The Head of State set before the agro-industrial complex the task to increase labor productivity and export of processed agricultural products at least 2.5 times within five years. Taking into account the tasks set in July 2018, the Government updated the State Program to 2021.
First Vice Minister of Agriculture Arman Yevniev reported on the progress in implementing the updated state program. It should be noted that the implementation of the state program for the first time in pilot mode is managed using the project approach. For this purpose, a full-fledged project office has been created, which conducts operational control and spot monitoring of projects throughout their entire life cycle. The entire state program, in accordance with the standards of project management, has been decomposed into 10 sectoral, 14 regional programs, as well as interaction with other government agencies on the development of 10 related subprogrammes on the development of the agro-industrial complex and rural areas.
Yevniev reported on the progress of the sectoral programs. The sectoral program for the development of animal husbandry has been implemented since the second half of this year and is based on small and medium-sized farms. For its implementation, a special preferential credit product “Sybaga” has been launched.
“This year the plan has already been exceeded, despite the fact that we started its implementation only from the second half of the year. To date, over 600 farmers have received loans. The annual plan for the purchase of cattle by farms is 50 thousand heads. Over 11 months, applications for more than 67 thousand heads have already been received, loans for 55 thousand heads have been approved and granted. The plan for breeding broodstock conversion is 1 million heads. Already today, about 977 thousand heads or 98% are involved in the breed transformation,” Yevniev reported.
According to the Ministry of Agriculture, for 11 months 2018, exports of beef amounted to 14.5 thousand tons. At the same time, Yevniev noted that by the end of the year the republic will exceed the planned 15 thousand tons of beef.
The sectoral dairy program provides for an increase in milk production over 10 years by 1 million tons. Indicators of achieving the goal have been defined. By 2027 it is planned to open 527 new family dairy farms with a capacity of up to 400 heads, 139 industrial farms for 400 heads.
“This year 15 dairy farms have already been commissioned. Of these, 10 are industrial with a total capacity of 7.4 thousand heads and 5 are family farms. By the end of 2018, additional input of 10 farms is planned with a total capacity of 4.5 thousand heads. As a result of the implementation of the program with the same amount of state support, by increasing its efficiency, the volume of milk production only in organized farms for 10 months amounted to 1.3 million tons. For comparison, in 2015 they produced 900 thousand tons,” Yevniev said.
According to the Ministry of Agriculture, it is precisely the organized farms that give the main milk growth. So, for 10 months they produced milk by 7.8% more than in 2017. And this is real, counting milk, which is received for processing. At the same time, personal subsidiary farms yielded a growth of only 1.9% over the same period.
As part of the sectoral program of the poultry industry, it is necessary to increase the level of poultry meat production by three times over the next 10 years and thereby ensure import substitution. This year, the Makinsk Poultry Factory project has already been launched with an annual capacity of 60 thousand tons. This is the most ambitious project at this stage in the poultry industry.
Yevniev noted that the largest reserve in crop production exists in the development of irrigated agriculture. The state program envisages the involvement of 610 thousand hectares until 2021, including 65 thousand hectares in 2018, of which 42 thousand hectares of irrigated land have been introduced today. The remaining area will be introduced before the late 2018. In general, for the implementation of this task, jointly with the Islamic Development Bank and the European Bank for Reconstruction and Development, projects are being implemented to restore the irrigation and drainage systems of the irrigated lands in demand on an area of 128 thousand hectares for more than 100 billion tenge.
In addition, within the framework of this sectoral program, additional 1.5 million hectares of new irrigated lands are planned to be brought into circulation, bringing the area up to 3.5 million hectares. Thus, the share of irrigated land in the total sown area will be 16%, and the gross output at 2.4 trillion tenge. Irrigation farming is not only vegetables and fruits, it is also guaranteed feed for livestock.
As part of the sectoral program for the development of intensive gardening, the task has been set for 10 years to lay out intensive gardens on an area of 47 thousand hectares and thereby ensure import substitution. In addition, related areas will be developed: the construction of fruit storage facilities, the creation of nurseries and laboratories for the production of virus-free seedlings, the reloading of processing facilities. The main regions where intensive gardens are located are Almaty, Zhambyl and Turkestan regions.
In addition, Yevniev reported on the progress in the implementation of a number of system tasks aimed at providing the agro-industrial complex with the necessary resources. So, to increase the accessibility of the subjects of the agro-industrial complex to financing, specific measures are envisaged.
First, this year the subsidized interest rates on loans for fixed assets, as well as the leasing of agricultural equipment and agricultural animals, have been resumed.
“Only in 10 months 2018, this allowed us to lend 2,752 equipment units worth over 50 billion tenge. For comparison, for the entire last year, 2,400 vehicles worth 40.2 billion tenge were leased. And this is taking into account the fact that the program began its implementation in the second half of 2018. In general, in 2018, it is planned to allocate up to 60 billion tenge for leasing programs,” Yevniev informed.
Second, the approaches to investment subsidies have been changed. Now the share of compensation for investments is equalized on all passports to 25%, with the exception of infrastructure projects for irrigation of pastures, where the percentage of compensation will remain at 80%.
“This gave impetus to the initiation of new investment projects. If for the entire last year, 40 large investment projects worth 45.1 billion tenge were approved through Kazagro, then from the beginning of the current one – 76 projects worth 104.5 billion tenge,” he said.
Third, in the framework of improving the efficiency of state support, ineffective subsidies are being reduced, such as, according to Yevniev, include hectare subsidies in crop production, subsidizing of productivity in animal husbandry. The results of the reform showed that of the 54 types of subsidies, 34 will remain, which will be simplified and fully automated by the end of 2018. This will reduce the time for consideration of applications by an average of 2.5 times and reduce corruption risks. In 2018, for the first time, the process of issuing subsidies for mineral fertilizers is fully automated.
Work is also continuing to involve financial institutions in financing the agrarian sector by funding them through KazAgro Holding. For two years, the volume of loans in this area increased from 21% to 37%. Since the beginning of 2018, the holding has funded financial institutions for 82.3 billion tenge.
Meanwhile, the loan guarantee system is being improved, so from 2019 guarantees up to 30% of the loan amount can be obtained by small and medium businesses in priority agricultural areas and which lack development collateral. The relevant rules were adopted.
In addition, as Yevniev emphasized, work is underway to improve insurance systems in agriculture and credit partnerships, and a new financial instrument– an agrarian receipt – is being introduced. To this end, a package of amendments to legislative acts has been formed, which is under consideration in the Majilis of the Parliament.
In addition, for the development of science, education and dissemination of knowledge in order to improve the quality of scientific research in the current year, structural changes were carried out in the system of the National Agricultural Research and Education Center. Based on the experience of the countries that most successfully use innovations in the agro-industrial complex. These are the USA and Brazil, where the main emphasis is placed on the transfer of science to applied tasks and targeted training of scientists.
“This year, program-targeted funding has been increased by 1.8 times from 4.2 billion tenge to 7.6 billion tenge. In addition, since this year, for the first time business associations have participated in making decisions on the financing of scientific research topics for the next three years. The next step will be the formation of the market demand for research through the introduction of co-financing subsidies. 4.1 billion tenge was allocated for updating the material and technical base of scientific organizations,” Yevniev said.
As the first vice minister of agriculture informed, the new knowledge dissemination system will rely on the system of agroparks and regional centers, which will carry out the agro-maintenance, transfer of the necessary technologies for the farmers of the region, their observance and necessary technological solutions based on regional centers.
“In order to ensure the availability of sales markets and export development, measures are being taken to protect the domestic market and expand foreign markets. The Chinese market is open to many agricultural products (fish products, breeding horses, frozen lamb, honey, wheat, wheat bran, soybeans, slaughter horses, rapeseed meal, beef, alfalfa hay, flour, vegetable oil, barley, corn). Due to these measures, in the first nine months, exports of agricultural products to China increased by 42%,” Yevniev said.
Veterinary requirements for the supply of live sheep, frozen and chilled lamb, beef, and edible eggs are agreed with the Iranian side. This year, the Ministry of Agriculture plans to harmonize the requirements for live cattle.
Restrictions on the supply of cattle and small ruminants to Saudi Arabia and the United Arab Emirates, as well as meat and meat products, chicken eggs in the UAE, have been lifted. In Kazakhstan 171 enterprises are included in the Registers of foreign countries that have the right to export agricultural products. For example, 153 enterprises received the right to export to China for various types of agricultural products, 17 fish processing enterprises have permission to export fish products to the European Union.
According to Yevniev, the International Epizootic Bureau filed a dossier on the division of the territory of nine areas free of foot and mouth disease without vaccination into five zones, which will simplify international trade. Negotiations are planned with the veterinary and phytosanitary services of Israel, Kuwait, Malaysia, Japan, South Korea, and the European Union countries on the possibility of supplying Kazakhstani agricultural products. As a result, exports of agricultural products for the nine months increased by 28.3%, including exports of processed products increased by 10%.
As part of the program of digitization of the agro-industrial complex, electronic field maps are being created, which are a key element of precision farming, 24 million hectares of arable land, or 100% of the total sown area, and 24.6 million hectares of pastures or 35% are digitized. By the end of the year it is planned to complete the full digitization of fields on pastures.
“According to the automation of the subsidy process from 15 types of subsidies, 3 subsidies (fertilizers, herbicides, hectares) were launched with full automation of the process. The blockchain technology was launched in the electronic grain receipts, which made it possible to ensure the security of operations with grain receipts in the amount of 5 million tons of grain,” said Yevniev.
Yevniev also reported that the measures and indications of sectoral programs were cascaded into regional programs. To date, all areas have developed and defended their programs.
“In order to monitor the implementation of the state program in the regions this year, instead of 103 indicators, which were previously monitored in the regions, a rating of regions by 30 indicators has been developed, aimed at encouraging regional leaders to take measures to increase labor productivity,” Yevniev assured.
According to the Ministry of Agriculture, in the country as a whole, there has been an increase in the volume of attracted investments in the fixed capital of agriculture, for 10 months it was 18.4%, and in food production – 34%. In plant growing continued diversification of acreage.
In turn, the chairman of the board of KazAgro Rustem Kurmanov said that according to the results of 10 months, the volume of funding of financial organizations amounted to 83 billion tenge, or 30% of the total lending. By the end of the year it is planned to reach the figure of 37%.
“In terms of increasing the level of technical equipment and intensification of production in the agro-industrial complex, 2,752 units of equipment worth 50 billion tenge were leased, which is 20% more than in 2017,” said Kurmanov.
Also, the akims of the Zhambyl region – A. Myrzakhmetov, the Turkestan – Zh. Tuymebayev, Akmola – M. Murzalin, the West Kazakhstan – A. Kulginov, Mangystau – E. Tugzhanov also reported on the implementation of the state program in the regions.
Deputy Prime Minister – Minister of Agriculture Umirzak Shukeyev said that a new sectoral program for the development of irrigated land is ready, which will be submitted to the Government in December. This program will include issues of subsidizing equipment for greenhouses.
This year, the state program for 2017–2021 was implemented at an intensive pace. And due to the fact that the agro-industrial sector is a fairly extensive area and has many areas, this program provides for the implementation of specific projects. At the level of the Ministry of Agriculture, work is carried out within the framework of project management. As a result, the entire program for the development of the agro-industrial complex should consist of specific projects: at the rural, district, and regional levels.
Summing up the consideration of the issue, Prime Minister Bakytzhan Sagintayev outlined the positive dynamics of changes in the indicators of the state program, while noting the lag behind the intended results in a number of areas. In this regard, the Ministry of Agriculture, together with the Akimats, is entrusted with the end of the year to ensure the achievement of all target indicators and the positive dynamics of the main indicators of the development of the agro-industrial complex.
At the end of the year, the Government meeting will hear reports of regional akims on the work carried out as part of the project management on agriculture and the digital economy.
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