Kazakhstan simplifies terms of land lease for agrarians
The Atameken NCE RK has ensured that bank guarantees are excluded from the rules for leasing agricultural land.
Hundreds of entrepreneurs in Kazakhstan were unable to obtain land for farming due to a regulation that came into force on 20 January 2019. According to the order of the Minister of Agriculture, the tender rules included the following requirements: the entrepreneur is obliged to provide the akimat the business plan and a bank guarantee or a positive decision of the credit committee to confirm the volume of attracted investments.
Initially, when the draft Rules were just submitted for approval to the Atameken NCE RK, they did not contain any rule on the guarantee, so the project received a positive opinion of the National Chamber and the business community. The norm was not displayed on the Normative legal act’s web-portal either. However, the Rules came into force with amendments. Although the motives of the developers are not quite clear, because according to the Land Code, the borrower reflects his obligations directly in the business plan.
As a result, banks began to refuse to provide guarantees to entrepreneurs. Since the beginning of the year, Atameken's employees have counted more than three hundred cases of refusal, each case is, in fact, an artificial barrier.
"The entrepreneur asked the bank and the bank asked about the guarantee cases, the terms for guarantee. What kind of security for guarantee liabilities can a farmer provide? Entrepreneurs asked the akimats to provide answers, but there were no answers. As a result, the businessman’s plan to take the land and develop it fails," Yerbol Yeseneyev, Managing Director - Director of the Agricultural Complex Department at Atameken, said.
Back in February, immediately after the first appeals of the business, the Atameken NCE RK requested the position of the developers regarding the expediency of the new norm, but there was no intelligible answer. In April, the NCE RK addressed the Government of the Republic of Kazakhstan directly. Only then it has been decided to revise the Rules. On August 12, the requirements to provide a bank guarantee were excluded, they come into force after 10 days from the date of official publication.
This is not the only systemic problem that the Atameken solved for farmers this year. The allocation of land plots in the agricultural sector is done through a tender. However, neither in the Rules nor in the Land Code the frequency of tenders was not specified.
"The entrepreneur who had all the necessary resources: a business plan and finance, and ready to develop, open or expand a business, was forced to wait for several months for the tender. He simply did not know about the availability of free land plots. Though, for example, in the Kyzylorda region, the tenders were not conducted from the beginning of the year and till June, the list of free lands was not made up. This legislative gap was a barrier for entrepreneurs who approached us and asked for assistance," Yerbol Yeseneev said.
As a result, the Atameken NCE RK insisted on the inclusion of a norm in the rules of competitions, according to which the list of available land plots will be made at the beginning of each year and further - not less than twice a year.
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