20 august 2020
2 min
Author: Yevgeniy Fedotov

Let's hope that we will be heard and this order will be revoked - Baigaliyev about utilization fee for agricultural machinery

Let's hope that we will be heard and this order will be revoked - Baigaliyev about utilization fee for agricultural machinery

It has already been a month since the order of the Ministry of Ecology was signed on the introduction of utilization fee for agricultural machinery in Kazakhstan, but heated debates around this topic are still ongoing. Farmers from all regions of the country, representatives of "Atameken", as well as deputies of the Majilis of the Parliament of the Republic of Kazakhstan are all saying the same things - agricultural producers are not ready for such a measure. Recently, it has also been often suggested that it is necessary to work towards abolishing the utilization fee before the agricultural sector begins to experience the negative consequences of such an initiative.

We talked with Serik Baigaliyev, chairman of the branch of the Kazakhstan Farmers' Association for East Kazakhstan, on this subject.

How, in your opinion, will the utilization fee on agricultural machinery affect the farmers?

- To date, agricultural producers in Kazakhstan are not ready to pay the utilization fee. This is not only my opinion, we discuss these issues at different sites and in groups. There are a number of objective reasons for this.

First of all, there are numerous other problems in the agricultural sector in terms of financial resources, so the utilization fee will create an additional burden. Our producers have not reached the level to pay any new fees. Today, there are problems with the export of livestock and crop products, including sunflower. It means that many of them have no sales.

Secondly, there is a problem with working capital, which is that the quasi-state sector, created to support the agro-industrial complex, has come to do business, that is, does not understand the goals of its creation. Pledge property of farmers today is assessed very low, applications, on the contrary, are considered for a very long time. There is a lot of bureaucracy. In particular, we are preparing a number of proposals specifically for loans.

It turns out that today we have problems with sales and access to finance. Here, we are getting to the issue of technology. We should understand that our country has a sharp continental climate, that is, if we take northern, eastern and central regions of Kazakhstan, we need very good equipment, which will have a high productivity. If we position ourselves as a modern state, if we want to keep up with the times, then we need the appropriate equipment. Today it is mainly foreign equipment, and they want to put it all under the utilization. Inflation in our country is quite high, there are often currency surges, which leads to higher prices for logistics, but the cost of diesel fuel and other items are not reduced. Utilization fee will seriously increase the financial burden on manufacturers.

Do you think that utilization fee will help the development of the domestic agricultural machine building industry?

- Today, if we talk about our machine building, everyone knows that it is a screwdriver assembly. It concerns both civil automotive industry and agricultural machinery. Materials are brought in, assembled here, and this is the end of our machine building industry. At the beginning, I think the state should establish its production here. Even if they don't produce engines, but there are a lot of other parts that can be produced in our country, and thus the engineering industry can be developed. And then it would be possible to move to agricultural machinery, where today the situation is similar to that of the automotive industry.

The entire reason for cost reduction lies in the manufacture of parts, but we do not have it. I think a separate state program should be created in this direction. To build factories, if it is agricultural machinery, to produce tires, disks and engine blocks for specific sizes. What will be unprofitable to produce - can be purchased. Then, when all this is settled, you can think about the utilization fee. But until then, in the next 10 years, we are absolutely not ready for that.

The agricultural producers and Atameken have one position - we are categorically against utilization. This issue will be raised more than once. Let's hope that we will be heard and this order will be cancelled.

In terms of cancellation of the utilization fee, how real is it, do you think?

- This fee will be administered by a private organization represented by ROP LLP. It turns out that this money will have no budget code. This is a private LLP, private business. Therefore, it is not clear how it will all work. The order has already been signed and is in effect, but in my opinion, it had no legal grounds, because there was no agreement with the industry, the National Chamber "Atameken" was against, the Ministry of Agriculture, as far as I know, was also against. But for some reason, the order was issued anyway.

I think that the Government and relevant authorities have to deal with it. If we approach it from the legal point of view, I think it can be cancelled. I think that this issue should at least have been coordinated with the industry, but it did not happen.


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