| What functions does the JSC "Kazagromarketing" carry out in the sphere of the compulsory crop insurance? || |
Based in the agreement with the Ministry of Agriculture of the Republic Of Kazakhstan in July 2012 The JSC «Kazagromarketing» carries out the functions of an Agent who manages the budget funds which maintains the compulsory crop insurance.
The JCS "Kazagromarketing" provides the following services:
1) Participates in the committee, created by the local executive body on the request of the insured, which defines the size of the area of the crop production that were exposed to adverse natural phenomena
2) Compensates the insured part (50%) of the paid insurance claims.
3) Makes the contract with the insured about the procedure and conditions of the partial reimbursement of insurance payments arising as a result of adverse natural phenomen.
By what laws the compulsory crop insurance is regulated?
- the Law of the Republic of Kazakhstan №533 "On the compulsory crop insurance" adopted on the 10th of March, 2004;
- the Law of the Republic of Kazakhstan №163 "On mutual insurance" adopted on the 5th of July, 2006.
| What is the main purpose of the Law "on compulsory crop insurance"? || |
The main purpose of the law is the protection of property interests of farmers, who grow certain types of grains and oilseeds, as well as cotton and sugar beets, from the effects of adverse natural conditions.
| In what way does the state supports the "compulsory crop insurance"? || |
State support of the "compulsory crop insurance" is implemented through the allocation of the budget funds to the Agent for the compensation of the half of the insurance payments to insurance companies and companies of mutual insurance on the cases that occurred as a result of the adverse natural phenomena.
What company carries out the function of the Agent who manages the budget funds to support the compulsory crop insurance?
| From the period of 2004 to July of 2012 the Agent was the JSC "the Fund of Financial Support of Agriculture" (subsidiary of JSC "KazAgro " ). From July of 2012 till now this activity belongs to JSC "Kazagromarketing". |
| What companies render the services on compulsory crop insurances in domestic market? || In 2013 two insurance companies (JSC "Grain Insurance Company", JSC "Kazahinstrah") and 37 mutual insurance companies rendered a service on compulsory crop insurances. |
| What crops are subjected to compulsory crop insurance? || |
4 types of crops are subjected to compulsory crop insurance:
3.Sugar beets; 4. Cotton.
| What documents are necessary for making a contract on compulsory crop insurance? || |
- Application form (taken from the insured);
- Taxpayer identification number;
- Reference to presence of the bank account;
- Certificate on the right to use land.
| What is the deadline to sign a contract on compulsory crop insurance? || |
the deadline for making a contract on compulsory crop insurance on all types of crop production: No longer than 15 calendar days after the completion of sowing that was registered by the local executive body.
| What are the long-term or short-term adverse natural phenomena under which the insured event is defined? || |
The contract on compulsory crop insurance considers the implementation of the insurance payments under one of this adverse natural phenomena:
- long-term (drought, winterkill, lack of heat, excess soil moisture, excess moisture in the air, flooding, water scarcity, hot wind)
- short-term (hail, downpour, freezing, strong wind, mudflow )
| What actions should be undertaken in the insured event? || |
1. To notify the insurer either orally or in written form within 5 working days after the fact of the occurred adverse natural phenomena that could lead to the insured event. The oral notification should be confirmed in written form during the following 72 hours.
2. To take the certificate about the fact of the occurred adverse natural phenomena from "Kazgidromet" or from the agency on emergency situations.
3. To apply for the local executive body about the creation of the committee that will register the area which was exposed to the adverse natural phenomena.
It Must Be Remembered!
- If the adverse natural phenomena is the short-term (hail, downpour, freezing, strong wind, mudflow) then you must apply to akimat (local executive body) during 3 working days; - If the adverse natural phenomena is the long-term (drought, winterkill, lack of heat, excess soil moisture, excess moisture in the air, flooding, water scarcity, hot wind) you must apply to akimat within 10 working days.
| Give an example on how the calculation of the insurance compensation is made? || |
Payments to agricultural enterprises that suffered from losses are compensated by the insurer fully, if plants on the insured areas have died completely. In partial loss of crops only the positive difference between the income derived from the crop and the established norms of costs per hectare production is paid. The crop products, collected from areas exposed to adverse natural phenomena in the case of partial loss of crops is subjected to mandatory assessment at harvesting.
For example: complete loss of crops of wheat is 100 hectares, this area is insured according to the standard costs: 3457 tenge per hectare. 100 * 3457 = 345 700 tenge - is the amount of insurance payment to the insured by the insurance company.
In partial loss of crop on an area of 100 hectare payment is: Products harvested from an area of 100 hectares are 3 tons, cost of 1 ton is 40,000 tenge, 3 * 40000/100 = 1 200 tenge - income from 1 hectare . The amount of loss equals (3457-1200) * 100 = 225 700 tenge. This amount of 225700 is - the amount of insurance payments in partial loss of crops.
It Must be Remembered!
- In total loss of the crops the insurance payment is compensated within 10 working days after obtaining all the documents - In partial loss of crops the insurance payment is compensated no earlier than 1 month, but no later than 3 months from the day of harvesting after obtaining all the documents by the insurance company.
| Subsidizing leasing of agricultural machinery |
What subject of credit/leasing gets under the subsidizing program?
Interest rates on loans in the sphere of AIC for replenishment of the turnover, acquisition of fixed assets and construction, and also obtaining manufacturing equipment and agricultural machinery on leasing, are all subject to subsidizing.
Rules approved the list of priority types of activity in the sphere of AIC:
-meat cattle breeding;
-dairy cattle breeding;
-acquisition of the main and current assets on an orchard start (intensive, family); -processing of agricultural products
| What are the conditions of the program? || |
Subsidizing is carried out under the loan agreements with fixed nominal interest rate of no more than 14% per annum in tenge, and no more than 10% per annum in foreign currency, where half of amount is subsidized by government, and the remaining amount is paid by borrower.
Interest rate subsidizing is carried out on credit agreement by lowering the amount by 7% (seven) per annum in tenge, and by 5% (five) per annum in foreign currency, other than in respect of reference of item 9 of Rules.
Subsidizing of interest rate is done by decreasing it by 10% (ten) per annum and by 7% (seven) per annum in foreign currency, it is carried out under the loan agreements on obtaining agricultural machinery and the equipment in an animal husbandry and forage production industry according to item 9 of Rules. If the nominal rate of remuneration according to loan agreements of the borrower is less or equal to subsidized part of interest rate, then nominal rate of remuneration according to loan agreements is fully subsidized.
How subsidies under the agreements of credit/leasing signed in foreign currency are charge?
On the credit/leasing issued by financial institution in a foreign currency or in tenge with a binding to a foreign currency, subsidizing of interest rate is carried out in tenge according at the rate established by National Bank of the Republic of Kazakhstan, on a date of transfer of amounts of subsidies by administrator to financial institutions. In case of a positive exchange difference, the difference is set off on account of future subsidies, in a case of negative exchange difference; the difference is paid by borrower. Thus indexation on remuneration are not subject to subsidizing.
What is the period of subsidizing?
Subsidizing is carried out on remaining period of validity of agreements of credit/leasing
What agreements of financial leasing aren't subject to subsidizing?
Loan agreements are not subject to subsidizing, on which support is carried out in a form of subsidizing interest rate with other state and/or budget programs, and also loan agreements, which have been financed at the expense of means of republican budget and National fund of the Republic of Kazakhstan.
Which state programs are allowed to be combined with subsidizing interest rates on loans and/or leasing?
Subsidizing the interest rate on credit and/or leasing is allowed to be combined with state support programs on guaranteeing and insurance of loans, subsidizing for cost reduction in a case of acquisition of fixed assets (which includes biological assets), compensation of part of expenses, incurred by the subject of agro-industrial complex by investments focused on building new or expansion of operating production capacities.
| Where the borrower should address to submit an application for subsidizing of interest rate? || For more information and submission of statements, borrowers who are willing to participate in the program, shall address banks of the second level and leasing companies, from where they incur the obligations. |
| What are the documents required from lessee to send request? || |
The request in a form according to appendix 2.
Thus, to the request as its integral part followings are applied:
The request shall be signed by the authorized person of financial institution or the person having the power of attorney with a right to sign, and seal by financial institution. Thus separate requests from branches (representations) of financial institution cannot be accepted.
- the copy of the credit agreement certified by financial institution with appendix of the repayment schedule of a principal debt and the remuneration concluded between financial institution and the borrower;
- the copies of the relevant documents of the borrower certified by financial institution (agreements and/or contracts, and/or acts), confirming target use of the credit (leasing);
- the copy of the statement certified by financial institution from the loan account of the borrower about receipt of the credit (for banks of the second level) or the document confirming transfer of credit/transfer of a subject of leasing;
- the copy of the power of attorney or the order on the right of signing the documents by other person if the request is signed not by the first head of financial institution;
In what cases the termination of subsidizing is possible?
The termination of subsidizing is carried out with a decision of commission under following circumstances:
1) presence of outstanding obligations of liabilities on settlement of a principal debt and/or remuneration of more than 90 (ninety) calendar days;
2) inappropriate use of borrowing facilities;
3) arrest of accounts of the borrower by court decision, which take legal effect;
4) complete settlement by the borrower of liabilities to financial institution according to the credit agreement
5) the written application of the borrower about refusal in receipt of subsidies; 6) termination of the of agreement.
Sample calculations of amount of subsidies.
Conditions: Acquisition of tractor "Belarus 82.1", worth 3 000 000 tenges, the initial contribution of 10% of cost, an interest rate of remuneration constitutes 12% per annum.
| № || According to loan agreements || Subsidizing starts from || Sample calculations |
| 1 || |
on which subsidizing of rates of remuneration within the budget program was performed in 2013: 214 "Development of plant growing and ensuring food security" to the subprogramme 104 "Reduction in cost of interest rates of remuneration on the credits (leasing) of agricultural machinery"
from 1 January 2014
Charge is made since 1 January 2014 till the termination of term of the credit agreement that is 20 March 2019.
By March 20, 2019 (by the end of the termination term of crediting) the borrower shall pay financial institution - -3 877 377,68 tenge, from which:
- 3 000 000 tenge, amount of loan (principal debt),
-877 377,68 tenge amount of remuneration for the use of credit.
By participating in the subsidizing program, the amount of a subsidy allocated by the state will be - 511 803,65 tenge.
Thus, the Borrower will pay 3 877 377,68 tenge, instead of 3 365 574,03 tenge.
| 2 || |
signed after 1 January 2014
from the moment of issuance of credit or transfer of a subject of leasing
1 May 2014 - date of the signing of the loan agreement, 10 May 2014 -date of transfer of equipment under the transfer acceptance report, 10 May 2020 -
end date of term of the credit agreement.
By March 10, 2020 (by the end of the termination term of crediting) the borrower shall pay financial institution - -4 128 057,01 tenge, from which:
- 3 000 000 tenge, amount of loan (principal debt),
-1 128 057,01 tenge amount of remuneration for the use of credit.
By participating in the subsidizing program, the amount of a subsidy allocated by the state will be - 658 033,26 tenge.
Thus, the Borrower will pay 3 470 023,76 tenge, instead of 4 128 057,01 tenge.
Conditions: Acquisition of milk tanker Gaz-3302 "Gazel-Business",worth 3 500 000 tenges, the initial contribution of 15% of cost, an interest rate of remuneration constitutes 14% per annum.
| № || According to loan agreements || Subsidizing starts from || Sample calculations |
| 1 || 213 «Development of processing productions" to the subprogramme 100 "Compensation of a rate of remuneration on the credits (leasing) for support of agricultural industry" || from the date of the following payment after allocation of subsidies of 2013 || |
15 March 2014 - date of the last distribution of subsidies of 2013, 15 March 2019 - end date of term of the credit agreement. Next payment is due on 15 June 2014 according to schedule. So, charge is made from the date of the following payment according to the repayment schedule till 15 May 2019.
By March 15, 2019 (by the end of the termination of term of crediting) the borrower shall pay financial institution – 4 332 074,44 tenge, from which:
- 3 500 000 tenge, amount of loan (principal debt),
-832 074,44 tenge amount of remuneration for the use of credit.
By participating in the subsidizing program, the amount of a subsidy allocated by the state will be – 594 338,89 tenge.
Thus, the Borrower will pay 4 332 074,44 tenge, instead of 3 737 735 ,55 tenge.
Note: at calculation of subsidies the settlement of a principal debt was made once a year, and the settlement of added remuneration was made twice a year.
| Financial rehabilitation of agribusiness entities |
| Who can participate in financial rehabilitation? || All agricultural enterprises having credit / leasing liabilities to financial institutions (ie banks and / or organizations engaged in banking activities) and / or creditor obligations (ie obligations to other companies) that arose prior to January 1, 2014. |
| Can I participate in financial rehabilitation, if, as a subject of agribusiness, my work is not included in the priority list of agribusiness? || |
| Can I participate in financial rehabilitation, if I do not have problems with repayment of the loan / lease / payable, and there is no outstanding debt? || Can. In the the financial recovery of is open to all agribusiness companies, regardless of the presence / absence of the above-mentioned problems with the repayment obligations. |
| Can I participate in financial rehabilitation, if my accounts are arrested? || You can not. |
| Where to apply for the financial recovery? || |
In the first place, it is necessary to apply to the financial institution to whom you have obligations (ie, to the bank or organization that carries out banking activities). Alternatively, you can apply to any other financial institution with an application to refinance liabilities (including creditor) under the financial recovery.
Necessary documents for the of financial recovery you will prepare together with the financial institution.
| What stages are financial recovery consist of? || |
Financial recovery consists of several steps:
| Which means "restructuring and refinancing are subject to ... obligations incurred before January 1, 2013"? || Means actually originated loans (loans) and leases prior to January 1 of 2014. |
| What part of the compensation after the procedure of of financial recovery, I'll pay the bank? || You will pay only 7% per annum. The remaining part of the compensation will be paid by the State in the form of subsidies. |
| What if the Bank, where I had made an application for financial recovery, are not aware of the existence of this program? || You can apply to any other bank to refinance your obligations under the financial recovery. |
| Can I be denied by a bank to accept the application for financial recovery? || Can. In case of failure of the bank making an application for financial recovery, you can apply to any other bank to refinance your obligations under the financial recovery. |
| Do I need to prolong the term of repayment of the loan / credit to participate in the program of financial recovery? || Necessary, as an extension of one of the main conditions for of financial recovery, but a minimum period of extension is not provided (maximum - up to 9 years). |