group predicts. The difference is in deep processing: flour, cereals, and vegetable proteins are more expensive and less dependent on stock market fluctuations.
The export quota of 25 million tons is an important regulatory tool, but it does not replace the strategy for developing processing capacities. These data are confirmed by the Ministry of Agriculture of the Russian Federation. Oksana Kozlova, a professor at Omsk State Agrarian University named after P. Stolypin, warns that the long-term concentration of resources on grain production increases the dependence of agriculture on the grain market conditions and causes risks associated with limited industry diversification. Without investments in processing, the industry can reach a "plateau of growth" (a situation where the industry reaches the maximum level of performance, after which further development slows down or stops), the expert believes.
Penza Agrarian University identifies three systemic challenges related to record grain exports. Firstly, excessive focus on foreign markets can provoke an increase in domestic grain prices, creating inflationary pressure on livestock and food processing. Secondly, the distribution of export revenues is characterized by asymmetry, in which the main benefits accumulate among logistics operators and traders, while grain producers record reduced profitability against the background of rising costs.
Thirdly, the intensification of production without fertility reproduction leads to degradation of the soil resource, with annual losses of about 1% of humus and erosion of about 15% of farmland, which, combined with climate risks, calls into question the long-term sustainability of export volumes and transforms current records into future threats to food security.
Who earns from record exports: a farmer or an intermediary
The profits from exports are unevenly distributed. The net margin of agricultural producers is only 5-15%, and in bad seasons it can drop to zero, according to the analytical data of the DP group. In the first half of 2025, the pre-tax profit of grain producers decreased by 25%, while the cost increased by 10-20% due to higher prices of fuels, fertilizers and logistics. At the same time, the purchase prices for wheat in the country decreased by 18%.
The main beneficiaries are large traders and holding companies that control grain elevators and ports. But even their margins are shrinking: according to DP estimates, operating expenses in the south of Russia reach 4-4.5 thousand rubles per ton. A significant part of the revenue is taken by the state through a damper mechanism, leaving farmers with the main risks — weather and market risks.
— The state manages exports through a quota mechanism. This is not an abstract figure, but a living tool that takes into account the balance: shifting stocks, crop forecasts and the needs of the country, including processing and animal husbandry," explained Vitaly Pavlyuk, Executive Director of Sibagro.
For a more equitable distribution of income, DP analysts propose developing small-scale cooperation, digital trading platforms for direct contracts, and taking into account regional differences in logistics when setting up regulatory tools.
What threatens future harvests
Climate change affects agriculture in Russia in different ways. In Siberia, warming is prolonging the growing season, but droughts have become more frequent in the key export regions of the south — the Rostov Region, Krasnodar and Stavropol territories. In 2020, 2021 and 2024, local wheat yield losses reached 15-25% — these data are provided by JSC AC Foresight. DP models show that by 2030-2035, the frequency of lean years in these regions may increase by 20-30%.
"There are shifts in the growing season of plants, winters are getting warmer, and the average temperature is rising during the growing season," says Dmitry Nardin, director of the Department of Scientific Research at Omsk Agrarian University.
And with warming comes new diseases and pests that were not previously typical of the northern territories, he adds.
In order to obtain stable grain yields in the next 5-10 years, according to the expert, it is necessary to create and bring to the market new varieties that are resistant to diseases and pests, including those that come to us from the southern regions.
In parallel, the problem of soil depletion is growing. About 80% of Russia's agricultural lands are subject to degradation to one degree or another, with annual losses of the fertile layer amounting to 1.5–2 million hectares, the DP group cites data. 11.4 million tons of nutrients are removed with the harvest, and only 5.6 million tons are applied with fertilizers. Such an imbalance reduces the potential yield by 25-30% in the long term.
The solution lies in the transition to resource—saving technologies: No-Till, cover crops, precision farming. They reduce erosion and retain moisture better — No-Till technologies retain 30% more moisture in the soil. However, their implementation is hindered by high start-up costs and a shortage of qualified personnel. Investments in fertility restoration and land reclamation are not expenses, but insurance against future losses of market positions, especially taking into account plans to export 80 million tons of grain by 2030 — this goal is fixed in the strategy of the Ministry of Agriculture of the Russian Federation.
The zero tillage system (No-Till) is an agricultural system in which the soil is not cultivated, and its surface is covered with specially crushed mulch plant remains. Translated from English, "no-till" means "do not plow."
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