Farmers, whose applications for subsidies have been approved in the past year, may be left without state support

At the meeting of the Committee of agriculture and food industry of the National Chamber of Entrepreneurs of Kazakhstan "Atameken" with the participation of Vice Minister of Agriculture Gulmira Isayeva were discussed new investment subsidy rules, as well as the rules of subsidy on interest rates for loans and leasing.

"We have analyzed a financial instrument, as investment subsidies. Today Akimats accept applications without taking into account the allocated funds. If you look at the results of 2016, today we received commitments worth about 83 billion tenge. However, the budget covers only 30% of this need - 25 billion tenge. The same amount is scheduled for this year. It turns out that Akimats paid 25 billion tenge for the applications and there is 58 billion tenge left, that we shall pay. It turns out that even if we take as priority those applications that have been reviewed in the past year, and will direct 25 billion tenge on it, 33 billion will remain debt within last year's commitments. And then there is an application for this year ", - said Gulmira Isayeva, speaking at the meeting.

According to the vice-minister, the current rules do not have priority to agricultural cooperatives, this has been fixed in the new edition. In addition, she noted that today subsidies for costly projects are paid in a single amount, and limited limit of funds in the first place goes to large applications. Now it planned to introduce a phased payment. If the amount of subsidy is in excess of 500 million tenge, the subsidy will be paid in stages over the years.

"If we analyze the entire amount investment subsidies, construction and installation works on average in Kazakhstan occupy more than 50%, and in some regions even more than 70%. (...) It was proposed to move away from cost recovery to construction and installation works", - she added.

NCE RK "Atameken" discussed the concept of the state program, as well as the draft of the state program itself, in close cooperation with industry associations, unions, the business community. The meetings of the AIC Committee of the Presidium of NCE were held twice on these issues, and, in general, the draft of the concept, the draft of the state program of agribusiness development for the years 2017-2021 was approved with the proposed comments.

As it was noted by the director of the Department of Agribusiness and Food Industry of NCE Rustem Kurmanov, "now it's time to agree subsidy rules. Comments were made regarding subsidizing of crop and livestock, there are now a number of proposals for these two projects of subsidy rules".

According to him, the new rules on investment subsidies came to NCE "Atameken" for approval on 19^th of January 2017, the Chamber promptly sent them to the members of the AIC Committee, associations, unions, regional chambers. Currently, it received about 400 proposals from the business on more than 100 pages.

"In fact, this is a precedent that never was. Business is simply scared by new rules on investment subsidies. The rules that are applied now, have been modified only in August of 2016 and now the Ministry of Agriculture once again radically changes everything. I note that such changes interfere with the development of the business. It is almost impossible to plan production, because business reads rules and follows these directions of state support, and while the investment project is implemented, the rules change. As a result, an agricultural produce hoped that he will receive subsidies, but he is left without them", - he said.

According to Kurmanov, there are many examples. "For example, the farm "Muzdybaev-1" from EKR, which cultivates  potatoes. The entrepreneur started to build a vegetable store in 2016. Now, if the rules are to be adopted in this edition, then in 2017 will not receive these subsidies. There are many examples, and not only related to potato growing", - he said.

"Many of the projects were approved in 2016. Now with the new rules, they should be reviewed again by the Commission, under the new criteria and requirements?" - questioned the representative of "Atameken".

The head of the Meat Union of Kazakhstan Maksut Baktibaev also spoke at the meeting. "I would like to remind that there is 61st step in the President's Address, which refers to the attraction of domestic and foreign investors in the meat industry. It implies that all laws and regulations have been created for this. Now there are about 15 companies that have already invested in the sector, but now they are "restless". This is a great social impact, there are 1.5 thousand jobs. It's full time, not counting seasonal workers. Here, I think, clearly, you need to "finish" that projects until 2016 get support", - he said.

The head of the AIC Committee Ivan Sauer also expressed his authoritative opinion that last year's objects should be subsidized. "All the objects that were built in 2016, should enter into this program and should get mandatory subsidies. Otherwise, it turns out some kind of provocation. And what this will evolve? Let business and ministry address to the government and will defend, prove. Otherwise, how will our farmers believe in the policy documents at all? "- he said.

The head of the Union of Potato and vegetable growers Kairat Bisetaev offered his solution to the problem. "I suggest that maybe it makes sense if we do decide to keep the current version of the rules on investment subsidies. Let us stop and try to figure out how we can pay investment subsidies, on which our peasant colleagues have already invested, and should have received state support", - he said.

As a result of consideration the representatives of the Ministry of Agriculture agreed to consider 400 proposals that were received from farmers and members of the AIC Committee voted for the decision to keep the old, the current version of the rules, with the possible inclusion of the establishment of the priority for agricultural cooperatives.

At the meeting were also discussed the rules of subsidizing interest rates on loans and leasing of technological equipment, for the purchase of farm animals, as well as the leasing of agricultural machinery. Developer of the rules eliminates subsidies for interest rates on loans and leasing, leaving only subsidies for working capital.

Members of the AIC Committee noted that the law on the state regulation of development of agribusiness and rural areas provides support measure in the form of interest rate subsidies for loans and leasing.

The draft rules of the project itself are called subsidizing interest rates on loans and leases ..." and, in fact, it is not in the rules, subsidies for working capital were only left; leasing and loans for fixed assets were excluded.

That is, the law stipulates these measures, and the draft rules eliminate support these measures, as a result the provision of the law is not fully implemented.

AIC Committee decided to suggest to the Ministry of Agriculture not to exclude the provision on subsidizing interest rates on loans for fixed assets and leasing of machinery and equipment.