2022 annual review of Kazakhstan’s agricultural sector’s development

Finance Materials 10 January 2023 09:07
Baku, Azerbaijan Trend News Agency Emin Sevdimaliyev
2022 annual review of Kazakhstan’s agricultural sector’s development

Kazakhstan took steps to address some of the challenges it had in the agriculture sector in 2022, and this approach seems to remain high on the agenda of decision-makers in 2023, Trend reports.

One of the key problems, which topped the agenda of the government and decision-makers in Kazakhstan, was the food security issue. Geopolitical risks and uncertainty, rampant inflation, and the post-pandemic economic recovery-induced consumption increase forced the government to pay more attention to guaranteeing security in this sector.

Below are some of the key developments in the agricultural sector of Kazakhstan in 2022.

Investments in new projects

In retrospect, the current year can be labeled as a year of preparation. The government of Kazakhstan, as well as local authorities, tried to reshape the future of the agricultural sector of the country. Significant investments were attracted for implementing various projects to accomplish the objective of guaranteeing the food security of the country.

Kazakhstan expects to implement 800 agricultural projects with a total investment value of 2.6 trillion Kazakh tenge (around $5.6 billion) by 2025, Yerbol Karashukeev, Minister of Agriculture of Kazakhstan said in December.

By that time, Kazakhstan has already implemented 227 projects with a value of 214 billion Kazakh tenge ($460.1 million), an equivalent of 96 percent of the annual plan.

The minister also highlighted that the Government is working on expanding the capacity of vegetable stores in the country. To meet the existing demand, additional vegetable stores, with a capacity of 135,000 tons, will be built.

An additional 113.6 billion tenge ($244.2 million) has been allocated by the government for the development of the agro-industrial complex of the Kostanay region.

Out of these funds, 45.7 billion tenge ($98.2 million) was allocated to subsidize agricultural producers, of which 13.9 billion tenge ($29.8 million) for crop production, 7.5 billion tenge ($16.1 million) for animal husbandry, and 24.3 billion tenge for other areas ($52.2 million).

This year, the area of spring sowing in the Kostanay region amounted to 4.9 million hectares, including 4 million hectares for cereals and legumes. The areas of oilseeds reached 748,300 hectares and increased by 141,000 hectares compared to last year.

In order to meet the needs of the population of the region in socially significant food products, the areas of such crops as buckwheat, sunflower, potatoes, and vegetables have been increased.

Production numbers

Kazakhstan harvested 486,900 tons of rice by November 2022. After processing, about 221,200 tons of rice groats were sent to warehouses.

The annual demand of the domestic market is about 165,000 tons, which is much less than the volume produced. So, the new crop will be enough to meet the needs of the population of Kazakhstan in rice.

Moreover, the excess crop is exported to other countries. For 8 months of 2022, 67,800 tons were exported.

At the same time, in 2022, the sown area of rice in Kazakhstan amounted to 87,800 hectares, which is 8,400 hectares less than in 2021. The main reason for the decline in production is the problem with irrigation water needed during the growing season.

Minister of National Economy of Kazakhstan Alibek Kuantyrov noted that Kazakhstan recorded a growth in agricultural production.

The gross output value of agriculture increased by 8.2 percent. The positive rise in production was recorded in 16 regions. The Kostanay, Akmola, Mangystau, and North Kazakhstan regions showed the greatest growth rate," Kuantyrov said at a government meeting.

As the minister noted, positive growth on all indicators is observed in Kostanay, Akmola, Jambyl, East Kazakhstan, and Kyzylorda regions, as well as in Almaty and Shymkent cities.

Some 8.07 trillion tenge ($17.2 billion) accounted for agriculture alone, including 5.1 trillion ($11.02 billion) accounting for plant growth, and 2.9 trillion tenge ($6.2 billion) - for animal husbandry.

The increase in the agriculture, forestry and fishery gross output during the reporting period was due to the increase in egg output by 4.9 percent, milk by 1.8 percent, and plant growth by 12.7 percent.

North Kazakhstan region leads by the total value of agriculture, forestry, and fishery gross output, which reached 1.02 trillion tenge ($2.1 billion) from January through October 2022, showing a 12.8-percent increase compared to the same months of 2021.

This includes 793.3 billion tenge ($1.6 billion) worth of plant growing output and 223.7 billion tenge ($479.1 million) of animal husbandry output.

Second and third places accounted for Akmola and Turkestan regions.

The value of agriculture, forestry, and fishery gross output in the Akmola region amounted to 976.6 billion tenge ($2.09 billion), which is 18.6 percent more than during the same period last year.

This includes 708.09 billion tenge ($1.5 billion) worth of plant growing output and 264.2 billion tenge ($565.8 million) of animal husbandry output.

Agriculture, forestry, and fishery gross output in the Turkestan region amounted to 950.6 billion tenge ($2.03 billion), which is 2 percent more than during the same period of 2021.

This includes 623.5 billion tenge ($1.3 billion) worth of plant growing output and 321.2 billion tenge ($687.8 million) of animal husbandry output.

An increase in agriculture, forestry, and fishery gross output were observed in 16 Kazakh regions during the reporting period.

Almaty city is one of the largest producers of agricultural goods in the country. From January through November 2022, the city output amounted to 279.2 billion Kazakh tenge (nearly $605 million).

Government initiatives

In the context of agriculture and the efforts of the government to retain control over this strategically important sector of the economy, it is critical to look at some of the state initiatives for 2023.

The Minister of Agriculture, Yerbol Karashukeev, said that from 2023, a new approach to forward financing for the supply of socially significant food products will be introduced. This approach will be implemented in 3 stages.

First, it is a forward purchase of autumn and early vegetables before August 1 and September 1 respectively, with their subsequent delivery to the market in the off-season.

The second stage provides for the financing of working capital for the purchase of raw materials from buckwheat, rice, and sunflower processing enterprises.

The third stage is financing through state support mechanisms and the sale of cheaper grain.

Karashukeev also said that the work on improving the system of subsidizing the agro-industrial complex is nearing completion. The minister added that a compromise option that will minimize corruption risks, take into account the opinion of the farming community, and provide the domestic market with sufficient food products has been developed.

The government is also looking to decrease the number of intermediaries to control the prices of agricultural products.

Speaking on a different date, Minister Karashukeev stated that Kazakhstan increased the production of certain types of vegetables, and now the wholesale price for these types ranges from 500 Kazakh tenge ($1.08) to 600 Kazakh tenge ($1.30).

Karashukeyev added that inflated prices are observed as a consequence of numerous unproductive intermediaries.

"The work to eliminate unproductive intermediaries is currently underway. It is important to control the markup together with the Ministry of Trade and Integration, and local executive bodies," the minister concluded.