This is a best prospect industry sector for this country. Includes a market overview and trade data.

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Overview
Agriculture plays an essential role in Kazakhstan’s economic, social and environmental development.  Once considered the breadbasket of the Soviet Union, Kazakhstan still suffers from the effects of agricultural and environmental mismanagement during the Soviet era.  Over a third of Kazakhstanis' livelihoods depend directly or indirectly on the country's extensive rangelands for food, fodder, fuel and medicinal plants. Widespread stockbreeding reflects the country's nomadic tradition, with around 75 percent of all agricultural land used for grazing.  While sheep breeding dominates the sector, cattle, pig, horse and camel rearing are important sources of food and income.
According to the OECD, in 2019 the agricultural sector accounted for approximately 4.5% of Kazakhstan’s economic production.  Kazakhstan is a major producer and exporter of grain. However, growing demand for imported food products has led Kazakhstan to become a net importer of agricultural products since 2004. 
Approximately 45% of the country's population lives in rural areas, and incomes of almost 30% of the economically active population are generated by employment in the agricultural sector. According to the Statistics Committee of the Ministry of National Economy of the Republic of Kazakhstan, out of the total number of 8.5 million employed, 2 million people work in the agricultural sector.
The total value of Kazakhstan’s agricultural output was approximately USD 12.7 billion in 2019.  This was an increase of 1 percent over 2018, due to a 4 percent increase in cattle production and a 1.7 percent decrease in the grain crop affected with drought in 2019.  Approximately 75% of the country’s territory is suitable for agricultural production, but  only about 30% of the land is currently under agricultural production.  Farmers raise sheep and cattle, and livestock products include dairy goods, leather, meat and wool.  The country’s major crops are wheat, barley, cotton and rice, with wheat exports a major source of foreign currency.  Kazakhstan is one of the top 10 grain exporters in the world, exporting to over 70 countries.  The International Grains Council forecasts wheat and barley productions in Kazakhstan for 2020-2021 at 12.9 and 4 million tons respectively.
According to the Ministry of Agriculture, as of September 2019, the total area under crops totaled 22.2 million hectares including 15.4 million hectares of grain crops, 2.9 million hectares of oilseeds, 3.3 million hectares of forage crops, 452,400 hectares of vegetables, melons and potatoes and 157,700 hectares of industrial crops (sugar beet, cotton, tobacco).
Nearly 90% of machinery currently in use in Kazakhstan is at the end of its lifecycle and needs to be replaced.  Tractors in use for more than 10 years account for 94% of the entire fleet, while harvesting combines in similar condition make up 77%.  Agricultural equipment imports are subsidized in Kazakhstan at 25% of the cost, at the same time financial leasing is provided at a 10 percent interest rate.  The rate of machinery renewal over the past 5 years ranged from 3–4.9%, but this rate should reach 6–8% annually.
In 2019, the Kazakhstani agricultural machinery and equipment sector was roughly estimated at approximately USD 500 million, of which USD 300 million was imported.  Russia is a market leader for agricultural machinery and equipment with a 40% market share.  Germany, Canada, the Netherlands, Belarus, Turkey and China are other large suppliers. 
Local production of agricultural machinery and equipment is small but growing, owing much to Kazakhstan’s entry into the Eurasian Economic Union.  In recent years, Kazakhstan launched several assembly projects with firms from Russia, Ukraine and Belarus, which are now producing equipment for the market.  Tractors and combines manufactured in Russia and Belarus are transported by train to Kazakhstan where tires and wheels are installed and a “Made in Kazakhstan” label applied.   This “Made in Kazakhstan” distinction allows local producers to avoid customs and duties and enables local producers to receive special subsidies.  Imported agricultural equipment face taxes and duties approaching 40%, making it difficult for western firms to compete with locally assembled equipment.  
A new recycling tax on imported heavy agricultural equipment imposed by the government of Kazakhstan in 2020 will increase the costs to farmers interested in purchasing western made equipment.  Designed to increase local production of agricultural equipment, this tax will have a negative impact on the development of Kazakhstan’s agriculture market in the long-run and may impede investment in emerging sectors such as livestock production and meat processing.
Livestock Industry
To increase livestock efficiency and strengthen the country’s export potential, in 2018 Kazakhstan adopted new programs for beef and dairy cattle industries development.  The program is designed to double lamb and beef production within ten years, with the aim of exporting to China, Iran, Saudi Arabia and Vietnam.  In 2017 the Union of Poultry Farmers jointly with the Ministry of Agriculture of Kazakhstan, developed the Sectoral Program for the Development of Poultry Farming in Kazakhstan for 2018-2027.
In view of the economic decline brought on by the COVID-19 pandemic, additional measures will be taken in Kazakhstan in the short term to create conditions for the development of animal husbandry.   Three modern meat processing plants and eight large poultry factories will be put into operation.  There are also plans to build 25 industrial and 30 family dairy farms.  In the meat processing sector, production facilities with a total capacity of 45 thousand tons will be commissioned.
Fish farming is also developing dynamically in Kazakhstan. Over the past 7 years, the volume of fish raised has increased 9 times, from 800 tons to more than 7 thousand tons.  There are about 180 fish farms in the country.
Agricultural Sector Financing 
Kazakhstan has substantial untapped agricultural potential, yet its agricultural sector is underdeveloped and under-financed.  Despite serving as the country's major employer, the agriculture sector in Kazakhstan comes in a distant second to the industrial sector in attracting government attention for investment and support.
State owned company KazAgroFinance JSC is a leading organization in the market, providing leasing and financing services to the agriculture sector.  More than half of all agricultural machinery imported into Kazakhstan has been financially supported by KazAgroFinance.  To increase cooperation and provide easy access to information on local and foreign producers of agricultural equipment, KazAgroFinance created the Electronic Supplier Base that serves as a bridge between local agricultural sector and international equipment suppliers.  The database includes more than 350 suppliers and more than 10,000 projects supported.
Two additional state-owned financial organizations in the agriculture sector are the Fund for Financial Support of Agriculture JSC that provides micro crediting for agriculture SMEs and rural populations, and the Kazakh Agrarian Credit Corporation, a financial institution providing loans and financial support to agricultural producers.    
In June 2020, the World Bank (WB) approved a USD 500 million loan to Kazakhstan for a Sustainable Livestock Development Program which will be managed by the Ministry of Agriculture.  The Program proposes to provide credit to 20 thousand farmers and to train 100 thousand farmers in sustainable livestock production. The project will provide farmers with financial support to develop infrastructure for free range animal husbandry and will create a traceable beef production system to produced beef in accordance with the requirements of countries importing Kazakhstani beef.
Leading Sub-Sectors
  • Agricultural chemical products and fertilizer applicators
  • Grain farm machinery, grain storage and processing equipment, yield enhancement technologies
  • Seeds and livestock genetics
  • Innovative technologies in livestock and poultry industries, and veterinary products and services
  • Food processing equipment
  • Innovative water saving technologies in irrigation
  • Precise agriculture equipment and technologies
  • Technologies for weather monitoring and forecasting in agriculture
  • Technologies for intensive aquaculture fish farming
Opportunities
American products enjoy an excellent reputation in Kazakhstan.  U.S. equipment exports to Kazakhstan consist mostly of grain harvesting combines, reapers, sprayers, tractors, seeders, cultivators and grain drying and cleaning equipment.  Best prospects include: 100-150 horse power (hp) tractors and combines for the southern regions, tractors of greater than 250 hp and combines for the northern regions, pneumatic seeders, reapers, sprayers, grain drying and cleaning technologies, grain storage equipment and storage quality control systems, water-saving and irrigation technologies, engineering, design and veterinary services for cattle feed complexes and on-farm processing facilities.
There are also growing markets for U.S. food related imports, including beef, poultry, almonds, beverages (particularly beer, wine, and spirits), livestock genetics and planting seeds.  Kazakhstan imports in this category consist mostly of cane sugar, black tea and poultry meat; however, if grouped together fresh fruits and vegetables, top all other agricultural imports at over 500 thousand tons, and most of those come from Uzbekistan or China.  
Resources
  • Trade Show: KazAgro/KazFarm 2020, Kazakhstan International Agricultural Industry Exhibitions, October 21-23, 2020, Nur-Sultan, Kazakhstan
  • Trade Show: AGROWORLD QAZAQSTAN 2020,15th Central Asian International Agriculture Exhibition, November 4-6, 2020, Almaty, Kazakhstan
  • Trade Show: AgriTek 202116th International Exhibition for Agriculture, Horticulture, Animal Husbandry and Stock Breeding, March 10-12, 2021, Nur-Sultan, Kazakhstan

For more information on agriculture equipment and services, contact Commercial Specialist Nurlan Zhangarin.
For agricultural commodities, contact Foreign Agriculture Service (FAS) Specialist Zhamal Zharmagambetova.

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Kazakhstan Agribusiness Trade Development and Promotion