Sowing is becoming more expensive every year, and now the machinery will become more expensive - the farmer on utilization fee

For a week now, in social networks and messengers, agricultural producers are vigorously discussing the signing of the order of the Ministry of Ecology on the introduction of utilization fee for agricultural machinery. Many say that it will strike a serious blow to agriculture, both from the financial and social standpoints. After all, many people are involved in the agricultural industry, so, according to farmers, the negative impact on the industry can lead to a corresponding multiplier effect.

We asked Yerken Kazybayev the head of the Yerman Farm (Makinka village, Akmola region) for his opinion on the introduction of a utilization fee.

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

- Not only that the order was signed recently, in June, but personally I, for example, in KazAgroFinance began to formalize in winter, in late January. In December 2019 there was a proposal to introduce a utilization fee, but in February-March I had already been charged with this fee for the purchase of a Russian-made combine harvester, at that time the cost was 33 million. I disputed this point, the utilization fee had not yet been introduced, there was no order, but I was already charged with it. The engine power factor has been applied, I don't know who developed it, but all this has been added to the cost of the combine harvester. As a result, the combine harvester, which was previously offered to me at 33 million, they priced at 46 million. The advance payment has also increased accordingly. From that moment on, I started disputing it because I didn't agree. That makes figures in millions.

In March, an official letter was sent to me; in addition to the combine harvester, I also had grain cleaning equipment worth 6.6 million, which makes the total amount of the project 52 million. The exchange rate was calculated at maximum, plus the utilization fee, that's the amount that came out.

Do you only want to buy equipment or have you already bought it?

- I have an approved application. If I make a down payment within 90 days, I automatically agree to these conditions. But I am still considering it, because I am not satisfied. The combine is turning out to be very expensive. Although it is lower in class than Vector or Esil of Kazakhstan assembly, but in cost it almost reaches theirs.

How do you rate the machinery of Kazakhstan production?

- We have components of the same "Vector" of Russian production, we only have a semi knock-down assembly. On the same "Esil" also an SKD assembly, but there is a label declaring that it is made in Kazakhstan. Can the assembly equal the production? Just at that time, the Vector cost about 50 million, and the Russian combine harvester that I chose was 33 million. The difference is significant. My farm is small, I have to counter the cost of machinery, the financial burden. In general, my application is still pending, if I do not make a prepayment, it will be cancelled.

Do you think the utilization fee is needed at all? The initiators of this idea say that it is intended to develop the domestic machine-building industry.

- In terms of domestic machine-building, everything is clear, but personally I see what problems it caused me. In our economy each thousand tenge let alone a million is on account, all the more so in spring. In light of recent events we had a sharp rise in price for sowing works, including spare parts and herbicides. The fuel and lubricants were slightly reduced at the expense of the state, while the rest has risen. I understand that suppliers are building a reserve for the future by cost. The last sowing campaign was much more expensive for us than in previous years. Now the machinery has also become more expensive.

P.S. Having read the opinions of farmers and representatives of industry associations, we can conclude that Kazakhstan farmers are completely unprepared for the introduction of utilization fee for agricultural machinery. Most of them perceive such changes as a serious setback for their activities. At the same time, we want to highlight the views of all stakeholders. The editorial staff of World of Nan website has sent requests to the ministries that took part in the preparation of the introduction of utilization fee, asking them to comment on the situation.