Why private investments do not come to agriculture?

More and more often experts and journalists began to raise the issue of state financing of agriculture. Once again, journalist 24.kz asked Farid Abitayev, Director of “Pilot Farm of Oil Plants” LLP, about the weak promotion of private investment in the agricultural sector, reports World of NAN.

Compared to other sections of business, the agricultural sector does receive huge state support. And this has kept various experts on their toes. However, last year, the sector suffered an economic shock. Yields halved due to drought, plus farmers are facing price pressure from their northern neighbour.

"The economics of crop production have become four times worse to count. And understandably under these conditions, even sustainable farming is in financial difficulty. Any sector of the economy would probably not have survived. We have a great dependence on natural and climatic conditions, as well as on other factors in the face of our northern neighbours. For these reasons, there is no queue for participation in agricultural projects today. The risks are very high," Abitayev explained.

Also according to FAO's projections for 2030-2040, 70 per cent of rainfall will occur in winter-autumn and 30 per cent in summer. This increases the challenges and risks. Another challenge for agriculture is lack of finance and impenetrable collateral policies of banks.

"Today our agrarians have a colossal asset in the form of land. But we don't have a land market. Today we are like a Moscow grandmother who lives in a $100,000 flat and has no money for milk. Land is the main peasant asset, and it is worth other money all over the world. For example, Australia today lends against the security of land for the amount of the harvest for 20 years. In our country, the cadastral value of land is lower than the annual cost of rent. If we have a land market today, we will have a completely different picture," Farid Abitayev concluded.

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