Food producers want the state to implement substantial policy to protect domestic food production from imports, to conduct market studies in order to export domestically-made products, and they want export taxes to be reduced.
Nearly 50 representatives of food producers and traders, including APU, Talkh Chikher, Suu, Makh Market, Khuns Complex, and Darkhan Khuns, attended an open discussion on state policy on challenges facing their industry, which was organized last week by the Mongolian People’s Party (MPP) group in Parliament and the Mongolian Food Producers Association.
During the open discussion, food producers spoke to parliamentarians about the vital issues that food producing companies, factories, and entities face. The attendees and organizers shared their views on the state’s support and protection of the sector as it relates to national security.
Parliament and the Government of Mongolia have issued over 50 policy documents since 1999 in order to develop production in Mongolia. Even though many laws and policies are in effect, many problems still strike the food sector and domestic producers. The attendees underlined the lack of substantial state policy for the nation to become more independent from the import of food products. They also stated that they want the state to support exporters with loans and taxation policy devoted to food producers so that the industry can become more independent and replace imports.
“The ministry in charge of food should create its policy to train personnel specialized in the food sector. At the moment, we need a specific outline for food industrialization, and specific research, calculations, and planning. The state will firmly support the development of production and cooperation from food producers to create more potential and high quality products,” noted MP S.Byambatsogt. The MP said that MPP authorities are initiating a light industry program and are developing a draft parliamentary resolution.
School lunch programs need reform
Director of Milk Company B.Gantulga highlighted reforms needed for lunch programs carried out in general education schools. He criticized the state’s policy, claiming that it tries to fill the pupils’ stomachs rather than feed children good-quality, healthy, and safe food in their lunch programs.
He emphasized the importance of children’s health and growth and stressed that milk should be included in the lunch programs of schools and kindergartens. He cited that the average height of children in China increased by six centimeters and tooth decay in children decreased by eight times since China implemented a special program for school children providing them with good quality milk with school lunches. B.Gantulga reminded state authorities that it is time to take care of providing children with healthy nutrition.
Director of Khuns Complex LLC and a member of the Board of Directors of the Mongolian Food Producer’s Association D.Oyuntuya represented meat and meat product companies at the discussion. She blamed the unregulated implementation of state policy for the increasing declarations of bankruptcy by meat producers. She explained that meat traders buy cheap meat from herders and sell it at higher prices, destabilizing the value of meat products. She also noted that food producers are under VAT pressure and stressed that the state does not do anything, even though food producers have asked many times to ease VAT.
Representatives of food product companies pointed out that domestically-made cookies cost more than imported cookies. Some Russian-made cookies cost 600 MNT per kg, but domestic cookie producers make cookies that sell for a minimum of 800 to 900 MNT per kg. They explained that VAT pressure impacts the price of domestic cookies, making them more expensive than imported options.
Noting that entities with income of less than 1.5 billion MNT per year receive VAT exemption when importing equipment, the attendees said that entities with income of more than 1.5 billion MNT have more potential to buy equipment, and suggested the amendment of laws related to VAT exemptions.