11/2017
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45 K y r gy zsta n Agriculture Bulletin Microfinance preferential loans now available ICD, Mol Bulak sign USD 10 million financing agreement USAID supports fruit processing and storage in Osh Potato harvest at 1.5 million tons
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Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5)
Second stage of livestock identification has begun ........................................................................ 2 Microfinance preferential loans now available ............................................................................... 2 Cancellation of VAT on flour cost state KGS 1 billion ...................................................................... 2 KGS 6 billion to farmers in preferential loans ................................................................................. 2 Ministry of Economy to promote a Green Economy ....................................................................... 3
Foreign Aid ................................................................................................................. 3 6) 7) 8) 9) 10)
ICD, Mol Bulak sign USD 10 million financing agreement ............................................................... 3 New food processing facility opens Jalal-Abad ............................................................................... 3 Russian Kyrgyz Development Fund needs investments .................................................................. 3 Conference on new veterinarian association held .......................................................................... 4 USAID supports fruit processing and storage in Osh....................................................................... 4
Private Sector.............................................................................................................. 4 11) 12) 13) 14) 15) 16)
Kyrgyz pasture degradation at over 50% ........................................................................................ 4 How to stabilize the Kyrgyz dairy sector ......................................................................................... 4 Kyrgyz beekeepers to supply white honey to China ....................................................................... 5 Potato harvest at 1.5 million tons ................................................................................................... 5 Veterinary controls remain along Kyrgyz-Kazakh border ................................................................ 5 Kyrgyzkommertsbank partners with RKDF ...................................................................................... 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 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 » BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
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BFC Agriculture Bulletin
State Initiatives 1)
Second stage of livestock identification has begun
November 21st, 2017, http://kabar.kg/news/v-kyrgyzstane-startoval-vtoroi-etap-identifikatcii-zhivotnykh/
The second stage of identifying domestic animals in Kyrgyzstan has started, following the completion of the first stage. During the first stage, the State Inspectorate issued a budget of KGS 28 million and purchased 716,000 ear tags and 2,000 applicators, helping successfully identify 680,600 heads of cattle. For the second stage, an additional KGS 40 million has been allocated for the purchase of 950,000 ear tags for cattle, 1,000 markers and 500 applicators. The State Inspectorate plans to complete the identification of cattle in the country during the second quarter of 2018. It should also be mentioned that, within the framework of an agreement between Russia and Kyrgyzstan regarding Kyrgyzstan’s accession into the Eurasian Economic Union (EEU), the company CROCUS has delivered 1.6 million ear tags. The identification process for horses and pigs is set to begin in the fourth quarter of 2018. The identification of dogs in the country is 80% complete.
2)
Microfinance preferential loans now available
November 16th, 2017, http://kyrtag.kg/economy/kreditov-pod-10-predusm
The Ministry of Economy has announced that arrangements have been made for a mechanism to provide preferential microfinance loans for less than 10%. Preferential loans are being provided for plant growing and livestock production as well as for export-oriented and import-substituting enterprises. Previously, the banking sector provided microfinance loans at rates of 20-30%. The new measures are part of the government’s ‘40 Step’ program and also upgrade the state agency for investment and export promotion. The government has also adopted the new ‘Order of the Stabilization Regime’ regulation, which will improve conditions for investments. Additionally, draft amendments have been developed to further relax restrictions for investors.
3)
Cancellation of VAT on flour cost state KGS 1 billion
November 16th, 2017, https://24.kg/english/68448_Budget_of_Kyrgyzstan_looses_more_than_1_billion_soms_due_to_cancellation_of_VAT_/
Deputy Economy Minister Bakkeldi Tyumenbaev has announced that the cancellation of the VAT on flour has cost the state revenues of KGS 1 billion in a period of just two years. In 2014, it cost the state KGS 635 million, and in 2015, it cost the state KGS 500 million. Members of Parliament, however, are skeptical that the losses are all a direct result of the VAT cancellation.
4)
KGS 6 billion to farmers in preferential loans
November 13th, 2017, http://novosti.kg/2017/11/svyshe-13-5-tysyach-fermerov-poluchili-v-etom-godu-lgotnye-kredity/
More than 13,500 famers have received nearly KGS 6 billion in preferential loans from the state so far this year. The funds were given within the framework of the ‘Financing of Agriculture’ program and were directed mostly for plant growing and animal husbandry. Page 2
BFC Agriculture Bulletin
5)
Ministry of Economy to promote a Green Economy
November 8th, 2017, http://donors.kg/en/3928-green-economy-eco-friendly-development#.Wg4MScZx3IU
Deputy Economy Minister Daniyar Imanaliev has announced the Ministry’s efforts to implement green economy development strategies in cooperation with United Nations (UN) ‘Partnership for Action on Green Economy’ (PAGE) initiative. The Ministry is planning to develop a Green Economy Concept and Action Plan by end of 2018 that will introduce standards and define sectors of green economy development, the role of the private sector and civil society and eco-friendly production. Green economic development is directly connected with the safe development of a society that embraces health, the environment, sustainable economic growth and the overall security of Kyrgyzstan.
Foreign Aid 6)
ICD, Mol Bulak sign USD 10 million financing agreement
November 26th, 2017, https://icd.africa-newsroom.com/press/signing-of-the-usd
The Islamic Corporation for the Development of the Private sector (ICD) and the micro-credit company Mol Bulak Finance (Mol Bulak) have signed an agreement for a line of financing amounting to USD 10 million. The funds will be used to support micro-entrepreneurs in the Kyrgyz Republic through Islamic modes of financing. This is expected to help reduce poverty, increase employment and assist in the development of entrepreneurship and social mobilization in Kyrgyzstan as well as support the growth of Mol Bulak’s portfolio. This marks ICD’s first line of financing extended to a microfinance institution within a member country.
7)
New food processing facility opens Jalal-Abad
November 22nd, 2017, https://www.usaid.gov/kyrgyz-republic/press-releases/nov-22-2017
The United States Agency for International Development (USAID) and Farmer’s Organic Garden LLC have launched a new fruit and vegetable processing facility in Suzak Rayon (Jalal-Abad region). The facility is expected to create 155 new jobs and directly benefit 1,384 households. It will also become the largest processing facility in the region, expanding the company’s production of juice, dried fruit, pickled vegetable, jam and tomato paste. The facility was co-financed through USAID’s ‘Agro Horizon’ project. The HACCP-compliant premises now have a processing capacity of 15,600 metric tons and a storage capacity of 11,105 cubic meters. It will support expanded domestic sales as well as exports.
8)
Russian Kyrgyz Development Fund needs investments
November 16th, 2017, https://24.kg/english/68382_Russian-Kyrgyz_Development_Fund_needs_investment/
Erkin Arsandiyev, the chairman of the Russian Kyrgyz Development Fund (RKDF), has stated that the Fund is in need of investments if it is to continue supporting the development of the economy of Kyrgyzstan. Currently, due to the lack of attracting investments, the Fund is unable to provide financing for large projects.
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BFC Agriculture Bulletin
9)
Conference on new veterinarian association held
November 15th, 2017, http://kabar.kg/news/v-kyrgyzstane-namereny-sozdat-natcional-n
A conference was held in Bishkek on the establishment of the National Association of Private Veterinarians. The conference also focused on a development strategy for the veterinary service of the Kyrgyz Republic. The purpose of the association is to protect the professional interests of veterinarians and to improve the quality of veterinary services to farmers as well as establish an effective partnership with the State Inspectorate for Veterinary and Phytosanitary Security. Improved veterinary services at a rural level will lead to improved prevention and control of diseases. This, in turn, will lead to increased livestock productivity, increased farmer incomes and greater food security. The conference was organized by the Food and Agriculture Organization of the United Nations (FAO) in cooperation with the Ministry of Agriculture, the State Inspectorate for Veterinary and Phytosanitary Security and other international organizations. Participants at the event included representatives of state bodies, heads of public associations, international organizations and public organizations as well as scientific experts and private veterinarians.
10) USAID supports fruit processing and storage in Osh November 12th, 2017, https://www.usaid.gov/kyrgyz-republic/press-releases/nov-12-2017
The United States Agency for International Development (USAID) has helped set up processing lines that meet the international standards needed to export agricultural goods. USAID’s support, which comes as part of its ‘Agro Horizon’ project, includes upgrading facilities, installation of modern equipment, adoption of international quality control (HACCP) system and other technical assistance. The new facilities are expected to benefit over 2,000 local households in and around Osh. The new fruit drying facilities are capable of processing more than 1,000 tons of produce per year, while a new storage facility is capable of storing up to 40 tons of apples. ‘Agro Horizon’ is a four-year USAID project that aims to increase smallholder farmers’ incomes by improving productivity and expanding access to local and international markets. To date, USAID has leveraged more than USD 27 million of private capital to provide opportunities for import substitution and increased export potential of Kyrgyz agricultural products.
Private Sector 11) Kyrgyz pasture degradation at over 50% November 21st, 2017, https://www.tazabek.kg/news:1416787
The degradation of Kyrgyz pastureland is reportedly at more than 50%, with a majority of pastures in the country having depleted soil and being overgrown with weeds. This makes growing forage grasses (or any other type of plant) extremely difficult, effectively making the land useless for economic purposes.
12) How to stabilize the Kyrgyz dairy sector November 17th, 2017, http://www.for.kg/news-458874-ru.html
With the recent ban on the sale of Kyrgyz dairy products in neighboring Kazakhstan, experts are searching for ways to ensure that the Kyrgyz dairy sector remains stable and, eventually, continues to Page 4
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develop. Economist Jumakadyr Akeneev noted that manufacturers are now ready to sell to anyone, at virtually any price. Mr. Akeneev argues that, if the sector is to find stability, dairy producers in the country must accomplish two things: begin processing more than 30-40% of raw milk and find other sales outlets for Kyrgyz dairy products. The expert notes that expanding sales to markets in China and Uzbekistan could easily offset the effects of the Kazakh ban and ensure the sector’s survival.
13) Kyrgyz beekeepers to supply white honey to China November 15th, 2017, http://kabar.kg/eng/news/beekeepers-from-kyrgyzstan-will-supply-white-honey-to-china/
An agreement was reached for Kyrgyz beekeepers to supply 10 tons of white honey to China. The agreement was made during a meeting with representatives from the non-governmental organization Naryn Uyuk and the International Transcontinental Corporation of Innovative Technologies.
14) Potato harvest at 1.5 million tons November 11th, 2017, https://en.trend.az/business/economy/2819666.html
Kyrgyz farmers have harvested nearly 1.5 million tons of potatoes. The largest amount (502,000 tons) was harvested in the Issyk-Kul region, followed by Talas (235,200 tons) and Batken (37,000 tons). Kyrgyzstan has also produced 1,760,000 tons of cereals (27,600 tons less than in 2016), 911,000 tons of vegetables and 247,900 tons of melons. The country has also produced 647,000 tons of sugar beet, 178,500 tons more than in 2016.
15) Veterinary controls remain along Kyrgyz-Kazakh border November 4th, 2017, https://24.kg/english/67610_Kazakhstan_not_removes_veterinary_control_on_border_with_Kyrgyzstan/
Kazakhstan has yet to remove veterinary controls along the Kyrgyz-Kazakh border. Kazakh authorities have stated that they will not remove the controls until they are convinced Kyrgyzstan has established appropriate controls to ensure phytosanitary requirements are met. In recent years, 133 violations of Eurasian Economic Union (EEU) policies have been identified in the fields of veterinary medicine and quarantines, leading to the import for dangerous pests such as the golden potato nematode, the Comstock worm, the eastern moth, the potato moth and the Asian berry fruit fly. Additionally, 66 violations of phytosanitary requirements were also identified, including the importation of products of animal origin without proper documentation and violations of registration rules.
16) Kyrgyzkommertsbank partners with RKDF November 3rd, 2017, http://www.agro.kg/ru/news/13573/
A credit agreement has been signed between the Russian Kyrgyz Development Fund (RKDF) and Kyrgyzkommertsbank. The funding will be used by Kyrgyzkommertsbank to help finance small- and medium-sized businesses. Specifically, financing will be provided for the procurement of new equipment, construction works and modernization. Priority will be given to those businesses involved in agriculture, garments and textiles, mining, metallurgy, tourism, medicine and transport.
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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.