Russia agricultural meltdown as farm machinery production collapses and grain crops crash

Russia's agricultural sector is reeling from a steep fall in the production of farm machinery and collapsing grain crops. The double blow is just the latest in a series of domestic crises facing the Kremlin during the conflict with Ukraine, as Russia's war economy begins to flag.

The latest data shows the production of agricultural machinery has plummeted by 27% in 2025, as farmers finds themselves unable to afford new equipment. Russia's largest manufacturer of farm machinery has been hit particularly hard by the sharp downturn in demand. Rostselmash has seen its sales of combine harvesters plunge by a massive 76%, forage harvesters by 49% and articulated tractors by 48% from January-April 2021 to January-April 2025.

The firm was forced to briefly switch to a four-day working week in March, before laying off 2,000 workers in April. Then in June, the company placed all 15,000 of its employees on leave for the entire month, as it desperately sought to cut costs.

"Farmers have no money to buy the equipment they need, and the market has drastically shrunk as a result," the company said in a statement.

The company also reported n eye-watering 130% year-on-year drop in net income last year, down to 6.9 billion rubles (£64.4million). Total revenue fell nearly 20 billion rubles to 78.3 billion (£731m) in 2024.

"Rostselmash continues to monitor changes in the agricultural machinery market," the company said.

Russia grain harvests are also collapsing, mainly due to extreme weather caused by global warming.

The 2025 harvest is shaping up to be the country's worst in years, with up to 25% of the grain crop in danger of being lost.

Unseasonable spring frosts damaged over 240,000 hectares of crops, with 100,000 hectares lost outright. These were followed by record summer heat, with temperatures above 40°C in key southern regions.

Drought conditions this summer have been devastating, with nearly 500,000 hectares destroyed.

Total grain output, which peaked at 158 million tonnes in 2022, is now expected to fall to around 130 million tonnes.