On measures of state support in the agro-industrial complex in 2023

The agro-industrial complex of the East Kazakhstan region is the second main branch of the region's economy, which provides not only food security, but also is a driver of economic development.
In 2023, in January-April, the gross output of agricultural products amounted to 73.7 billion tenge, with an increase of 128% compared to 2022. The IFO of the agricultural GDP reached 116.3%.
During the analyzed period, investments in fixed assets of agriculture amounted to 12.2 billion tenge, or 66.6% compared to the same period last year.
In the region, exports of agricultural products in January-March 2023 amounted to 135 million US dollars, with an increase of 110.7% compared to the same period in 2022. At the same time, the share of processed products in total exports amounted to 45.4% (in 2022 – 27.2%).
Measures of state support in the form of subsidizing the development of priority areas of the agricultural sector contribute to the positive dynamics of the development of the agro-industrial complex of the region. As part of the ongoing subsidy programs, subsidies are provided to agricultural producers to reimburse costs in the production of crop production, animal husbandry, processing industry, as well as costs in investment activities. The following subsidy programs are currently being implemented:
1. Subsidizing the reimbursement of part of the expenses incurred by the subject of the agro-industrial complex, with investments.
For reference: (Order of the Acting Minister of Agriculture of the Republic of Kazakhstan dated July 23, 2018 No. 317.)
The main purpose of subsidizing the reimbursement of part of the expenses incurred by the subject of the agro-industrial complex during investment investments is to increase the availability of goods, works and services within the framework of investment projects in priority areas (sectors) Agro-industrial complex by reducing capital intensity and increasing the return on investment.
Investment subsidies are carried out according to the passports of the projects specified in the "Rules of subsidization for reimbursement of part of the expenses incurred by the subject of the agro-industrial complex during investment investments", and are made at the place of implementation of the investment project. According to this program, 8.7 billion tenge has been allocated for 2023.
2. Subsidizing interest rates for lending to agro-industrial complex entities, as well as leasing for the purchase of farm animals, machinery and technological equipment
For reference: (Order of the Deputy Prime Minister of the Republic of Kazakhstan - Minister of Agriculture of the Republic of Kazakhstan dated October 26, 2018 No. 436.)
The main purpose of subsidizing interest rates for lending to subjects of the agro-industrial complex, as well as leasing for the purchase of farm animals, machinery and technological equipment is to increase the availability of financial services for subjects of the agro-industrial complex. This year, 6.3 billion tenge has been allocated under this program.
Under loan agreements concluded from January 25, 2022, the borrower pays 6% of the nominal interest rate, the remaining part of the nominal interest rate received as a result of the difference between the amount of the base rate of the National Bank of the Republic of Kazakhstan plus 7.5% per annum and 6% paid by the borrower in tenge is subsidized from the state budget.
Subsidization is carried out under loan agreements:
1) for the purchase of agricultural machinery, including mounted and trailed equipment, as well as for the purchase of farm animals, for investment purposes (with the exception of passenger cars and passenger transport), construction (with the exception of loans for the purchase of fixed assets for the production of flour, mineral waters and soft drinks);
2) to replenish working capital necessary for the technological cycle of the production process;
3) on loans issued for spring field and harvesting operations.
3. Subsidizing the development of livestock breeding, increasing the productivity and quality of livestock products
For reference: Subsidies are carried out in accordance with the Rules for Subsidizing the Development of Livestock breeding, Increasing the Productivity and Quality of Livestock Products, approved by Order No. 108 of the Minister of Agriculture of the Republic of Kazakhstan dated March 15, 2019 (hereinafter referred to as the Rules)
Under this program, subsidies are paid in accordance with the regulations approved by the Rules for the purchase of breeding cattle, sheep, horses, pigs, for breeding and breeding work with breeding stock of cattle, sheep, pigs, marals and bees. Subsidies are also paid for cow's milk and poultry meat produced.
The purchase of animals of all kinds in case of a reduction in the purchase price from half of the approved standard is subsidized in an amount equal to 50% of the purchase price.
The purchase of the seed of a breeding bull of dairy and dairy-meat breeds is subsidized up to 100% of the purchase price, but not more than the approved standard.
According to this program, 4.8 billion tenge has been allocated for 2023.
Subsidizing is carried out according to the Rules of subsidizing at the expense and within the limits of the funds provided in the local budget for the corresponding financial year. If there is a shortage of funds provided for the relevant directions, applications are received in the reserve (waiting list).
The payment of subsidies is carried out on the basis of an electronic application to the GISS (state subsidy information system), which must meet the criteria specified in Annex 2 to the Rules at the time of submission.
Applications are accepted at the location/registration of farm animals within the time limits provided for in the criteria in accordance with Annex 2 to these Rules.
The responsible executor of the local executive body, within 2 (two) working days from the date of registration of the application, checks the application for completeness of the data specified in Annex 3 to the Rules. And also sends a notification of the results of consideration of the application for subsidies, or a reasoned response about the refusal to provide a public service.
4. Subsidizing the increase in yield and quality of crop production
For reference: (Subsidies are carried out in accordance with the Rules approved by the Order of the Minister of Agriculture of the Republic of Kazakhstan dated March 30, 2020 No. 107)
Subsidies under this program are carried out in the following areas:
- Subsidizing the development of seed production
Subsidies are intended for:
- partial (70%) reimbursement of the costs of elite farms for actually purchased original seeds of zoned and promising varieties and reimbursement of the costs of family farms, agricultural producers (agricultural cooperatives) for actually purchased elite seeds;
- partial (50%) reimbursement of costs of agricultural producers (agricultural cooperatives) for actually purchased seeds of the first reproduction and (or) cotton seeds of the second reproduction;
- partial (50%) reimbursement of costs of agricultural producers (agricultural cooperatives) for actually purchased seeds of first-generation hybrids;
- partial (50%) reimbursement of costs of agricultural producers (agricultural cooperatives) for actually purchased elite seedlings.
- Subsidizing the cost of pesticides, bioagents (entomophages)
Subsidies are paid to agricultural producers or agricultural cooperatives to reimburse the costs of purchased pesticides, bioagents (entomophages) intended for processing against harmful (weeds, wheat thrips, meadow moth, karadrina and coastal fly) and especially dangerous harmful organisms.
- Subsidizing the cost of fertilizers (except organic)
Subsidies are paid to agricultural producers or agricultural cooperatives to reimburse the costs of purchased fertilizers (with the exception of organic ones).
- Subsidizing the cost of water supply services to agricultural producers
The recipients of the subsidy are agricultural producers who purchased irrigation water supply services from the water supplier and incurred the costs of paying for them.
According to this program of subsidizing the increase in yield and quality of crop production for 2023, 4.1 billion tenge has been allocated in the region.
5. Subsidizing the costs of processing enterprises for the purchase of agricultural products for the production of products of its deep processing
For reference: (Subsidies are carried out in accordance with the Rules approved by the Order of the Minister of Agriculture of the Republic of Kazakhstan dated November 26, 2014 No. 3-2/615 (hereinafter – the Rules).
Within the framework of the Program, the costs of processing enterprises for the purchase of agricultural products for the production of products of its deep processing (butter and hard cheese) are subsidized. In 2023, 2.4 billion tenge is provided for these purposes.
The costs of processing enterprises for the purchase of agricultural products for the production of products of its deep processing are subsidized according to the list of agricultural products for which the guaranteed purchase price and the purchase price are established.
Subsidies are paid to processing enterprises that incurred costs in the current year and the fourth quarter of the previous year for the purchase of agricultural products from agricultural producers, agricultural cooperatives and procurement organizations.