Why banks reluctantly give loans to farmers? How to make funding available for farmers? Who should get state subsidies?

These and other issues have become the subject of heated discussion at the last meeting of the Committee of agro-industrial complex of the National Chamber of Entrepreneurs of Kazakhstan "Atameken", the agenda of which was – reform of the system of distribution of state subsidies to agricultural producers.

The discussion of such a relevant topic was attended by representatives of the Ministry of Agriculture of Kazakhstan, heads of branch unions and associations, as well as representatives of agro-formations.

Opening the meeting, the Deputy Chairman of NCE RK "Atameken" Nurzhan Altaev recalled that recently under the Ministry of Agriculture of the Republic of Kazakhstan was created the Council for Agricultural Policy, the task of which is to develop specific proposals for the development of agriculture. "The Ministry of Agriculture actively encourages all agribusiness community to discuss the issues, which hamper the development of agriculture. I became a member of the Council as the Deputy Chairman of NCE. There is a good opportunity to bring all the problems of rural entrepreneurs for review of the Council, to hold joint discussions and take decisions on them", - he said.

Altaev also added that it is necessary to determine the list of the most important and priority issues that need to be discussed and to reach a consolidated stance of the business community.

Altaev named one of the main problems the lack of access to finances for farmers. "There are constant conversations only about loans of subsidiaries of the holding "KazAgro", but it's just one of the sources of funding. In addition to lending through development institutions, there are other types of financing. It should be noted that the second-tier banks are reluctant to lend to farmers, although in most developed countries, there are no problems with the financing of farmers through STB. Next, we need to decide how to develop rural lending through credit unions? How to attract funding for MFO to finance small and medium-sized farmers? We need to work together to develop a consolidated stance on all these issues and to submit proposals for discussion to the Council on Agricultural Policy", - said Nurzhan Altaev.

Deputy Chairman of the Board of NCE also urged committee members to develop a common position on tax, as the Joint Tax and Customs Code is in preparation, therefore,  it is necessary to discuss various approaches to reform of special tax regimes for farmers and LLP, as well as processors of agricultural products.

Director of the Department of Production and processing of crop production of the Ministry of Agriculture Azhar Kadzhibekova reported about suggested amendments to the crop subsidy system. "Currently, we study and consider the options for changing the existing scheme of state support for priority crops. We are presenting not the final version, we came specially to discuss with business our approaches. As an alternative, we propose an approach - not to subsidize per 1 hectare, by to give subsidies for products produced and handed over for processing. However, we reserve the basic subsidies for fertilizers and herbicides, as well as financial instruments for crop production remain unchanged. With regard to the greenhouses, we offer to subsidize utility services", - informed the representative of the Ministry of Agriculture.

The Chairman of the Union of Potato and vegetable growers Kairat Bisetaev, in turn, noted the need for a coherent state policy in the field of agriculture. According to him, agricultural producers today live in conditions of permanent changes of the rules, not knowing what to expect from the state.

"For STB to give loans to AIC, we propose a mechanism that will allow STB to do it. In particular, we offer to subsidize 20% of the cost of each hectare of cultivated cultures, it will be approximately 40% of the necessary working capital for the farmer. If each agricultural producers will receive subsidies of about 40% of that "turnover", then he will be able to build a relationship with the bank", - said Bisetaev.

The Director of the Department of Livestock of the Ministry of Agriculture Erkebulan Akhmetov spoke about the second item of the agenda. He announced proposals of the Ministry on reform of livestock subsidies. So, according to him, it is proposed not to subsidize the purchase of pedigree livestock from abroad. Subsidies for manufactured goods are retained, with the exception of pig industry. There will also be included changes to the criteria and requirements for producers, applying for subsidies. In addition, Akhmetov announced a proposal for the dissemination of the current subsidy mechanism for procurement and purchase of feed in terms of further strengthening this direction, taking into account the specifics of the region. The representative of the Ministry of Agriculture said that this year the total amount of subsidies is a little less than in 2015, but as part of the stimulus package, developed by the Government, the state plans to allocate an additional 30 billion tenge. Akhmetov also noted the need to automate the process of application and granting subsidies for livestock breeding.

Chairman of the Union of breeders of Kazakhstan Mher Terterjan expressed concern about a radical revision of the existing approaches to subsidizing pig breeding. He suggested a more detailed discussion of these reforms with the industry. According to him, the proposed changes have a negative impact on productivity. Terteryan noted that the existing mechanism is the most effective, as evidenced by the growth of the volume of pig production industry.

The head of the Union of Poultry Farmers of Kazakhstan Ruslan Sharipov noted the need for a return to centralization of subsidy payments. He also proposed to revise the priorities in the payment of subsidies to improve the productivity and quality of products.

At a meeting of the AIC Committee were also discussed proposals for reform of veterinary services in Kazakhstan. Recent outbreaks of highly dangerous animal diseases in a number of areas concerns entrepreneurs, who are engaged in animal husbandry. All participants of the meeting unanimously advocated that the stable epizootic well-being - is the foundation for the development of animal husbandry. The participants proposed the reform of veterinary service by returning to previous one, thus, transmitting control functions in the field of veterinary medicine from the local executive bodies to one authorized agency for veterinary medicine. We need a single vertical veterinary service, which will be independent, independent decision-making. It was also proposed to amend, to toughen the administrative responsibility for individuals, legal entities and officials in case of violation of veterinary legislation.

According to the results of the meeting of AIC Committee NCE RK "Atameken", all voiced proposals will be included in the protocol and sent to the Ministry of Agriculture.