Prime minister's instruction will lead to higher prices for agricultural products

Just yesterday, the head of the Cabinet of Ministers Alikhan Smailov instructed to reduce subsidies for imported agricultural machinery. Today, the Grain Union of Kazakhstan said that this decision will lead to an increase in prices for agricultural products, reports World of NAN.

According to Talgat Aldazharov, head of the production committee of the Grain Union of Kazakhstan, this government decision will lead to the rise in the price of locally produced agricultural machinery.

"As experience shows, when we change the terms of subsidizing of imported goods, be it pesticides or seeds, in order to give priority to domestic products, the prices of domestic products go up. As demand for domestic products increases, so does their price," Aldazharov explained.

The machinery produced in Kazakhstan is not suitable for all farms, Nurlan Ospanov, chairman of the Grain Union, added. The production capacity of domestic machinery does not allow agrarians to perform work at the optimal time on large areas.

"As arable land expands and yields increase, machinery must become more powerful and productive. Though the government is supporting domestic production of machinery for small and medium farms, it is hurting the large farmers. Now instead of one highly productive foreign machine we will have to buy several domestic machines, and accordingly hire mechanizers, which we have a shortage of. This will increase the cost of grain and our products will not be able to compete in the market," Ospanov said.

According to him, there are not so many plants producing agricultural machinery in Kazakhstan, and their production volumes are not enough for local farmers.

"What will happen in the end? Some can't produce as much as they need, others can't buy. And those who buy expensive high-performance equipment abroad incur losses. Who benefits? No one. Even machine manufacturers won't make a profit if there are no solvent farmers. The government wants to solve only one side of the problem. But this will not happen," emphasized the chairman of the Grain Union.

In his opinion, it will be more profitable for domestic factories to produce additional parts rather than machinery.

"If you pay attention to the spare parts market, its size is comparable to the size of the machinery purchase market. And it would be better if they immediately made an agreement with manufacturers of imported equipment and developed the production of spare parts in Kazakhstan. It is much more useful for the market if our plants produce spare parts", - concluded Mr. Ospanov.

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