Subsidies in agribusiness will be different

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The Ministry of Agriculture of Kazakhstan named the priorities for the development of the agricultural sector, not only in the domestic but also in foreign markets

The potential of the domestic agricultural sector is high, our products can successfully compete with foreign counterparts. This was announced today during the parliamentary hearings in Astana by the Minister of Agriculture of Kazakhstan Asylzhan Mamytbekov. The prospects of the agricultural sector were discussed at the hearing, not only at the domestic market, but also on the markets of the EAEU and the WTO, of which Kazakhstan became the full member.

Developing this theme, the minister said that the export potential for domestic agricultural producers has increased significantly, but the objective problems hinder commercial and industrial progress.

"Despite all the advantages of Kazakhstan functioning under conditions of open borders within the EAEU and the WTO, we see such negative factors as the presence of foreign counterfeit products at the domestic food market", - said A. Mamytbekov.

The Minister also noted that such products not only mislead consumers, but also "contributes to unfair competition in the food market". Therefore, the Ministry of Agriculture of Kazakhstan called “cooperate actively in the fight against the manufacturers and sellers of these products”. A. Mamytbekov also reminded how important Eurasian Economic Union for resolution of problems of foreign markets. Total GDP of the five countries of the common market of EAEU with a population of over 180 million is valued at more than 2.2 trillion US dollars. Total imports of agricultural products in the EAEU is more than 44.0 billion US dollars. As for accession to the WTO, Kazakhstan obtains "opportunities for the development of agricultural export-oriented industries". In addition, agricultural export to China increases.

Turning to the outstanding issues in the agricultural sector, Agriculture Minister, first of all, said that "the level of competitiveness, does not fully meet the requirements of the time".

"One of the reasons for this situation is underinvestment of the tools of the state program “Agribusiness 2020”. Thus, the volume of underfunding in 2013 is 26 billion tenge (14.13%), 2014 - 110 billion tenge (35.4%), in 2015 - 115 billion tenge (34.4%), in 2016 - 127 billion tenge (36.8%), in 2017 - 175.0 billion (45.7%)", - said the minister.

The reason, according to him, is "relatively low investment in agriculture". According to A. Mamytbekov, following the results of 2015, the volume of investments in fixed capital in agriculture amounted to 167.1 billion tenge. This is 23 times less than the volume of investment in fixed assets in the industry, and 7-fold in the transport and warehousing.

To solve this and other problems, the Ministry of Agriculture promises to continue "global reform of the system of the subsidies for agribusiness to further automate the process of subsidy".

It is also expected that the MA will adopt a package of amendments and additions to the existing legislation. "Due to the absence of the proposed changes in the current legislation, first of all, it is necessary to improve the legal regulation of agrarian and industrial complex and enhance its effectiveness", - said the minister.

A. Mamytbekov expressed hope that the legislative consolidation of new ways of state regulation of the agricultural sector "will improve the efficiency of agricultural support and achieve better results for the same investment".

Zhanar Serdalina