Subsidizing as a factor in the efficiency and innovative development of agriculture in Kazakhstan

Abstract

Abstract. The existing subsidy payments actually leads to overpricing of resources by suppliers and, as a consequence, to reduction of economic availability for all other agricultural producers, who don’t receive support measures. A limited number of economic entities receive short-term financial benefits from subsidies, which don’t refer to the whole agricultural sector. The purpose is to propose and substantiate recommendations for increasing the economic return on agricultural subsidies in Kazakhstan. Methods. The paper applies a statistical analysis of economic return on agricultural subsidies in Kazakhstan. The work estimates volumes of used resources and produced goods per 1 ruble of subsidies (considering their types). Scientific novelty consists in clarifying approaches to the assessment of economic efficiency of agricultural subsidies; determining the factors restraining the agricultural development in Kazakhstan at the expense of subsidies; proposing and justification of measures to mitigate these factors. Results. The focus of support on short-term results (replenishment of working capital instead of introducing new technologies); the orientation of support on gross indicators instead of production efficiency; insufficient funding for general services in the agricultural sector – are factors that hinder the growth of the returns from subsidies. The article proposes the improvement measures: 1) linking subsidies with production efficiency, application of innovative and environmentally friendly technologies; 2) re-orientation of subsidies in favor of domestic production of resources for agriculture; 3) financing of domestic breeding science, seed production. These measures are based on the need to overcome the technological backwardness of agriculture in Kazakhstan.