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You here:  Main Reports Report of the Minister of Agriculture Mamytbekov A.S. at the session of the Government of Kazakhstan, May 12, 201

Report of the Minister of Agriculture Mamytbekov A.S. at the session of the Government of Kazakhstan, May 12, 201



Dear Karim!

Allow me to report on the measures taken by the Ministry, for the development of agro-processing industries.

Slide 1 


In the field of food processing industry there are 1 689 enterprises, number of employees – 54.7 thousand. In 2014, produced 5.6% of the country’s industrial production and 17.7% – processing industry.

At the end of 2014 food production increased by 2.9% and for the first time was more than 1 trillion. tenge.

Imports amounted to 2.9 bln. Dollars. United States, export – 1.1 billion. Dollars. USA.

About 1.0 billion. Dollars. US imports account for exotic goods, domestic production is impossible due to the lack of climatic conditions (tea, palm, coconut, peanut butter, cocoa, cane sugar, vermouth, cotton elite varieties, and so on. d.)

Marked decline in imports by 6.2%, including the countries of the EAEC by almost 10%.

There is a stabilization of the growth rate of food imports at the level of 4-5% compared with the peak year 2011, when the pace of import growth exceeded 20%.

A decline in beef imports by 42.3% (to 24.0 thousand. Tons in 2013 to 16.8 thous. Tons in 2014), commercial egg 3 times (7 624.3 tons in 2013 to 2593 2 tons in 2014); Potato – 2 times (114 to 002.0 tons in 2013 to 56 385.7 tons in 2014);cucumbers – by 4.8 times (from 55 996.6 tons in 2013 to 11 781.9 tons in 2014).

During 2014 exports of chilled beef, compared with 2013 has increased more than 6 times (1 768.4 tonnes) of frozen beef were exported 615 tons, while in 2013 the export was practically absent.

Exports of sausages and canned meat increased by 9 and 2 times, respectively.Nearly 6 times increased the supply of condensed milk and cream (in 2014 – 2 144.0 tonnes), 1.6 times the export of dairy products (6 307.8 tonnes).

This trend has continued in the current year. For 2 months of 2015 it was exported 619.7 tons of poultry meat, while in 2013, over the same period the figure was 141.3 tons. Exports of cheese and cottage cheese was 316.6 tonnes, while for the same period of 2013, exports absent.

However, the current economic situation, including devaluation threaten the positive trend to reduce imports.

With embedded in the last year of the investment subsidies, investment in fixed assets of food industry increased in 2014 by 16.5% and amounted to more than 40.0 bln. Tenge. Food independence of the main types of food through domestic production of more than 80%. (For reference: the volume of imports of agricultural processed products for 2014 amounted to 2.9 bln. Dollars. United States, including nearly 1.0 bln. Dollars. US imported goods, which does not make sense to talk about import substitution due to lack of natural conditions for their production (tea, palm, coconut, peanut butter, cocoa, cane sugar, vermouth, elite varieties of cotton, wine and beverages, etc.).

But there are goods, the so-called “traditional” import, and they imported 1.9 bln. Dollars. USA.

The main share in the traditional volume of imports occupy dairy products (363.0 million US dollars of 18.5% from the traditional imports or 12,4% of total imports),confectionery products (267.3 million US dollars of 13.6% from the traditional import or 9.1% of total imports), meat products (266.7 million US dollars 13.57% from traditional import or 9.1% of total imports), vegetable oils and animal fats(140.1 million dollars United States 7.1% from the traditional imports or 4.8% of total imports).

Exports of agricultural products processed in 2014 was 1.1 billion US dollars, including to 561.2 million. US dollars (49.4% of total exports) – flour; 79.2 million. USD (7.0% of total export) – cotton fiber; 66.7 million. USD (5.9% of total exports) – fillet of fish; 43.6 million. USD (3.8% of total exports) – water, carbonated drinks, etc.

The range of exports is very limited and its geography longer falls on the countries of Central Asia. However, there remains potential to increase exports of products deep processing of grain, sugar confectionery, food processing oilseeds, meat, drinks).






  Slide 2

  Slide 3





























  Slide 4











In order to revitalize the industry, the analysis of the capacity of the Ministry of import and export. As a result, the following 10 priorities for recycling:

  1. Milk processing
  2. Meat Processing
  3. Production of oil and fat products
  4. Grain processing
  5. Processing of fruits and vegetables
  6. Confectionery
  7. Fish processing
  8. Initial processing of hides of farm animals
  9. Production of sugar
  10. Initial processing of wool

These priorities under the regionalized Scheme c / s specialization.

I note that the state support processing projects is a priority program of Agribusiness 2020 and the second five-year program of industrial-innovative development. 

On 16 congress of the party “Nur Otan” the Head of State instructed to attract foreign companies for the implementation of breakthrough investment projects in the food industry.

Currently, the Ministry of Agriculture worked out investment proposals for 15 projects.

In particular, it proposed to implement the project on creation of 4 cluster in meat cattle breeding with the participation of Austrian and German companies.

For example, «Eurasia Agro Holding” plans to build a meat processing complex with capacity of 17 th. Tons of processed meat per year, including a line for processing waste.

Also planned construction of 3 poultry farms with a total capacity of 90 thousand. Tons, which will reduce the import of poultry products by more than 50%.

Preparing a project for the production of dairy products and vegetable oils.

For example, the implementation of projects for the processing of oilseeds total capacity of more than 1.0 mln. Tons solve the problem of producers of oilseeds.Thus, in the result of the diversification in 2014 for the first time the area under oilseeds exceeded 2.0 mln. Ha, which makes it relevant to the question of their processing. The development of oil refining will establish long-term and steady sales of raw materials to neutralize the risks of sharp fluctuations in commodity prices, as well as provide job growth, high value-added tax increase and investment in agriculture.

Attracting foreign companies in the dairy industry, such as Megli is of interest in terms of the implementation in Kazakhstan of modern culture of production and technology, and established international investor markets allow predicting expansion of the geography and volume of exports.

The total estimated cost of the project is about $ 200 billion. Tenge.

The bulk of government support such projects will be carried out with the help of new tools: the investment subsidies and subsidizing interest rates on loans and leasing.

Implementation of these measures will require about 86.0 bn., At 43.0 billion. For each type of subsidy.

Almost all the projects prepared business plans have the prior consent of the second tier banks to finance, respectively, developed PSD. Projects with the highest and the average degree of readiness around 50%.

In turn, the question remains open bank financing of these projects. For BWI, note the willingness to finance projects if funding them through public financial institutions. The amount of funding is 155.0 bln. Tenge.


Slide 5


















Slide 6
















  Slide 7





An analysis of these priorities processing showed that in 2013 the capacity utilization of the processing enterprises of the main products was below 50%(reference: meat – 37% of the treated milk – 45.7% for butter – 36.1%; cheese and cottage cheese – 40.9%, sausage products – 31.2%, flour – 34,5%, cereals – 24.4%, sugar – 38.7%).

The main reasons for the low utilization rate are small-scale sources of raw materials, it entails periodic shortages, poor quality and expensive.

(Reference: for example: milk production in 2014 amounted to over 5.0 million tons, with the main share falls on smallholdings (82%). At the same time, enterprises in 2014 handled only about 2.0 mln. Tons of milk, which amounted to only 40% of the volume of its production. unprocessed milk accounted for by smallholders, who for a number of reasons why these are not attractive for industrial production.

A similar situation exists in the processing of meat. Because of the same reasons meat-packing plants processed 33% of all meat produced loading enterprises producing sausages is – 31%, for the production of chilled meat – 37%).

Thus there is no need for additional capacity, but more is needed modernization of energy-intensive and outdated morally and physically active with their productions dozagruzkoy and increase management efficiency.

In summary, it is proposed to refer to this set of problems in the processing of boththe production.

Slide 8
















Slide 9



The second block is proposed to call the trade, manifested in marketing products.Thus, the most acute problem of the presence on the market of cheap and substandard imports into force:

– Concealed dumping of imported goods;

– Weak control in the field of technical regulation;

– Poor orientation of the protection of competition in the importing countries;

– Poor access to the public procurement market;

– Weak support trade missions abroad;

– Weak public education campaign to promote healthy eating.

Similar problems were noted GMP Union of Grain Processors, meat and milk unions, associations and enterprises confectioners oil industry.

As seen in the decision block trade issues is beyond the possibility of the Ministry of Agriculture and lies more in the competence of the Ministry of National Economy, finance, investment and development, and others.

Slide 9

How to solve the problems of production











Returning to the production problems it should be noted that they have found their solution in the program “Agribusiness 2020”.

For example, the purchase of subsidized goods and works growers and breeders.

Implemented new measures of state support: financial improvement, investment subsidies, reduction% interest rates on loans and leasing.

So, in 2014, the interest rate on loans and leasing recovered in 1764 AIC subjects, including the number of processing enterprises amounted to 15.4%. (271 units.).

From 2014 it provided subsidies for the costs of processing enterprises in the procurement of raw materials. The list of subsidized agricultural products on import items include: sugar, milk powder, butter, cheese.


Increased comfort of Taxation for agriculture, in particular:

1.          There are exempted from income tax on income smallholders, and sells its products processing enterprises or procurement organizations. 
2.          The normative framework for the solution of the so-called “problem of the first VAT” by processing enterprises.

Processing enterprises were obliged to pay VAT on the total turnover since the purchase raw materials from smallholders and peasant farms, which are not subject to VAT, which leads to higher prices of final products and reduce its competitiveness.

In this regard provided by procurement organizations calculate VAT in the normal manner, with the amount of VAT paid to return to them in the form of grants.

A draft law providing for increased use of CHP for s / s cooperatives. However, in connection with the adoption of amendments to the Tax Code of the necessary improvements in the bill of the removal of restrictions on the use of s / s cooperative CHP (restrictions on subsidiaries, by the presence of farmland, etc.). Now MPs changed the bill submitted to the government and the need to accelerate the positive conclusion on it.

Slide 9

How are

trade issues

To address trade issues in a comprehensive development plan processing in 2014 – 2015 years and the second five-year GPIIR includes measures to reduce infrastructure costs, expansion of retail space, logistics centers, the development of consumer culture and the development of technical regulation.

However, the issue of funding of these activities GPIIR remained unresolved. Thus, the Ministry of measures have been proposed in the Action Plan GPIIR, with total funding of 250 bln. For 5 years, with virtually through JSC “EDF” Damu “on concessional lending processing industry is allocated only 12.5 bln. Tenge.

Slide 9

What need to do


1. In order to further develop the above-mentioned priority processing is necessary to ensure their “long” and “cheap” financing in local currency. The corresponding action plan for funding Holding “KazAgro” developed and need assistance in its implementation.

Slide 10



2.   Funding for the investment subsidies.

In 2014, 1087 applications to subsidize 13.0 bln., Which enabled the sector to attract private investment totaling 47.4 billion.

However, this measure in the years 2015-2017 there are only 17.4 billion. Tenge, which is almost 65 billion. Less than planned in the program “Agribusiness”. Thus, for 2015 it allocated a total of 5.8 bln. Tenge, while the governorates say about 25 bln. Tenge.

Slide 11


3.      Continue to improve the tax policy.

To shorten VAT refund procurement organization proposes to amend the law “On state regulation of agriculture” by providing subsidies for procurement organizations more than once for the year and on a quarterly basis.

It is also proposed to solve the problem of restrictions on the combination of harvesting with other species, because the law set conditions VAT refund the 90% of the SRS is harvesting. This requires the establishment of procurement organizations “alone and from scratch” that slows down the process.

In addition, the SPE jointly with unions and associations of processors draws attention to the practical implementation of the existing exemptions from VAT refunds for flour mills for export, distribution 70% VAT exemptions for the production of confectionery and others.

Slide 12



4.  Increase subsidy regulations and the poultry industry for the production of milk.

As I noted above, due to the fall of the ruble domestic manufacturers of dairy and poultry products face the problem of product marketing, is overstocked warehouses, and in the meantime on the market of imported products has a dominant share.

To improve the competitiveness of dairy and poultry products and support out of this situation, the Ministry proposes to increase the subsidy established standards for these types of livestock production by 50% for the coming half-year period. The amount of necessary funds will be 5.4 billion.

The proposal envisages to implement by reallocating funds in local budgets provided subsidies for crop sectors, which would not require additional funds from the republican budget.


Market protection

(what to do? trading)

5.                To protect the internal market and facilitate the promotion of exports.

It is proposed to entrust the

Committee of communication, information and information of the world:

  1. continue to work to promote the consumption of food products of domestic production;

Committee for Technical Regulation and Metrology WORLD:

  1. strengthen the enforcement of technical regulations;

Committee on Consumer Protection NEM:

  1. strengthen efforts to identify non-conforming safety and technical regulations of food products on the domestic market with the direction of the information to the relevant services of the Russian Federation.

The Ministry for Investment and Development and of Foreign Affairs:

activate the service of foreign policy, trade and industrial departments.

Slide 13


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