ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of November 7, 2016 No. 668

About modification of the orders of the Government of the Republic of Kazakhstan of February 18, 2013 No. 151 "About approval of the Program for development of agro-industrial complex in the Republic of Kazakhstan for 2013 - 2020 "Agrobusiness-2020" and of December 30, 2015 No. 1136 "About approval of the list of government programs and recognition voided some decisions of the Government of the Republic of Kazakhstan"

The government of the Republic of Kazakhstan DECIDES:

1. Bring the following changes in some decisions of the Government of the Republic of Kazakhstan:

1) in the order of the Government of the Republic of Kazakhstan of February 18, 2013 No. 151 "About approval of the Program for development of agro-industrial complex in the Republic of Kazakhstan for 2013 - 2020 "Agrobusiness-2020":

state heading in the following edition:

"About approval of the Program for development of agro-industrial complex in the Republic of Kazakhstan "Agrobusiness-2017"";

state Items 1 and 2 in the following edition:

"1. Approve the enclosed Program for development of agro-industrial complex in the Republic of Kazakhstan "Agrobusiness-2017" (further – the Program).

2. To provide to responsible central and local executive bodies, national holdings, the companies and the organizations (under approval) information on the program implementation course according to the Rules of development, realization, carrying out monitoring, assessment and control of the Strategic plan of development of the Republic of Kazakhstan, the state and government programs, strategic plans of state bodies, development programs of the territories, and also developments, realization and control of the Forecast scheme of territorial and space development of the country approved by the Presidential decree of the Republic of Kazakhstan of March 4, 2010 No. 931.";

The program for development of agro-industrial complex in the Republic of Kazakhstan for 2013 - 2020 "Agrobusiness-2020" approved by the specified resolution to be reworded as follows soglasnoprilozheniya to this resolution;

2) in the order of the Government of the Republic of Kazakhstan of December 30, 2015 No. 1136 "About approval of the list of government programs and recognition voided some decisions of the Government of the Republic of Kazakhstan" (SAPP of the Republic of Kazakhstan, 2015, Art. No. 77-78-79 583):

in the list of government programs approved by the specified resolution:

4, to state line, sequence number in the following edition:

"

4.

The program for development of agro-industrial complex in the Republic of Kazakhstan "Agrobusiness-2017"

Ministry of Agriculture of the Republic of Kazakhstan

2013 - 2017

".

2. This resolution becomes effective from the date of its signing.

Appendix

to the Order of the Government of the Republic of Kazakhstan of November 7, 2016 No. 668

Approved by the Order of the Government of the Republic of Kazakhstan of February 18, 2013 No. 151

The program for development of agro-industrial complex in the Republic of Kazakhstan "Agrobusiness - 2017"

1. Passport of the Program

Name	The program for development of agro-industrial complex in the Republic of Kazakhstan "Agrobusiness - 2017"
Basis for development	The message of the Head of state to the people of Kazakhstan of December 14, 2012 "Strategy" Kazakhstan - 2050": new political policy of the taken place state"
State bodies responsible for development and realization	The Ministry of Agriculture of the Republic of Kazakhstan (further - the MCX RK), akimats of areas, cities of Astana and Almaty
Purpose	Creation of conditions for increase in competitiveness of subjects of agro-industrial complex (further - the AIC) the Republic of Kazakhstan (further - RK)
Tasks	1. Financial improvement of subjects of the AIC. 2. Increase in economic goods availability, works and services for subjects of the AIC: 1) increase in economic goods availability, works and services in crop production; 2) increase in physical availability of services in grain storage; 3) increase in economic availability of water to agricultural producers (further – SHTP); 4) increase in economic goods availability, works and services in livestock production and commodity fish breeding; 5) increase in economic goods availability, works and services for production of deep conversion of agricultural raw materials; 6) increase in economic availability of financial services; 7) increase in availability, goods, works and services within implementation of priority investment projects; 8) increase in economic availability of educational services, results of agrarian science and consulting services. 3. Development of the state systems of ensuring subjects of the AIC: 1) development of system of phytosanitary safety; 2) development of system of veterinary safety. 4. Increase in efficiency of systems of state regulation of the AIC: 1) increase in efficiency of agrochemical servicing of agricultural industry; 2) increase in efficiency of monitoring and assessment of meliorative condition of the irrigated lands; 3) increase in efficiency of the state strain testing of crops; 4) development of system of rendering the state services for subjects of the AIC; 5) development of system of technical regulation in agricultural industry; 6) increase in system effectiveness of the state control and supervision in the AIC; 7) creation of conditions for development of production and turnover of organic agricultural products; 8) development of agricultural cooperation;  9) development of international cooperation in the field of agro-industrial complex.
Realization term	2013-2017
Target indicators	1) Increase in amount of the state support of agricultural industry due to subsidizing of subjects of the AIC in time 3,6 in 2017; 2) prolongation of debt load of subjects of the AIC due to refinancing and restructuring of loans for 9 years at least for the total amount of 500 billion tenges; 3) amount of the non-state borrowing facilities raised in the AIC at the expense of measures for increase in availability of the credits and leasing to 1, 1 trillion tenges for 2013-2017; 4) coefficient of threat of distribution of quarantine and especially dangerous harmful organisms of 0,94 of % in 2017; 5) share of the food products subject to monitoring laboratory researches, % 0,27 in 2017; 6) share of the state services transferred to electronic format, 62% in 2015.
Sources and amounts of financing	The total expenses provided in republican and local budgets on program implementation in 2013-2017 will constitute all the 2nd 102, 3 billion tenges, including: 2013 – 339, 7 billion tenges 2014 – 466, 0 billion tenges * 2015 – 543, 2 billion tenges * 2016 – 356, 7 billion tenges 2017 – 396, 7 billion tenges

* - the amounts will be specified according to the government budget for the corresponding financial year.

2. Introduction

For the period independence of RK in the AIC of the country considerable results are achieved: permanent increase in production based on the market relations is observed, productivity and labor productivity increase, updating of fixed assets and recovery of infrastructure of industry are made, self-reliance on main products of food is reached, there was significant growth in export of grain, oil-bearing crops, fishery products.

In 2011 the share of agricultural production of gross domestic product (further - GDP) the countries constituted 5, %, labor productivity occupied in agricultural industry from 2005 for 2011 changed with 304, 2 thousand tenges on occupied to 498 thousand tenges with annual average growth rates of one 9,3 of % a year, in the rural zone lived about 7,48 of one million people or more than 45% of all population of Kazakhstan.

Now new tendencies of world agrarian economy and demography are created, real development was gained by integration processes in the region, there are global climatic changes. Kazakhstan was included into the Customs union (further - the TS), during the next period plans entry into the World Trade Organization (further - the WTO). However low labor productivity level in industries, imperfection of the used technologies, melkotovarnost of production do not allow to conduct agricultural production on intensive basis, to provide the most complete use of material, labor and other resources, to observe ecological requirements. These factors reduce competitiveness of the domestic agrarian sector that in the conditions of the WTO and the CU can lead to domination of import of foreign products, replacement of local producers from the markets.

There is growth of the population of the country to intensive surplus of consumption of food and change of structure of consumption towards better products. The role of agricultural industry for providing the country with food, growth of employment of the population and economic development of the republic was repeatedly emphasized with the Head of state, including in the President's letter RK of N. A. Nazarbayev to the people of Kazakhstan of January 27, 2012 "Social and economic upgrade - the main vector of development of Kazakhstan".

In the changed conditions of external and internal environment, in connection with the entry of Kazakhstan into the CU and the forthcoming accession to WTO, need of use of new instruments of state regulation and upgrade of industry the new Development program of the AIC of RK is developed.

3. The analysis of the current situation in agro-industrial complex

Amounts of gross output of the AIC of RK show steady tendency to growth from level 1089, to 4 billion tenges in 2007 to 2286 billion tenges in 2011 of products of agricultural industry and with 490, 8 billion tenges in 2007, to 828 billion tenges in 2011 of conversion products. Over the last 5 years growth rate of amounts of gross output of agricultural industry on average made 20%, productions of food - % 12,2.

Figure 1. Production volume of gross output of agricultural industry

Source: RK agency according to the statistics

In 5 years the annual average gross production volume of key products of conversion made more than 650 billion tenges.

Table 1. Production of conversion, one billion tenges

Indicator	2007	2008	2009	2010	2011
Production of food	490,8	623,5	629,8	695,2	828,0
Conversion and conservation of meat and production of meat products	50,2	59,7	69,7	77,6	102,8
Conversion and conservation of fish, Crustacea and mollusks	6,3	6,9	7,3	8,1	9,6
Conversion and conservation of fruit and vegetables	68,2	60,8	69,6	68,3	87,6
Production of vegetable and animal oils and fats	43,6	60,4	42,9	85,6	72,3
Production of dairy products	89,4	101,5	103,5	117,3	132,8
Production of products of the flour-grinding industry, starches and starched products	79,3	133,2	128,0	119,6	168,2
Production of bakery and flour products	89,8	110,8	115,3	120,1	133,6
Production of other food	57,0	82,5	86,2	90,9	109,0
Production of ready-made feeds for animals	6,9	7,6	7,4	7,8	12,1

Source: RK agency according to the statistics

The agricultural industry of RK was integrated into the world markets of food and actively participates in forming of trading balance.

However the importozavisimost of Kazakhstan by many types of products of conversion of the AIC was created importozavisimost level on fruit and vegetable products, products of conversion of meat and milk is, so, high.

Table 2. Import share in consumption of products in Kazakhstan in 2009 - 2011, one thousand tons

Product	Import	Consumption	Import share in consumption, %
on average for 2009-2011, one thousand tons
Fruit, grapes and products of their conversion	573,6	678,3	84,57
Fishes and fish products	67,2	88,7	75,72
Vegetable oil and oil-containing products	165,4	342,3	48,33
Meat and meat products	209,2	1 122,2	18,64
Milk and dairy products	870,6	5 756,8	15,12
Sunflower seeds	28,7	316,4	9,06
Vegetables, melon cultures and products of their conversion	193,2	3 169,0	6,10
Potatoes and products of its conversion	145,3	2 518,7	5,77
Grain conversion products	43,8	1 989,8	2,20
Eggs and yaytseprodukta, one million pieces	33,4	3 565,5	0,94
Grain	110,0	11973,7	0,92

Source: The Customs Control Committee of the Ministry of Finance of RK (including mutual trade); RK Agency according to the statistics; Analytical Center of Economic Policy in the AIC LLP.

In 2011 in agricultural industry it was engaged 2196, by one thousand people (26% of total number of occupied), from them hired - 604,8 of one thousand people (% 27,5 from occupied in the sector), independently busy - 1591,3 of one thousand people (% 72,5 from occupied in the sector).

Acreage in RK in 2011 constituted 21083 thousand hectares. Under wheat it was busy about % 65,7 (13 848,9 thousand hectares) of all acreage. Under grain crops in 2011% 76,9 (16 219,4 thousand hectares) of all acreage was taken away. Livestock number for the beginning of 2012 constituted 5,7 of one million heads of KRS (further - KRS), 18,1 of one million heads of small cattle (further - MRS), 1,6 of one million heads of horses, 1,2 of one million heads of pigs, 0,17 of one million heads of camels and 32,9 of one million heads of birds.

3.1. Target domestic and foreign markets of sales of products of the AIC of RK

To the countries of Central Asia, the European Union (further – the EU), Afghanistan by 2018 Kazakhstan can deliver more than 7 million tons of grain products (wheat, flour, products of deep conversion of wheat) taking into account rapid growth of the population of the countries of Central Asia and Afghanistan. One of key tasks is preserving leading line items on flour export which can be reduced because of orientation of importing countries to development of own capacities in flour production. Export of products of deep conversion of wheat (starches, gluten, gluten, etc.) will constitute to 0,1 one million tons in raw equivalent on condition of success of the projects on deep conversion of wheat started now.

The domestic market of apples by 2018 will constitute more than 300 thousand tons, at the same time high dependence on import products (about 50%) in this connection the purpose is increase in self-reliance by this type of products remains.

The domestic market of vegetable products, including tomatoes, will constitute by 2018 about 4,3 one million tons from which local producers can provide more than 90% of the internal demand. Export of vegetable products by 2018 can constitute up to 55 thousand tons, is preferential to the countries of the Eurasian Economic Union (further – EEU). Internal production of the processed and tinned vegetables, including tomatoes, by 2018 according to forecasts will increase up to 17 thousand tons.

Demand in the domestic market of corn by 2018 will make about 0,8 one million tons in grain generally from livestock production. Iran annually imports now about 5,5 one million tons of corn in grain and is the perspective potential market of these products.

The domestic market of colza by 2018 will constitute about 160 thousand tons which will be provided with local products. Also there is potential of increase in export volume almost to 100 thousand tons.

The domestic market of soy by 2018 will constitute more than 230 thousand tons which will be provided with local products.

The potential market of import beef of the Russian Federation (further – the Russian Federation) constitutes at least 600 thousand tons annually on which Kazakhstan will be able to deliver about 10 thousand tons of the cooled KRS meat by 2018. Also domestic market of meat of beef will constitute about 440 thousand tons by 2018, mutton – about 170 thousand tons, horse-flesh – 110 thousand tons which will be provided with domestic production.

On mutton and horse-flesh orientation to ensuring domestic market is perspective, owing to specifics of the foreign markets of the adjacent countries export in mass quantities of these types of products is not possible.

The domestic market of products of conversion of meat according to forecasts by 2018 will constitute about 74 thousand tons of sausages, more than 14 thousand tons of canned meat from which local products can constitute about 45 thousand tons of sausage and more than 11 thousand tons of canned meat.

The market of the import cooled red fish (salmon) of the Russian Federation constitutes about 75 thousand tons per year from which Kazakhstan can occupy up to 1 thousand tons by 2018, export to the Russian Federation, the EU and other countries to 1 thousand tons of sturgeon and black caviar is also possible. The domestic market of fish and fish products will constitute about 70 thousand tons from which local products can constitute about 40 thousand tons.

The domestic market of dairy products in Kazakhstan will constitute by 2018 about 1,5 one million tons in milk equivalent from which local products can constitute about 1,4 one million tons in milk equivalent.

The need for compound feeds for livestock production will grow to 3 million tons per year.

On rice Kazakhstan reached self-reliance, there is potential of increase in export volume of rice grain to countries of the Commonwealth of Independent States to 80 thousand tons by 2018 on condition of the solution of key problems of industry.

In cotton production the area of the territories suitable for cultivation is limited to three districts of the Southern Kazakhstan area in this connection the considerable surplus of production and export is also not possible.

In the market of thin wool increase in production up to 7-8 thousand tons per year, also amounts of conversion of the made semi-rough and rough wool on several thousands of tons per year is possible.

The domestic market of products of deep conversion of grain of corn of local production according to forecasts by 2018 will constitute about 35 thousand tons, at the same time about 7 thousand tons of krakhmalopatochny products will be exported.

3.2. The analysis of the acting policy of state regulation of development of the AIC

At the moment the policy of state regulation of development of the AIC is implemented in the following forms:

1) provision of different forms of the state support among subjects of the AIC in the form of subsidies, public procurements, etc.;

2) use of the financial instruments supporting conditions for updating of the main production means - the park of agricultural machinery, the equipment, cattle livestock;

3) ensuring availability of financial and credit tools to subjects of the AIC;

4) creation of necessary conditions for investment attraction in projects of development of the AIC;

5) support of export of products;

6) rendering the state services in the field of veterinary and phytosanitary safety;

7) preserving and development of the infrastructure necessary for development of the AIC of RK, - transport, water, storages, conversions and so forth;

8) development of industry science and distribution of agrotechnological knowledge;

9) control over expenditure of budgetary funds.

In Kazakhstan generally monetary and financial instruments of support dominate.

Table 3. Structure of the budgetary funds allocated for development of the AIC in 2007-2011

№. of payment order	Direction of financing	Share, %
1	Subsidies	28
2	Credits	20
3	Investments and investment projects	30
4	Services for crop production, livestock production and conversion	20
5	Research and development and consultations	2
	Total	100

Source: MCX RK

In quantitative expression total amount constituted only in 2011 more 283, 5 billion tenges.

Figure 3. Amounts of the budgetary funds aimed at the development by the AIC, 2007-2011, one million tenges

Source: MCX RK

Table 4. Types and amounts of subsidizing for 2007-2011, one million tenges

Types of subsidies	Average for 2007-2011, one million tenges	Share, %	2011, one million tenges
Subsidies for development of crop production	22 820,5	50,8	30 011,4
Subsidies for development of livestock production	14 757,4	32,9	26 211,3
Subsidies for conversion	3 140,8	7,0	5 000,0
Subsidies for export	2 555,8	5,7	5 000,0
Subsidies for irrigation water	1201,1	2,7	1 248,7
Subsidies for insurance	360,7	0,8	1 203,3
Subsidies for implementation of standards	55,5	0,1	40,0
TOTAL	44 891,7	100	68 714,6

Source: MCX RK

Over the last 5 years subsidizing of the AIC increased more than by 3 times.

Figure 4. Subsidizing amounts at the expense of republican and local budgets for industries of the AIC, 2007-2011, one million tenges

Despite rather high level of the state support, number of shortcomings is noted:

1) number of subsidies is inefficient in view of low sensitivity of SHTP to them (subsidies for 1 hectare in production grain, oily, some other cultures, on forages on 1 head of KRS, etc.);

2) administration of subsidies is integrated to high costs;

3) receipt of subsidies of SHTP is late;

4) the mechanism of allocation of subsidies distorts market prices;

5) targeting of receipt of subsidies is insufficiently controlled (subsidies for artificial insemination, seed farming in crop production, etc.).

3.3. Analysis of problems of priority industries of the AIC

3.3.1. Analysis of problems of crop production

Productivity on the main cultures is at a low level in comparison with world indicators of productivity.

Figure 5. Comparison of productivity of the main crops, c/hectare

Source: data on Kazakhstan - the RK Agency according to the statistics (2011), this on foreign countries - FAO (2008)

Gross collection of the main crops in 2011 reached rather high level (in one thousand tons): wheat - 22732,1, corn - 482, barley - 2593, rice - 347, soy - 133, sunflower - 409, colza - 149, cotton - 336, potatoes - 3076, vegetables - 2878, corn on forage - 1053, fodder (rhizocarpous, melon, grain, on silo without corn) - 279, apples - 115 thousand tons.

In case of big crop of wheat in 2011 there was its excess production that caused difficulties when exporting products, deficit of grain-carriers and capacities for storage. On oil-bearing crops deficit of capacities of storage and lack of knowledge of SHTP agrotechnologies were shown. In production of soy and corn the melkotovarnost of production results in low productivity, there are also problems in the field of conversion. For production of fruit and vegetable products the major restraining factors are deficit of the irrigated lands, deterioration in their meliorative condition which are distributed among small-scale SHTP, deficit of storages, lack of raw materials for processing industry that leads to the high level of importozavisimost by this type of products.

Cultivated area of arable lands under forage crops in 2011 constituted 2484, one thousand hectares, from them the cleaned square constituted 78 thousand hectares of corn on forage, 197, of one thousand hectares of one-year herbs and 1780,1 of one thousand hectares of long-term herbs. Productivity of forage crops falls that is connected with inefficient structure of land use. The growing requirements of livestock production are provided with high-quality compound feeds insufficiently.

Level of phytosanitary safety is in the Republic of Kazakhstan at the satisfactory level with low quantity of cases of export ban of products of crop production from Kazakhstan.

3.3.2. Analysis of problems of livestock production

The big share of products of livestock production is made in personal subsidiary farms of the population that results in low productivity, does not allow to provide the growing consumption in the domestic market, leads to high cost and decrease in competitiveness, leads to forming of importozavisimost. So, prime manufacturers of all types of meat are, still, farms of the population which as of January 1, 2012 contain 76,7 of % of the heads of KRS, 67% of sheep and goats, 72,5 of % of pigs, 62,7 of % of horses and 40,9 of % of bird. Indicators of productivity of livestock production yield international several times.

Figure 6. Indicators of productivity of livestock production

Source: data on Kazakhstan - the RK Agency according to the statistics (2011), this on foreign countries - FAO (2008).

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