Kazakhstan may increase agricultural subsidies 2.5-fold

Kazakhstan may increase agricultural subsidies 2.5-fold, Tengrinews.kz reports citing Minister of Economic Integration Zhanar Aitzhanova as saying at the round-table meeting on the Common Economic Space on September 26. The Minister told about draft agreement on common rules of state support for the agricultural sector. It is called to introduce a coordinated policy on subsidies to agricultural sector. The main idea of the agreement is to limit the maximum level of state support that effects the final costs of agricultural products. It cannot exceed 10 percent of the industry's aggregate output. "It is currently $474 million in Kazakhstan, which is 4.3 percent of the agriculture's GDP. It is 6.4 percent of agriculture's GDP in Russia and 18.7 percent in Belarus,” Zhanar Aitzhanova told the deputies. According to this agreement, Belarus is obliged to halve the state support within 6 years, while Kazakhstan, on the contrary, will have an opportunity to increase the subsidies 2.5-fold. Besides, the document provides for development of fair competition in mutual agricultural trade. Kazakhstan has an opportunity to increase local production of meat, which is currently imported from Russia under the annual quota of $5 billion. At the same time, support of small and medium business and Research and Development projects allows for subsidies that do not have to be approved by the Customs Union (CU) commission. The permissible subsidies mechanism will come into effect in 2017. Kazakhstan will have to submit a report providing justification of subsidies offered to the industrial sector; the support will be provided upon approval of the CU commission.