Ten pain points of the agroindustrial complex of Kazakhstan

The authorities of Kazakhstan, most likely, will meet the wishes of the farmers, extending the possibility of paying the single land tax until 2023.  This was announced by the Minister of Agriculture Saparkhan Omarov at the reporting meeting, which took place in Nur-Sultan on June 18.

Recall that now in Kazakhstan a preferential system operates in regard to agrarians – the Unified Land Tax (ULT).  However, the current Tax Code assumes that from January 1, 2020, instead of ULT, it introduces a tax that every farmer will have to pay in turnover.  This will bring the existing problem of the absence of competent accountants in the countryside to a new peak.

A question about this to Saparkhan Omarov during the reporting meeting was asked by one of the farmers, stressing that innovation would be a big problem for the peasants.

The minister replied that he was familiar with the problem.  And he said the good news – the agrarian department is now negotiating to extend the preferential regime with the payment of the ULT until 2023.

– We have understanding with our colleagues on this issue, – said the head of the Ministry of Agriculture.

The questions were heard both from the audience and from the regions, by means of a teleconference, the correspondent of the KazakhZerno.kz news agency notes.  The peasants were worried about a wide variety of topics: from subsidizing construction and installation works when erecting agricultural objects to a ban on the export of cattle hides, which led to overstocking of warehouses.  By the way, Saparkhan Omarov said that the ban is valid until August, and he will do his best so that it will not be extended anymore.

The minister also answered the question of what is being done to ensure that unused land is transferred to those who really want to work.

– Rational use of land is our primary task, – said the head of the agrarian department.  – We return the land, transfer to bona fide agricultural producers.  Although, of course, this work is not yet at the proper level.  There is enough farmland in Kazakhstan, they just need to be treated carefully and efficiently.  Relevant changes in legislation are accepted.  So, from now on, the state will control how effectively the tenant is operating for five years.  This norm was not there before.  In addition, all maslikhats received the right to increase the tax on land that is not used up to 10 times.

There were many questions and livestock.  The Minister said that amendments to the rules for the purchase of cattle.  From now on, the purchase of not only imported breeding stock, but also local – in the same amount is subsidized.

Another critical moment that the farmers paid attention to is the removal of this same breeding stock from the country.  Especially in Uzbekistan.

– There are such facts, we established them by sending working groups to the borders with China and Uzbekistan, – said Saparkhan Omarov.  – This is not normal – the country spends a lot of money on importing breeding stock, and it is immediately exported.  According to our data, if in 2018 50 thousand heads of cattle were exported from Kazakhstan, then in five months of this year – already 42 thousand. The operational decision we are planning to take is a ban on the removal of the breeding stock from the country.  Moreover, there are a lot of violations now – tags are being cut from ears, cattle are being taken out without documents.

At the same time, in his report, Saparkhan Omarov drew attention to the fact that, despite all the difficulties, the country’s agricultural sector is developing.  At the end of 2018, livestock production increased by 3.6%.  In this, the minister sees the merit of the state, which infuses huge sums of money into the industry through the «Sybaga», «Yrys» and «Altyn Asyk» livestock lending programs.  Growing and crop.  This year, the state allocated 60 billion tenge for crediting spring field work, which made it possible to successfully complete the sowing of 19 million hectares, of which 14.5 million were cereals.

– The current year also started with quite good results, – Saparkhan Omarov noted.  – According to the results of five months, the gross agricultural output amounted to 815.1 billion tenge, which is 3.7% more than the same period last year.  Good dynamics in attracting investment in the industry, they grew by 52.2% to 124.3 billion tenge.

– In order to increase the effectiveness of state support, the Ministry of Agriculture plans to focus on ten tasks, – said Saparkhan Omarov.  – And the first is the land, the most important asset of the country, which is in state ownership.  If we want to increase the efficiency of agricultural production, we must first pay attention to the qualitative characteristics of the land.  Therefore, we plan to increase the coverage of farmland soil, geobotanical, agrochemical surveys.  Work in this direction has already begun, funds in the republican budget are provided.  Based on the survey results, electronic soil geobotanical maps will be created that will provide the basis for proper control and transparency in this area.

Another important issue is the return to the Ministry of Agriculture of control and supervisory functions in veterinary medicine.  This will restore the vertical control.  The necessary legislative changes have already been initiated.  The creation of a system of traceability of livestock products according to the principle “from farm to table” adjoins the same topic.

The changes will affect the insurance system, both in crop production and in animal husbandry.  At the same time, insurance from compulsory will become voluntary.

One of the key problems of Kazakhstan agricultural producers is the unavailability of financing.  Second-tier banks annually reduce the volume of investments in the industry: if in 2016 it was 207 billion tenge, in 2017 it was 140 billion, and in 2018 only 112 billion. Small and medium enterprises account for 96% of the total, and all of them have  problems with liquid collateral.  This does not allow them to receive loans.

To address this issue, the Ministry of Agriculture plans to develop alternative mechanisms.

– First, it is necessary to create Cooperative Financial Unions on the basis of rural credit unions (CFU) and microfinance organizations, – said Saparkhan Omarov.  – To this end, the current legislation has already been amended, providing for the unification of the CFU in the Central Partnership.  Second, it is planned to introduce a new instrument – agrarian receipts.  At its core, it is a bill that allows you to receive funding for the next harvest without the need for collateral.

Also, the Ministry of Agriculture of the Republic of Kazakhstan considers it necessary to develop agricultural processing to get more value added.  For this to be attracted investors.  Today, there are 24 major investment projects worth $ 1 billion in the country, including four with the participation of multinational companies.  But this is not enough, the work will continue.

An important issue is the expansion of irrigated land from the current 1.4 million ha to 2 million by 2021.  A plan has been developed to restore the water supply infrastructure.  41 facilities are included in the program for the reconstruction of emergency reservoirs in Kazakhstan.

– At the same time, today the main irrigated areas are located in the south of Kazakhstan, – Saparkhan Omarov noted.  – But in the north of the country there is also a huge potential for the development of irrigation using river water, as well as estuaries.  This will allow, first of all, to increase the production of feed for livestock.  The growth of the livestock of beef and dairy herds will provide sales.

Sales of agricultural products and provides foreign markets.  In general, the agro-industrial complex managed to increase export deliveries by 24.5% for 2018 and by 11.2% for January-March 2019. The Chinese market today is open to 13 groups of goods from Kazakhstan, including wheat, barley, flour, and vegetable oil  , honey, frozen lamb, beef.  Over the past year, Kazakhstani agricultural exports to China increased by 30.4%.

Other areas are actively developing: exports to the countries of the Persian Gulf grew 4.1 times, to Iran – 2.1.  The registers of foreign countries included 2008 agricultural producers of the Republic of Kazakhstan.

Sergey Buyanov

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