Why have we developed a Road map for price stabilization?

The Ministry of Trade and Integration of the Republic of Kazakhstan, together with the Ministry of Agriculture of the Republic of Kazakhstan and the Agency for the Protection and Development of Competition of the Republic of Kazakhstan, has developed a Roadmap for price stabilization.

The roadmap includes the following measures: inspections and compliance, trade measures, increased production and support for enterprises, as well as legislative changes.

The first direction is "Checks and compliance". Today, there is a significant increase in food prices. In order to prevent unjustified price increases, there is a need to strengthen control by the antimonopoly authority and akimats, the press service of the department reports. The competence of the Agency for the Protection and Development of Competition of the Republic of Kazakhstan is to establish the facts of price collusions of dominant business entities and to prevent such violations, if they are detected. In turn, the akimats are given the competence to monitor compliance with the maximum prices for NWTP.

The roadmap provides for the adoption of an algorithm for assigning inspections for small businesses, which will allow akimats, fiscal and antimonopoly authorities to carry out all the necessary control measures.

The second direction is "Trade measures". One of the most effective mechanisms for price restraint is the establishment of marginal prices in the regions. So, for sunflower oil and eggs, almost all regions have exceeded the threshold prices. Akimats should set maximum prices. The Ministry of Trade and Integration, in turn, proposes to set maximum prices for these products.

The second current mechanism is the "reverse scheme",
i.e. the provision of preferential loans to retail chains. As part of the turnover scheme, goods are sold from the shelves of retail chains at prices below market prices by an average of 15-20%. The Ministry of Trade and Integration proposes to expand the financing of the revolving scheme from the current 21.9 billion tenge to 50 billion tenge. The Ministry of Trade and Integration also proposes to set quotas for the export of goods, in particular for steers and rams. Since due to the high export of live cattle and MRS to Uzbekistan, there is a great risk of an increase in beef prices.

The third measure is to increase production and support enterprises. Under the support of agricultural producers, we mean subsidies. It provides for an increase in subsidies, a revision of the subsidy criteria, as well as compensation for the reimbursement of part of the costs of railway transportation, the allocation of socially significant goods from the reserve of food corporations for their further sale in retail facilities, as well as fixing electricity tariffs, since today one of the main costs of producers of NWPT is comuslugi.

In addition, the Ministry of Trade and Integration of the Republic of Kazakhstan proposes to reorient the stabilization funds for the purchase of import-dependent goods, since external prices are shifted to domestic ones and give a high price increase. This is noticeable in sugar and buckwheat. Due to the increase in world prices, the cost of these goods in the domestic market has increased.

The fourth direction includes legislative changes. Thus, when forming stabilization funds and concluding forward contracts of the SEC with producers and suppliers of socially significant goods, the issue related to the lengthy procedure for conducting public procurement remains relevant, which is reflected in the Roadmap.

According to the Ministry of Trade and Integration of the Republic of Kazakhstan, an important mechanism is forecasting, without forecasting the volume of production, export/import, acreage, the Ministry of Trade and Integration will not be able to predict the cost of food products. The introduction of the forecasting institute will make it possible to take appropriate measures in advance to prevent price increases, redirect goods from regions where there is an oversupply to deficit ones, and thereby restrain prices.

The Ministry of Trade and Integration of the Republic of Kazakhstan, together with the Ministry of Agriculture of the Republic of Kazakhstan and the Agency for the Protection and Development of Competition of the Republic of Kazakhstan, has developed a Roadmap for price stabilization, Minister of Trade and Integration Bakhyt Sultanov said at a Government meeting on March 11, 2021. In this regard, the Ministry of Trade and a number of CSOs are forced to use administrative levers to offset all the consequences. For this purpose, it is necessary to exercise control on the part of the state.