Parliament • 16 November, 2018

Memorandum on establishment of joint venture on seed industry development signed in the Government

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November 16 in Ukimet Uyi, Deputy Prime Minister – Minister of Agriculture Umirzak Shukeyev signed a Memorandum of Intent to create a joint venture KAZSEED, which will specialize in growing quality seeds in Kazakhstan using modern non-GMO technologies, the official site of Prime-Minister reports. 

The memorandum to establish a joint venture for the production of forage crop seeds using advanced technologies in Kazakhstan was concluded between the Kusto Group and the American Baumgartner Agriculture Science and Service, which is one of the leading service and research companies in the seed industry.

In the first year, the investment volume will be about $25 million with a further increase. The task of the joint venture is to provide farmers of Kazakhstan with quality seeds adapted to the climatic conditions of the country. In the future it is planned to enter the CIS market.

As Shukeyev noted, the creation of such advanced enterprises plays a huge role in achieving the goals set by the Head of State to increase labor productivity and export of processed agricultural products 2.5 times. The production of high-quality seeds will directly affect crop yields and will be the basis for the growth of the country's forage production. Also, the use of high-quality seeds by Kazakh farmers, in part of their high yields, will be able to significantly reduce expenses for farmers, increase the profitability of crop production.

“Following the President’s visit to the United States last year, we have been working with American companies. Today, the first contract is being created — a joint venture for the production of seeds. In general, in the agro-industrial complex it all depends on seed production. Understanding this, this year we have changed the rules on seed subsidies, which are completely different from our previous practice. The goal is that within 3-4 years all our peasants sow with seeds, so-called, not higher than the third reproduction. Therefore, in this regard, it is significant that they decided to create a joint production for growing feed crops in Kazakhstan, which are of fundamental importance for us,” said Shukeyev.

As part of the State Program for the Development of Agro-Industrial Complex for 2017–2021, the Ministry of Agriculture is working on seed development in Kazakhstan. Thus, the procedure for subsidizing seed production has been revised. If earlier the farmer had to look for funds to buy quality seeds or, as a last resort, plant commercial grain, then starting next year, farmers will receive seeds of main crops for free in the spring, and in the fall, after harvesting, they should transfer part of the value of the seeds obtained to the special seed development fund. This will allow the farmer to sow some of his area with high-quality seeds, and by reproducing, after three years, sow only high reproduction with seeds. In turn, the funds accumulated in the seed development fund will be used to finance seed farms to acquire the necessary equipment to improve the quality of the seeds produced.

Chairman of Kusto Group Yerkin Tatishev stressed that the emergence of such a specialized company in the field of seed production is a very important step for the development of the country's crop production. Advanced technologies and competencies of American partners in this industry will allow focusing not only on seed production, but also on their selection.

“What is the difference between not genetically modified and genetically modified products? The latter changes the genes to instill some new quality. This company does this through selection. To instill mosquito quality you need 10 generations. They do it in Puerto Rico, because they can harvest three-four times all year round. In three years they do not have time to inculcate new qualities — frost resistance, early sunrise. For example, their corn needs to be sown in the cold, no need to wait for heat. When it comes to heat, it will start rising itself,” noted Tatishev.

American investors noted the positive development of the agricultural sector in Kazakhstan, as well as the measures taken by the government to support all agro-industrial sectors in the Government to Business format.

“Thirteen years ago, we started developing non-GMO varieties of early ripening maize for the so-called ‘corn belt’ of the northern states of the United States. The agreement reached today is a proof that this genetics is viable for the development of corn culture in Kazakhstan. In the future, we will also develop soybean crops for Kazakhstan and continuously improve our modern maize hybrids. Research will be conducted in Kazakhstan. The potential that we see on the rich Kazakhstani agricultural land is unlimited. We are pleased and proud to be working with the Kusto Group on the development of the agricultural sector in Kazakhstan,” said Edward Joseph Baumgartner, director general of Baumgartner Agriculture Science and Service, an American company.

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