Russia to offer state aid for feed additive plants by 2027

Russian feed additive manufacturers can seek state aid from January 1, 2027, for the capacities built or modernised after 2024, the government stipulated. However, not every project matching the plan requirements will be eligible for state support. Photo: Canva

The Russian government has given state aid for feed additives the green light to reimburse 20% of the costs associated with the construction and modernisation of feed additive production capacities in the country.

Eligibility and selection process
Russian feed additive manufacturers can seek state aid from January 1, 2027, for the capacities built or modernised after 2024, the government stipulated. However, not every project matching the plan requirements will be eligible for state support. The government revealed that the Russian Agricultural Ministry will select specific projects for cost reimbursement through a competitive bidding procedure without providing additional details about this process.

The ultimate goal of the new initiative is to lower dependence on feed additive imports, which remains nearly absolute.”

Boosting food security
The measure will help strengthen Russian food security and technical sovereignty, Mikhail Mishustin, the Russian Prime Minister, said. The Russian government has been using partial reimbursement of capital costs in agriculture since 2018. As of today, it covers the construction of milk farms, poultry breeding farms, and aquacultural farms, among others.

Legislative support for subsidies
In July 2024, the Russian Parliament passed a bill paving the way for authorities to introduce broad state aid for feed additive production, including soft loans and the reimbursement of capital costs. Over the past few years, Russian agriculture has been subject to generous aid from the federal budget, but feed additive production has remained largely overlooked, lawmakers said in the explanatory note to the bill. According to Russian farmers, capital cost reimbursement was one of the most effective tools in the government’s arsenal designed to bolster agricultural businesses’ profitability.

Tight import dependence
The ultimate goal of the new initiative is to lower dependence on feed additive imports, which remains nearly absolute. In 2024, Russia imported 32,000 tonnes of feed vitamins, 5% up compared with the previous year, Feedlot, a consultancy, estimated. Feed amino acids jumped by 20% to 158,000 tonnes. Imports account for roughly 90% of Russian feed additive consumption, Feedlot estimated. Russia partly meets domestic feed lysine and methionine demand, fully relying on imports of other amino acids and feed vitamins.

Challenges in import replacement
The Russian government anticipates significant progress in the import replacement of key feed additives by the end of the decade, a development that could potentially transform the landscape of Russian agriculture. However, it’s important to note that local analysts and industry executives have expressed doubts about the feasibility of meaningful import-replacement in the industry. They argue that the internal Russian market remains relatively small, export prospects are uncertain, and production, especially of feed vitamins, may lack economy of scale, potentially leading to higher costs or less competitive products compared with imports.