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Wednesday, December 8th, 2021

Government considers mechanisms of food price stabilization

by December 12, 2016 Fun

A regular meeting of the Government considered the need to change the rules of stabilization funds operation. Ministry of Agriculture proposes to withdraw from the clear mechanisms of stabilization funds implementation and to establish the possibility of using various mechanisms for food price stabilization.

We are proposing three mechanisms for stabilization of food prices, the First Vice Minister of Agriculture Kairat Aituganov said.

Firstly, this is a simplifying existing order of stabilization funds operation. Process of making decision on purchase or sale of stabilization funds resources is heavily regulated. It is proposed to retain only the procedure of approving with the Commission the list of goods and maximum markup.

The second mechanism provides to social entrepreneurial corporations (SEC) the opportunity of creating a company under PPP with state participation in the authorized capital of not more than 49%. The private companies will benefit from resources provided by SEC � trade or monetary credit, social stores and other facilities. The advantage for the SEC is the minimized costs for additional infrastructure.

Within the 3rd mechanism, the akimats elaborate requirements for commercial facilities. The contracts are concluded with the trade facilities compliant with requirements. The contracts provide for lending from the akimats side and commitment to sell a specific range of products at a fixed price set by the contract � from the trade facilitys side.

To implement such mechanisms, the amendments to the AIC legislation will be made in the exclusion of stabilization fund concept and the inclusion of mechanisms of stabilizing food price concept.

Source: Government of the Republic of Kazakhstan