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In Kazakhstan, it is planned to double export of products and income of agricultural workers in five years

Tuesday, 02 March 2021, 11:00:44

At the government session chaired by Prime Minister Askar Mamin, the main directions for the development of the agro-industrial complex and the implementation of investment projects were considered. Minister of Agriculture Saparkhan Omarov reported on new approaches to the development of the agro-industrial complex, the Minister of Trade and Integration Bakhyt Sultanov reported on the stabilization of prices for basic socially significant food products.

At the end of 2020, the agro-industrial complex shows a positive growth trend in almost all macro indicators. The volume of gross agricultural production increased by 5.6% and amounted to 6.3 trillion tenge. This is the largest growth among the countries of the Eurasian Economic Union. At the same time, food production increased by 4%.

For the further development of the agro-industrial complex, the following tasks have been set:

  • to saturate the domestic market with food products at the level of over 80%;
  • to ensure a stable increase in the incomes of 1 million rural residents;
  • to increase labor productivity by 2.5 times;
  • to increase export of processed products by 2 times.

To solve the problem of saturating the domestic market with foodstuffs, the Ministry has identified positions for which it is necessary to reduce imports. These are poultry, sausages, cheeses and cottage cheese, apples, sugar and fish. To date, a specific pool of investment projects has been identified for each of the areas for the next three years.

According to the Minister of Agriculture, now the volume of own production of poultry meat covers only 58% of the needs of the domestic market. For full saturation, it is necessary to additionally increase the capacity by 171 thousand tons of poultry meat. Already last year, 8 poultry farms with a capacity of 94 thousand tons were commissioned.

“In the next three years, it is planned to commission 11 poultry farms with a total capacity of 191 thousand tons. The introduction of these projects within three years will allow to cover the demand for poultry meat in full,” Omarov informed.

The domestic market is provided with domestically produced sausage products by 62%. Full saturation will be ensured through the introduction of 6 meat processing plants with a capacity of 77.8 thousand tons, as well as through financing for circulating purposes and incentives for farmers to hand over livestock for slaughter.

“The total volume of imports of dairy products in terms of raw milk is about 500 thousand tons. The saturation issue is planned to be solved by commissioning and expanding the capacities of industrial dairy farms and additional loading of domestic dairies. Therefore, it is planned to commission 35 industrial dairy farms annually. At the same time, 48 MTFs were commissioned last year, of which 17 are industrial, with a total capacity of 98 thousand tons of milk,” explained Omarov.

Today the total consumption of apples is 344.3 thousand tons, import is 144 thousand tons. Saturation of the domestic market is expected through the establishment of new intensive orchards on an area of ​​6.6 thousand hectares.

As the head of the department noted, it is proposed to concentrate the laying of new gardens in the main horticultural regions: Almaty, Zhambyl, Turkistan regions and Shymkent.

“The annual planting of orchards will amount to an average of 2 thousand hectares, which, with a gradual reaching full fruiting, will make it possible to cover the deficit in apples and reach full self-sufficiency in 2024,” emphasized Omarov.

Currently, the deficit of domestically produced sugar is 240 thousand tons, or more than half of the demand. Saturation of the domestic market is expected through the modernization of the sugar plant in the Almaty region, as well as the construction of a new sugar plant in the Zhambyl region with a capacity of 150 thousand tons of sugar.

According to the minister, due to the additional production of 175 thousand tons of sugar, it is planned to solve the sugar deficit and reach 80% supply.

At present, the supply of fish products is 60.8%. To saturate the domestic market, 8 projects with a production capacity of 13.5 thousand tons of fish will be introduced. This will bring the security up to 100%.

“In general, it is planned to implement 380 investment projects in the republic in five years, including projects within the framework of import substitution make up more than 65%. This list also includes projects to increase the export potential of the agro-industrial complex, including feed yards, reproducers, greenhouses, as well as a number of projects for the processing of crop products,” Omarov assured.

In general, it is planned to commission an average of 75 to 80 projects annually. The pool of projects of the Ministry will expand, taking into account the development of plans for the implementation of investment projects with the regional akimats.

Also, these projects will become an integral part of the order of the Head of State to create 7 large ecosystems, within which it is planned to implement investment projects to create ecosystems for the production and processing of grain and oilseeds, fruits and vegetables, sugar, meat and milk.

So, for example, in crop production, an ecosystem for the production and processing of grain is being created in the North Kazakhstan region with the anchor enterprise LLP BioOperations.

According to the Minister of Agriculture, the ecosystem, according to the principle of cooperation, unites a plant for deep processing of grain, a feed mill, a poultry complex, a dairy farm and agricultural producers that provide these enterprises with agricultural raw materials.

Similar ecosystems are planned to be created in all regions of the country, taking into account regional specialization.

Along with this, microcrediting in the countryside will continue. Last year alone, 43.2 billion tenge was allocated for these purposes, this made it possible to issue more than 11 thousand microcredits, of which 60% are start-up projects. The implementation of the program has created 11 thousand permanent jobs in the countryside.

"In the next five years, it is planned to issue 50 thousand microcredits in the amount of 250 billion tenge," the head of the department said.

In order to increase labor productivity, work is being carried out to ensure the effectiveness of state support for the agro-industrial complex. To this end, last year the Ministry revised subsidy mechanisms that provide for a unified approach, without an emphasis on a specific industry. The thresholds for access to subsidies for small and medium-sized farmers have also been changed.

To increase the efficiency of state support, starting this year, counter-obligations for business will be introduced in stages.

At the same time, by increasing the volume of subsidies for basic subsidies, it is planned to bring by 2025:

  • the level of renewal of agricultural machinery from 4% to 6%;
  • application of mineral fertilizers from 21% of the scientifically grounded norm to 30%;
  • the level of application of high-quality seeds up to IV reproduction from 93% to 97%.

At the same time, the main principle of state support will be its stability and continuity. This will allow farmers to forecast their activities in the long term.

In addition, in order to increase the availability of financing for the agro-industrial complex, it is planned to expand the possibilities of lending to the agricultural sector through second-tier banks, the Development Bank of Kazakhstan and syndicated loans through inclusion in sectoral programs of state support.

“The possibility of expanding the forward purchase of agricultural products and the introduction of grants for the implementation of projects in the agricultural sector for young people is being considered. A single electronic resource for all measures to support the agro-industrial complex will also be created,” Omarov said.

In general, in the context of the coronavirus pandemic, a general understanding of the role of agriculture in ensuring the country's food security has increased around the world, therefore, the issue of import substitution for Kazakhstan and most states has become a priority.

The work carried out will allow by the end of 2023 to resolve the issues of import dependence and ensure the country's food independence. At the same time, the emphasis will be placed on those foodstuffs that affect inflation.

According to Omarov, in pursuance of the instructions of the Head of State Tokayev, a new national project for the development of the agro-industrial complex for the next five years with agribusiness and science is being discussed. All of the above measures will be included in the National Agro-Industrial Complex Project.

As a result of the measures taken, it is planned to increase labor productivity by 2.5 times over five years, increase the export of products and the income of agricultural workers by 2 times, and also attract 4.1 trillion tenge of investments to the industry, which will additionally provide jobs for up to 500 thousand people.

In turn, Minister of Trade and Integration Bakhyt Sultanov noted that food security, being the main task of the development of the agro-industrial complex, is directly related to the social well-being of our citizens.

As of Feb. 23, the growth in prices for socially important food products was recorded at the level of 2.4%. Most of all, the growth in prices was shown by import-dependent products, goods with high export demand, as well as vegetables that traditionally rise in price in the off-season. Their contribution to the overall growth was 2.0 p.p.

Analysis of food balances and price changes shows that, first, food prices depend not only on the balance of production and consumption, but also on the share of imported and exported products. Such flows transfer prices from external markets to internal trade.

“Second, the volume of stocks of stabilization funds is insufficient, that is, 25.4 thousand tons were formed in the amount of 3.7 billion tenge. Their interventions account for only 0.2% to 1.4% of total consumption. This has little or no effect on prices. Also, the stocks of the stabilization funds themselves are not being formed effectively. For example, in the Aktobe region in 2020, the prices rose the most for sugar, buckwheat groats, sunflower oil and eggs. At the same time, vegetables were bought into the funds, for which a slight increase in prices was observed during the year,” Sultanov explained.

Third, market-based instruments have proven to be effective. This is a forward purchase and a "turnaround scheme.’’

According to the Minister of Trade and Integration, to date, 22 billion tenge has been allocated from local budgets.

“The mechanism is effective, but for a significant impact on the market, increased funding is required. It is necessary to increase cheap loans to networks up to 50 billion tenge, accompanying in “manual mode” contracts with domestic producers,” Sultanov said.

Akim of the North Kazakhstan region Kumar Aksakalov reported that by the end of 2020, agricultural production increased to 779 billion tenge, an increase of 166 billion tenge. 124.4 billion tenge of investments were attracted to the industry.

“In 2020, we started the construction of 11 farms, 5 of which have been built. Further development of the industry is provided within the framework of the State Program for the Development of the Agro-Industrial Complex. 52 dairy farms will be built for 30 thousand head of cattle, as a result, the production of commercial milk will increase annually to 150 thousand tons. In beef cattle breeding, construction of 2 feedlots is already underway. By 2025, 6 more feedlots will be built,” Aksakalov said.

Construction of 2 broiler poultry farms for 15 thousand tons of poultry meat will begin this year. The modernization of two dairy plants is nearing completion. As a result, the processing capacity of commercial milk will be increased by 135 thousand tons, and the production of cheese up to 7.5 thousand tons.

At the same time, within the framework of diversification, the area of ​​oilseeds has been brought to 1 million hectares. To process these products, it is planned to build two oil refineries.

As part of the development of the ecosystem, the strategic investor implements investment projects for the production and deep processing of agricultural products. The investor revived the plant for deep processing of grain LLP Bioperition, produces starch and gluten, after the completion of the final stage, bioethanol is produced.

"In the current year, the work on expanding the pig complex to 100 thousand heads will be completed. Within 5 years, it is planned to increase the capacity to 500 thousand heads,” the akim of the North Kazakhstan region informed.

Also, a feed mill with a capacity of up to 110 thousand tons per year will be put into operation, the construction of a dairy farm for 3,000 heads, a milk processing plant and a breeding and genetic center will begin. Currently, these enterprises employ over 1,000 people.

“As a result of the measures taken in the next 5 years, labor productivity will increase 2.5 times, export of products will double,” assured Aksakalov.

Akim of the East Kazakhstan region Danial Akhmetov emphasized that thanks to the support programs implemented by the Ministry of Agriculture, a stable growth dynamics of the agro-industrial complex has formed in the region.

“In 2020, the gross crop production increased by 121%, in animal husbandry the growth was 112%, investment investments increased by 125%. In the region, 20 large investment projects worth 210 billion tenge are being implemented, aimed at import substitution and increasing exports,” said Akhmetov.

This year, a sunflower processing plant will start operating in Semey with a capacity of 300 thousand tons of raw materials per year, and by 2022 another complex of similar capacity will be launched. The total capacity of the enterprises will be more than 1.1 million tons of raw materials per year, which is 400 thousand tons more than the production volume and will ensure the diversification of oilseed crops.

At the same time, next year the construction of a dairy plant LLP Emil for processing 90 thousand tons of milk per year is being completed. Cheese and mixed products that are imported today will be added to the general product group.

“Until 2022, it is planned to commission 6 MTF with a capacity of 13.7 thousand tons of milk per year. The key import substitution project is the expansion of the Ust-Kamenogorsk poultry farm in 2021 from 28 to 55 thousand tons of poultry meat per year,” said Akhmetov.

In addition, an export-oriented project for the industrial production of pork with a capacity of 50 thousand tons per year is being implemented. To provide the two meat processing plants with raw materials, it is planned to create 6 feedlots for fattening 18 thousand head of cattle.

“Thanks to state support, 4.5 thousand hectares of irrigated arable land are additionally put into circulation in the region. In the region, 3 aquaculture projects have been implemented, in the future, the implementation of 7 more fish farming facilities,” added the akim of the East Kazakhstan region.

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