07/2017
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41 K y r gy zsta n Agriculture Bulletin Farmers receive KGS 3.5 billion in preferential loans State Program for Irrigation Development approved Arab Coordination Group pre-approves Kyrgyz projects Assessing agrotrade potential with Kazakhstan
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
Farmers receive KGS 3.5 billion in preferential loans ..................................................................... 2 State Program for Irrigation Development approved ..................................................................... 2 18 new EEU technical regulations set to come into force............................................................... 2 Kyrgyzstan to increase financing to agricultural sector .................................................................. 3 Jeenbekov discusses stepping up Chinese cooperation .................................................................. 3
Foreign Aid ................................................................................................................. 3 6) 7) 8) 9)
RKDF approves 112 projects in Chui region .................................................................................... 3 Arab Coordination Group pre-approves Kyrgyz projects ................................................................ 4 EEC Minister calls for increased cooperation with FAO .................................................................. 4 Kazakhstan allocated USD 100 million to Kyrgyzstan ...................................................................... 4
Private Sector.............................................................................................................. 5 10) 11) 12) 13) 14)
96,000 hectares destroyed by locusts ............................................................................................. 5 Assessing agrotrade potential with Kazakhstan .............................................................................. 5 Agro-industrial park to be built in Chui region ................................................................................ 5 Pasture degradation threatens Kyrgyzstan’s future........................................................................ 5 Kyrgyz sugar beet industry in jeopardy ........................................................................................... 6
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 Swiss-based 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)
Farmers receive KGS 3.5 billion in preferential loans
July 28th, 2017, http://kyrtag.kg/economy/za-pervoe-polugodie-vydano-lgotnykh-kreditov-fermeram-na-summu-3-4-mlrdsomov-minekonomiki-
Speaking at a government meeting, Economic Minister Arzybek Kozhoshev announced that, since the beginning of the year, the government has provided more than 8,000 preferential loans to Kyrgyz farmers, amounting to KGS 3.455 billion. The Minister also announced that KGS 3.5 million was planned to be issued until the end of the year for entrepreneurs engaged in light and industrial sectors.
2)
State Program for Irrigation Development approved
July 26th, 2017, https://24.kg/english/58474_State_program_to_allow_adding_66500_ha_of_new_irrigated_lands/
The State Program for Irrigation Development for 2017–2026 has been approved. The state program will provide for the construction of irrigation infrastructure and will provide rural residents with new irrigated land. The program will add 66,500 hectares of new irrigated lands, increase the water supply on 51,080 hectares, transfer 9,500 hectares from machine irrigation to gravity irrigation and improve land-reclamation on 50,000 hectares. 46 water facilities have also been selected for improvements based on their relevance, economic and technical indicators, social significance for the regions and appeals made to the government. The end results of the program will improve the social and economic situation of citizens and ensure the development of the regions while also addressing food security issues and combating poverty.
3)
18 new EEU technical regulations set to come into force
July 21st, 2017, https://ru.sputnik.kg/economy/20170721/1034389698/chem-grozyat-agrariyam-kr-novye-tekhreglamentyeaehs.html
Beginning on August 12, 2017, 18 new Eurasian Economic Union (EEU) technical regulations will enter into force in Kyrgyzstan regarding the sale of fruits, vegetables and animal products. For businesses already engaged in exporting to EEU countries, nothing will change. For many farmers and peasants who sell exclusively in domestic markets, they will be required to receive new documents and certifications for their products or face heavy fines. The problem, however, is that none of the 11 certification bodies and 32 testing laboratories in the country are capable of issuing all the necessary documents. While phytosanitary laboratories were built and equipped, they were not brought into full compliance with the requirements of the technical regulations of the EEU. This means that are no certification bodies in Kyrgyzstan for five of the new technical regulations. In order to obtain the necessary documents to trade agricultural products, one must currently go to Kazakhstan, something unrealistic for many. The government has announced that farmers without the required documents should not worry as they will give them the necessary phytosanitary and veterinary certificates and that the retrofitting of laboratories will be completed by the fall of this year. However, given the uncertainty surrounding the regulations, it is necessary to prioritize laboratories and speed up their retrofitting. If not, many Kyrgyz farmers and peasants could find themselves unable to legally sell meat, milk, fruits and vegetables.
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BFC Agriculture Bulletin
4)
Kyrgyzstan to increase financing to agricultural sector
July 18th, 2017, http://vesti.kg/index.php?option=com_k2&view=ite
Prime Minister Sooronbay Jeenbekov has announced the government’s intention to increase the amount of affordable agricultural loans to KGS 15 billion per year, including KGS 7 billion for the remainder of 2017. Moreover, interest rates for agricultural processing will be reduced to 6%, and interest rates for crop production and animal husbandry will be at 10%. The Prime Minister also stated that the government will develop an agricultural leasing program that will utilize KGS 1 billion. A program is also being implemented to expand machine and tractor stations through the year 2020. The government also plans to support the wide development of agricultural cooperatives throughout the country.
5)
Jeenbekov discusses stepping up Chinese cooperation
July 7th, 2017, http://kyrtag.kg/economy/kyrgyzstan-gotov-eksportirovat-v-kitay-myaso-moloko-rybu-i-druguyuselkhozproduktsiyu-premer
Prime Minister Jeenbekov held talks with Zhi Shuping, Minister of the China’s General Directorate for the Supervision of the Quality of Goods, Inspection and Quarantine. During the talks, the Prime Minister stressed Kyrgyzstan’s full support of bilateral cooperation with China in the field of agriculture, noting that China is one of the main trade partners of Kyrgyzstan and that Kyrgyzstan has a large untapped export potential of agricultural products. The Prime Minister proposed strengthening cooperation with China through the creation of joint ventures related to the processing of agricultural products, the development of livestock and the expansion of exports. To this end, the Prime Minister noted that it is important to accelerate the signing of protocols on the export of meat, dairy and fish products from Kyrgyzstan to China and also to begin the construction of agro-industrial parks and agricultural production parks within Kyrgyzstan. Prime Minister Jeenbekov also stressed the importance of the prompt resolution of issues regarding phytosanitary permits for agricultural products which Kyrgyzstan could sell to China. To do this, he noted, it is necessary to speed up the process of building Kyrgyz laboratories capable of certifying the quality of goods to be exported. The Prime Minister also added his support for exploring ways to maximize Kyrgyzstan’s membership within the Eurasian Economic Union (EEU) with its position along China’s ‘Silk Road’ trade project. For his part, Mr. Shuping stressed that the Chinese government considers its neighbor a strong friend and considers continued bilateral cooperation important, especially in the agricultural sector.
Foreign Aid 6)
RKDF approves 112 projects in Chui region
July 13th, 2017, http://kabar.kg/news/rkfr-odobril-112-proektov-po-chuiskoi-oblasti-na-obshchuiu-summu-3-8-mlrd-somov/
The Russian-Kyrgyz Development Fund (RKDF) has approved 112 projects in the Chui region for a total of USD 55.38 million (KGS 3.8 billion). 11 of the projects are large-scale projects and will be financed directly by the Fund, with the rest being financed through partner banks under a small-scale support program. Most of the projects will be in the spheres of agriculture (specifically, gardening and food processing) and the light industry. In just 21 months of operation, RKDF has financed 745 projects for a total of USD 234 million. Page 3
BFC Agriculture Bulletin
7)
Arab Coordination Group pre-approves Kyrgyz projects
July 12th, 2017, http://kabar.kg/eng/news/representatives-of-arab-coordination-group-to-implement-projects-in-kyrgyzstan/
Representatives of the Arab Coordination Group have pre-approved projects for USD 357 million in Kyrgyzstan. The projects are expected to bring great benefit to the socio-economic state of the country and will be in the fields of agriculture, transport, energy and health as well as the social sphere. In total, 23 projects were presented to the Group, including 15 irrigation projects, 5 health care projects, 2 road and transportation projects and 1 project for clean drinking water. The next step is for the Group to hold discussions with financial institutions and review their proposals. It is expected that details of the projects’ implementation will be discussed in greater detail in September 2017.
8)
EEC Minister calls for increased cooperation with FAO
July 7th, 2017, http://www.eurasiancommission.org/ru/nae/news/Pages/07_07_2017.aspx
Sergei Sidorsky, Minister of Industry and the Agroindustrial Complex of the Eurasian Economic Commission (EEC), met with Jose Grazianu da Silva, director general of the Food and Agriculture Organization of the United Nations (FAO). At the meeting, Minister Sidorsky noted that the natural result of increased agricultural production in Eurasian Economic Union (EEU) countries should be increased exports. To this end, the Minister has called for the increased participation of EEU countries with FAO programs in order to increase the sale of grain, sugar, vegetable oils, meat and other goods in export markets. In particular, EEU countries could benefit greatly from FAO activities on the development of organic agriculture, seed production, the use of genomic selection methods in animal husbandry, the introduction of animal identification systems and traceability of products, food safety, sanitary and epidemiological welfare and phytosanitary safety. The EEC Minister drew specific attention to the importance of needed technical assistance in organic agriculture, the prevention of animal and plant diseases, the formation and development of a geographical indications system for local traditional products and the assessment and management of food safety risks. It should be noted that much work has already been accomplished within the EEU because of the support of FAO, including a program which promotes phytosanitary safety and the harmonization of phytosanitary measures of the Union with international norms and standards.
9)
Kazakhstan allocated USD 100 million to Kyrgyzstan
July 5th, 2017, http://www.vb.kg/doc/362786_nazarbaev_podpisal_dokyment_o_vydelenii_100_mln_kyrgyzstany.html
Kazakh President Nursultan Nazarbayev signed a law allocating USD 100 million to Kyrgyzstan for the improvement of customs infrastructure along the Kyrgyz border with Eurasian Economic Union (EEU) countries. Assistance will be provided in stages, with the first tranche planned to be allocated in the amount of USD 41 million. This tranche will be for: arranging customs checkpoints, the modernization of testing laboratories, training in technical regulations, equipping the transportation sector, retrofitting a fire fighting laboratory, retrofitting a testing laboratory at the Ministry of Health of Kyrgyzstan and equipping veterinary and phytosanitary checkpoints. In order to monitor the targeted and effective use of the assistance provided, a joint bilateral audit commission will be established within the Kazakh-Kyrgyz intergovernmental council. Page 4
BFC Agriculture Bulletin
Private Sector 10) 96,000 hectares destroyed by locusts July 19th, 2017, https://24.kg/english/57872_Over_96000_hectares_of_pastures_crops_destroyed_by_locusts_in_Kyrgyzstan/
Approximately 96,000 hectares of Kyrgyz pastures and crops have been damaged by locusts. The pests invaded all regions of the country except the Issyk-Kul region. The Naryn region was most affected, with locusts decimating nearly 22,000 hectares of fields and pastures there. In an effort to combat the further spread of infestation, Ministry of Agriculture employees have, so far, treated 94,201 hectares of land with chemicals.
11) Assessing agrotrade potential with Kazakhstan July 17th, 2017, http://vesti.kg/index.php?option=com_k2&view=item&id=47097:nashi-fermeryi-osvaivayut-ryinkikazahstana&Itemid=79
Kyrgyz businessmen are planning to assess more preferential trade possibilities in Kazakh markets for agricultural products. The ultimate goal is to reduce the number of intermediaries between Kyrgyz farmers and end customers, which will have a direct positive impact on the profits of Kyrgyz producers. Meetings will be arranged between Kyrgyz producers and Kazakh buyers in order to facilitate such trade agreements. Additionally, the Kyrgyz side is considering the possibility of creating measures to boost cooperation such as the creation of guild communities. The measures are seen as positive developments which will help reduce the cost of goods and make Kyrgyz products more competitive in Kazakh markets.
12) Agro-industrial park to be built in Chui region July 8th, 2017, https://24.kg/english/57028_Chinese_businessmen_to_build_agro-industrial_park_in_Chui_region/
Kyrgyzstan’s Information Policy Department has announced that Chinese businessmen will build an agro-industrial park in the Chui region of Kyrgyzstan. The project is expected to cost USD 1 billion in total and, upon completion, will result in the creation of 30,000 jobs. The agro-industrial park will engage in meat processing, cow and horse breeding, fisheries and beekeeping. Other agricultural sectors are also planned to be covered. The agro-industrial park will become an important production link under the ‘Silk Road’ project, with all products produced in the agro-industrial park being exported to China. As part of the project, the infrastructure of the surrounding area will be improved, including main roads, better lighting and a modern monitoring and network communications system. At the initial stage, investments from China will amount to at least USD 250 million, creating around 5,000 jobs.
13) Pasture degradation threatens Kyrgyzstan’s future July 6th, 2017, http://kabar.kg/news/degradatciia-pastbishch-kyrgyzstan-teriaet-svoi-sokrovishchnitcy/
Pasture degradation is a serious problem for Kyrgyzstan as it threatens to take away one of the country’s main treasures and a vital part of its economy. Preserving pasture lands in Kyrgyzstan is a matter of maintaining the stability of the country's social and economic development, especially in the light of an increasing number of farm animals in need of pasture lands.
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BFC Agriculture Bulletin
According to experts, there are three main problems to be overcome in order to save this national resource. The first is uneven grazing. More specifically, spring-autumn pastures experience much more grazing than remote mountain pastures. This largely is connected to many livestock owners being unable to transport animals to distant pastures and the lack of appropriate bridges and roads. The second main problem to overcome is the incompetent management by governing authorities who were not appointed because of their subject-matter knowledge. The final main problem to overcome is, perhaps, one of the most difficult: the growth of weeds like the Karagan. These weeds have proven difficult to eradicate and are not eaten by cattle. Moreover, they overtake approximately 2% more land every year. Significant support in improving pasture management is being provided by projects implemented by the Ministry of Agriculture in partnership with organizations such as ARIS, the Research Institute of Livestock and Pastures and the National Association of Pasture Users. The overall objectives of these projects are to improve pasture land quality and increase livestock productivity. There are a total of 9 million hectares of pasture land in Kyrgyzstan currently supporting 1.5 million head of cattle, 6 million sheep and goats and 0.4 million horses.
14) Kyrgyz sugar beet industry in jeopardy July 3rd, 2017, http://vesti.kg/index.php?option=com_k2&view=item&id=46860:ryinok-saharnoy-sveklyi-mozhetobvalitsya&Itemid=79
Kyrgyzstan’s National Statistics Committee has reported that the volume of imports from Commonwealth of Independent States (CIS) members increased by USD 54.2 year-on-year during January-April 2017. The increase is largely due to the increased import of sugar. According to Nurlan Aliyev, an expert in the field of agriculture, this increase in sugar imports is a bad sign that demonstrates that, although Kyrgyzstan can produce sugar beet, it still has problems processing it and brining finished products to domestic markets. Aliyev added that, due to suggestions from the Ministry Agriculture, more sugar beet was planted this year. Without enough processing factories, this could mean that sugar beet farmers will experience losses this year and, without enough places for sugar beet farmers to sell their products, could lead to a collapse of the industry as early as in 2018. The issue of the competitiveness of domestic producers also remains important. The only way to overcome this issue is to place quotas on imports which allow for domestic products to be favored within the country. Earlier, similar quotas on the supply of sugar helped protect the market and could lead to increased domestic production in the future.
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Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.