We do not accept this situation: Kazakh PM on food price increase as state subsidies allocated

Prime Minister Alikhan Smailov held a meeting on the prices of socially important food products with the participation of central government authorities and regional akimats on Thursday at the Ukimet Uyi, El.kz cites primeminister.kz.

First Deputy Minister of Trade and Integration Arman Shakkaliyev reported that food inflation for 10 months of this year reached 20.5%. Last month the prices for socially important food products rose by 0.8%. Specifically, eggs rose by 7.6%, flour by 3.9%, rice by 3% and milk by 2.2%. However, there was a decrease in the price of carrots (0.8%), potatoes (0.6%), sugar and cabbage (0.1%).

In order to stabilize the prices of a wide range of foodstuffs, there are plans to work out the issue of cheapening grain, fodder and sunflower oil. At the same time, according to him, for some commodity items - eggs, vegetable oil, rice, there is unfair behaviour of market players.

"Just the day before during a visit to Abay region there was revealed a fact when the poultry farm, located 200 kilometres from Semey, sold eggs at 360-380 tenge per dozen, and the price of the final sale was 600 tenge. Urgent anti-monopoly measures should be taken in this regard. In addition, recently there have been public statements in the press by individual producers about an impending price increase. Here, too, we need to respond appropriately," Arman Shakkaliyev said.

Minister of Agriculture Yerbol Karashukeyev reported on the results of the analysis of the reasons for rising prices of tomatoes, cucumbers and eggs as well as possible measures to stabilize their prices. He noted that some farmers have asked for more state subsidies.

"This year we have doubled the subsidies for agriculture, but at the same time we see a 20% increase in food prices from those who receive them. We are not satisfied with such a situation. If we give them subsidies they should be obliged to do it in return. The subsidy system must work properly," Alikhan Smailov said.

First Deputy Chairman of the Agency for Protection and Development of Competition Rustam Akhmetov made a speech on anti-monopoly response measures. The akims of Ulytau region Berik Abdygaliuly, Kostanay region Arkhimed Mukhambetov and Atyrau region Serik Shapkenov reported on the situation in the regions.

Having heard the speakers, the Prime Minister noted that there are serious questions to the activities of government agencies in terms of stabilizing food prices.

"Ministries and akimats have all the necessary tools, financial resources, controlling functions to regulate the cost of socially important food products, but the dynamics of rising prices is obvious," Alikhan Smailov said.

He also stressed that earlier we were repeatedly instructed to bring financing of the turnover scheme to 100 bln tenge, but six regions (Almaty, Zhambyl, Pavlodar, Atyrau, Kostanay and Akmola) have not done so yet.

He also said the regional commissions investigating pricing chains, whose work has been reformatted, have yet to produce the expected results, and the database of vegetable storage facilities has not been updated.

"This is the result of the weak work of the akimats and lack of coordination from the ministries of agriculture, trade and integration. I charge to bring to disciplinary responsibility supervising deputies of akims of these regions for improper fulfillment of their duties," Alikhan Smailov said.

In addition, the Prime Minister instructed the Ministry of Trade and Integration to submit a proposal to bring to disciplinary responsibility the officials in charge of this direction, as well as to dismiss the chairman of the Committee of Trade.

In conclusion, he reiterated that concrete measures should be taken for the items with the highest price increase, such as cucumbers, tomatoes and eggs.

"We need to understand who the major suppliers are and why they are increasing. If they take their margin by increasing prices, then let them work in a market environment, and we will redirect the subsidies to other areas. At the same time, in the regions, monitoring of allowable trade markups and the work of special commissions should be put on a systematic basis. Colleagues, I ask you to step up efforts to prevent unjustified increases on socially important food products. All the tools are available," Alikhan Smailov concluded.

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