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Wednesday, August 5th, 2020

R. Kurmanov: Agricultural processers to be supported by subsidies


At a press conference following the Government meeting, Deputy Minister of Agriculture Rustem Kurmanov reported on measures of state support for agricultural products processing enterprises.

According to the Deputy Minister, a social-working group of scientists, businessmen and Akimat workers was established, which systematized all issues related to the Processing Plan, counted up the number of active enterprises, as well as enterprises needing modernization. Thus, more than 80 enterprises require modernization: some of those need replacing production lines, some – equipment.

“Some enterprises still use equipment from the 60s, which requires replacement, since consumer preferences for food products should be satisfied through modern technological equipment, � Kurmanov said.

Modernization of processing enterprises will be carried out through assets of banks, which are planned to be involved in financing Projects of the Processing Plan by subsidizing interest rates on working capital and fixed assets. In total, it is planned to channel loan funds in the amount of 226.9 billion tenge for modernization until 2021. To this end, 24 billion tenge will be allocated from the state budget to subsidize the rate of remuneration. Thus, the subsidy for working capital rates will be 4%.

“For example, a processing enterprise takes a loan of 100 million tenge to replenish working capital. Currently, the market rate is 14%. In other words, the enterprise should pay an additional 14 million tenge adding to the 100 million. Under the new scheme, the state will reduce this amount by 4%. That is, of these 14 million tenge, 4 million will be paid by the state, 10 million by the entrepreneur himself. For processing enterprises, this amount is generally doable, � the Deputy Minister said.

The rate for fixed assets is higher than for working assets and is 16%. In this regard, the state will subsidize 10% of the total loan amount.

In addition to subsidizing the rate of working capital and fixed assets, about 50 billion investment subsidies are also to be allocated from the state budget. The state will reduce the interest rate by 25%.

Recall, today’s Government meeting examined the draft Agricultural Processing Plan, developed for 9 priority types of processing, including, for each district by region.

The Plan is based on three consecutive principles. This is the loading of existing capacities of 435 enterprises by providing access to loans for the replenishment of working assets, as well as organizing the collection of raw materials through cooperatives; modernization of 80 operating enterprises, to increase competitiveness, and for the effective use of existing production facilities; construction of 79 processing enterprises, mainly small ones, in those regions where there is raw material, and existing processing enterprises are located fairly far away.

Source: Government of the Republic of Kazakhstan