ANNOUNCEMENT 31 Aug 2019
On 31 August 2019, the Russian Government announced new edition of the rules regarding the preferential leasing of agricultural machinery, starting 2020. On 23 September, the agriculture ministry published a list of machinery eligible for subsidisation.
NUMBER OF INTERVENTIONS
Government of Russia. 2019. Resolution dated 31 August 2019 N 1135, On approving Rules for subsidies from the federal budget to Rosagroleasing joint stock company, Moscow city, to compensate for lost income under preferential leasing contracts ("Об утверждении Правил предоставления субсидий из федерального бюджета акционерному обществу "Росагролизинг", г. Москва, на возмещение недополученных доходов при уплате лизингополучателем лизинговых платежей по договорам финансовой аренды (лизинга), заключенным на льготных (специальных) условиях"), http://ivo.garant.ru/proxy/share?data=q4Og0aLnpN5Pvp_qlYqxjK_xqrzXt9W_qeqZArb1tcalo_yf8-aowbnJtcvygADzs-CD6ZPhgP2M5pb8nfPvvualzLXQpdG50wLqneeH57jlt-ewrQ==
Ministry of Agriculture. Order N557 dated 23 September 2019, "Об утверждении перечня (наименований) сельскохозяйственной техники, машин и оборудования, приобретаемых акционерным обществом "Росагролизинг", г. Москва, для передачи по договорам финансовой аренды (лизинга), заключаемым на льготных (специальных) условиях" (On approving list of machinery and equipment, purchased by Rosagroleasing joint stock company (Moscow) for leasing out under preferential conditions), http://ivo.garant.ru/proxy/share?data=q4Og0aLnpN5Pvp_qlYqx_aPg1fyY8tC-7LnXAuug8tKk5KPL86_wk7XDoNGi31Pzu_CQ4o7hiP2P4Znii_On8ae0zrPLvOu-w3-52fKP8bfju-O54I_kwQ==
On 31 August 2019, the Russian Government announced the new edition of the program of preferential leasing of agricultural machinery and equipment (also called Program for Renewal of Fleet 2020 - Программа обновления парка техники 2020). According to the information from Rosagroleasing website (checked November 2019), the state-owned leaser and implementer of the program, under the new program no down payment or collateral is needed. The machinery is leased out for up to 7 years, with the lease appreciation rate as low as 3%. The threshold sum of leasing contracts with one client is 400 thousand rubles (USD 6000).
According to the Government Rules regarding the program, Rosagroleasing would be reimbursed for incomes lost under the program of preferential leasing. To be eligible for reimbursement the leasing contract cannot exceed 8 years, rates of annual appreciation can only be between 2 and 5% and the government will only reimburse 7.5 percentage points from whatever the profit rate Rosagroleasing sought from a leasing deal.
The agriculture ministry followed up on 23 September publishing the list of machinery eligible for support. The 190-item list includes machines and equipment for agriculture and primary food processing (from tractors and combine harvesters to food packaging and cleaning equipment).
From the viewpoint of the lessee, Rosagroleasing reports the following difference of the new program from its predecessor. Under the new program the rate of appreciation is 3% (3.5% under the old program) and down payment required is 0 (20% under the old program). Moreover, under the new program the first payment is delayed for 6 months.
On 6 April 2020, as a measure of support to farmers during the Coronavirus outbreak, Rosagroleasing increased the delay of the first payment to 12 months, for deals closed before 1 June 2020.