A month ago, deputies raised a number of important questions before the government regarding the loss of the new harvest and the sharp decline in grain prices. They also raised a number of other pressing issues. Deputy Prime Minister Serik Zhumangarin responded to the deputies' request, reporting on the purchase of large volumes of grain, how the situation with the collapse of purchase prices is being mitigated, and also on exports, the APK News agency reports.
As the deputies stated, farmers contact them daily reporting the loss of the harvest. Social networks are full of videos of grain piles being covered with snow. Majilis members raised a number of questions before the government.
First: will there be a purchase of large volumes of grain this season?
In his response to the deputy's request, Serik Zhumangarin reported that the Food Corporation is already taking measures to purchase grain from farmers. However, as follows from his information, there will not be such volumes this season as in 2011, when the corporation purchased over 5 million tons.
“The Food Corporation will purchase 1.2 million tons of grain. At present, 705 thousand tons of grain, or 59%, have been delivered to elevators. The Food Corporation will also directly purchase new harvest grain. At the first stage, it is planned to purchase 150 thousand tons of products at market value (the purchase price was announced on November 18),” Zhumangarin noted.
He recalled that the price of class 3 wheat from the Food Corporation is from 75 thousand to 90 thousand tenge; class 4 wheat - from 55 thousand to 65 thousand tenge; class 5 wheat - 50 thousand tenge, class 2 barley - 50 thousand tenge.
The second question that the deputies put to the Government was: what is being done to mitigate the situation with the collapse of grain purchase prices?
“During the period of falling domestic grain prices, the Food Corporation helps farmers sell their products at a profitable price by conducting intervention purchases, thereby minimizing the losses of agricultural producers,” the Deputy Prime Minister answered.
“During the period of high prices, the state operator sells grain to flour mills, livestock and poultry farms at prices below market prices, thereby restraining the growth of prices for final products. Thus, the Food Corporation provides systemic support to the market by providing forward contracts and commodity loans, selling cheaper wheat to flour mills, livestock and poultry farms,” S. Zhumangarin also reported.
As part of the forward purchase, the price for grade 3 wheat was set at 85 thousand to 100 thousand tenge. This year, 593.6 thousand tons of grain have been contracted for forward purchase for a total of 40.7 billion tenge. To date, a total of 403.4 thousand tons of grain have been delivered to the Food Corporation for a total of 32.3 billion tenge.
Regarding the solution to the issue of supplying wagons for uninterrupted grain exports, it is reported that at present, about 11.8 thousand grain trucks and 16 thousand covered wagons are involved in grain transportation.
"The existing fleet has the ability to fully meet the needs for grain transportation. The standard turnover of wagons with grain cargo will be ensured in all directions. This year, the grain export potential is projected at 12 million tons. According to the results of 11 months, Kazakhstan Temir Zholy transported 9.2 million tons of grain cargo, of which 2.2 million tons were transported domestically and 7 million tons were sent for export. The export of the new crop (September - November) amounted to 2,871 thousand tons, which is 51% higher than the same period in 2023 (1,907 thousand tons), "the Deputy Prime Minister explained.
Serik Zhumangarin also clarified the situation with the extension of loans issued for spring field and harvesting work and the consideration of the possibility of using the offset mechanism.
"In terms of the extension of loans of JSC NMH Baiterek, applications will be considered on an individual basis. The extension will be carried out on a general basis in accordance with the internal regulatory documents of financial institutions. Currently, farmers are receiving requests with questions about loan restructuring. Thus, JSC Agrarian Credit Corporation received 119 requests from farmers for a loan amount of more than 5.1 billion tenge. In this case, it should be noted that the loan funds were issued at the expense of budget loans. In case of non-repayment of loans by farmers, there is a risk of non-repayment of funds to the budget,” the Deputy Prime Minister said.
As for the application of the offsetting mechanism, JSC Agrarian Credit Corporation and JSC KazAgroFinance, he noted that these companies are financial institutions, therefore, payment in products for received loans/leasing is not provided for by the credit policy.