Rostselmash furloughs 15,000 employees – Russia’s agricultural industry on the brink!

Rostselmash furloughs 15,000 employees – Russia’s agricultural industry on the brink!

Russia's agricultural economy is facing enormous challenges, symbolized by a drastic furlough of employees at the largest manufacturer of agricultural machinery, Rostselmash. All of the company's 15,000 employees will have to take a break in June 2025 because demand has fallen sharply and exports have collapsed. Loud fr.de Sales figures have fallen alarmingly in recent years: combine harvesters recorded a decline of 76%, forage harvesters by 49% and articulated tractor sales by 48% compared to the first quarter of 2021.

Rostselmash experienced a loss in revenue of almost 20 billion rubles (965 million euros) in 2024. In order to counteract the desolate situation, the company tried to improve the situation in March 2025 with a four-day week and reduced its workforce by 2,000 employees in April. According to the Ukrainian Center for Countering Disinformation, Rostselmash experienced a “record loss” in sales after losing key export markets in the EU and the US. The company is now looking for new markets in Asia and the Middle East.

Economic impact on agriculture

The agricultural sector is considered fundamental to the economy in Russia, although the share of agriculture in gross domestic product has fallen. Agricultural value added increased from $45.9 billion in 2000 to $66.2 billion in 2019. Nevertheless, the farmers' financial situation is described as critical, which is subsequently leading to a decline in the market. Inflation in Russia is currently at 10.20%, and the Central Bank has increased key interest rates, further exacerbating the situation.

In addition, experts report on the financial difficulties of Russian agricultural holdings, which were considered attractive investments a few years ago. Companies like Ekosem-Agrar AG, known under the chairmanship of Stefan Dürr, controls 600,000 hectares of agricultural land and suffers from rising operating costs for seeds and fertilizer, which have to be paid in euros and dollars. This explosion in costs and access to financing have been made significantly more difficult by Western sanctions capital.de explained.

Sanctions and their consequences

The state-owned Rosselkhozbank, which plays a key role in financing the agricultural sector, has been on the sanctions list since 2022 and is excluded from the SWIFT banking system. Therefore, the refinancing of companies operating on the capital market and the provision of liquidity are becoming increasingly difficult. Putin's plans for agricultural self-sufficiency are severely threatened by these developments. Although Agriculture Minister Dmitry Patrushev plans to increase agricultural exports by 50% by 2024, the challenges posed by sanctions and dependence on Western technologies for high-performance seeds and agricultural technology are enormous.

Experts warn that large agroholdings could face tougher sanctions and greater challenges due to their reliance on Western technology. While Russia's self-sufficiency in grain is already largely secured, there is a lack of international materials for many high-yielding varieties. This creates a worrying situation in which the future of Russian agriculture and yields are at long-term risk.