Russia to introduce quotas for preferential farm machinery imports after scrapping fee hike
MOSCOW. Dec 16 (Interfax) - Russia's Industry and Trade Ministry intends to ease the effect of the looming fivefold increase of the vehicle scrapping fee for farm machinery by introducing quotas for preferential imports of foreign farm machinery, demand for which is not fully met by Union State manufacturers, at the old fee rates.
At the beginning of November, the ministry announced plans to quintuple the scrapping fee for farm machinery as of 2025 and raise it by 15% annually in the subsequent several years. It was reported that the fee would increase only for machinery that is already made in Russia and Belarus.
The ministry's press service said that the proposals of the industry association were analyzed and taken into account in the process of revising the relevant draft resolution. It said machinery that is not mass produced in Russia and Belarus, such as self-propelled beet and potato harvesters, is now essentially not subject to the scrapping fee.
"Furthermore, the Industry and Trade Ministry of Russia will annually set quotas for imports of foreign machinery in a targeted manner in cases where Russian and Belarusian enterprises cannot fully meet domestic demand in accordance with farmers' needs, consolidated by the Agriculture Ministry of Russia. For imports of machinery within the bounds of the quota, the scrapping fee will be paid according to coefficients in effect in 2024," the ministry said.
The draft resolution to raise the fee is "aimed at establishing a balanced position that will make it possible to both meet the needs of farmers in a number of areas, and create favorable conditions for the development of domestic machinery manufacturers," the ministry said. It pledged to use the fee to continue programs to subsidize discounts on farm machinery sold to farmers on preferential terms.
"Additionally, the Industry and Trade Ministry and Agriculture Ministry have been implementing the mechanism of farm machinery deliveries at fixed prices for two years already. In 2023, more than 5,500 Russian and Belarusian tractors were delivered to farmers according to the delivery plan approved by the ministries. A similar plan for tractors, combines and other self-propelled machinery was also prepared for 2024, and 7,100 pieces of machinery will be delivered by the end of the year. The price of machinery delivered under the plan remains fixed for the whole year. This mechanism will also be implemented next year, and the delivery plan will include tractors, combines and other self-propelled machinery," the ministry said.
The chairman of the State Duma Industry and Trade Committee, Vladimir Gutenev, commenting on the draft resolution to raise the scrapping fee on farm machinery, said that, given the drop in Russian farmers' profit margins, "it is extremely important that the scrapping fee is balanced and takes into account the interests of agricultural producers, as well as the consumers of their products," since a "decrease in demand and low profitability set certain restrictions, which adversely affects the amount of orders and, consequently, the production cost of this product."
"It is important for the development of the agribusiness sector that farmers maintain the ability to update their machinery even amid low margins and high interest rates. Therefore, revenue from the scrapping fee will be, among other things, directed toward programs to stimulate demand for farm machinery," Gutenev said.
