Profitability of Russian agricultural sector in 2023 declines to 18.9%, not likely to increase in 2024 - AgMin
MOSCOW. Feb 5 (Interfax) - The profitability of Russian agriculture fell to 18.9% in 2023 (including subsidies), Deputy Agriculture Minister Elena Fastova told reporters.
"Profitability is falling, 2023 ended with 18.9%. I remind you that in 2022 it was 20.3%. This is with subsidies, without subsidies [in 2023] - 15.5%," she said.
According to her forecast, profitability this year will remain at the same level. "Profitability is unlikely to grow. There are many risks for agriculture. Our profitability should be at least 20%. We hope that we will remain in that area," she said.
The deputy minister noted that the agricultural sector consists of 49,000 agricultural producers. "Most of them are small forms [of agriculture], so it is difficult to say that all are doing well," she said. At the same time, the share of profitable farms increased by 0.6 p.p. last year, up to 86.7%, Fastova said.
According to her, there are no grounds to say that subsidies have a strong impact on the level of profitability. The share of direct state support in the form of incentive and compensatory subsidies, which are combined into one in 2024, is only 3% of all costs. "We have low-profit sectors - cattle production, sheep breeding, to which we give a little more, they account for 8% of costs, in milk and sheep breeding also 8%, in cattle - 6%. And wool production is traditionally an unprofitable industry at the moment, so there is also more there. But in general, it is almost 3% - in livestock, in crop production, they remain level from year to year," the deputy minister said.
Fastova also said that revenue of agricultural organizations in 2023 amounted to almost 5 trillion rubles, up 6.6% from the prior year. "Revenue is growing within the inflation rate, but costs are increasing beyond that," she said.
According to preliminary data from Rosstat, agricultural production in Russia in 2023 decreased by 0.3% compared with growth of 11.3% in 2022.
