Kazakhstan • 06 March, 2020

How will agriculture develop in Kazakhstan in 2020?

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What are the Kazakhstan's plans in agriculture development for 2020?

This year it is planned:

  • to complete the audit of all agricultural land and the digitization of the land cadastre;
  • to implement a pilot project for monitoring agricultural land through a web portal with the introduction of modern control methods based on space monitoring;
  • together with akimats to continue work on providing the local population with pasture land;
  • initiate the Bill on the involvement of unused agricultural land in production activities with the strengthening of appropriate mechanisms for their withdrawal by reducing their terms from 2 years to 1 year and increasing base tax rates by 20 times for unused lands.
  • to revise investment subsidy approaches taking into account import substitution of food products;
  • to enable akimats to set financing limits for passports of investment subsidies based on Territorial Development Programs and regional characteristics;
  • to subsidize interest rates on loans and leasing increase the share of subsidies on loans for working capital replenishment - up to 7% (previously it was up to 5%), give the opportunity to subsidize loans for spring field work up to 6% per annum, which will allow borrowing working capital up to 3 years and subsidize interest rates on them;
  • to work out and approve the Rules for subsidizing insurance premiums, since from this year the rules on voluntary insurance in agriculture come into force. That is, it is necessary to launch this mechanism of the new agricultural insurance system, which will allow in the future to take, among other things, the insurance policy and expand the access of agricultural producers to financing.

In 2019, Kazagro Holding funded 56 projects totaling 84 billion tenge.

The holding's mission is to promote the sustainable economic growth of the agro-industrial complex of the Republic of Kazakhstan in order to implement state policy and achieve strategic goals in the agro-industrial complex.

The holding is working on the implementation of the Ecosystem to optimize the entire line of loan products. To ensure a break-even activity, a standard business plan and detailed instructions for doing business in agriculture will be provided.

Today, the Holding’s investment portfolio includes 776 investment projects worth 611 billion tenge, of which 56 projects were funded in 2019 for a total of 84 billion tenge.

So, for 2019, the Holding's subsidiaries financed:

  • the purchase of more than 170 thousand head of cattle, 545 thousand head of small cattle;
  • opening of 10 dairy farms;
  • two poultry farms with a productivity of 36 tons of poultry meat;
  • 10 gardens and 11 greenhouses, 5 of which are using an irrigation system;
  • 10 projects for the processing of agricultural products;
  • sown 4 million hectares of land;
  • leased about 5.9 thousand equipment pieces.

As a result of active lending, the Holding’s loan portfolio grows annually, which today reached 887 billion tenge, and the number of borrowers exceeded 77 thousand.

At the same time, the main priorities of the Holding remain providing rural employment and supporting SMEs through lending. As an example, over the past 3 years, the Holding provided assistance in creating 38,539 new jobs.

For small and medium-sized businesses, the year 2019 was special in the Holding, since special attention was paid to the development of SMEs. The volume of lending to SMEs increased 2-fold from 232 to 437 billion tenge, thereby almost 98% of all credit funds were directed to this segment of the business.

As a result, in 2019, the number of funded SME entrepreneurs increased by 5,277 projects, or by 21%, in comparison with 2018.

In addition, the share of long-term loans amounted to 86%, and the average loan size per 1 borrower was 18 million tenge.

The share of financing a large business amounted to only 2%, while the number of large projects decreased from 102 projects in 2018 to 32 in 2019.

In accordance with the approved Development Plan of the Holding for 2016-2020, this year it is planned to finance agribusiness for a total amount of about 391 billion tenge.

Of these, 38.3 billion tenge for meat farming, dairy farms — 14.7 billion tenge, poultry — 10 billion tenge, gardening — 5.7 billion tenge, greenhouses — 44.2 billion tenge, processing — 6.2 billion tenge , spring field works — 70 billion tenge, funding for credit partnerships and microfinance organizations — 28.6 billion tenge, leasing of agricultural machinery — 82 billion tenge, working capital — 25 billion tenge and microcredit — 66,3 billion tenge.

The implementation of these plans for financing the development of livestock will make it possible to purchase 156 thousand head of cattle, 160 thousand head of cattle, create 9 dairy farms for 46 thousand tons of milk and organize the production of 30 thousand tons of poultry meat.

For the development of crop production, it is necessary to create 400 hectares of gardens, 1,500 hectares of irrigated land, 40 hectares of greenhouses, organize processing of 120 thousand tons of products, carry out spring field work on 3 million hectares, and update 4.5 thousand agricultural machinery pieces.

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