What if words and actions don’t match?
- By Dashmaa D -
- Mar 20,2023
Statistics show that our country imports about 48 percent of its consumer food. Therefore, to reduce dependence on imports and expand domestic production, the national program “Food Supply and Security” has been implemented. In the framework of this, it is intended to create an opportunity to supply 19 main types of food within the country. These include eggs, rare vegetables, fruits, berries, milk, dairy products, and vegetable oils. Mongolia also set a goal to increase the cultivation of wheat, oil, and fodder plants, the main agricultural products, and become exporters. Spring planting will begin soon, and we will have a lot of work preparing to grow the food for next year.
In connection with the implementation of the “Food Supply and Security” national program, this spring Mongolia will probably sell more assets and work more proactively than in previous years.
In the case of the agricultural sector, cultivation starts more than a month from now on. But in the next week, they will start to make moisture barriers in the field. Preserving the humidity of the soil means preparing the field by burying the cracked areas and animal footprints with dirt. About the preparation of the planting work, Ch.Perenlei, director of the “Uguuj Mandal Uul” company in Khushaat soum of Selenge Province, said, “Spring plantation is about to begin. This year, there are no border restrictions, and we farmers can travel here and there freely, and we are fine with preparing with our spare parts. However, financial problems are still difficult. Banks are not accepting loan applications because it has not been decided which agricultural sector to choose and how much money to provide loans. They said to wait for the decision from the ministry and government organization. It takes 30 to 45 days to study and confirm the loan decision. In addition, if the collateral requirements are not met, there are many cases where the application is rejected and the desired amount of the loan cannot be obtained. In general, it can be said that loans are more likely to be received by reputable companies that have been operating for many years or have a lot of collateral. It would be effective if everyone who owns a family producer and small or medium-sized company is given access to loans. Moreover, they would like to receive loan requests from January and start granting them now. Due to the lack of funding, planting may start late and work may be delayed. Losing one day in spring is equivalent to losing 10 days in autumn, so we want to make a quick decision.”
Last year, about 618.600 thousand hectares of land were planted in the country. About 385,000 hectares of it were cultivated with grain and 14,200 hectares with vegetables. This year, there is a plan to increase the area of vegetables by five percent and increase the yield by 10 percent. D.Yesun-Erdene, head of the Agricultural Policy Implementation Department of the Ministry of Food, Agriculture and Light Industry (MoFALI), said that in general, land with river banks and fertile soil is being planned and researched to be used for agriculture. He reported, “It is planned to increase the amount of cultivated area from last year. However, it is currently unclear how many additional hectares will be used for planting and where. Research is being conducted and will be revealed at the Farmers’ State Conference early next month. About 52 billion MNT will be provided to the agricultural sector this year with an annual interest rate of five to six percent. This is an increase from last year. In addition to wheat seed lending and fuel support, vegetable seeds will be multiplied and given on loan or free of charge. Long-term loans will be provided to enterprises that will build greenhouses and cellars. However, it has not been decided how much money to give to some enterprises and when, and discussions are underway with commercial banks. The loan will be given only through the commercial bank, and it will be given by April.”
The Farmers’ Union Toward Modernization of Mongolian Countryside (MUTMMC) mentioned that if the variety of crops is increased, the possibility of producing food to replace imported products will increase even more. When the association asked for opinions from producers and entrepreneurs, there were more requests to plant more hectares of pea, barley, corn, and oilseeds. However, the land in the main cultivation area is being used in general, and there is a problem with allocating additional land. It should be decided as soon as possible where and how many hectares of land will be used for agriculture in the local area. They also emphasized the need to create an opportunity to export wheat and flour and give companies a common understanding of what standards and what types of products can be supplied where. The MUTMMC notes that farmers will create financial independence by exporting their surplus products, and the income from the agricultural sector will increase.
This year, the government has decided to grant a total of 223 billion MNT loans to the agriculture and food industries. In particular, food production that replaces imports will be supported, and 4,000 jobs will be created in the field of agriculture and food processing in 2023, according to the Department of Food Processing Policy Implementation of the MoFALI. Enterprises interested in taking a loan will apply to the Food and Agriculture Department of their province, sum, and district. Therefore, it is necessary to get a loan through a commercial bank.
Furthermore, the Department of Development of Small and Medium Enterprises (SME) will provide a loan of 35.4 billion MNT this year based on loan repayment. It has interest rate of three per year and its term is five years, and the principal payment can be waived for one year. It will not be transferred through a commercial bank, it will be given only according to the criteria of SMEs, but collateral and other requirements will be set. At present, more than 340 enterprises interested in processing meat, milk, potatoes, other vegetables, fruits, and berries, building greenhouses and cellars, and supplying seeds have submitted loan requests of about 52 billion MNT. Loans will be given to small and medium-sized businesses and cooperatives operating in all provinces, according to the above department.
Meat, flour, milk, and dairy products are predominant in the food consumption of citizens of our country. It is profitable to meet 100 percent of our potato needs from the domestic market. However, we still import approximately 10 million eggs, 5,000 tons of food and rare vegetables, 1,500 tons of vegetable oil, and 500 tons of dry or condensed milk, according to the report of the General Department of Customs. In addition, nearly a billion dollars are spent annually on the purchase of food products such as rice, wheat flour, fruits, sugar, and cheese. Increasing the production of staple products is of course important for reducing import dependence. Whenever issues such as improving the productivity of the agricultural sector and the food industry and increasing the names and types of cultivated and ready-made products are discussed, the issue of subsidized loans, aid, fertilizer, and fuel support are raised. This year too, the officials are talking about a large amount of money, mentioning that they will lend a considerable amount of money, and provide support for fuel and seeds. However, some farmers have high criteria for getting loans, and they give loans at the same time as they start farming, causing problems. Also, since the majority of all types of loans are provided through commercial banks, the loan applicants will not meet the collateral requirements. In other words, nothing more has been heard so far than the issues that are discussed only every year. The goal of completely abolishing the import of certain foods and becoming an exporting country, organizing meetings, and implementing programs here and there is ineffective and sloganeering. What if words and actions don’t match?