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Introduction of utilization fee will not affect prices of agricultural products — Ministry of Industry and Infrastructure Development

Wednesday, 10 July 2019, 18:37:23

It is planned to introduce utilization fee only for newly produced and imported combine harvesters and tractors. This equipment is produced at domestic enterprises and it can provide the full range of the required volume to saturate the market without price increase. Vice Minister of Industry and Infrastructure Development Amaniyaz Yerzhanov announced this at the briefing in the Government.

 “If we provide the market with necessary equipment, then there will be no price increase for agricultural products. This law does not apply to agricultural and plant products. Therefore, the introduction of the fee will allow localizing previously imported models of technology through the creation of new and expansion of existing industries, to reduce their cost, to create a complete system of utilization of agricultural equipment in the country. Farmers will be able to update the fleet of vehicles by issuing a discount certificate and preferential leasing for the purchase of domestic agricultural equipment, preserve the cost of domestic machinery through incentive measures and increase the level of localization within the framework of the agreement “On Industrial Assemblage,” said Yerzhanov.

According to the vice minister, in March 2018, Atameken National Chamber of Entrepreneurs supported the introduction of scrap materials on agricultural equipment after July 1, 2019, subject to the following measures:

  • Postponing the introduction of the fee for 1 year;
  • Abolishing the fee for the equipment that is not produced in Kazakhstan or is produced in insufficient quantities;
  • Aboloshing the fee on previously registered agricultural equipment;
  • Introducing subsidies for 25% of the cost of equipment (introduced in July 2018 by the order of the Ministry of Agriculture);
  • Developing a preferential program for the purchase of equipment at low interest (introduced in July 2018);
  • Introducing a discount certificate program upon the delivery of old agricultural equipment for recycling (the relevant changes have been made to the legislation, will automatically work when the fee is introduced);
  • Introducing localization obligations (agreements on the industrial assembly of agricultural machinery came into force in March 2019).

To the implement the law, joint order of the Acting Minister of Energy and Minister of Industry and Infrastructure Development approved the rules for stimulating the production of self-propelled agricultural equipment. So, the cost of domestic technology will not increase. At the same time, in terms of agricultural machinery, they will enter into force only after the introduction of the utilization fee. In addition, in accordance with the aforementioned order, a program is envisaged to stimulate the delivery for recycling of agricultural equipment that has been decommissioned.

The program of delivering the out of operation agricultural equipment, where instead of the old, delivered for recycling, a discount certificate for purchasing a new domestic equipment is issued, will be started with the introduction of scrap collection. The nominal value of the discount certificate is proposed to be set in the amount of 1.5 to 3 million tenge, using two certificates, the discount can be from 3 to 6 million tenge, which can be used as a down payment in the program of preferential leasing. Transportation costs are covered by the LLP Operator ROP. Today, when the combine is delivered, compensation is 300 thousand tenge and transportation is carried out independently.

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