Abundant resources, big risks: development of agriculture in Kazakhstan
16 February 2022 18:39

Abundant resources, big risks: development of agriculture in Kazakhstan

NUR-SULTAN. KAZINFORM - Agriculture is a key sector for Kazakhstan, where nearly 42 percent of the population lives in rural areas, and close to 14 percent of the country’s economically active population are employed in the industry. Being the ninth largest country and having nearly 74 percent of the territory suitable for agriculture are just among a few factors that make agriculture a promising sector for the country. More about the current state and challenges in agriculture is in the latest analytical article of Kazinform.

According to the data from the Kazakh Ministry of Agriculture, in 2021, 281 investment projects to the amount of 255.1 billion tenge have been implemented and put into operation, including 180 projects in livestock farming to the amount of 145.4 billion tenge, and 101 projects in crops production to the amount of 109.7 billion tenge.

Based on the ministry’s plan for 2021-2025, there is a pool of 934 investment projects worth 4.4 trillion tenge. These projects include such areas as the creation of dairy farms, poultry farms, reproducers, fattening sites, and sugar factories.

In 2022, according to the ministry’s data, the plan is to implement 312 projects worth 581.1 billion tenge, including 197 projects in livestock to the amount of 259.1 billion tenge, 7 projects in fish farming to the amount of 7.6 billion tenge, and 99 projects in crops to the amount of 299.4 billion tenge.

Though the country possesses significant agricultural potential, not all of this potential was always used properly. President Kassym-Jomart Tokayev repeatedly spoke about the need to reform the agricultural sector stressing the opportunity to form seven large ecosystems for the production and processing of meat, fruits, vegetables, sugar, cereals, oilseeds, and dairy products.

In his January 15 address to the Majilis, a lower chamber of the Kazakh Parliament, President Tokayev said the government should focus on addressing key problems in the sector. He spoke about the adverse consequences of drought that the country’s western and southern regions suffered from last year, which caused significant harvest losses.

«Compared to last year, the volume of harvested grain decreased by 4 million tons. This has affected the supply of raw materials and fodder. According to forecasts, the situation may be difficult this year as well. The government must strictly control the supply of seeds, fodder, fertilizers, and the sowing campaign,» said Tokayev.

Challenges in the sector

The agriculture sector in Kazakhstan has certain challenges needed to be addressed to fully unlock its potential - reform in the subsidy system, updating the equipment, developing research and science as well as curbing climate change.

Subsidies

Over the past five years, Kazakhstan allocated more than 2 trillion tenge to develop agriculture, but according to the President, despite the increase in subsidies, there has been no significant change in this area.

Subsidies are usually given to finance the development of priority crops production, the cost of mineral fertilisers, the cost of pesticides and bioagents (entomophagy) as well as the cost of water supply services.

«Subsidies are embezzled, do not reach their recipients, and are used for purposes unrelated to agricultural production,« said Tokayev.

In recent years, Kazakhstan’s Anti-Corruption Agency has investigated 960 criminal cases and 54 percent of them were involved in the theft of subsidies. 80 billion tenge was allocated for pasture irrigation, but half of it disappeared.

Tokayev instructed the government to create a single platform where farmers will be able to receive information and services on subsidies free of charge as there is a strong need to facilitate access to subsidies, ensure their accessibility and transparency.

But while the majority of farmers live in rural areas, where the internet connection is often poor, using these kinds of platforms becomes hardly possible.

Among other problems in the current subsidy system is the complexity and multiplicity of subsidy areas, the focus on supporting intermediate technological processes, which are difficult to control, and the lack of a norm to evaluate the effectiveness of subsidies as well as lack of accountability for subsidy recipients to achieve specific results

At the February 15 government meeting, Agriculture Minister Erbol Karashukeev said the new system is in development. He spoke about the measures taken to adjust the system of state support for the industry.

Currently, the proposals are being considered by the working group and will be presented to the government in March.

Besides the introduction of cross liabilities, the new system, which will be launched in Akmola region in pilot mode soon, will also be transferred to digital format, which means it will have an automatic register of subsidy recipients, check of their compliance with the category of agricultural producers, registration of their counter obligations, and evaluation of their performance, and the order of receipt of subsidies.

According to Evgeniy Karabanov, an official representative of the country’s Grain Union, who spoke in an interview to one of the country’s national TV channels, the mechanisms should be clear and as realistic as possible and access to subsidies should be simplified. This support is of paramount importance for agricultural producers, who suffered significant losses in harvest due to severe drought last year. Without it, the producers fear an extremely difficult situation in the upcoming sowing campaign.

To address these issues, Kazakhstan’s agriculture ministry recently requested the government to consider increasing the budget loan for spring field work for an additional 70 billion tenge.

Climate change impact on agriculture

Last year’s drought, the most severe that the country has seen in years, is an example of how climate change affects agriculture.

But while farmers are severely affected by climate change, agriculture, on the other hand, is one of the sectors that cause significant greenhouse gas emissions. According to World Bank data, it currently generates 19–29 percent of total greenhouse gas emissions.

«Climate change’s negative impacts are already being felt, in the form of increasing temperatures, weather variability, shifting agroecosystem boundaries, invasive crops and pests, and more frequent extreme weather events,» says the World Bank. «On farms, climate change is reducing crop yields, the nutritional quality of major cereals, and lowering livestock productivity.»

Climate change causes short- to medium-term production risks for farmers and producers with droughts and floods becoming more frequent and reduced availability of water for irrigation stemming accelerated glacial melt.

According to the UNDP forecast, if current farming practices remain as they are, Kazakhstan may lose up to 13-37 percent of spring wheat yield by 2030. This means that 23-81 percent of the harvesting area may shrink causing nearly 457 billion tenge in direct economic losses.

«Given the fact that Kazakhstan is the world’s ninth-largest producer and seventh-largest exporter of wheat and the only exporter in Central Asia, the lack of climate change adaptation measures in Kazakhstan could pose a threat to food security of the entire region,» said the UNDP.

Food security is the issue that President Tokayev raised on several occasions noting that measures to address deteriorating food security cannot be delayed. These include more efficient use of land and water resources, improving land fertility, introducing water-saving technologies, among other measures. Addressing the Majilis session, Tokayev described tackling food security as a «key priority for the government.»

With the abundant resources that Kazakhstan has, but with the equally big risks that it faces the question arises - will Kazakhstan be able to meet its needs without compromising the ability of future generations to meet their food needs, but at the same time trying to achieve bigger yields, better water efficiency and much-wanted sustainability.

Article by Assel Satubaldina


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