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You here:  Main Reports Report of the Minister of Agriculture of Kazakhstan A.Mamytbekov at the meeting of the Council of Foreign Investors under the President of Kazakhstan

Report of the Minister of Agriculture of Kazakhstan A.Mamytbekov at the meeting of the Council of Foreign Investors under the President of Kazakhstan

Dear Nursultan Nazarbayev! Distinguished members of the Council!

Traditionally, Kazakhstan has been and is the largest agricultural country. The agricultural sector is of great importance for economic and social development of the country and is the main source of income for nearly half of the population. In the agricultural sector accounts for almost one-fifth of all economically active citizens.
In this context, from the early days of our independence agribusiness identified priority sectors.
Since independence directly under your Nursultan Nazarbayev, the leadership in the agricultural sector conducted fundamental reforms. Privatized state and collective farms. Introduced the institution of private property and private land. There was a private farmer who is vitally interested in the results of their labor. It is allowed to transfer the agricultural sector with the planning of the Soviet way of management on the development of modern market.
Of course, the path of reform was difficult and not without loss. But thanks to the transition to a market consisting governance model in the agricultural sector has become economically attractive industry.
Over the past 10 years, the volume of agricultural production has increased almost 4 times. Exports of agricultural products increased by 3 times. The inflow of investments in fixed capital in agriculture has increased from 44 bn. In 2004 to 166.4 billion. Tenge in 2014, or almost 4 times.
(For reference: The volume of gross agricultural output in 2014 totaled 2.5 trillion. Tenge that compared with 2004, an increase of close to 4 times (695.8 million. tenge) in nominal terms. The issue of livestock production for the period increased by 3.9 times, crop – 3.4 times. The share of investment in fixed assets agriculture compared with 2004 (44.1 bln) increased by 3.8 times and amounted to 166.4 billion. tenge). These figures are the result of a focused and balanced agricultural policy, which is carried out in the country under your leadership, dear Nursultan! However, on a number of agriculture of Kazakhstan has great potential and unused reserves of more growth. For example, according to the OECD, the export opportunities of Kazakhstan in meat have obvious advantages, due to the presence of huge natural resources and geographical location. Kazakhstan has 180 mln. Ha of pasture and is bordered by two countries of the top ten world’s largest beef importing countries. It is Russia and China. The total volume of beef imports for these two countries in 2014 amounted to about 1.0 million. Tons more than $ 4.0 billion. Dollars. USA. (Reference: The volume of Russian imports – 616.6 thous. Tons by 2.7 bln. Dollars. United States, China – 297.9 ths. Tons of 1.3 bln. Dollars. USA). Also important is the processing of agricultural products, which is defined sub-sector as a priority in the program “Agribusiness 2020”. to stabilize the rate of growth of food imports at the level of 4-5% compared with the peak in 2010 – 2011 years, when the growth rate of imports exceeded 20%. And in 2014, compared with 2013 year celebrated even decline food imports by 6%, including the countries of the EAEC of 10%. This reduction is the first time. However, the volume of imports is still significant.
Export opportunities are also quite significant, so the processing industry is an attractive niche business. In the context of the integration process, we need a transfer of international best practices, including through attracting foreign direct investment and joint ventures in agriculture on a mutually beneficial basis. For this there are a number of these global and local prerequisites. Of the global preconditions I would like to highlight the following: First, is the growth of the population: In view of the forecasts for population growth, by 2050 it will be necessary to produce 60% more food than it is today, and in developing countries is 2 times more than the current level. And second, the world’s agricultural potential is exhaustedgrowing population and changing consumption patterns, on the one hand, and the high rate of depletion of natural resources, on the other hand, as already noted, can lead to a significant increase in food shortages. It aggravated by the absence of large reserves to increase the volume of agricultural production. Experts estimate the global reserve of arable land is about 1.0 billion. n (ratio of reserve land between the developed and developing countries 1: 4), and only a relatively small part of them can be put into economic circulation in the relatively low cost. (For reference: according to the FAO global land fund of 13.4 billion. Ha). This means that virtually all the available arable land fund of humanity has already used. Therefore, given the relatively small population of its own, Kazakhstan will play an important role in stabilizing and improving food the situation in the world. As for the local premises.There certainly should be noted political stability, market-based mechanisms of the APC and the measures taken for the protection of investors’ rights. I want to emphasize that the current legal framework of the agricultural sector complies with the requirements of the world market economy and is aimed, first of all, the protection and support of entrepreneurship, which is confirmed by ratings of Doing Business (reference: in the World Bank’s Doing Business Indicators “Taxation” Kazakhstan occupies 17th place, “Protection of minority investors” – 25 position, “Registration of companies” – 55 position from 189 economies in the world). Kazakhstan is considered to be one of the leaders among the CIS countries to provide favorable conditions for investment activities. In comparison with other post-Soviet states, Kazakhstan provides a favorable tax climate. Thus, the VAT in Kazakhstan today is 12%, while in Russia – 18%, in Belarus – 20%. At the same time, processors are paying 70% less(reference: Article 267 of the Tax Code of the Republic of Kazakhstan). Furthermore, all the farmers working in the preferential tax regime, which also involves a reduction of 70% of the fee for 4 types of taxes. This property, transport, social tax and VAT. With the release of goods from the territory of free warehouses and special economic zones granted privileges on payment of customs duties and VAT.
In addition, last year a reform to alleviate the tax burden on the entities of agribusiness. Created favorable conditions for foreign investors land in December last year to the Land Code amended to provide for an increase of the lease of agricultural land to foreigners to 25 years. Previously, this period was 10 years. And, of course, among the local prerequisites necessary to note the establishment of the initiative of President of Kazakhstan Eurasian Economic Union. An economic union provides an opportunity to trade in the commodities market with a population of over 180 million. People with a total GDP of the five countries more than 2.2 trillion. US dollars. Food consumption in this market significantly. Total imports of agricultural products and processed products in the Eurasian Economic Union is more than 44.0 bln. Dollars. In addition, the forthcoming accession to the WTO opens up opportunities for the development of export-oriented agricultural production. The new tools of state agribusiness Considering the potential and the priority of the agricultural sector in the economy country on your behalf Nursultan Nazarbayev in 2013, was first developed and implemented long-term program “Agribusiness 2020”.
The program provides for an increase in state support agribusiness 4.5 times, allowing the industry to attract about 70.0 billion. US dollars of private funds. Already in 2015 the amount of subsidies for the development of the sector amounted to almost 1.0 billion. dollars. United States (176.8 billion. tenge), which is 2 times more than in 2013 (88.7 billion. tenge). Along with the existing subsidy resources and works in crop and livestock program contains a number of new instruments to support industries such as financial restructuring, reduction of interest rates on loans and leasing, subsidizing the cost of guarantees and insurance of loans. Among the new areas – investment subsidies, through which businesses can recoup some of their costs for investments in agriculture. From 2014 provided subsidies for the costs of processing enterprises in the procurement of raw materials. The list of subsidized agricultural products includes the most import-dependent position of sugar, milk powder, butter, cheese. Due to the measures taken already have positive results. For example, in 2014 in comparison with 2013 has increased volume of butter by 11.6%, milk powder by 24.4%. It is planned to increase sown area of sugar beet and its production in 2015 compared to last more than 10 times. This performance is only one year of the grant. These measures significantly influence the expansion of access of farmers to finance and will improve the competitiveness of domestic agricultural producers and processors of agricultural products. I note that the state support processing projects is a priority program of Agribusiness in 2020 and the program of the second five-year industrial -An innovative development. In the 16 congress of the party “Nur Otan” you, Nursultan Nazarbayev, is charged to attract leading foreign companies for the implementation of breakthrough investment projects in the food industry. At present, the Ministry of Agriculture worked out investment proposals for 15 projects. In four of them, Nursultan Nazarbayev, I reported earlier. Among them «Eurasia Agro Holding”, which plans to build a meat processing complex with capacity of 17 th. Tons of processed meat per year, including a line for processing waste. Preparing a project for the production of dairy products and vegetable oils, poultry projects. As a result of diversification in 2014 for the first time the area under oilseeds exceeded 2.0 mln. ha, which makes for a topical issue of agricultural marketing and processing. It is worth noting that among these fifteen projects, three projects include oilseed processing a total capacity of more than 1.2 million. Tons.
This is more than half of the raw material that the average yield produced at our facilities oilseeds. The development processing of oil will lead to the long-term and steady sales of raw materials to neutralize the risks of sharp fluctuations in commodity prices, as well as provide high value-added tax increase and investment in agriculture. Attracting foreign companies in the dairy industry, such as the German company Megli is of interest in terms of the implementation in Kazakhstan of modern culture of production and technology, and established an investor international markets allow predicting expansion of the geography and volume of exports. The total estimated cost of these 15 projects is about $ 200 billion . tenge or more than 1.0 bln. dollars. USA.Particularly attracted the initiators of the project is that part of the investment costs will be reimbursed from the budget. The work in this direction we will continue. At the same time, we must not stop at made and continue to actively improve the investment climate. The next steps should be: 1. Removal of restrictions on the circulation of agricultural land.
In accordance with your instructions under the Plan “100 Steps” work in this direction has already begun. So, working on the issues to increase the turnover of agricultural land through: – simplifying the procedures and conditions for the acquisition of agricultural land in private ownership; – removal of restrictions on land transactions in the secondary market (simplification of the procedures for changing the purpose of land, reducing the time of registration of transactions, etc. .). The work on reforming the sphere of land relations will be continued.2. Improvement of legislation in the field of grain. It is supposed to make changes to legislation in the field of grain, providing for the introduction of an electronic register of grain receipts, which will increase trust and investment attractiveness of grain receipts. 3. In the field of seed production.Permissive nature of the State Register of selection achievements is expected to change in the advisory.It liberalizes the regulation of seed. Such changes we have already made in livestock. 4. There is a need to improve the pricing policy for water. As you know, the development of irrigated agriculture provides an increase in land productivity and, therefore, gross output of crop production. In the area of irrigated land there is a high deterioration of irrigation and drainage systems, as well as the low level of implementation of new irrigation technologies. The main reason we see the tariff policy in the field of water resources, which discourages the introduction of new technologies and attract investment in this sector. To ensure the sustainable and rational use of irrigation water is possible only through the establishment of appropriate market rates that will attract investment in the restoration of irrigation systems. Fair tariff allows via the payment for the water to return invested in the renovation and construction gidromelirativnyh systems investments, with no increase in public expenditure on these objectives. At the same time it will bring following such positive results, such as: – reducing the consumption of irrigation water; – increasing the productivity of irrigated agriculture; – Increase agricultural efficiency.
Thus, the construction and maintenance of drainage structures itself should become an attractive destination for investments. 5. Automate the process of subsidies in agriculture. Automation of the process of allocating grants for SKHTP will more effectively implement the state policy in the field of agro-industrial complex of the Republic of Kazakhstan, to eliminate all the prerequisites for corruption violations in issuing grants. 6. Development Cooperation Legislation on agricultural cooperation. As is customary in many countries, transactions between members of co-operatives should not be taxed. Simultaneously, the draft Law will solve the following questions: 1) instead of the five existing laws would be one; 2) will be realized the opportunities and benefits of co-operative principles to increase income of agricultural producers; 3) will be created conditions for the consolidation of agricultural production, optimizing costs in agribusiness; 4) will be given the legal ability to distribute profits from cooperative activities among its participants. The work to create the conditions for improving the business attractiveness of the agricultural sector will continue. At the end of his report, dear participants Council using this site, I would like to appeal to all potential investors with an invitation to cooperation and mutual work in the agricultural sector of Kazakhstan.

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