In his speech at the concluding meeting of the State Commission on the State of Emergency, the President of the Republic of Kazakhstan Kassym-Jomart Tokayev noted that the current situation clearly confirmed the well-known truth: food security is a key element of the security of the state as a whole. Today, the country's farmers are receiving maximum support. During the state of emergency, the necessary list of socially significant goods was approved, according to which state price regulation is carried out. It is necessary to ensure the availability of sufficient reserves, to work out mechanisms for bringing them to the shelves, to strictly control prices and to exclude speculation.
During the state of emergency, the country's enterprises worked stably, and the manufactured products were freely delivered to retail outlets, as evidenced by store shelves where products are available in sufficient quantity and assortment.
The outbreak of the crisis associated with the coronavirus pandemic, the introduction of emergency and quarantine in many countries led to the closure of borders and the disruption of established trade relations, which negatively affects the economy of almost all countries. This situation is especially negatively reflected in countries dependent on imports of basic food products.
According to the Ministry of Agriculture, Kazakhstan almost completely provides itself with basic foodstuffs from its own production. So, the department keeps records of production, import, export and consumption of 29 items of food products that are consumed in everyday life (based on statistics from the Committee of Statistics of the Ministry of National Economy and the Committee of State Revenues of the Ministry of Finance).
According to these data, in 2019 for 23 of the 29 types of foodstuffs, the security due to domestic production is 80 percent or more, and for some more than 100%.
The exception is 6 products: apples (62.9%), fish (60.8%), sausages (62.0%), cheeses and cottage cheese (57.0%), sugar (46.6%) and poultry (58.3%), for which there is still import dependence.
In particular, import substitution will be carried out on poultry, cheeses and cottage cheese, sugar, apples and sausages. Long-term industry programs have been developed.
In addition, the Roadmap for the Development of the Food and Processing Industry for 2019-2021 is being implemented, which is aimed at developing raw material base, including the processing of milk, meat, sugar beets, fruits and vegetables, and poultry farming.
The Roadmap for the development of apple production is also being implemented on the example of Amal Bio and Dala Fruit.
As part of import substitution measures, in 2020 25 dairy farms with a capacity of 105 thousand tons, 3 meat processing plants, 8 poultry farms with a capacity of 73 thousand tons will be built, gardens are planned to be planted on 2,000 hectares, construction of 2 sugar factories has begun with a total production capacity of 200 thousand tons of sugar per year in the Zhambyl and Pavlodar regions, it is planned to modernize three existing sugar factories.
At the same time, irrigated lands will be expanded, including: for fodder land for 45 thousand ha, for vegetables for 15 thousand ha, and also for diversification, sown areas for highly profitable crops such as oilseeds, legumes, industrial crops will be increased. This will allow by 2024 to ensure the saturation of the domestic market with these foodstuffs in full, for sugar – by 40%.
Kazakhstan maintains quite confident growth in the development of livestock
Much attention is now being paid not only to increasing the volume of production, but also to increasing the level of efficiency and profitability of animal husbandry.
Meat production increased by 3.7% and amounted to 149.4 thousand tons (of which beef – 62.2 thousand tons, mutton – 15.5 thousand tons, pork – 15.1 thousand tons, horse meat – 15.9 thousand tons, meat poultry – 38.2 thousand tons), cow's milk – by 4% to 334.9 thousand tons.
According to the Committee on Statistics of the Ministry of National Economy of the Republic of Kazakhstan, for the period January-March 2020, compared with the same period in 2019, the production of sausages increased by 21.1%, canned meat and meat and vegetable products – by 1.7%, processed fish 2 times, canned fish – by 62.1%, processed milk – by 3.7%, butter – by 14.5%, dairy products – by 6.4%, hard cheese – by 9.9%, and milk powder – by 30.7%.
Availability of stocks of finished products ranges from a week to several months
According to the operational data of the regions, as of May 4, 2020, the republic has reserves in the total volume of 857 thousand tons of various food products, including 47.1 thousand tons in stabilization funds, 284.1 thousand tons in manufacturing enterprises, in warehouses – 172.8 thousand tons, in retail chains – 351.1 thousand tons.
In addition, there are 351 million eggs and 3.8 million tons of food wheat. Reserves of socially significant food products in the republic are available in a total volume of 719.4 thousand tons, including flour – 147.7 thousand tons, potatoes – 121.5 thousand tons, rice – 98.7 thousand tons, pasta – 17.6 thousand tons and others.
Provision with available stocks of finished products for actual consumption for different types of products from a week to several months. At the same time, there are enough raw materials and materials for food production, as well as the capacities of manufacturing enterprises, all enterprises are working and producing. Also, part of the products is delivered from abroad, however, this is an insignificant part, which does not play a decisive role for the provision of the population with foodstuffs. Thus, the stocks of foodstuffs are constantly replenished and a shortage of products is not expected.
With regard to prices, in times of crisis and hype there is always a tendency to increase prices for food products. Moreover, if this growth is partially caused by objective factors, then for the most part growth occurs for unjustified reasons. In this regard, in order to prevent unjustified price increases during the state of emergency, the joint orders of the Ministry of Trade and Integration, the Ministry of Agriculture and the Ministry of National Economy approved maximum prices for 9 types of basic foodstuffs.
Ban on export and high demand for consumption
According to statistics of the Republic of Kazakhstan, in January 2020, agricultural exports amounted to $219.1 million, which is 66.2% less compared to the same period in 2019 ($330.9 million). However, the export of processed agricultural products in January 2020 increased by 7.6% and amounted to $94.6 million (in January 2019 – $87.9 million).
The top group of agricultural products exported in January 2020 includes: wheat and meslin – 17.9% of the total exports of agricultural products, barley – 12.5%, flour – 11.9%, cotton fiber – 9.2%, flax seeds – 8.5%, vegetable oils – 7.6%, sunflower seeds – 3.6%, lentils – 1.8%, fish fillet (ice cream) – 1.6%.
A ban was also introduced on certain types of food products of high social significance for the republic. To be included in the list, the following criteria were taken into account: high demand in the domestic and foreign markets (flour, wheat, sunflower oil), a high share of imports in the domestic market (sugar), insufficient availability in the domestic market due to seasonality of production (buckwheat, potatoes).
The list of goods whose export from the territory of the Republic of Kazakhstan is prohibited:
- Sugar – insufficient volumes of domestic production, a high share of sugar imports in the domestic market.
- Buckwheat, potatoes and onions – high demand in the domestic and foreign markets, a high share of exports of buckwheat and raw materials, insufficient volumes during the off-season.
- Sunflower seeds and refined sunflower oil are the risk of a decrease in security due to the high demand in the domestic and foreign markets for raw materials and oilseeds.
The list of goods with respect to the export of which from the territory of the Republic of Kazakhstan quantitative restrictions (quotas) are introduced:
Flour and wheat are high demand in the domestic and foreign markets. Unrefined sunflower oil and seed potatoes previously prohibited from export from Kazakhstan are included in the list of goods with respect to which quantitative restrictions are established (export quotas).
As of May 6, 2011, in 13 regions of the republic (Akmola, Aktobe, Almaty, Atyrau, East Kazakhstan, Zhambyl, West Kazakhstan, Karaganda, Kostanay, Kyzylorda, Pavlodar, North Kazakhstan and Turkistan regions) pre-sowing work is carried out.
To date, moisture closure has been carried out on 16.3 million hectares, or 108% of the target (planned 15 million hectares), pre-sowing tillage – on 2.9 million hectares, or 41% (7 million hectares planned).
Crops are sown in 12 regions (Aktobe, Almaty, Atyrau, East Kazakhstan, Zhambyl, West Kazakhstan, Karaganda, Kyzylorda, Mangistau, Kostanay, Pavlodar, Turkistan).
In particular, 907 thousand hectares, or 6.2% of the target, were sown with grain and leguminous crops, 382 thousand hectares (12.6%) with oilseeds, 199 thousand hectares of vegetable and melon crops and potatoes (44.5%) , sugar beets – 17.4 thousand ha (83.3%), cotton – 54 thousand ha (45.2%), perennial grasses – 170 thousand ha (54.7%).
Spring field work is carried out as usual, while the sowing rate of 2020 is higher than that of the previous year for a similar date.
Supporting farmers, tax exemption
Government decrees provide for the following support measures:
- until Dec. 31, 2020, agricultural producers were exempted from the land tax on agricultural land;
- for all taxes, the interest on unfulfilled tax liabilities was suspended until Aug. 15, 2020, and the deadline for submitting tax reports was postponed to the 3rd quarter of 2020;
- the list of imported goods for which VAT is paid by the offset method includes cattle and pedigree chickens;
- until Oct. 1, 2020, the VAT rate on socially significant food products is set at 8%.
In addition, all subjects of small, medium, micro-business are provided:
- deferral of tax and social payments until June 1, 2020;
- all measures for the enforcement of tax and customs debt are suspended until June 1, 2020.
In addition, small and micro businesses are exempted from income taxes for three years.
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