Kazakh Zerno - News and analysis of cereals

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Monday, 26 March 2018 09:29

The Ministry of Agriculture of the Republic of Kazakhstan again makes meat production with an emphasis on exports the priority of the development of the AIC of Kazakhstan. It should be noted, not the processing (aboutthe need for development of which the Head of State has recently spoken several times), but the same trade in raw materials. Moreover, in a very crazy version: the purchase of commercial (!) herds abroad with the support of state subsidies, fattening, slaughtering - and export of beef in the opposite direction.

It is difficult to imagine more inefficient way to spend public money, the correspondent of the ""publication said. And who would you think is behind the development of this "brilliant" scheme for the development of public money? Exactly, the ex-Minister of Agriculture Asylzhan Mamytbekov.

A reasonable accent

"For us, the Ministry of Agriculture of Kazakhstan is a monkey with a grenade. And we understand that it is necessary to keep well out of its reach,"Kazakhstani agrarians said. The reason for such a skeptical attitude towards the agricultural department is that there is not even the slightest continuity between the strategies proposed by every new Minister of Agriculture. The rules of the game (the subsidy system and the emphasis of state support) change almost every year. At the same time, real professionals understand that agriculture is the industry where the result does not come at once. Therefore, a long-term strategy is needed for it. The Ministry of Agriculture's staggering from side to side says that either the department is headed by non-professionals, or they simply do not care about the real development, and the purpose of their actions is different. For example, the development of public funds in the most useful way to them.

During the preparation of the State Program for the Development of the AIC of the Republic of Kazakhstan for 2017-2021, the Ministry of Agriculture (under the leadership of the then-minister Askar Myrzakhmetov) conducted an analysis of the livestock sector.

It should be recalled that the previous head of the department Asylzhan Mamytbekov promised in 2016 not only to fully cover the demand for beef in the domestic market, but also to export surplus meat in the volume of 60 thousand tons.

What happened in reality? By the end of 2015, availability of the domestic market is only 98%. Meat was exported in the amount of 2.3 billion tenge, while imported amounting to 12.3 billion! Negative balance is 10 billion tenge!

At the same time, 75% of the meat was produced by the villagers on personal farmsteads - those who had hardly used any state support instruments before (no subsidies, no preferential credits).

Peasant and private farms gave 18 percent of the volume, and agricultural enterprises – 7 percent.

The logical conclusion from this analysis was that the team of Askar Myrzakhmetov decided to shift attention (including financial) to supporting private farms (РF).

At the same time, they decided to help in two ways. Firstly, by the in-kind subsidies to agricultural cooperatives for each kilogram of meat delivered. Secondly, (and this is the main thing) - through the development of feed production in the country. It was assumed that through subsidizing the production of seeds of perennial grasses and their sowing, as well as the production of fodder and ready-mixed feed, it will be possible to create a fodder base in the country. And where the feed is- there are elevated milk yields and gain in weight. So, more products to the townspeople and money to the villagers.

Back to villagers

However, the new Minister of Agriculture Umirzak Shukeyev seemed not to notice all these studies conducted by the team of his predecessor. Instead of analysis, he began to listen to the advice of ... AsylzhanMamytbekov. It is no coincidence that the ex-head of the Ministry of Agriculture of Kazakhstan, a few days after UmirzakShukeyev was appointed deputy prime-minister - minister of agriculture, left his post in the bank and became a freelance adviser to the Ministry of Agriculture, simultaneously taking the post of head of the Meat Union - a public association created when Mamytbekov was a minister and which united farms, which received generous funding from the state for the import of foreign livestock.

What exactly does the former head of the Ministry of Agriculture of Kazakhstan advise today? Very soon it became clear that the course was taken to complete refusal fromMyrzakhmetov's policy and return to the line begun by Mamytbekov himself.

Firstly, it is support only for large agricultural producers and the refusal from any kind of cash recharge of personalfarmsteads.

The real reason for such a position is understandable - a large agricultural business is somehow controlled by officials or their relatives. Redirecting state support from small farms to large ones is simply financing at public expense of business which belong to people close to the authorities.

In words, such a position is "beautifully" explained by the fact that small farms are unpromising in terms of better performance - they cannot buy new machinery themselves, and do not implementmodern agricultural technologies.

But no matter how they explain such a turn of the Ministry of Agriculture back to ordinary farmers, the result is obvious - it will not lead to anything good.

Sorry, but the minister is not only a manager, it's also a politician to some extent. And he should understand that agriculture in Kazakhstan is more than just one of the branches of the economy. With a total population of about 18 million people, there are 7.7 million (more than 46%)in rural areas. Moreover, the share of the villagers in the southern regions is much higher than that of the townspeople, and reaches, for example, 76% in the Almaty region.

At the same time, for many villagers the personal farmstead (namely, the production of meat and milk) is the only source of livelihood. To deprive them of the attention of the state and subsidies means to deny the prospects for the growth of living standards in the countryside, to stimulate further outflow of the population to the cities. And simply - to warm social tension in society. We remember that the five-year "administration" of Mamytbekov ended in mass land rallies throughout the country. Will UmirzakShukeyev want to come to the same thing, listening to Mamytbekov's advice?

Toleutay Rakhimbekov, who worked as a vice-minister in the team of Askar Myrzakhmetov and was responsible for the agricultural cooperation, gave such a comment on this in social networks:

"The sums needed for the state support of the agricultural sector of Kazakhstan are small. These are unscrupulous critics of the SAP (State program for the development of the AIC for the years 2017 - 2021) who hyped nationwide that all SAP money was taken from agriculture, from large and medium-sized farmers and was distributed to support AC and PSF. Even according to the official data of the Ministry of Agriculture, in 2017 about KZT 3.4 billion was allocated for credit provision of 342 AC, that is, KZT 10 million for one AC for the purchase of milk receiving points, slaughtering stations, transport and tractors. Half of this amount returned as an investment subsidy of 50 percent of their value, for this purpose KZT 1.7 billion was allocated. To subsidize the services of AC, less than KZT 500 million was allocated to its members (for example, for the collection, storage, delivery of milk to milk factories in the amount of KZT 10 per 1 litre). In total, all the state support of 342 ACs in 2017 under SAP amounted to 3.4 billion of loans and 2.2 billion tenge of subsidies. Whereas the amount of all subsidies paid to the AIC for the same year was about KZT 200 billion, that is, only 1% for the ACs subsidiaries!"

On the old rake

But, apparently, it's too late to argue. The policy of the Ministry of Agriculture has already been determined - attention is focused on large agribusiness. At the same time, the choice of the accent also causes surprise among the agrarians. Once again it is beef cattle farming. The program of increasing the export potential for beef, which was launched at the time of Mamytbekov, failed miserably. And now, Umirzak Shukeyev decides to revive it. Last year there was talk of such accents as ensuring the country's own food security, as well as the production and export of vegetable oil, legumes, small cattle. Now everything is again reduced to beef. Why should I step on the old rake? It's not clear to specialists.

- The policy of the Ministry of Agriculture, in my opinion, should be to support those areas in which the domestic market is not closed as a matter of priority," the owner of a large dairy farm said. - Kazakhstan's own milk supply is officially not more than 30%. And in fact, even less, 20 percent. And first of all, the Ministry of Agriculture should think about providing its own country with quality products, but not to feed someone abroad! And we see some absurdity. If such problems are with milk, then why is this industry practically not supported? And at the same time, a subsidy for meat is raised 4 times! Where is the logic? What is a subsidy? This is not only support for the peasants, but also stimulating them to develop in the right direction. We, dairy farmers, have received subsidies per liter at a constant rate for five years: for farms of the first category - 25 tenge, for the second - 15 tenge. At the same time, in the project of subsidizing meat cattle breeding, as we learned, it was suggested to raise subsidies for meat at once from two to four times! That is, if last year 20 thousand tenge was paid for a head of a bull, now it is offered to make gradation on weight of cattle and to pay from 45 thousand tenge to 75 thousand tenge for a head!

Let's look to the north and remember that the Russian government made milk production a special priority this year. The task is to come to the complete self-sufficiency of the domestic market. And this despite the fact that now the Russian Federation closes the internal need for its milk by 75%. That is, every year they produce 31 million tons of milk with the necessary 40 million tons.

Kazakhstan, on the other hand, produces milk only 25 to 30 percent of the demand, the deficit is 70-75 percent! But the authorities for some reason are not concerned with this imbalance, and stress the need to produce meat for export. What for?

The Kazakhstani farmer points out that, with a competent approach, there is no need to separately engage in meat cattle breeding in general. It is much more effective to breed universal, meat and dairy breeds of cattle. After all, it is clear that half of the annual offspring of dairy farms are bullheads. Farmers fatten them and sell them for slaughter, only leaving cow calves to replenish the milking herd. All! If you invest in such projects, then Kazakhstan will be able to provide itself with milk and meat much faster.

- Yes, they say that beef of meat bulls is better, - the farmer said. "But, I'm sorry, it's somewhere in the west the audience is satiated, and they can choose that they want just a steak from the Angus for dinner." Our task is simply to provide the domestic market with quality beef at an affordable price, without all these extra bells and whistles.

Pull no punches

The development of feed production should be the basis for the development of the livestock sector. This is the very question about which Asylzhan Mamytbekov "forgot", introducing the program of increasing the export potential for cattle meat. And the current team of the agricultural department for some reason does not want to move this cornerstone of development.

The position of scientists is unambiguous: modern animal husbandry means procurement of succulent fodder (silage and haylage), so that in winter the milking of cows and the weight gain of meat bulls do not stop. No hope for free maintenance of livestock in pastures throughout the year (broadcast by associates of Asylzhan Mamytbekov to this day) will not work: cattle need silage and haylage (containing carotene), plus full hay and forage. State support should go here, and not to the purchase of livestock (whether commercial or pure herds) abroad.

We recall that the analysis of the Ministry of Agriculture conducted in 2017 when creating the Fodder Production Card showed that the cattle in the country is starving.

Due to the lack of feed, animals do not receive half of the necessary nutrition- with 20.4 million tons of fodder needed for the existing livestock, 11.9 million tons are actually produced in the country.

The conclusion of the study was as follows: "Underfeeding of animals at a rate of 1 feed unit /day on average reduces the productivity by 4-5 percent. Thus, the existing feed deficit of 8.5 million tons of feed units is the reason for the shortage of 14% of the GP for a total of 211 billion tenge."

To solve the problem, a number of measures were offered by the Feed production map, including a five-year increase in silage production by 4 million tons, from 1.3 to 5.3 million tons. This was to be achieved by measures of state support: it was proposed that the coverage of per hectare subsidies for fodder and forage crops to be increased from 830 thousand hectares in 2016 to 1,500 thousand hectares in 2021. The amount of the annual subsidization for feed production was set at about 10 billion tenge.

However, the new head of the Ministry of Agriculture of the Republic of Kazakhstan, Umirzak Shukeyev, has already expressed a position for the abolition of all per hectare subsidies (and they remained only for some types of crops, including fodder and forage crops). He noted that last year of the 65 types of subsidies, 11 types have already been reduced, leaving 54.

- Of these, we see 15 more subsidies, which we can reduce. These are all natural subsidies. Subsidies per hectare, of course, only four subsidies left - it's cotton, rice, it's fodder. And we simply remove these subsidies. We believe that there is nothing to argue about," the head of the agricultural department said.

Meaningless import

The aim of the reduction is to save money and redirect them to "more necessary" (according to the Ministry of Agriculture) directions. And, first of all, it is a reanimated program of import of foreign livestock into the country. At the same time, it is initially "set" in such a way that all generous flows of state subsidies go through one channel - the Meat Union of Kazakhstan, which at the end of January was headed by the well-known in the country specialist on beef – Asylzhan Mamytbekov.

"As for the import of livestock, this is meaningless," the farmer said. - Of course, you can import it. But what for? If there is a shortage of fodder - just to waste. We have already passed through all this while Mamytbekov was the Minister. And now - again. And again - with the participation of Mamytbekov, although in a new role. I was in the Ministry of Agriculture, at the discussion the proposed system of importation of livestock. They there have made such a mess! They chose four operators for meat cattle breeding. Of these, one is “SK-Food”, the main member of the Meat Union. That is the firm of Mamytbekov and Bakhtibayev. A decision has already been made to allocate money for them to purchase livestock. And these are billions of tenge.

They will import livestock to sell it to local farms here. And make money on this. Moreover, I very much doubt that there will be an opportunity to control the quality and the price at which the cattle are imported. But many will not have a choice - they will have to buy livestock from them. They want to do the same in dairy cattle breeding - appoint an operator who does not even have his own farm! He deals with the fact that he realizes the seed material. And he wants to import cow calves, to carry out insemination with the available material - and sell. It is clear that there will not be any clear control here - what insemination was done with, what kind of cow calves they brought. In fact, it's just a scheme for cash disbursement. It will not bring any benefit to the cattle breeding of Kazakhstan.

To understand what sums are being discussed, it is enough to know that only one region of the country, Aktobe, plans to import 11 thousand heads of cattle this year, including 1,000 bulls. This was stated by the head of the region Berdybek Saparbayev on March 10 at a meeting dedicated to the creation of meat cluster in Aktobe. All this will be subsidized by the republican budget. It is simple to calculate the amount: according to the draft rules, "purchase of imported breeding and purebred seed stock" is subsidized in the amount of 300 thousand tenge per head. The treasury will have to pay KZT 3.3 billion for 11 thousand heads. And this is only in one region of the country! With similar appetites of other regions, the import of cattle will cost the Ministry of Agriculture an amount of 50 billion tenge per year. At the same time, we recall that the subsidization of feed production, according to the Development Map, was expected to amount to 10 billion tenge per year. That is, much less money would do much more good. After all, the cattle fed by the standards would give more meat, even without increasing the number of livestock.

But, apparently, it is more important for the Ministry of Agriculture through whose hands the state billions will be disbursed, and not what benefit they will bring ...

Akyn Aulov

"" newspaper

Last Updated on Thursday, 26 April 2018 14:13



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