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Steady growth of 4% maintained in livestock industry — Ministry of Agriculture

Tuesday, 26 May 2020, 11:43:13

At a government conference call chaired by Prime Minister Askar Mamin, issues related to the development of livestock farming were considered. The Minister of Agriculture Saparkhan Omarov reported on the current state of the industry.

In the livestock sector, steady growth is maintained at 4%. The gross output for the year grew to 2.3 trillion tenge.

The implemented measures last year through lending and additional subsidies gave their effect.

According to the Minister, for four months of this year there is a positive trend in the growth of livestock of livestock: cattle by 4.1%, sheep and goats by 2.7%, horses by 7.6%.

“Meat production increased by 3.6% and amounted to 314 thousand tons, milk by 3.2% and 1.5 million tons. Egg production decreased by 6% due to lower demand in foreign markets,” Omarov informed.

The volumes of production of processed livestock products are also growing. So, the production of sausages increased by 20.9% (18.8 thousand tons), canned meat by 9% (3 thousand tons), processed fish by 51.3% (3.9 thousand tons). For dairy products, growth remains at an average level of 10%, with the exception of processed milk due to a decrease in demand during the quarantine period and the reorientation of the main raw materials to the production of dairy products with a longer shelf life.

According to the plans of the ministry, this year additional growth in livestock production is projected at 4.2% (IFO) or 2.6 trillion tenge. For 4 months of this year the volume of gross output amounted to 656 billion tenge, the growth of IPO — 2.2%. Planned indicators in the context of each region are identified and to achieve all the prerequisites are available.

According to Omarov, in the sector of beef cattle breeding, the main measures are aimed at increasing the breeding stock of cattle. In 2018, a loan program for farmers for the purchase of breeding stock was launched.

“During this time, more than 1.5 thousand farms received loans and purchased livestock. In the medium term, the task is to develop anchor cooperation with the involvement of multinational companies. The expected volume of investments due to the creation of farms will be 350 billion tenge and bringing beef exports to $370 million by 2025. More than 42 thousand jobs will be created by farms,” the minister said.

In livestock farming, three main indicators have been identified:

  • accelerated growth of cattle breeding stock through lending to farmers;
  • increase in livestock productivity due to pedigree transformation of the breeding stock;
  • development of the beef production chain by letting gobies to industrial feedlots and meat plants.

For 2019, 63 thousand head of cattle were imported by farms. As a result, the proportion of breeding stock increased to 12%.

“In this year we plan to lend to farms for the purchase of 95 thousand heads. In general, regional akimats need to intensify work on involving farms for the purchase of cattle, including with ready-made infrastructure. Last year, a credit mechanism secured by acquired livestock was tested on a pilot basis, including this mechanism is used everywhere,” Omarov said.

An important component is the continuous operation of the beef production chain. The republic already has a network of feedlots for 279 thousand cattle places and meat processing plants for 240 thousand tons. To ensure their loading, a plan for the delivery of calves is provided. The sales season falls on autumn periods, however, since the beginning of the year, farmers sold 41.7 thousand heads of calves to feedlots.

In addition, in order to stimulate farmers, a subsidy mechanism has been introduced for the live weight of a bull sold in an industrial feedlot or meat processing plant. Additionally, financing for replenishment of working capital in the presence of an export contract is provided for meat processing plants and feedlots.

In sheep breeding, the main task is to increase the number of livestock and the development of anchor cooperation. The project of anchor cooperation on sheep breeding in the Zhambyl region is being successfully implemented. Currently, a project is being worked out in the Almaty region for the construction of a modern meat processing complex for processing mutton with the German company Bauman.

To ensure year-round operation of the enterprise, it is planned to create a network of feedlots in five regions. For these purposes, the ministry has already provided for subsidizing part of investment investments in the construction of feedlots.

“Over the past year, 1,059 farms were financed for the purchase of 374 thousand stock of sheep. In this year according to the plan, we plan to credit the purchase of 360 thousand heads. In fact, 28 thousand goals have been financed at present,” said the minister of agriculture.

Sheep breeding has a great prospect in increasing exports. Kazakhstani exporters have positive experience in supplying Kazakhstani lamb to the markets of the Persian Gulf and China.

But given the low interest of farms in increasing the number of livestock, this year the ministry has revised existing measures to support sheep husbandry. Subsidy mechanisms have been finalized. The corresponding draft amendments are being approved by government bodies.

In the dairy livestock sector, in accordance with the task of import substitution, projects are being implemented to create and expand a network of dairy farms. In 2019, eight industrial and 14 family farms with a capacity of 44 thousand tons of milk were introduced (for comparison, only 3 MTFs were introduced in the republic in previous years). However, there is import in the amount of 464 thousand tons.

The ministry faces an ambitious task for the annual implementation of 25 industrial dairy farms. In general, over five years it is planned to completely close the issue of import substitution by increasing the processed milk by 500 thousand tons.

Together with the regional akimats, potential projects for the construction of dairy farms were worked out. This year the regions proposed potential projects for the construction of 29 industrial dairy farms and 39 modernization of family farms. For seven industrial projects financing issues have been resolved, one project is being implemented at our own expense. For other projects, financing will be carried out this year from an additional 400 billion tenge allocated under the Economy of Simple Things.

At the same time, the Ministry jointly with Kazagro NMH JSC has revised collateral requirements for financing investment projects, introduced a mechanism to guarantee up to 85% of the loan amount of second-tier banks in case of shortage of collateral during the implementation of the investment project, as well as financing for the acquisition of cows, machinery and equipment secured by incoming in the future.

“For investors who have launched dairy farms, support will be provided in the form of subsidizing part of investment investments in the investment project, as well as reducing the cost of milk sold for processing,” Omarov said.

The ministry also conducted an analysis of the main grain-sowing regions and revealed that 270 farms with a total area of ​​about 4 million hectares of arable land do not engage in animal husbandry. This potential must be used, since they have experience in the production of feed, which is a great advantage when implementing livestock projects.

In addition, in the production of poultry meat last year, due to the commissioning of one new poultry farm and the modernization of 5 projects, poultry meat production increased by 14% (223 thousand tons). Nevertheless, the share of imports in consumption is 45%. Here further measures will be continued for import substitution of poultry meat through the commissioning of new capacities. In the medium term, it is also planned to implement 12 projects of broiler poultry farms with a production capacity of 174 thousand tons. Due to these measures, as well as the full utilization of poultry facilities, poultry meat production will be increased 2.2 times. Initial investments will amount to 110 billion tenge. 4.7 thousand jobs will be created.

As the minister of agriculture emphasized, pork production is a promising direction in increasing the export of livestock products. In 2019, the ministry carried out work to confirm the status of a free country for African swine fever at the International Epizootic Bureau. A veterinary certificate was also signed with China for the export of pork. In 2019, the first stage of inspection work was carried out by the Main Customs Service of China.

“Within the framework of the Comprehensive Plan for the Restoration of the Economy, work is underway to coordinate the inclusion of Kazakhstani enterprises in the register of importers with the Main Customs Service of China. Thus, by the end of the year, pork supply to the PRC will be organized,” Omarov assured.

Thanks to these measures, interest from foreign companies in investing in pork production has increased. Currently, 11 projects with a capacity of 187 thousand tons are at the implementation and design stage. 6 projects are under construction. Most projects have private investment. In general, due to these projects, it is planned to ensure a 2.7-fold increase in production volumes in the coming years. The volume of investments will be 271 billion tenge. An additional 3.8 thousand jobs will be created.

The ministry, together with regional akimats, is taking measures to attract multinational companies and strategic investors in the sector of processing livestock products on an anchor basis. Negotiations are underway to bring Tyson Foods to the beef processing sector. At the design stage, Bauman's lamb processing project is underway.

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