At NCE Atameken they consider it premature to introduce the utilization fee on agricultural machinery in Kazakhstan

For several weeks in a row, social networks have been actively discussing an initiative to introduce utilization fee for all imported agricultural machinery in Kazakhstan. To recall, at the end of 2019 a partial utilization fee was already introduced for machinery, assembly production of which already exists in our country. Now we are talking about expanding this collection to other types of machinery. Earlier we already represented the position of agrarian associations and unions, as well as the Ministry of Industry and Infrastructure Development on this subject. We have also made an official request to NCE Atameken.

At the National Chamber, it has been noted that utilization fees are to be introduced in Kazakhstan to stimulate the production of self-propelled agricultural machinery that meets all environmental requirements. Accordingly, payments received for utilization are planned to be directed precisely for this purpose.

At the same time, it is assumed that each of the parties should undertake commitments: industry - to increase the share of localization and improve the quality, and farmers - to ensure guaranteed demand for domestic equipment.

"Each equipment has its own segment of buyers. For example, small agrarians, unlike large ones, still prefer to use domestic combines and tractors, because they are cheaper and their "horsepower" is enough for small areas. It also allows domestic producers of agricultural machinery to invest in their production, create new jobs, and pay taxes to the budget," commented in Atameken.

However, the National Chamber noted that the farmers should also be supported. Especially since the sown areas are now actively diversified.

"In the history of Kazakhstan, there were no such large areas of linseed, legumes and oilseeds. In the north, for example, sowing soybeans has not been done. These are global trends, which drive us to be competitive. For all this, we need high-performance imported machinery, which we do not yet produce. In this regard, last year, utilization was not introduced to the entire list of agricultural machinery. However, experience of the neighboring countries shows that work in this direction is important. World manufacturers of agricultural machinery are interested in localization of those countries that are ready to create conditions for production, including through the protection of the domestic market," the National Chamber noted.

But the support of domestic manufacturers of agricultural machinery, as well as agricultural producers, according to the NCE Atameken should be implemented in a comprehensive manner, including within the existing programs.

"It is possible to provide them with soft loans and exemptions. Producers of agricultural machinery also contribute to the development of agriculture. The solution could be to provide soft loans to domestic machine builders for further development and increase of the localization ratio of produced tractors and harvesters. In addition, it is possible to provide for an increase in the standard of investment subsidies in favor of domestic production, so that state funds do not go abroad," believes in NCE.

According to the National Chamber, in case of introduction of utilization for the entire list of imported agricultural machinery, its cost for medium and large domestic agricultural producers will go up in price, which may adversely affect their activities.

"For example, in the structure of wheat production, agricultural enterprises, mainly operating in the form of LLP, account for up to 68 percent of the gross harvest. Some of these agricultural enterprises use modern agricultural technologies aimed at increasing labour productivity, and use high-performance equipment from far-abroad countries. The decision to introduce utilization fee first of all had a negative impact on the rate of technical renewal of this very category of agricultural producers. They are also the basis for diversification of production, expanding the range and volume of their products (peas, lentils, rapeseed, mustard, flax, etc.). Taking into account the unstable situation on the world market due to the COVID-19 pandemic, we consider these changes to be premature at the moment and not of such priority, which will require discussion in the future, when the situation stabilizes," concluded in Atameken NCE.