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Sunday, September 15th, 2019

Bakytzhan Sagintayev instructs to analyze the multiplicative effect of the development of agricultural cooperatives

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During today’s Government session chaired by Prime Minister Bakytzhan Sagintayev, First Deputy Minister of Agriculture Arman Yevniyev reported on the further development of agricultural cooperation

Beginning his speech, Arman Yevniyev noted that the adoption of the law On Agricultural Cooperatives in 2015 made it possible to eliminate the main barriers to the development of cooperation: the members of cooperatives were given the right to distribute profits among themselves, it lead to the creation of conditions for the establishment of audit unions for an annual audit of cooperative activities, instead of three laws there is now one, the special tax regime is extended to agricultural cooperatives, and the activities of agricultural cooperatives are clearly dentified.

According to statistics, 2849 cooperatives were registered as of April 1, uniting more than 62 thousand people.

At the same time, there are a number of open questions. In this regard, as part of the work to update the current State Program for the Development of the Agro-Industrial Complex, six key areas have been identified, where it is necessary to replace the existing target indicators. This is labor productivity, product competitiveness, technical equipment, knowledge, profitability from product sales, and comparability of overhead costs.

The purpose of the program for the development of agricultural cooperatives is to determine the constant increase in labor productivity and competitiveness of participants in agricultural cooperation.

It is proposed to introduce three measurable key indicators with an annual growth of at least 10%: growth in labor productivity of cooperative members, growth in revenues from sales of products (including exports) and provision of services, growth in investment in fixed assets of agricultural cooperatives, � A. Yevniyev said.

According to the Ministry of Agriculture, the proposed target indicators stimulate participants in cooperatives and local executive bodies to economically analyze the entire chain of production, technological and marketing processes, identify and eliminate constraints.

Arman Yevniyev also reported on specific measures and tools for implementing the sectoral cooperation development program. One of the tools is equal conditions for subsidizing agricultural cooperatives for all available measures of state support.

For reference: It is proposed to preserve investment subsidies, VAT subsidies for procuring organizations, as well as commodity-specific subsidies in animal husbandry from the local budget. In the current year, 495 500 000 tenge was allocated to cooperatives for cheaper feeding of bull-calves, 478 325 000 tenge for the support of cooperatives engaged in milk production.

Subsidizing interest rates for leasing and loans to agribusiness entities will be restored. It is proposed to abolish indicative plans for Akimats to create cooperatives, as well as indicators on the activities of cooperatives. In addition, the provision of microloans for farmers, agricultural cooperatives, and individual entrepreneurs will continue.

Two mechanisms of cooperation will be a key instrument for increasing production efficiency: horizontal cooperation and vertical (anchor) cooperation. Anchor cooperation provides for the partnership of small and medium-sized peasant farms and cooperatives created by them with processing enterprises and backbone enterprises.

Cooperatives can create associations or even larger cooperatives. Private subsidiary farms can also participate in cooperation in the form of individual entrepreneurship, peasant and farming.

The First Deputy Minister of Agriculture noted that the success of such models is confirmed by international practice on dairy cooperatives. Small and medium-sized farmers in New Zealand, Holland, Sweden, Denmark, the United States and South Korea join together in large cooperatives, increase their efficiency and conquer markets.

To maintain the activities of cooperatives, a special Internet portal will be created, where each cooperative must register. The site will provide an opportunity to automate the collection of information and monitoring of cooperative data, evaluate results, keep records of workplaces and labor productivity of each participant, train digital literacy, rank cooperatives and participants, and others.

The information system will become a tool for participants in agricultural production cooperatives (APC) to motivate, analyze, train, manage and evaluate performance.

In addition, it is planned to execute a number of actions to support the development of cooperation, which include continuing education and information support for cooperatives.

Traditional training needs to be transformed into consulting trainings with an emphasis on increasing labor productivity and increasing competitiveness.

One of the tools for implementing the agrocooperation development program will be the application of the project-based approach to the development of agricultural cooperation. In fact, the cooperation program will be one of the subprograms of the agro-industrial program currently updated, � A. Yevniyev noted.

The participants of the program of cooperation development will be the Ministry of Agriculture of the Republic of Kazakhstan, Akimats and NCE Atameken. The Agriculture Ministry will be responsible for strategy, state support, legislation. Local executive bodies should secure, first of all, the access of cooperatives to the markets, the formation of sectoral regional cooperation. NCE Atameken will manage training, consulting, and marketing.

Thus, we are completing the initial stage of agricultural cooperation and moving to a qualitatively new stage of its development as one of the key tools for increasing labor productivity in agriculture, � Arman Yevniyev summarized.

Minister of National Economy Timur Suleimenov, in turn, noted that the association in cooperatives allows centralizing the processes of processing and selling agricultural products and increasing their competitiveness. Small farms, trading firms and agrarians, uniting in cooperation, make mutually beneficial actions, significantly reduce costs, expand physical infrastructure, in general, it is an increase in GDP.

Also, according to Suleimenov, the correctness of the chosen direction is indicated by the successful experience of such world giants in the sphere of agricultural cooperatives, as Frontera, Erala Foods, uniting today thousands of farmers. New methods proposed by the Ministry of Agriculture will allow developing agricultural cooperation in a qualitative way and achieving significant results in the agro-industrial complex. At the same time, the Minister noted that a convenient tax regime is in place for agricultural cooperatives.

Chairman of the Board of NMH KazAgro JSC Nurlybek Malelov noted that KazAgro is financing agricultural cooperatives and their participants.

According to data for 2017, KazAgro has financed: 11 agricultural co-operatives in crop production uniting 176 producers for sowing works for a total of 9.9 billion tenge (this allowed sowing on an area of 574 thousand hectares) and 304 agricultural cooperatives in livestock breeding uniting 7390 farmers, for the production and procurement of raw materials, processing of agricultural products for a total of 20.2 billion tenge. Participants in agricultural cooperatives purchased more than 156 thousand head of meat and dairy cattle.

Reports on the pace of development of agricultural cooperation in the regions were delivered by Akims of Aktobe region B. Saparbayev, Almaty region � A. Batalov, Pavlodar region – B. Bakauov, Deputy Akim of South Kazakhstan region A. Osserbayev.

Following the reports, Prime Minister Bakytzhan Sagintayev noted the positive dynamics of growth in labor productivity and output compared to the same period last year. At the same time, a number of specific instructions were given.

The Ministry of Agriculture was instructed to analyze the multiplicative effect of the creation and development of agricultural cooperatives. Particularly � to consider the impact of the association on the volumes of meat and dairy production, the number of jobs created, demand and pricing.

In addition, the Ministry of Agriculture, in conjunction with concerned government agencies, as part of the adjustment of the AIC State Program, should work out in detail measures to develop agrocooperation. The measures taken should ensure an increase in the production of agricultural products, higher employment in the countryside and, as a result, a further increase in the export of agricultural products.

Overall coordination is assigned to Deputy Prime Minister and Minister of Agriculture U. Shukeyev.

Source: Government of the Republic of Kazakhstan

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