Increasing labor productivity, export production and income of rural residents — what tasks are posed by national agro-industrial complex

Ministry of Agriculture held a briefing on the national agro-industrial complex project for 2021-2025 today at the Central Communications Service under the President of the Republic of Kazakhstan. According to the Minister of Agriculture Yerbol Karashukeyev, this document was developed on behalf of the Head of State and is focused on solving specific, key tasks and projects that require concentration of efforts and resources.

“When developing the national project, global challenges and world trends in the development of the agro-industrial complex, the results of the implementation of previous state and sectoral programs were taken into account. Experts of the international Food and Agriculture Organization at the UN, representatives of industry unions, associations and science were involved in the development of the national project,” he said.

In accordance with the instructions of the President of Kazakhstan, the following main tasks of the national project have been identified:

  • first, increasing labor productivity in agriculture by 2.5 times;
  • second, providing Kazakhstan with the main food products of domestic production;
  • third, increasing the export of agricultural products by 2 times, bringing the share of processed products in it to 70%;
  • fourth, ensuring a stable increase in the incomes of 1 million rural residents through the formation of 7 large ecosystems and the implementation of investment projects.

To achieve the goal of increasing labor productivity by 2.5 times, the main factors have been identified. This is the use of high quality seeds, mineral fertilizers, modern equipment and technology, irrigated agriculture, etc.

The development of seed production is planned through the implementation of state support measures, the creation of a seed traceability system, as well as technical equipping of seed farms with modern technology and equipment. In order to increase the level of application of mineral fertilizers, subsidizing of organic fertilizers of industrial production and the improvement of the activities of the republican scientific and methodological center of the agrochemical service and the improvement of its material and technical base are provided.

The adoption of these measures will increase the share of high-quality seeds from 93% to 98%, the level of mineral fertilizers — from 20% to 29% of the need. As a result, the yield of grain crops will increase by 10-15%.

In order to increase the level of technical equipment, investment subsidies will continue, and leasing programs for agricultural machinery will be expanded. As a result, the level of renewal of agricultural machinery will be increased from 4% to 6%. Also, measures will be taken to widely introduce water-saving technologies, improve the mechanism for subsidizing water supply, as well as a project to create a network of demonstration farms in Kazakhstan and build a plant for the production of modern irrigation systems with a capacity of up to 1,000 per year. This will increase the coverage of areas where water-saving technologies are used up to 450 thousand hectares.

In order to reduce import dependence and increase the export of livestock products, the transition to intensive livestock farming will continue. For this, it is planned to increase lending to farms for the purchase of livestock, stimulate feed production, develop distant pasture farming and pasture infrastructure, as well as stimulate the introduction of modern breeding methods, including artificial insemination and embryo transplantation. This will ensure 100% capacity utilization of processing enterprises, as well as increase the productivity of livestock and poultry.

In addition, it is planned to improve the system of dissemination of knowledge by full-scale coverage of the knowledge dissemination system for agribusiness entities through centers for the development of competence at the regional level and the revival of rural information and consultation centers at the district level, as well as through the introduction of modern forms of remote training for farmers.

“Work will continue to ensure the adequacy of funding for agricultural science, industry grant funding has been introduced, and it is planned to create and operate a situational analytical center of the ministry to conduct a comprehensive analysis, assess the prospects and forecast the development of the agro-industrial complex. As the coronavirus pandemic has shown, securing the domestic market is paramount. Therefore, along with the priority export policy, the issues of import substitution will be comprehensively resolved. The ministry has identified the most imported items — poultry meat, sausages, cheeses and cottage cheese, apples, sugar and fish,” said Karashukeyev.

To date, specific investment projects have been identified and are being implemented in each of these areas. To achieve this goal, a number of state support measures will be implemented, including the provision of concessional lending, subsidies, land resources, infrastructure, as well as measures to protect the domestic market. As a result, by 2024, the provision for these types of products, with the exception of sugar, will be 100%, and for sugar — 80%.

One of the priority areas of the national project is the development of production and export of processed agricultural products. For this, a set of measures has been developed that provides for additional loading of existing enterprises, as well as the construction of modern and modernization of existing enterprises. Today, in the pool of investment projects, 194 are new processing projects that will provide additional growth in production and, accordingly, additional exports in volume, which will ultimately help achieve the goal of increasing the export of agricultural products by 2 times with increasing the share of processed products in the total volume of the agro-industrial complex export up to 70%.

On behalf of the Head of State, the priority of the national project will be the formation of 7 ecosystems around large investment projects, including the production and processing of meat, fruits, vegetables, sugar, cereals, oilseeds, and dairy products. This will involve at least 350 thousand farmers and households that will be able to participate in the creation of final Kazakhstani products with high added value.

“In general, within 5 years, it is planned to implement 582 investment projects worth 4.1 trillion tenge. As a result of the implementation of the national project, it is planned to increase labor productivity by 2.5 times in five years, provide jobs for 500 thousand people, thereby increasing the incomes of 1 million rural residents," said the Minister Karashukeyev in conclusion.

Answering journalists' questions, Karashukeyev announced the forecast for grain yield.

“Indeed, as we know, this year's grain harvest was lower than last year. For grain, we plan that we will have about 16 million tenge. The yield is average. The overall yield is at the level of 10 centners. The volume that we have now collected, I want to assure you that this volume will be enough to cover internal needs. And internal needs are directly grocery wheat for bread and food. Definitely, we have 2 million of grain left as seed material; grain fodder is also used intensively in animal husbandry. Accordingly, the volume of export potential takes into account 3 million tons of grain included in the balance sheet. Our export potential is about 6.5 million tons,” said the Minister of Agriculture.

Karashukeyev stressed that in general, FAO predicts growth in the medium term for the food group.

“As for domestic prices, given that grain, the product of its processing — flour is an export commodity, they depend on the conjuncture of world prices for these products. In general, in this regard, prices are indeed growing. But, given that there was a low yield in a number of regions, accordingly, farmers had high expenses, and the cost of grain increased. In this regard, the rise in grain prices, on the one hand, will have a positive effect on the financial condition of farmers, because the entire range of measures must be prepared at the expense of export earnings in order to successfully carry out spring field work next year,” the minister explained.

Karashukeev also added that one of the important issues is the price of social bread.

“We are taking a set of measures to ensure the stability of bread prices. First of all, the provision of grain and flour to all enterprises that produce bread. For this purpose, we are introducing amendments to the current legislation so that a food contract corporation from state reserves could send cheap grain to a flour mill for the production of flour for social bread. The government keeps the issue under constant review. The roles were assigned to the regions until the end of 2021. Regions accumulate flour in stabilization funds in order to produce bakery products from it. After the New Year, the Food Contract Corporation will join this work. As you know, PKK will purchase about 680 thousand tons of grain due to the forward purchase, more than half has already been supplied under the forward purchase,” explained Karashukeyev.

The minister also added that there should not be a sharp increase in social bread.

“A sharp increase in social bread is not allowed. We have all the tools for this. There are necessary reserves, taking into account last year's harvest. We use these reserves not only for grain, but also to support the livestock industry. Therefore, there should not be a sharp increase in social bread. In this regard, I have a forecast that bread will cost within reasonable limits,” concluded the Minister of Agriculture.

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