Kazakhstan’s farmers will be subject to a new tax

The introduction of a recycling fee on imported agricultural machinery will not bring any benefits to the country’s economy. On the contrary, this measure will slow the renewal of the park and cut off domestic farmers from advanced agricultural technologies. This position was voiced by the Grain Union of Kazakhstan, addressing an open letter to the Ministry of Agriculture, the Ministry of National Economy, the Ministry of Energy and the National Chamber of Entrepreneurs «Atamenken», reports The Sobkor IA «Kazahzerno.kz».

The document notes that the Ministry of Infrastructure Development of Kazakhstan (MIID) initiated the issue of introducing a recycling fee for agricultural machinery imported into Kazakhstan, but avoids open and transparent discussion of this issue with the company itself farmers. This issue is particularly sensitive for farmers of the main grain regions of the country — Kostanai, North Kazakhstan, Akmolin and Karaganda regions. The position of the peasants is unequivocal — the innovation will not bring anything good to the farmers themselves.

«Recycling as an additional tax on means of production will put an unforeseeable burden on agricultural producers, and therefore on the whole industry, which is in the stage of recovery and diversification», — the grain growers note.

For the first time, the proposal to introduce a recycling fee in February this year was voiced by the mazhilisman Kenes Absaturov in a parliamentary inquiry addressed to the Prime Minister. He suggested that this measure motivates foreign producers to open their factories in Kazakhstan. At the same time, the size of the collection mazhilisman indicated modest — 5%.

However, the IARC, which prepared its proposal on this issue, did not hesitate and marked the corridor of rates from 10% to 30%. In support of its position, the agency overseeing the development of mechanical engineering issued an analysis of regulatory impact (ARV).

Oddly enough, in this study, the only victims of the introduction of scrap collection were named … suppliers and sellers of imported agricultural machinery. The authors of the ARV seem to have forgotten that farmers will suffer from innovation in the first place.

— This analysis of the consequences of the recycling fee was lopsided, — said Shokan Badykhan, executive director of the Grain Union of Kazakhstan. -The impact on the SCTP was not reflected. This is very strange: a recycling fee is introduced on machinery, a means of production that allows farmers to work and earn money. But the impact of this measure on their business is not in any way indicated. The Ministry says only one thing — that it will allow the development of Kazakhstan’s machine-building assembly plants. In fact, it turns out that the state wants to support these plants at the expense of peasants, because it will be on them this new fee. Moreover, its size — at least 10%, and the maximum — up to 30% for certain types of agricultural machinery.

All this will slow down the already low rate of renewal of the agricultural machinery park. In addition, it will make inaccessible to most agricultural farms, even large, high-performance Western equipment. In Kazakhstan, there are grain companies that initially focused on the purchase of equipment of the world’s leading producers. The decision to introduce a recycling fee in the first place will hit them.

And the equipment offered by local assembly plants will not satisfy them, because it does not have the right level of productivity and does not allow to introduce advanced agricultural technologies. For example, modern harvesters can analyze grains at once in a bunker, showing the quality of the crop. Or, there are sprayers, which thanks to sensors make drugs only where it is necessary, automatically analyzing the condition of the foliage.

To show the real picture, «Atameken» NPP conducted its analysis of the consequences of the introduction of scrap collection. And I have made this conclusion: due to the growth of the exchange rate, Western technology is already becoming more inaccessible to farms in Kazakhstan, focused on productivity and diversification. This leads to an increase in wear and tear. Today, the fleet of tractors in the Republic of Kazakhstan is 152,629 units, the fleet of grain harvesters and harvesters — 41,494 units. At the same time, 65% of tractors and 46% of combines have a lifespan of more than 17 years. That is, they are to be written off. Moreover, 19841 tractors and 2821 combines are not working at all.

The state is taking measures to stimulate the rate of renewal in the form of interest subsidies for leasing and payment of investment subsidies. But the introduction of a recycling fee will completely overtake these measures.

The Chamber of Entrepreneurs conducted an analysis of the price policy of agricultural machinery manufacturers. The conclusion is disappointing: while the technology of foreign countries in the Kazakhstan market is becoming more expensive for objective reasons (depreciation of tenge), Kazakhstan’s assembly plants and producers of Russia and Belarus raise the cost without any Reason. As a result, for 2014-2017 the most popular products of domestic manufacturers, namely, the tractor «Belarus 1221», combine «Yesil», combine «Vector», increased in price by 2 — 2.5 times.

«This suggests that domestic factories are increasing their prices following Western machinery. Therefore, any further increase in the cost of Western machinery will lead to an increase in the prices of machinery of local plants», — the authors of the study conclude.

— It turns out that for the sake of three or four factories in Kazakhstan, which collect primitive tractors and combines, they want to introduce, in fact, a new tax on imported equipment, — said Yerbol Yeseneev, director of the department of the agro-industrial complex and food industry NPP «Atameken».  — If it is about 10% of the cost of the equipment, the landowner will have to pay millions from each unit of the tractor or combine.  This will have a very negative impact on the rate of renewal of the park, which is already worn out above a critical level.

At the same time, there is no reason to say that domestic engineering will receive some kind of powerful impetus.  After all, local manufacturers are assembling from parts brought from Russia and Belarus.  So, in essence, the introduction of the utilization fee is nothing more than lobbying for the interests of the producers of our EAEC neighbors and several assembly plants in Kazakhstan.

— What has saddened us, we did not see the tough position of the Ministry of Agriculture of the Republic of Kazakhstan in upholding the interests of agricultural producers, — Shokan Badykhan said.  — Introduction of the utilization collection is planned from July 1.  So that this innovation will be at least postponed, we will continue to try to open the eyes of the authorities that the country will not receive any advantages from the innovation.  But on the development of agriculture, it will be a blow.

Sergey Buyanov

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