The Government session chaired by Prime Minister Alikhan Smailov considered measures to implement the instructions of the Head of State given during the opening of the first session of the 8th Parliament. The Acting Minister of Agriculture Yerbol Karashukeyev reported on the plans of work on development of the agro-industrial complex.

In pursuance of the instructions of the Head of State, the Ministry of Agriculture will take a number of systematic and expeditious measures.

According to the Acting Minister of Agriculture, in order to ensure food security by the end of this year 291 investment projects for the development of the agro-industrial complex worth 536 billion tenge will be implemented. A total of 700 investment projects worth 2.6 trillion tenge are planned to be implemented in 2023-2026.

At the same time, large industrial investment projects for import substitution of milk, poultry and vegetables are planned to be implemented by replicating the successful experience of North Kazakhstan region, which provides for the allocation of a soft repayable budget loan to regional akimats for 10 years for further lending to agribusinesses through a trusted agent to be determined through a tender process through public procurement.

In turn, loans for agribusinesses will be extended for up to 10 years at an annual interest rate of 2.5%, with a grace period on principal and interest.

"This year we allocated 100 billion tg for this purpose, which will finance the construction of 65 dairy farms, which will increase milk production by at least 373,000 tonnes. On the one hand, this will provide year-round employment in rural areas, and on the other hand will allow to move away from import dependence," Karashukeyev informed. 

In order to create storage infrastructure and reduce the shortage of vegetable storage facilities, implementation of the Comprehensive Plan for the construction and modernisation of vegetable storage facilities will continue. By the end of 2025, vegetable storage facilities with a total capacity of 135,000 tonnes will be added, including 26 storage facilities for 105,000 tonnes in 2023. This will make it possible to cover the republic's shortage of vegetable storage facilities.

At the same time, the operation of the Stabilisation Fund has been reformatted since the beginning of this year with the introduction of a three-stage system of price containment for socially important foodstuffs.

The essence of the new staple fund approaches is to provide farmers in advance with an advance on the supply of autumn and early vegetables at fixed prices and to exert a regulating influence on the price increase of the vegetable group during the off-season.

According to the Acting Head of the Ministry, the regions are currently selling contracted vegetables from the 2022 harvest at fixed prices. At the same time, work is under way to conclude forward contracts with producers for the supply of vegetables from this year's harvest.

The provision of working capital for processors to purchase raw materials is also envisaged.

A separate mechanism of state support for the sale of cheaper grain has been worked out, which will make it possible to contain the rise in prices not only for flour products, but also for livestock products through the provision of grain and fodder for livestock.

"In general, to finance new approaches within the framework of the implementation of mechanisms to stabilize prices for socially important food products in the local budgets of regions provides about 125 billion tenge, including 99 billion tenge for preferential crediting and 26 billion tenge for direct purchase from producers," Karashukeyev said. 

In order to increase the accessibility of concessional financing for agribusinesses in accordance with the Decree of the President of the Republic of Kazakhstan "On measures to expand lending to the real sector of the economy and reduce the over-indebtedness of the population", work is being done to increase lending to second-tier banks and microfinance organisations, and expand co-financing mechanisms for projects in the agricultural and food processing sectors by NUH Baiterek JSC organisations.

In addition, in accordance with this Decree by the end of this year, grain receipts are planned to be included in the category of hard collateral with the guarantee of quasi-public sector entities for lending purposes. For this purpose, the Ministry jointly with the Agency of the Republic of Kazakhstan on Regulation and Development of Financial Market and the National Bank is working on the issue of criteria for inclusion of grain receipts as collateral.

In order to increase the volume of preferential financing for the sector, the Ministry, together with NUH Baiterek JSC, is working to attract budgetary investment from JSC Agrarian Credit Corporation in the amount of 40 billion tg for the implementation of investment projects in priority areas of the agricultural sector.

At the same time, 20 billion tenge will be allocated to increase the charter capital of KazAgroFinance JSC to finance the purchase of agricultural machinery, including forage harvesting equipment, and mobile irrigation systems for subsequent leasing in this year. A total of 79.4 billion tenge of budget investment will be allocated for these purposes over three years. All these measures will improve the conditions and availability of financing for agribusinesses. 

On the instructions of the Head of State, the "Auyl Amanaty" rural income improvement project has been launched, under which micro-credits will be issued through an attorney (agent) for up to 5 years, in livestock farming up to 7 years, at 2.5% per annum. The maximum amount of microcredit is 8.6 million tenge, with 27.6 million tenge for agricultural cooperatives.

According to Karashukeyev, 100 billion tenge is envisaged for the project this year, with a plan to issue 17,000 micro-credits, which will create more than 18,000 new jobs.

"In order to provide family farms with fodder for livestock, it is planned to create service agricultural cooperatives, which will provide services to their members at cost price and sell fodder to them at below market prices. In general, for 7 years the project is planned to spend up to 1 trillion tg with the coverage of more than 1 million villagers and involving them in cooperative entrepreneurship with the creation of about 350 thousand jobs," Karashukeyev said. 

On instructions from the head of state, the ministry will continue working on the withdrawal of unused agricultural land. This year, there are plans to return an additional 5 million hectares of agricultural land. In the first place, these lands will be allocated to meet the needs of the rural population in terms of grazing.

In conclusion, the acting Minister of Agriculture said that a special project office "Auyl Amanaty" was established under the Amanat Party, which together with the Ministry would oversee and monitor the qualitative implementation of the programme to increase the income of the rural population.

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