The Ministry of Agriculture of Kazakhstan has carried out poor quality work on the preparation of a project to reform the existing system of state support for agriculture. In addition, the proposals have lost their relevance against the backdrop of events in Ukraine. This position was expressed by the participants of the meeting on improving the mechanism of subsidizing in the agro-industrial complex, which was held on March 5 under the chairmanship of the First Deputy Prime Minister of the Republic of Kazakhstan Roman Sklyar.
As a result, the committees of the Atameken National Chamber on the agro-industrial complex and the food industry recommended that the government maintain the current system of state support until 2023, and send the proposals of the Ministry of Agriculture for revision.
Recall that the main idea of the Ministry of Agriculture was the transfer of all state support to subsidize the rate on bank loans. However, the meeting participants noted that this would not allow fulfilling the main task that President Tokayev set for the Ministry of Agriculture - to expand access to state support to as many farmers as possible. After all, a meager part of farmers, especially small and medium-sized ones, use bank lending. Therefore, it is important for them to subsidize seeds, herbicides, fertilizers, fuels and lubricants. If all this is canceled and translated into subsidizing interest rates on loans, then a very small part of large agricultural holdings working with banks will benefit.
This opinion was expressed in an interview with ElDala.kz portal by Ivan Sauer, chairman of the agro-industrial complex NCE Atameken, general director of Agrofirm Rodina.
- The Ministry of Agriculture will simply destroy small and medium-sized farmers with its state support reform, - said Ivan Sauer. - Therefore, my opinion is that the existing system should be left. Yes, some things can be polished. For example, to equalize the amount of subsidies for the purchase of imported and local livestock. Now they pay more when buying livestock abroad. And this is nonsense! There are no analogues to this approach in the world. Therefore, the amount of subsidies here must be equalized, and in a good way, make domestic livestock a priority by paying more subsidies for its purchase.
These things can be polished, but in general, the system cannot be changed in the version proposed by the Ministry of Agriculture, experts say and pay attention to a variety of risks for certain sectors of agriculture that will appear if the project proposed by the Ministry of Agriculture of the Republic of Kazakhstan is approved.
For example, it involves the payment of all commodity-specific subsidies from local budgets. Given that the treasury of the regions most often does not have free funds, this approach is tantamount to the abolition of these payments - the amimats simply will not be able to make them. Farmers will be hurt and the country's food security will be threatened.
- You can't do anything stupid with the reform of subsidies, otherwise you can lose the dairy industry, - said Ivan Sauer. - Those guys who got involved in this a long time ago and have already gone deep, they, of course, will not be lost. But new ones will definitely not come. And we need to expand, launch new projects in order to get away from import dependence. Look what life has shown: the Belarusians took and raised the price of powdered milk by 1.5 times. And immediately there were problems with milk in Kazakhstan. This has never happened before! Because natural raw materials are not enough, even die.
The main supplies of dairy products to Nur-Sultan are provided by the two largest milk producers in Kazakhstan - the Rodina agricultural firm and Zenchenko and K. But their current capacity is not enough: the daily demand of the capital for 40 tons remains uncovered. These applications are closed by other manufacturers, many of which work on "sushnyak" - imported milk powder. After the price of this raw material rose, they had to refuse supplies. Some people still have previously delivered volumes, but sooner or later they will run out. This will lead to the need to raise product prices. And until our own production closes the demand in the domestic market, such price jumps will occur constantly.
Therefore, we are talking about the need to create new dairy farms in Kazakhstan, which would allow us to meet the needs of the domestic market on our own.
- Now in our country there are only five or six large full-cycle companies that produce milk themselves, process it themselves, and sell it themselves, - said Ivan Sauer ..
The shortage of milk in Kazakhstan is estimated at 500 thousand tons per year. This means that another 50 modern dairy farms for 1,000 heads each need to be built. But without state support, business will not go into this industry - it requires huge one-time investments, which, even with the existing state support, pay off in 8-10 years. If subsidies are removed, then the payback horizon will shift into an unattainable distance. In addition to the loss of prospects for increasing milk production, the abolition of state support will also lead to an increase in prices for products of already operating enterprises.
- Now the cheapest milk in the CIS is in Kazakhstan. And in Kazakhstan, the cheapest is in Nur-Sultan, - Ivan Sauer explained. - Because 80% of the market of the capital is controlled by two companies, CT "Zenchenko and K" and agricultural firm "Rodina". If we cancel subsidies per liter of milk, we will have to raise prices for our products in order to compensate for the loss of state support. This is approximately an increase of 18-20%. So nothing will change for us. On the contrary, we will stop hearing unfair reproaches about receiving subsidies. It is not we who will suffer, but the buyers, for whom the products will become more expensive.
Yes, indeed, now the dairy industry enjoys powerful state support. But, in fact, thanks to this, a part of the cost of production is subsidized for ordinary Kazakhstanis, who, thanks to this, have the opportunity to buy natural fresh domestic dairy products at a lower price.
As for producers, the most difficult situation will be small dairy farms that do not have their own processing and hand over the produced raw materials to dairy plants. The purchase prices of processors are low, and the profitability of the raw material producer is at a minimum level. Now this is somehow compensated by subsidies. But after their abolition, farmers will find themselves in a difficult situation - they will not be able to raise the price of their products due to their dependence on the processor, and they will no longer receive support from the state.
- At the same time, it is impossible to make any bet on household plots, which are talked about a lot, in the dairy industry, - Ivan Sauer explained. - The fact is that private household plots do not milk milk in winter. It is impossible to rely on this segment in the dairy industry. Therefore, the Ministry of Agriculture of the Republic of Kazakhstan needs to take all this into account, while maintaining support for the industry in the current format. This is necessary to ensure the food security of the country.