Kazakh Agro Sector Anticipates Good Harvest, Investment Increase

The 2015 agriculturalseasonwill be marked byglobal changesin the agricultural sector, according to the Kazakh Ministryof Agriculture. Expectations are that the state will increase its support of the sector in the current year. The acreagedevoted to wheat will be significantly reduced in order to increasecrop fields with a higher priorityin today’s market, such asoilseeds, fodder grain and beans.

Minister of Agriculture Assylzhan Mamytbekov

Minister of Agriculture Assylzhan Mamytbekov

“Such measures have to be taken, as demands are dictated by the market,”explained Minister of Agriculture Assylzhan Mamytbekov.

An electronic monitoring of grain receipts will also be introduced this year. The state will give up its investment in the country’s grain exports while increasing funds that will be used to support local farmers, develop seedage, purchase technical equipment and subsidise leasing.

According to the minister, more than 60 billion tenge (US$324.8 million) in credit will be allocated by the state this year for spring field work, which is 20 billion tenge (US$108.3 million) more than was given in the past year. According to the minister, the agricultural sector experienced an investment increase of 14.4 percent during the past year, totaling more than 166 billion tenge (US$898.5 million). In addition, the investment in fixed assets in food production increased by 16.5 percent, amounting to 40.8 billion tenge (US$220.8 million). In his opinion, the agricultural sector showed “good results” in 2014.

“The volume of the gross agricultural output amounted to 2.5 trillion tenge (US$13.5 billion) in 2014, which is higher than the level of the previous year by 0.8 percent. The increase was also determined in cattle breeding by 3.8 percent, the index of the physical volume of crop production amounted to 98.4 percent and the food production increased by 2.9 percent, totaling 1.042 trillion tenge (US$5.6 billion),” announced Mamytbekov.

Talking about the investment aggregate profitability of large and medium-sized companies involved in agriculture, this number represented 17.7 percent in the third quarter of 2014 and is definitely higher in comparison with the same period of 2013, when the level of profitability was only 4.5 percent. Three key grain regions accounted for 58 percent of all investments in fixed capital. Investments in the North Kazakhstan region amounted to 50 billion tenge (US$270.6 million), in the Akmola region, 27 billion tenge (US$146.1 million) and in the Kostanai region, 19.5 billion tenge (US$105.5 million). The same regions are emphasised by the KazAgro holding in accordance with its 2013-2020 development programme for the Kazakh agricultural sector. As per financial statements for the third quarter of 2014, the investment portfolio of the holding had 464 projects worth 298.6 billion tenge (US$1.6 billion).

The leading positions concerning investment projects among the regions are held by Akmola – 63 projects (18. 1 percent of the total number of projects entered), North Kazakhstan – 40 projects (11.5 percent), Almaty – 39 projects (11.2 percent), Kostanai – 37 projects (10.6 percent) and South Kazakhstan – 30 projects (8.6 percent).

The total amount of diesel fuel needed for spring field work was also determined together with the Kazakh Ministry of Energy. For this year, 365,700 tonnes of fuel at a price between January and February of 90,000 tenge (US$487) per ton, or 76 tenge (US$.41) per litre, will be purchased, while the market price at the gas station is 107 tenge (US$.58) per litre.

By tradition, this year the official operator to supply reduced-price diesel fuel for farmers of the Zhaksy district in the Akmola region will be Zhaksynskaya tank farm. For the third year, this enterprise will supply high-quality fuel at a reasonable price.

Based on current weather conditions, favourable forecasts for the future harvest season were given by experts in the agrarian sector. For example, the chairman of the State Inspection Committee in the agricultural sector of the Kazakh Ministry of Agriculture Saktash Khassenov is optimistic about the future prospects for the harvest, referring to weather in fall 2014 and winter 2015.

“Heavy rains last year have created a very favourable supply of moisture. Thus, it gives reason to believe that this year we are going to have favourable conditions for the spring field work,”predicted Khassenov.

 

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