What are the prices of grain dependent on, what problems do the villagers face now, what is necessary for young people not to leave for the city? Nartai Iskakov, a deputy of the Akmolin regional maslikhat, answered these and other questions of the “KazakhZerno.kz”.
– In early June, Akmolin region completed the sowing campaign. Probably not everything was easy. Especially, for small farms. As a farmer, the chairman of the standing commission on agrarian issues and the industrial-innovative development of the regional maslikhat, you probably know about this. What worried the villagers this year in the first place?
– The main question always arises with working capital. But, I want to note, the state allocates 60 billion tenge annually for spring field work in the republic. This money goes through the second-tier banks, financial institutions of “KazAgro”, as the JSC “Fund for Support of Agriculture”, “Agrocredit Corporation”. For example, this year Akmolin region has mastered 18 billion tenge. This is a considerable amount, and, as far as I know, there was no problem with financing as such. It was possible to get more money, but sometimes the producers themselves were not ready.
The requirements are large: there should be no tax debts, overdue debts, you should have a good credit history, collateral, etc. Therefore, those farms that have been engaged in the production of agricultural products for a long time have come to this prepared, and received all the necessary funds.
The only thing is, of course, it is difficult for small peasant farms to independently solve financial issues and they need to join credit partnerships. They provide joint and several liability. If any of the participants of the CT did not pay the loan, then the rest should repay it together. Many people are afraid of such an approach, but recently credit partnerships have put their work on the proper level, and do not allow for debt, carefully monitor what the farmer takes the money, how he expects to return it.
This is budget money, issued, by the way, at low interest rates that need to be returned. I will add that large grain traders who allocate funds for the future harvest are connected to the financing of agricultural producers. This is not always beneficial to the peasants. For example, last year they tentatively gave 40-42 thousand tenge per ton of barley, and after harvesting the price increased to 65 thousand tenge. Therefore, peasant farms that received such financing lost part of their income. But, as I noted above, there is a real opportunity to get available working capital from the state, it all depends on the farms themselves.
– Nevertheless, do you think that the state should change the approach to supporting agricultural producers?
– I will say frankly, no matter how people criticize agricultural subsidies, it is quite tangible. This was not before. I am glad that this year they began to pay in full investment subsidies. This is one of the most effective support tools for acquiring equipment. The state reimburses 25 percent of the cost of the cost. This is a very big deal, because in order to increase productivity, improve technology, we need power supply. Then you can complete the entire list of works provided by the routing in the shortest possible time, which is the main condition for increasing yields. Not in vain among the people since ancient times they said that the spring day was feeding the year.
The same can be said about the harvest, when using modern technology can reduce the time, thereby avoiding losses.
In the current year, investment subsidies in the amount of 8.4 billion tenge have already been paid in Akmolin region. These funds were not enough, can you imagine what is happening update technology? It has already been confirmed that in August-September an additional 4.5 billion tenge will be allocated. An important difference of this help from previous years is that these funds can be received in advance. After all, commodity producers acquire the main equipment on lease, with a certain down payment being paid, the rest is distributed in installments for seven years, and the rate of remuneration is subsidized by the state. According to the amended rules, with the approval of the project in “KazAgroFinance”, you can apply for subsidies. Thus, it is possible to receive this money in advance and send it to pay the down payment.
For example, a new combine now costs 50 million tenge, the initial payment is 15 percent, not everyone has one. Having received subsidies, you can buy a combine in installments for 7 years, this is a very big help.
Another measure of state support is subsidizing the cost of herbicides. In the Akmolin region for this purpose this year allocated about 9.5 billion tenge. The state also provides assistance for protection against diseases and pests.
But, in my opinion, it is necessary to change the order of granting this measure of support. Currently, it is carried out as follows: representatives of the RSE “Phytosanitary” go to the fields, identify diseases and pests, determine the amount of the areas to be treated. Then centrally required preparations are procured, and the contractors who will process the fields are determined by means of a tender. It takes some time and you can miss the processing time. It also affects the human factor, someone is treated more, someone less. The quality of processing does not suit many. Gas generators are used, which depend on the direction of the wind and therefore it is not always possible to precisely process the desired field. At this time, many manufacturers have modern units for the introduction of herbicides and fungicides. The farms could carry out a higher-quality processing, choose the most appropriate products. Therefore, I propose, and this is the opinion of many of my colleagues, that the funds that the state uses for this assistance be sent for subsidies. That is, the farms themselves buy the protective equipment, process it themselves, and some of these costs will be subsidized. The state must be left in control of large-scale phenomena, like the locust, the bitter weed of the type gorchak.
Further, I would like to note the fact that this year the new rules for subsidizing elite seeds did not work properly. They were developed, of course, out of good intentions, so that everyone, including small peasant farms, could purchase elite seeds. According to the rules, seed farms at fixed prices released elite seeds without payment. The state reimbursed them for the cost. Producers in the fall handed over grain in the NC “Food Corporation” 30% of the value of the seeds received. But seed farms need funds for spring field work. Therefore, they did not want to sell under these conditions. Farmers had to pay the full price when purchasing seeds, in this case the subsidies are not paid.
It turned out that the state allocated funds, but many could not use this help. Therefore, it is necessary to return to the old practice when commodity producers bought seeds, paying the full price at the market price, and the state reimbursed part of the costs. That at the same time subsidized seeds brought even from Russia. What to hide, the seed Russians are one step ahead. For northern Kazakhstan, for our soil-climatic zone, Omsk and Kurgan varieties are suitable. For example, I purchased elite seeds of barley, wheat, flax, Sudan grass in Russia and did not get for subsidies.
I would also like to talk about the situation with fertilizer subsidies. This is an expensive product. Previously, we paid part of the cost, and the state directly transferred subsidies to manufacturers. For example, ammophos costs 185 thousand tenge per ton. Two carriages of fertilizers – already 25 million tenge, and this is already big means. The state will refund the cost of fertilizers later, about 33 percent. If the state would give the subsidized part of the funds directly to fertilizer producers, and we would pay the rest, then we could purchase even more. I suggest subsidizing fertilizer revision.
– In general, is it possible for a peasant farm to independently sell products at a reasonable price? In Kokshetau, a commodity exchange previously existed, where villagers could directly sell their products to the buyer at a fixed commission charge. But lobbyists “pushed through” the consolidation of commodity exchanges, and now there is no such market mechanism in the Akmolin region. Does this affect the financial situation of agricultural producers?
– I would not say that the commodity exchange in Kokshetau has found wide application among manufacturers. Exchange as a trading instrument exists now, not necessarily in the Akmolin region. When the “Food Contract Corporation” purchased grain, it really formed the price, which was used by both the villagers and grain traders. In the autumn many farms, in addition to loans, have current debts. In recent years, it has been practiced that herbicide sellers are lending products, that is, they have to pay until November. You also need to pay salaries, taxes. Therefore, in the fall of the grain falls in price. At this time, traders are trying to make purchases. If during this period NK “Food Contract Corporation” participates in the purchase of grain and sets a fair price, this will prevent a collapse in prices in the domestic market. This would be a significant help to manufacturers. Unfortunately, last year NK “Food Contract Corporation” did not purchase grain.
– What else does grain pricing depend on?
– Many factors affect pricing. Take the same VAT refund when exporting grain. It seems that everything is written on paper, but in reality everything is more complicated. Traders are not sure about the VAT refund when they buy from manufacturers, so they put risks and reduce the purchase price. For example, at a price of 60 thousand tenge per ton, the VAT refund would have amounted to 6,400 tenge, and traders could take into account this amount when purchasing and, therefore, offer producers a higher price. Therefore, the VAT refund should be carried out by law and on time, and not with the proviso that there is no money in the budget.
Also, the shortage of railcars has a significant effect, so traders incur additional costs for storing grain, of course, purchase prices are reduced by this amount. Questions of car shortages arise every year and are painfully overcome with the creation of operational headquarters, etc. These problems need to be addressed.
– Storing the grown crop and seeds until the sale and the next sowing campaign is also not an easy task for small farms. Elevator services are not affordable for everyone, as they say. And not everything suits them. It is no accident that larger farms are trying to start their own granaries in order to save their costs before making a profit. And what should a small enterprise do? And what do they actually do in this situation?
– This is one of the most difficult questions. Elevators often underestimate the quality of grain deposited, cleaned and dried, which has become a real scourge for manufacturers. There are GOSTs for which grain is exported. For moisture, for example, 14 percent, weeds – 2, grain impurities – 5. If the elevator underestimates by one percent for each indicator, huge numbers are added. It is very difficult to challenge your case. According to the Law “On Grain”, a sample of grain must be stored for 3 days. If the grain deliverer does not agree with the indicators, then he may contact the territorial committee, jointly withdraw samples and pass on an independent examination for verification. If they do not coincide with the data of the elevator, then they can be punished. For repeated violation – suspend the license for this activity.
But in practice, one percent deviation is allowed. Let’s count. 22 tons fit in the “KAMAZ”. One percent by litter that you can never prove is already 220 kg. One percent by humidity is another 220 kg, as much by grain impurity. As a result, only by three indicators there is a shortage of 660 kg, which at current prices of 60 thousand tenge per ton is over 40 thousand tenge from one car! If an entrepreneur delivers 5 thousand tons, what is the amount? There are other losses. Grain with a gluten of 22 percent is considered the 4th class, 23 and above – the third class. The difference in price is about 2 thousand tenge. As I said above, it is impossible to prove 1%, than unscrupulous grain-receiving points use. To all this, you can add a constant difference in weights. Farms inspect their weighing equipment annually. However, at the elevator from each KamAZ, as a rule, there is a shortage of 30-50 kg in favor of the elevator.
Count yourself how much the commodity producer loses? This is the most sensitive issue, especially for small enterprises. A number of large firms agree with the HSP so that their representatives, laboratory assistants, participate in the acceptance of grain. But many elevators do not agree, arguing that they have a large number of grain deliverers and their representatives will interfere with their work. All this creates an atmosphere of distrust. We would be happy to pay at the price of HSP if everything was fair.
Therefore, each grain producer is trying to build its own storage facilities, to purchase drying and cleaning units. But this is an undue burden on production. These funds could be sent to the purchase of new technology. For example, at one station, the Novoishimskaya SKO counted 18 elevators 4 years ago! Do you need so much? Of course not. Simply, farms, seeing what is happening, are forced to build their own elevators, with additional costs.
– Is there a way out in the current situation?
– Together, we need to find ways to address this issue. Oil crops, like, a way out. Many farms themselves ship flax in big-run to Europe by road. At the same time, they are responsible for its weight, quality in front of the buyer. And most importantly, no one is deceiving them. After all, real business should be based on honesty and decency.
– At the end of our conversation I would like to ask, how do you see the future of the village? It is no secret that young people are leaving for the city in search of a better life. And the villages, especially located far from the railway, the large highways, are becoming empty.
– This question worries me as a deputy, as a native of the village. In the native Zerendinsky region, the population also decreases from year to year, although it is prosperous and is located near Kokshetau. Why is the youth not delayed? Here, probably, the question is not only in the quality of life. We began to promote through the TV series the image of a young man who drives a prestigious car, goes to a cafe with girls, flies abroad. And the youth sees this beautiful picture, and thinks that if you move into the city, perhaps they will also have a beautiful life. They also see that earlier it was possible to achieve material benefits with the help of honest labor, and now some of them are undeservedly getting richer.
But the most important thing is the big difference in the quality of life. City dwellers have great privileges. For example, this year in Kokshetau reduced payment for heat by 30 percent. Therefore, in the city during the heating season, residents pay 20-30 thousand tenge for 5 months of cold weather, and for the winter, the villager only takes 100 thousand tenge for coal. If the city is allocated billions to buy fuel from the budget, the villagers buy coal at market prices on their own. The city has a housing modernization program, where dilapidated housing is being repaired at a low percentage. For townspeople mortgage housing is being built, the villager does not have such opportunities.
Targeted social assistance becomes less affordable for villagers, since cattle in their own farmstead is considered income. Although the same cow must be maintained, it’s not cheap food to buy. Therefore, livestock maintenance becomes less profitable. One example is that in the village of Bereznykovka, near Kokshetau, there are less than 60 milk cows left for 139 yards. I spoke several times about the incorrectness of the calculation of TSA for rural families. But this is a republican decision.
The villagers also want their children to receive music education, go in for sports in various sports sections, new cadres came to school, there was a high-quality medical care. But the villages lack such specialists. Why not build housing for them? Houses at the expense of the budget are built only in cities and district centers. And it is necessary to cover the village. Even the program “With a diplom to the village” is not fully implemented due to lack of funds. So, for Akmolin region allocated 874.9 million tenge for 231 specialists provide only 50 percent of the existing need. In fact, 449 specialists in the amount of 1 billion 700 million tenge applied for budget crediting under this program.
The lack of funds leads to an outflow of specialists who arrived in rural areas to work and live in the project. A concrete example: in the Zerendinsky region, 20 young specialists received budgetary loans to purchase housing, and twenty-four did not have enough money. Recently I found out that only twelve of them remained to work in the village. Half left without waiting for help! We say to young people – go to the village, but do not fulfill the conditions of the Program. Thus, we are accelerating urbanization. Summing up, I will say that the village should be given the same attention as the city. Then there will be a society of equal opportunities and universal labor, which was repeatedly mentioned from the high tribunes.