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A.Myrzakhmetov meets with south Kazakhstan agrarians

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by December 2, 2016 General

Deputy Prime Minister � Minister of Agriculture Askar Myrzakhmetov met today with the agricultural producers of Almaty, South Kazakhstan, Kyzylorda, and Zhambyl regions. The meeting focused on the draft state program for AIC development in 2017-2021.

The conceptual approach of the program is the large-scale development of cooperation to exploit the potential of personal subsidiary farms and small farming households as an objective factor of growing production and rural living standards.

This is the main difference between the new state program and those previously existed. All previously adopted programs involved subsidies, loans, seeds, fertilizer, livestock breeding. The new program has all the same, but also provides the mechanisms of involving into the commercial production of hundreds of thousands private farms and small farming households.

Analyzed production base of Kazakhstan showed that over 80% of the products manufactured by private subsidiary farms remain in rural areas not reaching the processing plants and urban residents.

At the same time there is no opportunity to farmer to harvest, primarily process and transport the goods manufactured to the city or enterprises. Even if there is, the farmer bears high costs. When merging cooperatives, the main issue to be solved is logistics. In cooperation, the farmer produces and the cooperative brings the produced goods to the city or enterprise.

Kazakhstan imports annually food products more than 1 trillion tenge worth. What is meant here is the goods we can and must produce � butter, cheese, canned fruit and vegetables, sugar, etc.

Part of the money, leaving today to other countries, can be turned to our villages through the cooperatives, buying agricultural goods produced by our farms, provide processing plants with them. Our processors are now experiencing a shortage of agricultural raw materials, wherefore their capacities are loaded only by 20-60%. However, only 10-30% of agricultural products are processed.

The rural cooperatives on sales are designed to solve this bottleneck problem between the agricultural products and processing, between the villages and cities.

Each farmer of the country will have a real opportunity to receive state support through agricultural cooperatives.

Agricultural cooperatives will address issues of sustainable procurement and sales of agricultural products with further transfer to processing enterprises.

KazAgro holding will provide cooperatives with technological equipment. Support will also be provided through subsidies for cooperatives to provide personal subsidiary economies with veterinary, agrochemical, financial, marketing and other services.

Development of agricultural cooperation will involve into commodity production over 500,000 small producers, which will provide raw materials to processing plants and increase 1.3 times loading level.

Development of agricultural cooperation will provide annual income of villagers in the amount of 300 billion tenge, and reduce the trade margin by 15-20% by reducing intermediary links.

300 billion tenge is twice the amount of state subsidies. By 2021, over 500,000 personal subsidiary economies and small collective farms will merge into 1,500 agricultural cooperatives.

Kazakhstans domestic market will be provided with its own organic and nutritious products by the agricultural cooperatives.

Involving the simple farms and farmers in the mass production and processing of agricultural products will be followed by an increase in the export potential of Kazakhstan products.

Besides, cooperatives may provide its members with veterinary, agrochemical, forage, slaughtering, milk collection, and product storage and distribution logistics services. For instance, when prime cost for hay required by the villagers is 7-8 thousand tenge per ton, it is sold for 20 thousand summertime, 30 thousand in autumn and 40-50 thousand tenge in winter. A cooperative, leasing under state support the tractor, mower, trailer, can provide the villagers with hay at cost price.

There is also an opportunity for cooperatives to become the rural credit institutions, provide loans both for agroindutrial purposes and opening of non-agricultural businesses in rural areas (baths, barbers shops, etc.). In addition, the cooperative can provide consumer loans for the purchase of TV, fridge, for education payments. A villager will not have to go to the bank in the district or even regional center to obtain a loan.

Source: Government of the Republic of Kazakhstan

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