As part of instructions of the Head of State, new approaches to subsidizing in agro-industrial complex under development — Yerbol Karashukeyev

A briefing on measures to implement the instructions of the Head of State given in the Address to the people of Kazakhstan "Unity of People and Systemic Reforms — Solid Foundation for the Country's Prosperity" was held in the press center of the government of Kazakhstan. During the briefing, Deputy Prime Minister Roman Sklyar, Minister of Agriculture Yerbol Karashukeyev, Minister of Industry and Infrastructure Development Beibut Atamkulov, and Minister of Energy Magzum Mirzagaliev answered the questions of journalists.

In the questions addressed to the Minister of Agriculture Yerbol Karashukeyev, the journalists were interested in the situation with the export of grain, especially to Afghanistan.

In particular, the questions concerned the volumes of grain and flour in grain equivalent exported by Kazakhstan to Afghanistan in the 2020-2021 marketing year, as well as how much is planned to be exported in the 2021-2022 marketing year. Also, how has the current situation in Afghanistan affected the export of Kazakh grain — whether the volume of exported grain and flour has decreased, whether Kazakh exporters are experiencing any difficulties, possibly with payment or transportation. Is Kazakh grain currently exported to Afghanistan, if not, when is it planned to resume export.

According to the minister, the Afghan market traditionally occupies a significant share in the export of grain and flour from Kazakhstan. For the 2020/2021 marketing year, 2.2 million tons of wheat and flour in grain equivalent were exported to Afghanistan.

“Indeed, the political events in Afghanistan have affected the trade relations between the countries. There were problems with payment for goods due to the suspension of interbank transactions, as well as problems with the supply of wagons because of fears about their safety and return,” Karashukeyev said.

Accordingly, he said, this also affected the volume of trade. All problems were resolved in September.

Currently, the shipment of grain and flour in the direction of Afghanistan is being carried out. Since the beginning of the 2021-2022 marketing year, about 200 thousand tons of flour and 60 thousand tons of grain have already been shipped.

Since August, 9 thousand tons of wheat and 31 thousand tons of flour have been shipped.

“By the end of the marketing year, by June 30, 2022, we plan to catch up with the volume of grain and flour exports. They will be within the average annual limits, which were the last 5-6 years,” Karashukeyev said.

The minister also answered in detail about the topical issue of subsidizing agricultural producers. The President has repeatedly noted that subsidies in the agro-industrial complex do not reach small and medium-sized businesses.

As part of the Address of the Head of State Kassym-Jomart Tokayev to the people of Kazakhstan "Unity of People and Systemic Reforms — Solid Foundation for the Country's Prosperity" dated Sep. 1, 2021, the Government was instructed to revise and stabilize subsidy mechanisms with providing access for mass agricultural producers.

“Indeed, the current system of subsidies in the agro-industrial complex has a number of significant shortcomings. First of all, these are multiple directions of subsidies. Accordingly, there are numerous criteria for obtaining them, for example, these are the age of animals, average weight, capacity of the feedlot, the number of cows, etc. All this pushes our producers to look for ways to bypass these criteria, creates difficulties in the administration of the system itself and is one of the main reasons for the occurrence of violations on the ground,” Karashukeev said.

Secondly, according to him, the existing system is aimed at supporting not the final result, but at subsidizing intermediate technological processes, for which it is difficult to establish clear criteria and indicative indicators.

The third problem that can be traced is the focus on supporting mainly large recipients. For example, it is no secret in animal husbandry, about 80% of subjects do not have permanent access to subsidies. Often, due to the discrepancy between the volumes of applications submitted and the allocated funds, we have to wait for adjustments, clarifications and the allocation of additional funds.

“All this leads to the fact that the recipients of subsidies stand in queues for a very long time and are forced to look for other ways to receive subsidies,” Karashukeyev said.

According to the minister, recently the Ministry of Agriculture completed an inspection of the General Prosecutor's Office, created a working group with the Anti-Corruption Agency, together with which the issues of a comprehensive solution of all issues are being worked out.

“Currently, the Ministry is developing a new subsidy mechanism within the framework of the Concept for the development of the agro-industrial complex. First, we want to reduce the number of criteria as much as possible. Secondly, we want to achieve a tangible result, which we can control with clear indicators,” Karashukeyev said.

Thirdly, according to the minister, it is planned to create a mechanism for reciprocal obligations from recipients of subsidies. They should be held accountable for the effectiveness of the use of subsidies.

Fourth, it is imperative that everyone has access to subsidies, regardless of the size of production. Create a level playing field for all actors.

Fifth, and this is very important: the concept is supposed to lay down a mechanism for minimizing the number of documents required to receive subsidies. An agricultural producer must provide a minimum package of documents, the rest must be available from databases.

The automated system will reduce the influence of the human factor on the process and the corruption component.

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