The Decline of Farms in Russia: The Causes and Consequences of the Reduction

One of the key reasons for the alienation of farms is the sharp increase in interest rates on preferential loans, which have become inaccessible to most farmers. Financial institutions are increasingly assessing the solvency of borrowers from the agricultural sector, which makes it difficult to access loans. In 2024 , for example, more than 400 farms closed in the Rostov region. The Krasnodar region, known for its fertility, is also recording a decrease in the number of individual entrepreneurs in the agricultural sector, reaching a decrease of 6.7% in early March 2025 compared to the previous year.

Difficult economic conditions force farmers to make difficult decisions, including freezing operations or going out of business entirely. In addition to financial problems, farmers face natural risks such as drought. One farmer in the Rostov region lost half of his beet crop due to adverse weather conditions, which led to equipment being seized for non-payment.

Previously, farmers could hope for payment deferrals and relaxed terms, but in recent years approaches to support have changed. Leasing companies have become stricter, which is causing farmers to lose essential equipment.

Experts predict that in the context of the deterioration of both the industry and the financial situation, there will be a wave of asset sales by small and medium-sized farms, leading to the concentration of agriculture in the hands of large agricultural companies. The current state of farms is a cause for serious concern, and active government support is required to preserve and develop them, otherwise the agro-industrial sector may face much more serious problems in the future.