Farmers can receive additional preferences in Kazakhstan

The Ministry of National Economy came up with the idea of providing better lending terms for businesses involved in the reprocessing industry, agricultural processing and services. The draft document is available at the legalact.egov.kz website for public consideration.

Currently, the government provides subsidies only for those loans with a repayment period of five years and loans for working capital financing for three years. Now, the ministry suggests extending the period when the government can subsidize loans to seven years for any business representing one of the 15 priority sectors.

The proposal suggests subsidizing 14.25% per annum of a loan for businesses in those priority sectors, even though the current rule offers 13.25% per annum of compensation.

According to the ministry, the priority sectors should include the following activities: the breeding of dairy animals, poultry breeding, reprocessing and conserving of meat products, milk processing and cheese-making, production of meat products, green-cut fodder, textile fiber, fertilizers, drugs, flat glass production and processing, production of construction materials made of hardened clay and concrete, production of cast iron, steel and ferroalloys, and production of cleaning and polishing substances.

The Ministry of Finance developed this list in August 2022. At the time, the agency suggested that the list of priority sectors should be expanded in order to decrease the country’s imports.

In November 2022, President Kassym-Jomart Tokayev expressed concern over the correlation between the country’s high dependence on imports and an increase in inflation. Costly construction materials also add to the price surge in the real estate market. Moreover, there is no import phase-out of construction materials in the country, although the government says the opposite.