A farmer buys machinery, like he's getting married, once for life. They don't turn it in for recycling - the deputy chairman of the farmers' union of Kazakhstan

The introduction of utilization fee for agricultural machinery in Kazakhstan will lead to higher prices for agricultural products. This opinion was expressed by Deputy Chairman of the Union of Farmers of Kazakhstan Yerbol Yeseneyev in an interview with a correspondent of the World of Nan portal.

Recall that the order of the Ministry of Ecology on the introduction of utilization fee for agricultural machinery was signed on June 17. Earlier, Kazakh farmers have repeatedly stated that such a step would cause a serious blow to agriculture and the economy of Kazakhstan. 

How do you feel about the fact that the order on the introduction of utilization fee was signed, despite the active objections of farmers?

- The history around this issue is quite long. Only two years ago this issue was being discussed. There were a lot of discussions, the farmers were against it, because we are losing the price competition in the purchase of equipment. There are several major negative factors, such as our distance from the main markets for equipment. In other words, to the nearest factories that can supply with modern equipment, 2.5-3 thousand kilometers, I am talking about Russia. And if we talk about European and American models, this is literally a different continent. All this reflects on the cost of the equipment itself. Naturally, it is the main means of production, so the slightest increase in the price of equipment negatively affects the cost of manufactured products.

The question of purchase of machinery is extremely important for local agrarians. Mechanization is the only factor that will allow us to reach some profitability, because the other factors, such as the amount of moisture and fertility of the land, are invariable. The only opportunity to improve the yield on the same land is through technical means.

In Kazakhstan, the domestic agricultural machinery industry is to be developed through the utilization fee. How do you view this idea?

- Actually, we have already found a compromise solution earlier. We live in one country, and we understand that without the development of domestic machine-building, we will not advance anyway. So it was decided to introduce a utilization fee for imported equipment, which is also produced in Kazakhstan. We did not come to this at once, but this decision suited everyone. It turns out that we indirectly stimulated domestic production. Agrarians also realized that they need to gradually develop their own machine building, but this last decision has shocked us all. Because a decision was made to collect fees from all equipment. This is really not right.

This decision was not announced yet, but farmers have already talked about the fact that during the pandemic it would be reasonable to forego this regulation altogether, because machinery is the main instrument of production. It would have been logical to forego this. Additional measures to stimulate domestic production could have been applied, although they already enjoy almost all possible and impossible types of support, including tax preferences and loans.

It would appear that now the fee can result in higher prices for equipment. As a consequence, will manufacturers try to somehow offset their costs?

- Definitely, yes. It will all be added to the prime cost. At the same time, it will not increase productivity. It's a simple increase in cost. They say that there will be a certificate for the purchase of new equipment, but in my memory, farmers buy the equipment once, just as they get married, for life. Only spare parts come out of it. There are cases when our equipment is used for 30 years. It doesn't go anywhere, it doesn't go for recycling. We buy a similar equipment and the old one goes to spare parts. It's not just us, it's everywhere, even in America. That is why, such a measure will not give any impetus, on the contrary, it creates fees and restrictions out of nowhere.

As we understand it, one of the main ideas of the initiators of the introduction of w utilization fee is to have Kazakh farmers switch to domestic equipment. How do you think agrarians are ready for such changes?

- Some farmers may and will be ready to switch to domestic equipment, because it is cheaper in terms of price. But I look through the eyes of an active farmer, he has already developed some algorithm of work, he uses the same type of equipment, such as John Deere or Claas. Probably, the last thing he will consider is buying domestic equipment, because he already has a warehouse of spare parts, the qualification of mechanics. Well, who would want to move from John Deere, for example, to "Belorus"? The choice of equipment is a long-term decision, a person approaches it very consciously, understanding who will work on it, on what lands. In the northern regions of Kazakhstan, for example, it is not profitable to work on Russian equipment, there should be modern imported equipment. There are many such examples.

The size of the utilization fee is also depressing, i.e. preliminary calculations show that it is a serious load of 5-10 percent of the cost. This is unacceptable.