Production Dips, Harvests Collapse Amidst War and Climate Challenges

Russia's agricultural sector is experiencing significant challenges, marked by a decline in farm machinery production and a decrease in grain harvests. This situation adds to the existing domestic crises faced by the Russian government amidst the ongoing conflict. The war's impact is becoming increasingly evident as the economy struggles.

The production of agricultural machinery has decreased by 27% in 2025, making it difficult for farmers to acquire new equipment. Rostselmash, a major farm machinery manufacturer, has been severely affected by this downturn. Sales of combine harvesters have dropped by 76%, forage harvesters by 49%, and articulated tractors by 48% from January-April 2021 to January-April 2025.

In response to the decline in demand, Rostselmash implemented a four-day work week and later laid off 2,000 workers. The company then placed all 15,000 employees on leave for a month to reduce costs. The company stated that farmers lack the funds to purchase necessary equipment, leading to a significant market contraction. Rostselmash also reported a substantial year-on-year decrease in net income and total revenue in 2024.

Simultaneously, Russia's grain harvests are declining, primarily due to extreme weather conditions linked to global warming. The 2025 harvest is projected to be one of the worst in recent years, with a potential loss of up to 25% of the grain crop. Unseasonal frosts and record-breaking summer heat have damaged and destroyed vast areas of crops. Total grain output, which reached a peak in 2022, is now expected to fall significantly.