Utilization of agricultural machinery: opinion of Kazakhstan farmers was left unheard

June 17, despite the strong objections from agricultural producers, an order of the Ministry of Ecology on the introduction of utilization fee for all imported agricultural machinery was signed, which is to be enacted 10 days later.

To recall, hot debates around the introduction of utilization fee arose in early May. Major agricultural associations of the country then strongly opposed it, saying that such an initiative will deal a serious blow to agriculture and the economy of Kazakhstan as a whole.

Earlier we had published materials on this subject, including an interview with Kairat Bisetayev, Chairman of the Board of the Union of Potato and Vegetable Growers of Kazakhstan and Kanat Suleimenov, Chairman of the Akmola branch of RPU "Union of Farmers of Kazakhstan", as well as surveys among the experts.

All experts interviewed by us were firmly against the introduction of the fee, because, in their opinion, it will cause irreparable damage to the agrarians, depriving them of access to modern high-performance equipment.

The Ministry of Ecology answered to all the objections from the agrarians that the first and foremost objective of the introduction of utilization fee is to renew the outdated by 80% agricultural machinery fleet, to stimulate an increase in the level of localization of production on the territory of Kazakhstan, as well as to create a comprehensive system of utilization of agricultural machinery.

"Introduction of utilization fee as of today solves the following tasks: stimulation of population to dispose of agricultural machinery by issuing discount certificates for purchase of new domestic machinery and monetary compensation; opening of new plants in Kazakhstan and expansion of existing production sites; increase of localization of produced machinery, which implies reduction of production costs, creation of new production facilities of components, additional jobs", - replied to the inquiry of the editorial office of the World of Nan website.

At the same time, the Ministry of Ecology stressed that currently, according to international experience, there are no other effective alternatives.

At the same time, commodity producers point out that while agricultural engineering needs to be developed, why should it happen at the expense of the farmers, and not at the expense of budget or investment funds? In their opinion, this will impose a serious financial burden on those who have to buy agricultural machinery. They ask themselves, how to develop and maintain agriculture without technical upgrade? And how to conduct this upgrade, if today the cost of one machine will increase by 11-12 million tenge only through the introduction of utilization fee?

Agrarians believe that the introduction of utilization fee to support domestic agricultural machinery is not the right approach. Here, they say, other instruments should be found.

As an alternative measure, the producers suggested introducing various programs to subsidize domestic machinery, that is, to make preferential conditions separately for the purchase of equipment of Kazakhstan assembly. According to experts, this is the right market mechanism to motivate farmers to buy it. But the Ministry of Ecology ignored these arguments and placed a major stake in the utilization fee.

The National Chamber of Entrepreneurs "Atameken" also supported commodity producers, saying that it is premature to introduce such measures in the conditions of the pandemic and economic crisis.

In conversations with us, farmers have repeatedly stated that in preparation for the introduction of full utilization fee there were no discussions with producers. Their position was simply ignored. The only opportunity for the agrarians to express their opinion was through the media. According to them, there was also no thorough analysis of the current situation with the disposal of existing agricultural machinery (according to market players, there are simply no problems with disposal today), no consideration and study of alternative options to address the issue.

Today Kazakh agricultural producers only hope that the state will hear their pleas and addresses until the order of the Ministry of Ecology comes into effect. Otherwise, experts predict considerable recession in agriculture which can last for many years.

The editorial staff of the World of Nan portal will continue to cover the issue of introduction of utilization fee for agricultural machinery in detail. In the coming week, we plan to record a number of interviews with representatives of agricultural associations, Atameken and government agencies.