04/2017
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38 K Y R GY ZSTA N Agriculture Bulletin Agricultural cooperative development concept approved Draft law on 7% rate for agricultural loans approved Farmers given certificates to lease agricultural machinery Number of agricultural cooperatives halved
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Contents State&Initiatives&...........................................................................................................&2! 1)!
Agricultural!cooperative!development!concept!approved!..............................................................!2!
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KGS!4.8!billion!in!preferential!loans!in!2016!....................................................................................!2!
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MP!calls!to!reduce!the!variety!of!agricultural!species!.....................................................................!2!
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KGS!7!billion!in!concessional!lending!in!2017!..................................................................................!2!
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Draft!law!on!7%!rate!for!agricultural!loans!approved!.....................................................................!3!
6)!
JalalKAbad!region!leads!in!agricultural!loans!received!.....................................................................!3!
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Informational!campaign!on!phytosanitary!certification!..................................................................!3!
Foreign&Aid&..................................................................................................................&3! 8)!
Farmers!given!certificates!to!lease!agricultural!machinery!.............................................................!3!
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JICA!continues!support!of!regional!development!...........................................................................!4!
10)! Russia!allocates!KGS!450!million!for!cattle!database!......................................................................!4! 11)! Poland!to!loan!EUR!40!million!for!Kyrgyz!agriculture!......................................................................!4!
Private&Sector&..............................................................................................................&4! 12)! 2016!gross!agricultural!output!tops!KGS!197!billion!.......................................................................!4! 13)! Number!of!agricultural!cooperatives!halved!...................................................................................!4! 14)! 99%!reimbursement!rate!for!preferential!loans!..............................................................................!5! ! ! !
Note:& The$Agriculture$Bulletin$presents$a$monthly$roundup$of$headlines$and$news$stories$related$to$Kyrgyzstan’s$agricultural$sector.$$ This$bulletin$is$prepared$by$Business$&$Finance$Consulting—a$SwissBbased$development$finance$consulting$company$with$a$long$ history$of$working$in$Kyrgyzstan.$Currently,$BFC$is$implementing$the$Agricultural$Lending$Programme$for$KfW.$Read$more$»$
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BFC$Agriculture$Bulletin$ $
State%Initiatives% 1)! Agricultural%cooperative%development%concept%approved% April$25th,$2017,$http://www.tazabek.kg/news:1378838$
Prime! Minister! Sooronbay! Jeenbekov! signed! a! decree! approving! the! ‘Concept! for! Agricultural! Cooperative!System!Development!for!2017K2021’.!The!main!goals!of!the!concept!are:!create!favorable! conditions!for!the!effective!operation!of!agricultural!cooperatives;!improve!the!mechanism!of!financial! and!credit!support!for!cooperatives;!organize!village!infrastructure;!introduce!elements!of!cooperative! management!in!agriculture;!and!develop!a!system!of!scientific,!informational,!consultative!and!human! resources!for!agricultural!cooperatives.! ! The!concept!is!planned!to!be!implemented!in!two!stages.!In!the!short!term!(2017K2018),!a!number!of! issues! will! be! resolved! in! order! to! stimulate! the! development! of! agricultural! cooperatives.! In! the! medium! term! (2019K2020),! stable! networks! of! agricultural! cooperatives! will! be! developed! for! the! processing!of!agricultural!products,!insurance,!supplies!and!marketing.! ! !
2)! KGS%4.8%billion%in%preferential%loans%in%2016% April$17th,$2017,$http://www.vb.kg/doc/358463_bolee_13_tys._fermerov_polychili$
Agriculture! Minister! Nurbek! Murashev! announced! that! Kyrgyz! farmers! and! processors! received! more! than! 13,000! preferential! loans! totaling! KGS! 4.8! billion! in! 2016.! This! enabled! the! full! volume! of! agricultural!production!to!be!fulfilled,!including!the!production!of!388!tons!of!meat.! ! !
3)! MP%calls%to%reduce%the%variety%of%agricultural%species% April$14th,$2017,$http://24.kg/english/49537_Competitive_struggle_of_agricultural_producers_should_go_inside_Kyrgyzstan/$
Member! of! Parliament! Akylbek! Zhaparov! stated! that! Kyrgyz! agricultural! producers! should! first! concentrate! on! competing! in! domestic! markets! before! entering! foreign! ones.! He! noted! that,! to! help! this,!the!Ministry!of!Agriculture!should!work!with!producers!to!help!them!cultivate!only!the!best!species! of! crops! and! animals.! For! example,! there! are! more! than! 7.5! million! sheep! and! 2.5! million! cattle! in! Kyrgyzstan,!all!of!different!breeds.!This!makes!it!difficult!for!buyers!to!obtain!the!necessary!quantity!and! consistency!they!need.!Zhaparov!also!thinks!it!necessary!to!stimulate!farmers!to!expand!their!operations! and!provide!them!with!benefits!for!10!years!so!that!they!can!become!stable.! ! !
4)! KGS%7%billion%in%concessional%lending%in%2017% April$12th,$2017,$ http://www.vb.kg/doc/358164_fermeram_bydyt_vydany_lgotnye_kredity_na_symmy_do_7_mlrd_somov.html$
The!government!has!allocated!KGS!7!billion!in!the!form!of!soft!loans!for!the!development!of!agriculture! within! the! ‘Financing! of! AgricultureK5’! project.! The! project! is! broken! down! into! two! stages.! The! first! stage! will! lend! KGS! 3.3! billion! to! farmers! while! the! second! will! lend! KGS! 3.6! billion! to! farmers.! The! government!has!also!allocated!KGS!700!million!to!subsidize!commercial!banks.! ! Loans!for!the!development!of!livestock!or!for!crop!production!will!be!issued!for!36!months!at!10%!per! annum!while!loans!to!villagers!who!intend!to!export!or!process!agricultural!products!will!be!issued!for! 36!months!at!6%!per!annum.! Page!2!
BFC$Agriculture$Bulletin$ $
5)! Draft%law%on%7%%rate%for%agricultural%loans%approved% April$12th,$2017,$http://knews.kg/2017/04/zhogorkuBkeneshBodobrilBzakonoproektBoBvydacheBselhozkreditovBpodB7/$
The!Kyrgyz!Parliament!has!approved!the!draft!law!on!a!7%!interest!rate!for!agricultural!loans.!According! to!the!draft!law,!concessional!lending!will!be!introduced!at!interest!rates!of!no!more!than!7%!per!annum! for! agricultural! producers! and! processors,! including! crops,! livestock,! poultry,! beekeeping! and! fish! producers!and!processors.!Currently,!preferential!agricultural!loans!are!issued!at!10%!per!annum.! ! !
6)! JalalLAbad%region%leads%in%agricultural%loans%received% April$11th,$2017,$http://24.kg/english/49238_JalalBAbad_region_leads_in_terms_of_agricultural_loans_amount/$
The!JalalKAbad!region!leads!all!other!regions!in!the!amount!of!concessional!agricultural!loans!received! within!the!‘Financing!of!AgricultureK5’!project.!Since!the!beginning!of!the!year,!892!entities!in!the!region! have!received!loans!for!KGS!302.38!million.!The!Batken!region!has!received!the!least!amount!of!loans! under!the!project,!receiving!220!loans!for!KGS!70.1!million.! ! In!total,!more!than!3,300!agricultural!producers!have!received!loans!totaling!more!than!KGS!1.24!billion! as!part!of!the!project.! ! !
7)! Informational%campaign%on%phytosanitary%certification% April$5th,$2017,$ http://www.vb.kg/doc/357885_grajdane_ne_znaut_kak_polychit_veterinarnye_i_fitosanitarnye_sertifikaty.html$
Prime! Minister! Sooronbay! Zheenbekov! has! instructed! the! appropriate! government! bodies! to! conduct! informational! campaigns! on! the! issuing! of! phytosanitary! and! veterinary! certificates.! As! part! of! the! directive,! the! government! will! hold! informational! sessions! with! business! community! members! on! the! processes! and! procedures! for! obtaining! the! phytosanitary! and! veterinary! certificates! necessary! for! exporting!domestically!produced!agricultural!products.! ! !
Foreign%Aid% 8)! Farmers%given%certificates%to%lease%agricultural%machinery% April$25th,$2017,$http://knews.kg/2017/04/fermeramBkyrgyzstanaBvydaliBsertifikatyBnaBselhoztehnikuBvBlizing/$
With! assistance! from! the! Eurasian! Development! Bank,! Kyrgyz! farmers! have! been! given! certificates! for! the! leasing! of! agricultural! machinery! to! help! increase! the! level! of! technical! capacity! within! the! agricultural!sector.!First!Deputy!Prime!Minister!Mukhammetkaly!Abulgaziev!noted!that!more!than!KGS! 800!million!has!been!allocated!to!Ayil!Bank!to!provide!new!machinery!to!farmers!with!leasing!conditions! that!have!a!lower!interest!rate!and!a!longer!period.! ! Last!year,!the!government!revised!leasing!conditions!to!reduce!interest!rates!and!extend!terms!to!up!to! 10!years.!First!Deputy!Prime!Minister!Abulgaziev!reiterated!the!government’s!support!of!the!agricultural! sector,!stating!that!the!government!is!continuously!exploring!new!ways!to!support!farmers.! ! ! ! !
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9)! JICA%continues%support%of%regional%development% April$24th,$2017,$http://www.vb.kg/doc/358789_jica_prodoljit_podderjivat_proekt_odno_selo_odin_prodykt.html$
Deputy! Economy! Minister! Daniyar! Imanaliev! met! with! representatives! of! the! Japan! International! Cooperation! Agency! (JICA)! to! discuss! the! ‘One! Village! –! One! Product’! project.! For! his! part,! Deputy! Minister! Imanaliev! noted! the! positive! results! of! the! project! in! the! IssykKKul! region! and! stated! his! confidence!that!the!project!will!continue!to!make!a!productive!contribution!to!regional!development.!In! their! turn,! JICA! representatives! noted! that! local! producers! in! the! IssykKKul! region! have! significantly! improved! the! quality,! design! and! taste! of! their! products! and! have! introduced! new! implementation! mechanisms! and! product! promotion! techniques.! They! also! expressed! their! hope! that! project! results! would!be!expanded!and!achieved!in!other!regions!as!well.! ! !
10)! Russia%allocates%KGS%450%million%for%cattle%database% April$19th,$2017,$http://novosti.kg/2017/04/rossiyaBvydelitB450BmillionovBsomovBnaBidentifikatsiyuBskotaBvBkyrgyzstane/$
The!government!of!Kyrgyzstan!plans!to!carry!out!full!identification!of!cattle!within!three!years.!To!this! end,! KGS! 40! million! has! been! allocated! from! the! state! budget! for! the! project,! with! another! KGS! 450! million!being!obtained!from!the!Russian!Federation!as!assistance!within!the!framework!of!Kyrgyzstan's! membership! in! the! Eurasian! Economic! Union! (EEU).! The! project! will! provide! training! to! 3,000! people! who! will! then! provide! the! initial! information! for! the! national! database! as! well! as! provide! continual! updates!to!it.! ! !
11)! Poland%to%loan%EUR%40%million%for%Kyrgyz%agriculture% April$10th,$2017,$http://novosti.kg/2017/04/polshaBpredostavitBkyrgyzstanuBkreditBvBrazmereBsorokaBmillionovBevro/$
Poland! will! allocate! EUR! 40! million! for! a! loan! for! Kyrgyzstan! to! finance! the! purchase! of! processing! equipment!for!agricultural!products!as!well!as!for!an!animal!identification!project.!The!maturity!of!the! loan!is!25!years.! ! !
Private%Sector% 12)! 2016%gross%agricultural%output%tops%KGS%197%billion% April$17th,$2017,$http://kyrtag.kg/economy/obemBvalovoyBproduktsiiBselskogoBkhozyaystvaBkrBvB2016BgoduBdostigB197BmlrdB somovB17$
The!gross!agricultural!output!of!Kyrgyzstan!increased!to!KGS!197.1!billion!in!2016.!The!increase!is!largely! due!to!an!increase!in!animal!production!(a!2.5%!increase)!and!crop!production!(a!3.7%!increase).! ! !
13)! Number%of%agricultural%cooperatives%halved% April$11th,$2017,$ http://www.vb.kg/doc/358122_kolichestvo_selhozkooperativov_v_respyblike_sokratilos_pochti_v_dva_raza.html$
The! number! of! agricultural! cooperatives! has! been! nearly! halved! in! recent! years.! According! to! the! Ministry!of!Agriculture,!there!are!442!large!cooperatives!active!in!Kyrgyzstan!today,!down!from!1,000.! Lending!conditions!have!recently!been!simplified!to!support!agricultural!cooperatives,!including!a!lower! minimum!loan!amount!threshold.! ! Page!4!
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14)! 99%%reimbursement%rate%for%preferential%loans% April$11th,$2017,$http://kabar.kg/news/protcentBvozvrataBfermeramiBlBgotnykhBkreditovBsostavliaetB99Ba.omorkulov/$
Speaking!at!a!press!conference!for!the!‘Financing!of!AgricultureK5’!project,!RSK!Bank!Chairman!Azizbek! Omorkulov! announced! that! the! reimbursement! rate! on! preferential! loans! is! 99%.! According! to! him,! previous!projects!connected!with!agricultural!financing!had!a!small!number!of!nonKperforming!loans.! ! The! chairman! also! noted! the! ease! with! which! farmers! can! obtain! the! credit.! For! example,! to! obtain! a! loan! of! up! to! KGS! 250,000,! a! farmer! needs! only! a! passport,! a! marriage! certificate! and! a! document! confirming!the!existence!of!agricultural!land!or!animals.!To!get!more!than!KGS!250,000,!a!farmer!must! produce!the!same!documents!as!well!as!certificates!confirming!the!absence!of!other!outstanding!debts.! ! !
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