7 Feb 2024 15:34

Kazakh president orders doubling of agricultural funding

ASTANA. Feb 7 (Interfax) - Kazakh President Kassym-Jomart Tokayev has instructed that financing for agriculture be doubled.

"The problems that hold back the development of the agricultural sector are well known. The most acute of them is the chronic underfunding of the industry. Lack of investment results in wear and tear of agricultural equipment, low yields, and low labor productivity. Therefore, we should maximize, if possible double financing for agriculture, drawing not only on budget funds, but also funds from other sources, including second-tier banks," Tokayev said at an expanded government meeting on Wednesday.

He instructed that the volume of preferential lending for sowing and harvesting campaigns be raised to 1.5 trillion tenge, for investment projects to 800 billion tenge, and the volume of preferential leasing of agricultural equipment to 450 billion tenge annually.

"This will make it possible to bring the rate of renewal of agricultural equipment up to 10% per year. According to calculations, these measures will contribute to a twofold increase in the volume of gross agricultural output," Tokayev said.

Tokayev also said it is necessary to reconsider applying a single land tax, which, in his opinion, "should not only simplify administration, but also take into account the efficiency of land use."

"All measures of state support should be provided based on the one-stop principle. It is advisable to combine the services of specialized financial institutions," Tokayev said.

He also emphasized the need to step up the capacity of the Agrarian and Credit Corporation and delegate to it the functions of a local government organization to subsidize agriculture. For this purpose it is essential to combine the services of preferential lending and subsidizing entities of the agricultural sector in one digital platform.

The agricultural sector needs largescale reform aimed at increasing labor productivity through the introduction of new technologies, rational use of land and other resources, as well as improving the effectiveness of benefits and subsidies, he said.

"The specially established Ministry of Water Resources and Irrigation has not yet yielded the expected results. Meanwhile, neighboring countries are much more active and purposeful in addressing the problem of water shortage. We have only recently adopted the Concept of Water Resources Management System Development. The discussion of the document dragged on considerably. At the same time, only 13% of irrigated land in the country is covered by water-saving technologies," Tokayev said.

As reported, around 500 billion tenge has been allocated for subsidizing the agricultural sector in Kazakhstan in 2023.

The official exchange rate on February 7 is 454.59 tenge/$1.