From 2020, direct subsidies for factories producing agricultural machinery will be abolished in Russia, Kommersant reports.
Instead of the privilege under the 1432 program, which distinguishes those who produce agricultural machinery into a special article, the mechanism of preferential leasing will be applied for all branches of mechanical engineering on a general basis. As specified in the Ministry of Agriculture, over the five years of the specialized program 1432 agricultural machinery producers received 34 billion rubles from the state. Since 2013, they have received from 15 to 20 percent of subsidies for equipment sold to farmers, and last year the percentage increased to 30.
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However, doubts have crept in at the government over Rostselmash’s “too successful work with this mechanism: the company can use it to monopolize the market and dumping.” As a result, it was decided to abandon direct subsidies to agricultural machine manufacturers in favor of preferential leasing. Industry participants themselves find the program effective and useful. During its operation, the production of equipment doubled, exports tripled, and the budget received up to 1,82 rubles per ruble of state subsidies. The adoption of new rules will slow down mechanization in the country, they argue.
The government commented on the changes as follows: direct subsidizing is a way to maintain the net profit of companies, and financing through subsidizing indirect instruments (leasing, loans) is more effective, it allows you to establish healthy competition. Now more attention will be paid to localization: in order to qualify for benefits, it will be necessary to prove that the equipment is manufactured in Russia, for this a point system was invented.
Source: https://rosng.ru/