“Food Revolution” Gains Momentum

2023-03-09 07:37:02

Ulaanbaatar, March 9, 2023 /MONTSAME/. Public, private and international organizations, and food producers have been joining and actively supporting the “Food Supply and Safety” national campaign, initiated by the President of Mongolia Ukhnaagiin Khurelsukh. The food and agriculture sector representatives, joined the national campaign which is abbreviated as the “Food Revolution”, assembled at the Government Palace last week to discuss the issues they have faced.

The pandemic and geopolitical tensions have resulted in food crises worldwide. During this trying time, ensuring food safety has become the immediate goal for countries around the world.

Within the framework of the "Food Revolution", we, Mongolians, have set the goal of fully meeting our domestic needs of 19 major food products in the next 5 years, becoming a food exporting country, and creating a healthy region free of animal diseases.

In his remarks at the opening of the consultation meeting, President Mr. Khurelsukh said, “In order to successfully implement the “Food Revolution” national campaign, public and private sectors should pay special attention to following six areas and work together. These are, 1) Implementing the "Food Revolution" in close coordination with the regional development policy, establishing and developing clusters, planning the raw material supply chain and transport logistics network in an optimal way; 2) Improving the legal environment aimed at protecting and developing wealth creators who produce food; 3) Solving the problems of vaccination and production of biopreparations to create a healthy zone free of animal diseases; 4) Leveraging the loan, tax, and insurance incentives, improve the incentive system, and encourage private sector investment; 5) Developing awareness among citizens to support their national producers; 6) Reporting the results of "Food Revolution" to the public every six months” 

This year alone, it has been decided to allocate about MNT 223 billion in funding to the food and agriculture sector, which is the largest support given to the sector in the past 30 years.  

Any production project pays off in 5-10 years, so there is no way to finance a national-scale project like "Food Revolution" with high-interest and short-term bank loans. Mongolian commercial banks have expressed their support for the "Food Supply and Safety" national campaign and have decided to grant long-term concessional loans of up to MNT 1 trillion to enterprises in 2023 with an interest rate of 3-5 percent. For this purpose, the Government has planned to spend MNT 135.5 billion for loan interest support.

In addition to the discounted loans, the Government has decided to support food producers and wealth creators by providing certain tax incentives. Specifically, new equipment for the processing of food and agricultural raw materials will be exempted from customs duties on imported goods by 100% until 2027. Also, until 2025, imported and domestically sold agricultural machinery, equipment, fertilizers, and plant protection substances will be exempted from VAT. Domestically grown grains, potatoes, vegetables, seedlings, fruits and flour produced by the domestic farmers; industrially processed and domestically sold fat and cut meat, unprocessed internal organs and by-products; milk and dairy products processed with domestic raw materials and sold domestically are exempted from VAT, respectively.  In addition, enterprises with annual sales of less than MNT 1.5 billion will enjoy 90 percent of tax reduction. Also, 50% tax reduction will be given to enterprises that produce and cultivate grains, potatoes, vegetables, milk, fruits, fodder, fodder plants, meat and meat products.

Moreover, a permanent resident who produces and cultivates grain, potatoes, vegetables and their seeds; fruits, berries, their seeds and seedlings; fodder plants and tree saplings will receive a 50 percent discount on the tax on the income from that production.

These decisions will be a big boost for the "Food Revolution" to gain momentum. As a result, thousands of new jobs will be created through domestic production, helping people out of unemployment and poverty.

At the end of his remarks, the President emphasized that in the future, in addition to food, we should be able to fully meet our domestic needs for strategic products such as electricity and fuel.

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