ECONOMY
How the Bureaucracy Is Strangling Russia’s Agricultural Sector
July 14, 2025
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Tatiana Rybakova
Journalist and writer
Journalist Tatiana Rybakova argues that the reason for Russian agriculture's low crop yields is the government's ever-widening push for import substitution.
The original text in Russian was published in The Moscow Times and is being republished here with their permission.
Among the achievements of post-Soviet Russia, one of the main ones is that in the 30 years since the fall of Soviet power, Russia has gone from an importer of wheat into one of the world’s leading exporters.
This is largely thanks to large, modern agribusiness holdings with modern equipment, a good seed bank, qualified personnel and technology from top manufacturers that has been adapted to local specifics.
Russian farmers have proven able to withstand many challenges, from the weather to bureaucratic stupidity, but with each passing year they find it harder and harder to keep the progress going. As a result, the Russian agricultural sector is slowly but surely approaching the eye of a “perfect storm.”
For the second year in a row, bad weather has aggravated the situation. As the reason for weak initial results of the currently underway grain harvest (especially wheat), observes cite the severe drought in many regions.
Among the achievements of post-Soviet Russia, one of the main ones is that in the 30 years since the fall of Soviet power, Russia has gone from an importer of wheat into one of the world’s leading exporters.
This is largely thanks to large, modern agribusiness holdings with modern equipment, a good seed bank, qualified personnel and technology from top manufacturers that has been adapted to local specifics.
Russian farmers have proven able to withstand many challenges, from the weather to bureaucratic stupidity, but with each passing year they find it harder and harder to keep the progress going. As a result, the Russian agricultural sector is slowly but surely approaching the eye of a “perfect storm.”
For the second year in a row, bad weather has aggravated the situation. As the reason for weak initial results of the currently underway grain harvest (especially wheat), observes cite the severe drought in many regions.
Harvesting in Russia. Summer 2024. Source: YouTube
Falling indicators
According to agricultural consultancy SovEcon, initial grain yields in the largest agricultural regions of Russia’s south is lower than last year’s harvest, which itself was below average due to late spring frosts and drought that followed.
In Rostov Region, the country’s key wheat producer, grain yields are 20 centners/hectare versus 36 centners/hectare a year ago; in Krasnodar Region, 45 centners/hectare versus 62 centners/hectare last year. There is drought in both regions.
In Stavropol Region, meanwhile, grain yields are higher than last year, at 40 centners/hectare versus 35 centners/hectare, but soil water storage is higher than normal there.
According to agricultural consultancy SovEcon, initial grain yields in the largest agricultural regions of Russia’s south is lower than last year’s harvest, which itself was below average due to late spring frosts and drought that followed.
In Rostov Region, the country’s key wheat producer, grain yields are 20 centners/hectare versus 36 centners/hectare a year ago; in Krasnodar Region, 45 centners/hectare versus 62 centners/hectare last year. There is drought in both regions.
In Stavropol Region, meanwhile, grain yields are higher than last year, at 40 centners/hectare versus 35 centners/hectare, but soil water storage is higher than normal there.
“SovEcon expects things to improve as more fertile fields are harvested, but according to its forecast issued in June, spring wheat yields will be 4.1% lower than last year.”
The government has included bananas in a list of domestic agricultural products. Source: Telegram
The consultancy estimates the wheat harvest in the south at 31.5 million tons, while a year ago it was 32.6 million tons; overall across Russia (as the harvest comes in in Siberia), a slightly better harvest than last year is forecast, at 83.0 million tons versus 82.4 million tons.
The Union of Grain Exporters and Producers pencils in a total grain harvest of 132-138 million tons, while the Russian Grain Union puts it at 120-125 million tons. The Ministry of Agriculture, as usual, is optimistic in its forecasts, seeing 135 million tons of grain and 90 million tons of wheat being produced this year.
Still, even the rosiest projections are not much higher than last year’s low figures.
Of course, meteorological conditions are critical for the harvest. But droughts, torrential rains and other cataclysms are typical for the entire planet today: the climate is getting more unstable, with a rising number of extreme weather events. Yet Russian crop yields are lower than those of the leading producers of basic crops like wheat, corn, potatoes and sugar beets.
Russia has managed to overtake Belarus in sugar beet yields: 52.5 centners/hectare versus 50.4 centners/hectare. Russia’s average wheat yield of 26.7 centners/hectare lags the high-tech US (33.4 centners/hectare) and traditional powerhouse Canada (35.1 centners/hectare). Yields are as high as 57.4 centners/hectare in China and a record 89.5 centners/hectare in Belgium.
The situation with potatoes is no better. Here the gap in yields is huge: Russia produces 160 centners/hectare versus 428 centners/hectare and 508 centners/hectare for Germany and the US, respectively.
Other countries are ahead of Russia in potato production by a factor or two or more, the exceptions being China (185 centners/hectare) and Belarus (206 centners/hectare). Even Belarus, known for potatoes, does not reach the level of most developed countries. Overall, this is the situation for each of the abovementioned basic crops. So it seems that the weather is not the main thing holding Russia back. But what is?
Import substitution
The most important reason is restrictions on seed imports. This is not a new issue: Russia put in place agricultural counter-sanctions, including a ban on seed imports, back in 2014, in response to Western sanctions after the annexation of Crimea.
Russian farmers howled, since 80-90% of seeds were supplied by the Netherlands and other “unfriendly” countries. Imports were again allowed – but with quotas. The quotas have been reduced each year, and the Agriculture Ministry is determined to do away with them altogether. Officials do not hide that they are acting in the interests of Russian plant breeders – just as they do hide that they are knowingly lowering the quality of seeds for the sake of developing local plant breeding.
The Union of Grain Exporters and Producers pencils in a total grain harvest of 132-138 million tons, while the Russian Grain Union puts it at 120-125 million tons. The Ministry of Agriculture, as usual, is optimistic in its forecasts, seeing 135 million tons of grain and 90 million tons of wheat being produced this year.
Still, even the rosiest projections are not much higher than last year’s low figures.
Of course, meteorological conditions are critical for the harvest. But droughts, torrential rains and other cataclysms are typical for the entire planet today: the climate is getting more unstable, with a rising number of extreme weather events. Yet Russian crop yields are lower than those of the leading producers of basic crops like wheat, corn, potatoes and sugar beets.
Russia has managed to overtake Belarus in sugar beet yields: 52.5 centners/hectare versus 50.4 centners/hectare. Russia’s average wheat yield of 26.7 centners/hectare lags the high-tech US (33.4 centners/hectare) and traditional powerhouse Canada (35.1 centners/hectare). Yields are as high as 57.4 centners/hectare in China and a record 89.5 centners/hectare in Belgium.
The situation with potatoes is no better. Here the gap in yields is huge: Russia produces 160 centners/hectare versus 428 centners/hectare and 508 centners/hectare for Germany and the US, respectively.
Other countries are ahead of Russia in potato production by a factor or two or more, the exceptions being China (185 centners/hectare) and Belarus (206 centners/hectare). Even Belarus, known for potatoes, does not reach the level of most developed countries. Overall, this is the situation for each of the abovementioned basic crops. So it seems that the weather is not the main thing holding Russia back. But what is?
Import substitution
The most important reason is restrictions on seed imports. This is not a new issue: Russia put in place agricultural counter-sanctions, including a ban on seed imports, back in 2014, in response to Western sanctions after the annexation of Crimea.
Russian farmers howled, since 80-90% of seeds were supplied by the Netherlands and other “unfriendly” countries. Imports were again allowed – but with quotas. The quotas have been reduced each year, and the Agriculture Ministry is determined to do away with them altogether. Officials do not hide that they are acting in the interests of Russian plant breeders – just as they do hide that they are knowingly lowering the quality of seeds for the sake of developing local plant breeding.
“‘It may be poor quality, but it’s our stuff’ is the motto of the push for total import substitution.”
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“Buying even a used German tractor risks ruin for farmers today.”
A poster with the phrase 'There’s no money, but hang in there' at an anti-corruption rally. St. Petersburg, March 2017. Source: Wiki Commons
Moreover, money is tight for farmers – and this is the third reason. Previously, they got subsidized loans from Russian Agricultural Bank, pledging future harvests as collateral. Now, as Dmitri Medvedev said when he was prime minister, “there’s no money, but hang in there.” Old loans can be restructured, but good luck getting a new one.
Previously, grain producers could also obtain loans from foreign traders, who were happy to work in Russia, offering not only loans but also storage and logistics. With the start of the war, Western traders left, and Russian traders have neither the resources nor, frankly speaking, the interest to take their place.
Bureaucratic madness
Farmers are losing heart, as well. In early July, a court ruled to nationalize the assets of Vadim Moshkovich, the founder of Rusagro, one of the largest agricultural producers in the country.
The reason is a dispute with Solnechnye Produkty, whose owner is connected with Duma Speaker Vyacheslav Volodin. The arrest of Moshkovich and seizure of his assets alarmed big agricultural players: why bother investing in a low-margin business if everything can be taken away when a competitor runs to his high-ranking patron or when your fields catch the eye of someone powerful.
The latter scenario is quite realistic. Until recently, top officials were interested mainly in viticulture – Medvedev, ex-Agriculture Minister Alexander Tkachev or business ombudsman Boris Titov.
Previously, grain producers could also obtain loans from foreign traders, who were happy to work in Russia, offering not only loans but also storage and logistics. With the start of the war, Western traders left, and Russian traders have neither the resources nor, frankly speaking, the interest to take their place.
Bureaucratic madness
Farmers are losing heart, as well. In early July, a court ruled to nationalize the assets of Vadim Moshkovich, the founder of Rusagro, one of the largest agricultural producers in the country.
The reason is a dispute with Solnechnye Produkty, whose owner is connected with Duma Speaker Vyacheslav Volodin. The arrest of Moshkovich and seizure of his assets alarmed big agricultural players: why bother investing in a low-margin business if everything can be taken away when a competitor runs to his high-ranking patron or when your fields catch the eye of someone powerful.
The latter scenario is quite realistic. Until recently, top officials were interested mainly in viticulture – Medvedev, ex-Agriculture Minister Alexander Tkachev or business ombudsman Boris Titov.
“But as agribusiness becomes harder for ordinary farmers, opportunities are opening up for Putin’s inner circle.”
Land does not depend on government decisions, while restrictions that handicap ordinary farmers can be cancelled as a one-off for “friends.” This creates an incentive for “friends” to buy up assets of battered agribusinesses on the cheap (or even nationalize them, as happened to Rusagro) and get into the food market, where prices are soaring.
Finally, another blow to Russian grain producers was dealt by a simultaneous decline in exports and prices for Russian wheat. Exports were dampened by a global-price-linked export duty, and farmers were often forced to operate in the red. Meanwhile, after Russian exporters shipped stolen Ukrainian grain from occupied territory in 2023-24, Russian wheat got a bad reputation among responsible buyers, which swiftly dented prices.
In addition, grain from Russia’s south is shipped via the Black Sea, where there is a war going on, pushing up the cost of shipping. True, at the beginning of July, thanks to low global prices in the previous period, the export duty has gone to zero, and prices at ports have been rising due to the weak initial harvest. But many farmers are already deeply in debt, and an improvement in the export situation will not save them.
Still, the bureaucratic madness goes on. Russians may now be left without vegetables: on June 30, Rosselkhoznadzor banned the import of vegetable seeds from the Netherlands under the pretext of having found pests in them. Vegetable growers will, judging by the looks of it, have to make do only with local seeds, so the “borscht basket” of vegetables will get significantly more expensive.
It might come to the point where Russia will again need to import food, if not from “unfriendly” Canada, then from “friendly” China. But things are not that bad – they could get worse. The government recently penciled bananas into the list of domestic agricultural products. The reason is that bananas are starting to be grown in greenhouses in Stavropol. The first harvest has yet to come in, but already the government deems it possible to reduce banana imports under import substitution. Needless to say, these greenhouse bananas will cost a fortune.
Finally, another blow to Russian grain producers was dealt by a simultaneous decline in exports and prices for Russian wheat. Exports were dampened by a global-price-linked export duty, and farmers were often forced to operate in the red. Meanwhile, after Russian exporters shipped stolen Ukrainian grain from occupied territory in 2023-24, Russian wheat got a bad reputation among responsible buyers, which swiftly dented prices.
In addition, grain from Russia’s south is shipped via the Black Sea, where there is a war going on, pushing up the cost of shipping. True, at the beginning of July, thanks to low global prices in the previous period, the export duty has gone to zero, and prices at ports have been rising due to the weak initial harvest. But many farmers are already deeply in debt, and an improvement in the export situation will not save them.
Still, the bureaucratic madness goes on. Russians may now be left without vegetables: on June 30, Rosselkhoznadzor banned the import of vegetable seeds from the Netherlands under the pretext of having found pests in them. Vegetable growers will, judging by the looks of it, have to make do only with local seeds, so the “borscht basket” of vegetables will get significantly more expensive.
It might come to the point where Russia will again need to import food, if not from “unfriendly” Canada, then from “friendly” China. But things are not that bad – they could get worse. The government recently penciled bananas into the list of domestic agricultural products. The reason is that bananas are starting to be grown in greenhouses in Stavropol. The first harvest has yet to come in, but already the government deems it possible to reduce banana imports under import substitution. Needless to say, these greenhouse bananas will cost a fortune.
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