Ablay Myrzakhmetov "the offered subsidies should yield return"

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The Commission on distribution of agricultural subsidies should consist by up to 50% of the representatives of business associations and agribusiness

This was announced at a press briefing at the Service of Central Communications by the Chairman of the National Chamber of Entrepreneurs of Kazakhstan "Atameken" Ablay Myrzakhmetov regarding the issue of subsidizing agribusiness.

As the head of the NCE stressed, recently "Atameken" has repeatedly brought to the discussion the issue of the reform of subsidies in agricultural sector with agribusiness associations accredited in the NCE. The Chamber came out with this question to the Government.

Why is there a need to reform the subsidies in the agricultural sector? By the way, the same question was repeatedly raised by the head of the state. Each year, the level of subsidies is growing, but there is no expected return, the released products do not quite meet the level of funding that has been allocated.

"First of all it will affect crop hectare subsidies which occupy half of all issued funds. 75 billion tenge was allocated for this sector, and about 32 billion tenge were allocated on the hectare subsidies this year. However, these subsidies, unfortunately, don’t lead to an increase in productivity, that is, we do not see the direct impact. Meanwhile, today, as it was noted by farmers, agriculture is an important technical equipment. We need new technologies, new approaches must be part of science. It is necessary to purchase new herbicides, new types of fertilizers and seed varieties. And the current reforms are intended to transfer hectare subsidies into more efficient subsidies", - said Ablay Myrzakhmetov. According to him, the Union of Farmers of Kazakhstan, as well as the main (some) AIC Association supported the decision of the Government on the reform of subsidies. It has been repeatedly stated previously by the head of the Union of Farmers, that not all farmers receive hectare subsidies, as there has been no possibility to buy new agricultural techniques.

Moreover, as it was stated by the Chairman of the NCE, the system of distribution of subsidies hasn’t been transparent. For example, Almaty businessmen complained that subsidies often receive the same farmers, while others are refused or obtain them with a delay. In this regard, "Atameken" has made its proposals for a new system of subsidies.

"One of the measures that we are proposing is to include in the composition of the commissions for distribution of grants of up to 50% of the representatives of business associations and agribusiness, which will establish public control over the issuance of new subsidies. Now we are changing the rules (with the consent of the Ministry of Agriculture) so that business associations could receive a quota and participate in commissions to obtain subsidies", - said Ablay Myrzakhmetov.

Chairman of the Board of NCE also added that, in addition to reforming the system of subsidies and there were stipulated other measures, first of all, the creation of Competence Centers in each district, which will advise the Kazakh farmers to implement new technologies. We remind the Government of Kazakhstan approved the approach of the Ministry of Agriculture to reform subsidies to farmers, which will redirect hectare subsidies to encourage the purchase of machinery, equipment, technology adoption, purchase of seeds, herbicides, fertilizers, involvement of consultants and introduction of innovations.

It is expected that the budget of 2016 will incorporate the necessary changes that will increase the efficiency of crop subsidies, and in 2017 the same changes will be made in the system of subsidies for livestock breeding.