19 june 2023
5 min

What does the state and farmers need?

What does the state and farmers need?

At the government meeting deputies voiced a paradoxical phenomenon: in Kazakhstan there is an overproduction of the most important types of products, but it does not lead to price stabilization. What is the problem? This question was answered by Kairat Bisetayev, the Chairman of the Union of Potato and Vegetable Growers of Kazakhstan, to World of NAN.

The main problem is the lack of transparency in the delivery of products from the farm to the store shelves. The product, before reaching the consumer, passes through a number of resellers, most of whom work without financial reports, and the markup, roughly speaking, is taken out of nowhere. So, the potatoes come to the Kazakh people three or four times more expensive.

To solve this problem, according to Kairat Bisetayev, it is necessary to create wholesale distribution centers (WDC), which the state once abandoned due to their high cost.

"It is necessary to create civilized distribution ways, the main element of which is the wholesale distribution centers," noted Bisetayev.

At that, the creation of the wholesale distribution centers doesn't need large financial injections, as the government used to say. It is enough to organize proper and daily trade. Therefore, without the intervention of the government and local executive bodies can't do without it.

"Together we have to organize a transparent route for the product. The key is that not only WDC owners should participate, but that industry associations, retailers and local executive bodies should have influence on them. So we can all have a say in the decision-making of that WDC. Perhaps through a supervisory board or a board of directors," the expert added.

Ideally the scheme looks simple. Each city creates a WDC, which serves as a transshipment base for all products grown in Kazakhstan and imported by distributors. Farmers supply products there on a daily basis, and retailers take away the volume they need on a daily basis. The system is as old as the world, but it allows you to see the real markup on goods.

"Everyone will see what price the farmer's produce came in at and what price the store picked up from the WDC, plus the center's markup. There will be all the paperwork and invoices. Each of us will justify the reasons for the price. The akimat will be able to control prices in the WDC. Everything will be transparent and civilized. And there will be no need to close borders for export or to make other rash decisions," explained Kairat Bisetayev.

If a farmer knows there's one point of sale in the city where he can deliver his products, he will naturally take them there. Because they need stability, to be confident in the implementation of grown products. The contract for a year in general will simplify the work of all industry players. Even the akimat will become easier to control prices and the required volume of production. Thus, there will be no need for forward purchases and other inefficient tools.


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