April 2020 Highlights of Kazakhstan Agricultural Sector

Nieuwsbericht | 08-05-2020 | 15:13

Agriculture of Kazakhstan grows by 2.5% in the first quarter of 2020

The other day, a Government meeting was held, where they announced the results of the development of the country’s social and economic life. Coronavirus has made global adjustments to life, there has been an international recession. However, in Kazakhstan, industries such as industry and agriculture are afloat in almost all regions. The economy of all countries of the world is in a difficult situation. International financial institutions note the emerging global recession, low activity in business circles. All this happens in connection with protective measures against coronavirus infection. There is a decline in the situation on basic commodities. As for Kazakhstan, there is an increase in the main sectors of the economy. Positive growth was noted in construction by almost 12%, in industry by almost 6%, as well as in agriculture by 2.5%. The largest increase in industry was noted in Kostanay and Akmola regions. Growth is observed in 15 regions of the country. In agriculture, there is almost universal growth. The best results were shown by Kostanay, Aktobe, Karaganda, Akmola regions, as well as North Kazakhstan and East Kazakhstan regions.

In order to reduce the negative consequences, the country has taken measures, including support for small and medium-sized businesses and the agro-industrial complex, according to Kazakh Zerno.

Kazakh Ministry of Agriculture extends terms of veterinary certificates from Russia

The Ministry of Agriculture has extended the use of bilateral veterinary certificates of the Russia - the third country format for the import of goods subject to veterinary inspection in Kazakhstan. “Due to the unfavorable epidemiological situation of coronavirus infection in the world, and, accordingly, the difficulty in negotiating the approval of veterinary certificates at the request of third countries, for certain types of goods, the Ministry of Agriculture of Kazakhstan extends the use of bilateral veterinary certificates until January 1, 2021 of the Russia - the third country format for the import of goods subject to veterinary control into the territory of Kazakhstan,” the Vice Minister reported. In total, 231 veterinary certificates are valid when importing agricultural products to Kazakhstan. In accordance with the Decision of the Customs Union Commission dated April 7, 2011, on Forms of Unified Veterinary Certificates for Controlled Goods from Third Countries Imported into the Customs Territory of the Eurasian Economic Union, veterinary certificates are the same when importing agricultural products to the EAEU member states. Their list is published both on the website of the Eurasian Economic Commission and on the website of the Ministry of Agriculture of Kazakhstan. In addition to the uniform forms of VC of the EAEU-third country format, there are 29 veterinary certificates agreed by the EAEU with the European Commission, Spain, Canada, USA, Brazil, Australia, Tunisia, Japan, Turkey, Czech Republic, Iran, Israel, China. “It should be recalled that in accordance with the Order of the Minister of Agriculture of Kazakhstan dated December 9, 2014, when importing agricultural goods from nonmembers of the EAEU, the importer submits an application for permission to import. Then, if it meets the requirements of the EAEU, an import permit is issued that is valid during the calendar year,” the Vice Minister explained. Further, the importer receives a third veterinary certificate and imports products into Kazakhstan. When importing agricultural products from the EAEU member states, permission is not required, only a veterinary certificate for agricultural products is required, depending on its type, Kazakh Zerno reported.

Ministry of Agriculture presents list of products prohibited for export from Kazakhstan

The Ministry of Agriculture of Kazakhstan issued a statement explaining in detail which goods are banned for the period of emergency. On April 2, an order was prepared by the head of the Ministry of Agriculture together with the Ministry of Trade of Kazakhstan on some issues of the export of certain goods from the territory of Kazakhstan, which is valid until September 1 of this year. This document details the categories of products that cannot be exported and that are subject to quotas. A complete ban was imposed on the export of buckwheat, white sugar, potatoes, fresh and chilled onion vegetables, crushed and uncrushed sunflower seeds, sunflower oil and buckwheat. Export quotas apply to carrots, turnips, beets, fresh and chilled vegetables from the genus Brassica, wheat and wheat-rye flour, as well as common wheat and meslin. The Ministry of Agriculture explains that a ban was not imposed on the export of cabbage to the EAEU countries, which means that the issuance of certificates is carried out in accordance with the regulations stipulated by law. At the moment, applications for 10,000 tons of cabbage have been filed in the country. The Ministry will review monthly quantitative restrictions on the export of products from the country, as well as the volume of guaranteed supplies of food products to the domestic market. These indicators depend on the volume of production, consumption and stocks of products, proposals of administrations and representatives of associations involved in the production and processing of food, Kazakh Zerno reported.

Kazakhstan allocates 237.5 billion tenge for the construction of wholesale distribution centres

Kazakhstan plans to create a national distribution network consisting of a single complex of wholesale distribution centres. 20 centres are promised to be built by 2022. Their cost will be 237.5 billion tenge, the Minister of Trade and Integration Bakhyt Sultanov said at a government meeting. “Every year from February to May, when last year’s harvest is already depleted and the delivery of a new one from neighbooring countries begins, we observe high price volatility. This, in turn, has a negative effect on inflation. The reason for the need to create a system for storing and selling products manufactured in the country is associated with the high costs of manufacturers,” Bakhyt Sultanov said. In Kazakhstan there is not enough quality infrastructure for long-term storage, which, in turn, increases the costs of the agricultural producer. “For an urgent and at the same time systematic solution to existing problems, it is proposed to create a national distribution network consisting of a single complex of wholesale distribution centres. This ecosystem will create a separate economic cluster, which will bring the producer closer to the consumer, and also join the trade infrastructure of the republic, forming a single mechanism,” Bakhyt Sultanov explained. The head of the department is confident that the distribution centre will become the centre of the system, which will offer specialized services, from storage and processing to distribution and marketing of products. This infrastructure will make it possible to build efficient transport and logistics channels for key areas of product supply. There will also be export-import operations in the EAEU, Central Asia and China, which will expand the sales markets. The deficit of vegetable stores in the country is about 70%, and in some regions this figure reaches 90%. “This leads to large losses of products and the inability to store them for a long period. For example, the loss of vegetables and fruits is about 19%, meat and dairy products at 5%. This means that all expenses incurred by the entrepreneur due to losses fall on the final cost of the products,” Bakhyt Sultanov said. There are currently 750 trading markets in the country, 51% of them are non-stationary. Moreover, virtually none of the markets meets modern requirements. “In addition, in the existing markets there is no information system for tracking goods flows. Moreover, the mechanism of producers’ access to the shelves creates the basis for distorted pricing, unfair trade margins and unjustified price increases in certain periods. The excitement during the introduction of quarantine in our cities clearly exposed these problems,” the minister said. The creation of a distribution system is proposed to be implemented in three stages. At the first stage, it is planned to build 5 wholesale distribution centres in Pavlodar, Almaty and Turkestan regions. “We would like to store the autumn harvest of the current year at facilities with a total capacity of 600 thousand tons. This determines the use of the budget mechanism,” Bakhyt Sultanov specified. In the next two stages, given the limited capabilities of the national budget and the scale of wholesale distribution centres, an effective way to attract investment is to use the PPP mechanism. “The total cost of the project is 237.5 billion tenge. Creating a distribution system will attract and provide jobs for about 10.5 thousand specialists, including 4.2 thousand for the construction period, 6.3 thousand specialists for operation of facilities,” he said. The department has already developed mechanisms for the full commissioning of capacities in the total volume of 4.8 million tons per year by 2022, Kapital reported.

Kazakhstan plants spring grains on nearly 0.5 million hectares

The Ministry of Agriculture of Kazakhstan started publishing the operational data on the rates of the spring crops planting campaign in the country. To date, 5 oblasts of the country already started planting spring spiked grain crops (without corn and rice). As of the reporting date, farmers planted the crops throughout the areas of 437.7 thousand ha, or 63.3% of the plan in the regions (691.5 thousand ha). At the same time, two oblasts even exceeded the planned indicators for the planting works of spring grains: as of April 22, the Jambyl province planted the crops throughout 215.4 thousand ha (105.2%), and the Turkistan province 64.5 thousand ha (102.2%). In addition, the Kyzylorda province planted grains throughout 4.4 thousand ha (89.8%), the Almaty province 139.2 thousand ha (53.7%), and the West Kazakhstan province 14.2 thousand ha (8.9%). Also, 4 oblasts already planted corn for grain throughout 18.6 thousand ha (12.6% of the plan), and 5 oblasts planted oilseeds throughout 129.2 thousand ha (32.2%). By comparison, as of April 20, Russian farmers planted spring agricultural crops throughout the areas of 7.9 million ha, or 15.2% of the forecast (on the same date in 2019 5.2 million ha), declared the Ministry of Agriculture of the Russian Federation. In particular, farmers planted spring grains throughout 4.8 million ha, or 16.6% of the forecasted areas (in 2019 3.2 million ha), including spring wheat on 912.5 thousand ha, or 7.5% of the forecast, spring barley on 2.4 million ha, or 30.7%, corn for grain on 657.5 thousand ha, or 24.1%, and rice on 0.4 thousand ha (0.2%). At the same time, Russian farmers planted sunflower seed throughout 1.3 million ha, or 15.9% of the forecasted areas, spring rapeseed on 118.3 thousand ha, or 9.1%, and soybeans on 83.5 thousand ha, or 2.6%. As of the reporting date, Russia planted sugar beet throughout 574.3 thousand ha, or 60.8% of the plan. In addition, farmers provided additional fertilizing of winter crops throughout 13.9 million ha, or 75.7% of the planted areas (in 2019 12 million ha), APK Inform reported.

Kazakhstan directs over 220 billion tenge to irrigation of land

Kazakhstan is actively working to restore land irrigation. The Ministry of Ecology, Geology and Natural Resources reported how much money is allocated for this, LS reported. Currently, loans from development banks account for 134.3 billion tenge, for financing from the national budget at 86.7 billion tenge. In total, it is about 221 billion tenge. The main investments are made as part of the state program for the development of the agricultural sector for 2017-2021. During this time it is necessary to restore the irrigation infrastructure of 610 thousand hectares. From 2017 to 2019, it was possible to do this on 146 thousand ha, including 66 thousand ha in 2019. “At the first stage, to restore the infrastructure of irrigated lands on 128.0 thousand hectares, borrowed funds from the international financial organisations of the Islamic Development Bank, European Bank for Reconstruction and Development were attracted,” the Ministry of Environment said. From 2017 to 2024, irrigation and drainage in the Almaty and Turkestan regions with a total irrigation area of 136.8 thousand ha were restored with IDB borrowed funds. 35.4 thousand ha in Almaty region, 101 thousand ha in Turkestan region. The total project cost is 53.2 billion tenge. Of these, 48.3 billion tenge from the IDB, 4.9 billion tenge from the national budget.  At the expense of funds raised from the EBRD, the reconstruction of water management and irrigation and drainage systems in the Aktobe, Zhambyl and South Kazakhstan regions with a total suspended area of irrigation of 92.7 thousand hectares is being carried out. Including 15.9 thousand hectares of Aktobe region, 51 thousand hectares of Zhambyl region and 25.7 thousand hectares of the Turkestan region. The project is also being

implemented from 2017 to 2024. The total project cost is 60.9 billion tenge. Of these, 53.9 billion tenge from the EBRD and 7 billion tenge from the national budget. “At the second stage, the Asian Development Bank is considering the issue of restoring the infrastructure of irrigated lands in the East Kazakhstan, Zhambyl, Karaganda and Kyzylorda regions with a total area of 171 thousand hectares,” the ministry added. With the assistance of the International Bank for Reconstruction and Development, it is planned to improve water availability and the condition of irrigated lands in the basins of the transboundary rivers Syr Darya, Talas, Shu and Ili. In the period from 2015 to 2022, 106.9 billion tenge will be allocated to the project. Of these, the share of the IBRD loan is 32.1 billion tenge or 30%, co-financing from the national budget is 74.8 billion tenge or 70%. The project provides for the reconstruction of worn-out irrigation and drainage systems on 105.1 thousand ha. Including 12.4 thousand ha in the Almaty region, 15.2 thousand ha in the Zhambyl region, and 62.4 thousand ha in the Turkestan region and the Kyzylorda region at 15.1 thousand ha. Previously, the Ministry of Agriculture was inspired by income from irrigated lands and predicted that the gross production of 3 million hectares would amount to 3.7 trillion tenge per year. This forecast was voiced by LS in the Ministry of Agriculture.

New meat processing plant appears in Kazakhstan with Chinese investment

This year Kazakhstan is expected to launch another meat factory. The project cost is about 5 billion tenge. According to the Ministry of Agriculture, the capacity of the enterprise will be 20 thousand tons of meat per year.

“A high-tech meat processing complex is being built in Akmola region, near Nur-Sultan. The project cost is estimated at 4.7 billion tenge,” the Ministry of Agriculture emphasised. It is planned that the facility will be commissioned this year. The project has already been implemented by 80%. To date, the construction of the meat processing complex has been completed. Work is underway to lay the water supply and domestic sewage. The Ministry of Agriculture did not specify how many Kazakhstanis would be employed at the enterprise. This project is being implemented by Chinese investors. However, information about its value was not announced. Earlier it was reported that a similar project will also be implemented in Almaty region. Thus, the construction of a meat processing plant with American investments is expected in the region. The project is estimated at $300 million. The company plans to create about 20 thousand jobs, LS reported. 

Fish processing factory appears in Kazakhstan

This year, it is planned to launch a fish processing plant and a workshop for the production of plastic boats for 160 million tenge in Kyzylorda region. This was reported in the regional department of industrial and innovative development. Initially, the company was supposed to launch in 2018, then it was postponed to 2019. However, the project was never launched. This is due to the fact that the work on connecting electricity has not been completed.

“The launch date of the project was postponed to June 2020. Its cost is 160 million tenge,” the government agency added. The implementation of this project takes place in three stages. In particular, this year the start of a filleting workshop is expected, in 2022–2023 of a slugging workshop, in 2023–2024 of the production of plastic boats. “During the implementation of the second and third stages, additional investments may be attracted,” the administration summed up. 70% of the finished product will be directed to the domestic market, 30% to the external, LS reported.

Export of fresh eggs from Kazakhstan in the winter months falls by a critical 57.5%

In Kazakhstan, 1.19 billion eggs were produced over 3 months, 6.9% less compared to the first quarter of last year. Among the regions, the leaders in production were Almaty region at 243.9 million eggs, Akmola region at 203.9 million eggs, and Karaganda region at 154.5 million eggs. The decline in production was recorded in 11 of the 17 regions of the country. Kazakhstanis should be wary of rising egg prices after the state of emergency is lifted. This is due to rising feed prices and the abolition of subsidies. The decision to reduce state support in the Ministry of Agriculture was made in December last year, and businessmen do not see any other way out of this situation, except for the rise in price of eggs. During quarantine, the cost of eggs has not yet increased. In 2019, all egg-producing poultry farms, and there are 37 in Kazakhstan, received 11 billion tenge, that is, 3 tenge for one egg produced. In 2020, poultry farmers will not receive this money. In January-March 2020, the average egg yield per hen was 54 eggs. In January-March last year, the average yield was 58 eggs. In January-February 2020, Kazakhstani companies secured the demand for eggs by 97.4%. The export of eggs by Kazakhstani companies decreased over the year by a critical 57.5%. In March 2020, in the shops and bazaars of the country, the average price of a dozen eggs reached 298.15 tenge. The annual rise in price amounted to 10.7%. Among residents of large cities, a dozen eggs cost the most to Almaty residents at 367 tenge, residents of Nur-Sultan at 348 tenge, and Aktau residents at 345 tenge, Energyprom reported.

Kazakhstan to be fully provided with domestic apples by 2024

The area of apple orchards increased from 31.6 thousand hectares in 2015 to 35.2 thousand hectares in 2019. According to the ministry, this indicator was increased by 11.4%. The volume of production since 2015 increased by 46.4% and amounted to 216.1 thousand tons in 2019 against 147.6 thousand tons in 2015. The ministry also shared data on productivity, which increased from 57.2 q/ha to 70.0 q/ha. This year it is planned to collect about 250 thousand tons of apples. “Thus, the availability of domestically produced fruit has increased from 46% to 67.5%. Given the pace, it is planned to meet the republic’s need for apples by 80% by 2021, and to completely close the need by 2024,” the Ministry of Agriculture expects. Apple orchards were created in Turkestan, Almaty and Zhambyl regions. This year Kazakhstan is implementing 17 projects for laying gardens on an area of about 1.5 thousand hectares. Due to them, 1.5 thousand people will be employed. However, the Ministry of Agriculture was not informed how much investment was directed to these projects, LS reported.

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