Bill on liquidation of Agricultural Support Fund supported
- By Misheel Lkhasuren -
- Mar 24,2023
During its plenary session on March 23, Parliament supported to discuss a draft amendment to the Law on Special Government Fund.
In order to increase the income of agricultural operators and create an accessible distribution system for products based on the real market demand and needs, the bill sponsors believe that it is appropriate to establish a state-owned enterprise. The draft amendment includes provisions for the liquidation of the Agricultural Support Fund.
During the session, Minister of Agriculture and Light Industry Kh.Bolorchuluun reported, “The Agricultural Support Fund has become a place of debt and charity. The amount of the fund’s receivables and payables is 200 billion MNT. It’s really not possible to go on like this. In any case, we view that people’s tax cannot be spent inefficiently as a fund. Therefore, the fund needs to be converted into a corporation. Management members will be selected through a selection process. We will change its staff and structure. The main debt of the fund is related to the fact that fixed assets and large agricultural machinery, are borrowed from abroad and distributed at a discount. In the future, it should be subject to public scrutiny.”
Member of Parliament S.Odontuya commented, “Recently, people no longer trust state-owned companies. You must have seen it during the public hearing of the Development Bank. The goal of developing agriculture and supporting the private sector is right. The Development Bank also said that it would provide loans for projects that would boost the country’s development. The Mongolian People Party’s policy says that all people will be lifted out of poverty by giving 10 trillion MNT loans, but the loans did not go to small business owners. The chairman of the Standing Committee on Economy said that Mongolia’s savings increased fivefold a week after the 10 trillion MNT loan went to the banks. It might weaken people’s confidence.”
Minister Kh.Bolorchuluun explained, “It is necessary to turn the fund into a corporation and operate it on a business basis. The shareholder of this company is the Ministry of Agriculture and Light Industry. The corporation will not compete with what the private sector is doing. However, the support provided by the government will go through the company. The most important thing is to settle the debt. Green tractors from China were distributed to almost every cattle farmer at a 50 percent discount. The debt is incurred on the fund. In the future, the corporation will support all agricultural companies.”