EL DALA KZ: What changes in government support for the meat industry does the Ministry of Agriculture plan?

Country: Kazakhstan
EL DALA KZ: What changes in government support for the meat industry does the Ministry of Agriculture plan?
24 April 2024

The Ministry of Agriculture has presented a draft of the new National Project for the Development of the Agro-Industrial Complex "Strong APC" for 2024-2028 with a total financing volume of 15.7 trillion tenge. It is planned that over the next five years, Kazakhstan should increase production of products that still have a high share of import dependence. To achieve this, both preferential lending and subsidization of the industry will be increased starting from this year.

The National Project has not yet been adopted and is under public discussion. As noted by the Ministry of Agriculture, the livestock sector of Kazakhstan is currently characterized by low productivity. Average milk yields, egg production, and average live weight of cattle are significantly lower than in neighboring countries. For example, the average milk yield per head in Kazakhstan is 2,395 kg, the average live weight is 339 kg, and egg production is 205 pieces. The reasons for this are cited as a weak feed base, insufficient genetic potential of agricultural animals, and low funding of the industry.

The missed opportunity in animal husbandry due to these reasons is estimated by the Ministry of Agriculture at 30%.

Another problematic issue remains the narrow geography of exports. Due to outbreaks of dangerous infections in recent years, several countries have banned the import of livestock products from Kazakhstan, which has had a negative impact on the industry.

Against the backdrop of instability, insufficient preferential lending, and as a result of low competitiveness in Kazakhstan from 2012 to 2022, 10 meat processing enterprises, 9 milk processing enterprises, 80 fattening sites, 20 dairy farms, and 12 poultry farms were closed.

The new national project provides for an increase in preferential financing of priority projects for the production and processing of agricultural products to 800 billion tenge annually, including through the replication of the experience of the North Kazakhstan region - no less than 400 billion tenge from 2025.

Preferential lending will be directed towards the creation, expansion, and modernization of poultry farms, industrial greenhouses, dairy farms, enterprises for deep processing of meat, milk, and grain, as well as crop and livestock projects.

Subsidies will also increase. In particular, for the development of breeding livestock for five years, 882.3 billion tenge will be allocated: in 2024 - 114.6 billion tenge, 2025 - 166.5 billion, 2026 - 173.4 billion, 2027 - 187.3 billion, 2028 - 196.9 billion tenge.

For subsidizing the costs of wool processing enterprises from 2025 to 2028, 10.9 billion tenge will be allocated. Subsidies for fur processing will be much lower and fluctuating: in 2025 - 618 thousand and in 2026 - 642 thousand.

It is worth noting that a total of 15.7 trillion tenge (including refundable funds - 10.5 billion tenge) is planned for the implementation of the National Project in the period 2024-2028:

2024 - 1.9 trillion tenge
2025 - 3.6 trillion tenge
2026 - 3.7 trillion tenge
2027 - 3.9 trillion tenge
2028 - 2.5 trillion tenge.

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