Meat processing left between MIID and Agri Ministry

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First Deputy Chairman of the Board of the Atameken NCE RK Eldar Zhumagaziev stated this during the meeting of the Committee of the Food Industry. The experts have discussed the development of the meat processing industry for import substitution.

According to him, the introduction of the ban on the export of cattle has exposed several problems in agriculture. The Atameken NCE RK with branch associations is ready to support the Ministry of Agriculture and take an active part in work on their elimination. It becomes an actual issue after President’s criticism during the extended session of the Government.

"The Ministry of Agriculture positions itself as a state body responsible for the production of raw materials in the form of meat, livestock, and cereals. We do not know which ministry: the Ministry of Industry and Infrastructure Development or the Ministry of Agriculture is responsible for the processing system. Therefore, this issue falls out all the time. This suggests that the Ministry of Agriculture does not have a clear policy to promote domestic producers. Moreover, it is not clear why there is no department in the structure of the Ministry of Agriculture that is responsible for the policy of development of the processing of agricultural products. Nobody roots for processors. First of all, it is necessary to create parity conditions for farmers to have a choice - put them on feeding grounds or for processing. And I think that certain preferences should be extended to processors," Eldar Zhumagaziyev said.

The experts of the Atameken NCE RK are sure that it is necessary first of all to increase the raw material base by the introduction of subsidy at the delivery of raw materials on processing for the development of meat processing for import substitution and loading of capacities of the enterprises.

With a view of the development of qualitative processing, it is necessary to establish certain criteria for meat processors concerning deep processing: manufacture of meat and meat production with simultaneous processing of blood, meat co-products, bones and other waste at slaughter.

Due to the introduction of these criteria for the volume of subsidies, about KZT 8 billion of subsidies will be needed at a standard of 200 tenge/kg for live weight or 400 tenge/kg for slaughtering weight.

This support scheme will give farmers the right to choose whether to send their cattle to a feeding ground or directly sell them to a meat processing plant and receive state support.

The Association of Meat Processors of Kazakhstan presented the methodology for granting subsidies in the sphere of agriculture to the Ministry of Agriculture.

Secondly, to stimulate deep processing of meat, the Atameken NCE RK proposes to provide passports of investment subsidies for reimbursement of costs (from 35% to 50%) for the modernization of meat processing enterprises for the purchase of necessary equipment.

Moreover, it is necessary to identify only farms - LLP, peasant farms, IE and agricultural cooperatives - as suppliers of livestock and recipients of subsidies.

According to Eldar Zhumagaziev, to ensure a stable market and output of domestic products on the shelves of Kazakh stores, it is proposed to subsidize the interest rate on loans of retailers and distributors under the Business Roadmap – 2025 programme for the purchase of products from domestic producers. Currently, the trade sector is not supported by any government measures.

It is also proposed that the Ministry of Agriculture should expand the General classifier of economic activities 47.11 "Retail trade in non-specialized stores mainly in foodstuffs".

The issue of product quality is also important. As of today, imported products sold in Kazakhstan are subject to monitoring only in the process of control purchases by the Quality and Safety Committee of the Ministry of Health of Kazakhstan according to the approved monitoring plan.

"That is, the goods have entered, and already post facto we will learn about some poor quality products. While in Russia, the control bodies check all the products at the entrance. If we could put such a barrier at the border, then the competitive edge of our manufacturers would be strengthened. It is necessary to mirror the measures promoted by Russians," Eldar Zhumagaziev, First Deputy Chairman of the Atameken Management Board, suggested.

At the end of the Committee's meeting, he proposed to work out a unified position on the rest of the agro-industrial complex together with its processors, Atameken, and the markets under this scheme.