August 2020 Overview of Kazakhstan Agricultural Sector

Kazakhstan to develop fisheries in all regions of the country this year. Livestock breeding is developing in Kazakhstan. Kazakhstan allocates almost 2.5 billion tenge for subsidies to livestock breeders. World leader in agricultural machinery sets up production in Kazakhstan. Fisheries in Kazakhstan increase output volumes by 2.7 times. Kazakhstan increased area of land suitable for agriculture.

These are the highlights of Kazakhstan Agriculture introduced in August issue of the Economic Newsletter prepared by the Economic Section of the Embassy of the Kingdom of the Netherlands in Kazakhstan. The overview will get you acquainted with the latest updates of Kazakhstan Agricultural sector.

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Fish processing

Kazakhstan to develop fisheries in all regions of the country this year

The development prospects of the fishing industry of the country were considered at a government conference call chaired by Prime Minister Askar Mamin. Ministers of Ecology, Geology and Natural Resources Magzum Mirzagaliyev, Agriculture Saparkhan Omarov, as well as representatives of the Hamit fish farms Bakhytzhan Sermanizov, Caspian Riviera Raushan Khamitova, King Fish Marlen Tursynali. Fishing and fish farming is one of the priority sectors in the production of food products. In Kazakhstan, 180 fish farms are engaged in the cultivation of commercial fish.

As a result of a meeting held in February 2020 in Atyrau, chaired by the Head of Government, a number of legislative initiatives were developed aimed at minimizing administrative barriers and creating optimal conditions for the development of the fishing industry. Particular attention was paid to optimizing payments for the use of water resources, effective zoning and location of fish farms (including in the water protection zone), determining a rational fishing schedule and the operation of fishing vessels, tightening the rules for the sale of prohibited fishing gear.

In September this year, the corresponding legislative amendments will be submitted to the Parliament. Additional measures of state support are provided in terms of subsidizing feed (up to 25%) and reimbursement of investment costs (up to 30%). Concessional lending for investment projects aimed at the development of commercial fish farming is provided.

In general, the industry has significant potential and is showing dynamic growth. Thanks to the measures taken, the volume of farmed marketable fish this year is planned to be increased to 9 thousand tons with an increase of 1.6 times over the past two years (in 2018 — 5.6 thousand tons, in 2019 — 7.4 thousand tons). The main volume of farmed fish is in the Turkistan region (about 68%), Almaty, North Kazakhstan and East Kazakhstan regions.

The prime minister stressed that fish production can be significantly increased and by 2030 brought to 600 thousand tons. At the same time, the fishing industry should become one of the basic in the structure of the agro-industrial complex, the volume of exports increased 10 times to 300 thousand tons and at least 100 thousand additional jobs were created.

“In each region, fish production should be organized, water bodies should be assigned to business entities, the number of outlets for the sale of high-quality fresh fish should be increased. To ensure a healthy diet of citizens, it is necessary to increase the level of fish consumption to the WHO recommended 16 kg per capita (today in Kazakhstan — 3-4 kg per year),” Mamin said. The Head of Government instructed, by Nov. 1, 2020, to develop and approve regional programs for the development of fisheries, indicating specific indicators and measures for priority subsidies, allocation of land plots, infrastructure and other measures of state support.

The Ministry of Ecology, Geology and Natural Resources, together with interested state bodies, was instructed to work with the business community within a month on proposals to expand subsidies for the fishing industry, together with the Ministry of Education and Science — to revise the educational and practical programs of universities with a shift in focus from fishing to fish farming. The Ministry of Finance, together with the Ministry of Trade, was instructed to work out the issue of simplifying the procedures for registering supplies and passing all types of controls at the border when transporting fish seedlings of valuable fish species from abroad, the press service of the PM of Kazakhstan reported.

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Breeding livestock

Livestock breeding is developing in Kazakhstan

In Kazakhstan, the number of farms engaged in cattle breeding is increasing. Many farmers choose the Aberdeen Angus breed, one of the top brands in the global beef production, to improve the quality of commercial livestock. The value of gross output at the end of 2019 increased to 2.3 trillion tenge, which is 13% higher than in 2018.

At the end of 2017, more than 6,745.4 thousand head of cattle were registered in the Kazakhstani database on the identification of farm animals, in 2019 this figure increased to 7 696,6 thousand.

The livestock business is becoming more and more attractive to entrepreneurs. First, agricultural products in general and livestock products in particular are a category of essential goods, and this niche will always be in demand. The second reason is government programs aimed at supporting the industry. Thanks to them, 840 new livestock farms were created in 2019, which is 38% more compared to 2018.

Choosing the meat direction, farmers often prefer the Aberdeen Angus breed, bred in Scotland, but adapted to local conditions. In 2019, 94,095 heads of pedigree Angus were registered in the database of the National Chamber for the Angus breed of Kazakhstan, in July 2020 this figure reached 100 thousand. A hundred-thousandth bull calf was registered in the Pavlodar region in one of the farms.

Since 2015, the number of Angus heads born in Kazakhstan prevails over the number of livestock imported into the country. Of the 29 thousand heads registered in the chamber in 2019, 19 thousand were born in Kazakhstan.

The number of sold livestock is also growing. Thus, in 2019, 16,604 Angus heads were sold in meat or live weight, which is 54% higher than in 2018. Kostanay, North Kazakhstan, Akmola, Almaty and Karaganda regions stand out among the sales leaders in the regions. In total, 169 thousand head of cattle were sold in Kazakhstan in 2019, of which 71 thousand or 42.3% are pedigree animals, including 16 thousand or 9.8% of Angus breeds, that is, one tenth of the total sold cattle, LS reported.

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Livestock

Kazakhstan allocates almost 2.5 billion tenge for subsidies to livestock breeders

In Kyzylorda region, since the beginning of 2020, almost 2.5 billion tenge has been allocated to livestock breeders from the regional budget for subsidies. 625 farms have already received 1.5 billion tenge. Since August 2020, the Ministry of Agriculture of Kazakhstan has made amendments and additions to the order On approving the rules for subsidizing livestock breeding support, increasing the productivity and quality of livestock products in accordance with the order of the Minister of Agriculture of Kazakhstan dated July 17, 2020.

Now, for selection and breeding work, 15,000 tenge are given for 1 head of the breeding stock of cattle. For 1 head of imported livestock from Australia, the USA, North and South America, Europe is now 300 thousand tenge instead of the previous 225,000 tenge. Subsidies were also increased for the purchase of breeding sheep from 8,000 tenge to 15,000 tenge. Subsidies for the purchase of broodstock of sheep increased from 2,500 tenge to 4,000 tenge, subsidies per head of brood sheep increased from 1,500 tenge to 2,500 tenge.

The rules approved the requirement for artificial insemination, for the registration of the obtained offspring of cattle and sheep. They should now have boluses, chips, RFID tags. Other standards and requirements remained unchanged. In accordance with this requirement, farms that want to receive subsidies must, as soon as possible, transfer their own livestock to an electronic identification method, according to Kazakh Zerno.

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Agricultural machinery

World leader in agricultural machinery sets up production in Kazakhstan

Recently, one of the most successful manufacturers of agricultural machinery in Europe, the PÖTTINGER company, concluded a Cooperation Agreement with the largest domestic agricultural machine-building enterprise AgromashHolding KZ. This is another large world engineering company that is establishing work in Kazakhstan.

In 2019, the Kirovets plant was launched in Kostanay, now the country is negotiating the construction of a German CLAAS machinery plant.

Already this year, PÖTTINGER is ready to launch the first stage for the joint production of seed drills. The Austrian company will be based on the territory of the new Localisation Centre in Kostanay.

“PÖTTINGER has established itself in the world as an innovative manufacturer. This applies not only to the manufactured equipment, but also to the approach to doing business. Therefore, despite the pandemic when enterprises around the world suspend their production, we highly appreciate the desire of AgromashHolding KZ for a kind of unification of all leading manufacturers in Kazakhstan,” Alexander Zernov, Sales Director of the company in the CIS, said.

The localization centre is now at the stage of reconstruction and engineering. The area of the plant of over 27,000 sq.m. will include universal workshops with high performance modern machine tools, office space, a training centre and a hostel for employees.

“The proposed conditions are beneficial for business arrangement. We have long planned to introduce localisation of seeding complexes in Kazakhstan, where we feel an increase in demand for our product. Today it becomes possible,” Zernov emphasized.

Representatives of the AgromashHolding KZ plant note that they are also open to new offers from manufacturers of both equipment and components.

The business attraction in the second case is that the partners will receive a guaranteed sale of components that meet the technical specifications required by machine-building enterprises.

The Localization Centre is ready to provide advisory support, provide the necessary space, equipment, tools and labor resources, according to LS.

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Farmers harvest tra fish in Can Tho city, Mekong Delta

Fisheries in Kazakhstan increase output volumes by 2.7 times

In January-June 2020, fish farmers of Kazakhstan produced 29.8 thousand tons of fresh, chilled or frozen fish, 2.7 times more than a year earlier. The output of cooked and canned fish and caviar also increased by 2.7 times, to 11.7 thousand tons.

In monetary terms, the processing and preservation of fish, crustaceans and mollusks in the first half of the year amounted to 11.1 billion tenge, twice as much as a year earlier. In the regional context, the largest volume of cooked and canned fish and caviar fell on the Atyrau region at 6.9 thousand tons, 31.3 times more than last year.
The 2 leaders also included the West Kazakhstan region at 1.7 thousand tons, plus 14.5% on-year, and the Turkestan region at 1.5 thousand tons, plus 53.1%.

A significant increase in output in the sector was also noted in the Almaty region by 8.8 times, up to 203 tons, and the Kyzylorda region by 4.8 times, up to 100 tons.

In January-May, Kazakhstani producers provided for processed and canned fish, crustaceans and mollusks by 58.5%, against 40.5% a year earlier. The share of imports, respectively, accounted for 41.5%. The volume of imports in the sector also increased by 14.5% on-year, and amounted to 21.8 thousand tons.

The share of exports accounted for 18.8% of the resources: 9.9 thousand tons of processed products, 21.7% less than a year ago.

At the end of January-July 2020, fish and seafood prices in the country increased by 11.6% compared to the same period a year earlier.

The price of frozen fish increased by 16.5% on-year; for fresh fish by 11%; for salted and smoked non-delicacy fish by 11%; for gourmet canned fish by 12%; for non-delicious canned food by 8.6%, Energyprom reported.

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Soil cultivation

Kazakhstan increased area of land suitable for agriculture

The Ministry of Agriculture told about the regions through which it is planned to increase irrigated land to 3 million hectares by 2030. Thus, an increase is expected in the East Kazakhstan region by 157.7 thousand hectares, in the Akmola region by 112 thousand hectares, in the Pavlodar region by 94.5 thousand hectares, in the Turkestan region by 85.5 thousand hectares, in the Almaty region by 83.5 thousand hectares.

Also, land plots will be expanded in the Karaganda region by 74.1 thousand hectares, in the Aktobe region by 57 thousand hectares, in the Kyzylorda region by 51.3 thousand hectares, in the Kostanay region by 16.9 thousand hectares, in the West Kazakhstan region by 6.5 thousand ha, and in the North Kazakhstan region by 4.9 thousand ha.

At present, the Ministry of Ecology, Geology and Natural Resources has developed a draft program for water resources management until 2030, which is being approved by state bodies. In particular, it is planned to build irrigation facilities and 38 new reservoirs within its framework.

After the adoption of the program, the development of a feasibility study and design estimates for the construction of these facilities will begin. The Ministry of Agriculture added that this will take some time, so basically the introduction of new irrigated land will begin in 2022.

“The amount of funds is currently being worked out by the MEGNR with the ministries of finance and national economy,” the Ministry of Agriculture explained. It is also planned to increase export volumes or expand the range of countries to which agricultural products will be supplied. However, the figures were not announced by the department.

The Ministry of Agriculture reported that more than 200 billion tenge would be spent on increasing irrigated land. The Ministry of Agriculture predicted that the gross production of 3 million hectares of irrigated land would amount to 3.7 trillion tenge per year, LS reported.

The full version of the latest Economic Newsletter is available here.