09 BFC Kyrgyzstan Agriculture Finance Bulletin

11/2014

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9 K y r gy zsta n Agriculture Finance Bulletin Kyrgyzstan and Belarus Discuss Agricultural Trade Avenues Kyrgyzstan Announces EUR 16 Million Livestock Identification Tender Chinese Investors to Build $550 Million Fertilizer Plant Russia to Reintroduce Kyrgyz Meat Imports

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BFC. Agriculture Finance Bulletin.

Agriculture Finance Bulletin Edition #9, November 2014

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6)

Kyrgyzstan and Belarus Discuss Agricultural Trade Avenues .......................................................... 2 Talantbek Uzakbaev: Agricultural Export Promotion Requires Implementation of Customs Union Sanitary Norms ................................................................................................................................ 2 Kyrgyzstan to Export Several Bean Varieties to Turkey................................................................... 2 KGS 380 Million to Be Allocated to Irrigation System ..................................................................... 2 Food Security Outlook Good Says Minister of Agriculture .............................................................. 3 Kyrgyzstan Announces EUR 16 Million Livestock Identification Tender ......................................... 3

Foreign Aid ................................................................................................................. 3 7)

Ministry of Agriculture and IFAD Discuss Progress of "Livestock and Market Development 1" Program ........................................................................................................................................... 3 8) Delays in Construction of Meat Quarantine Center in Kyrgyzstan, says Saudi Ambassador .......... 4 9) Chinese Investors to Build $550 Million Fertilizer Plant .................................................................. 4 10) Tayirbek Sarpashev: China to Provide Assistance with Agriculture Projects .................................. 4 11) Iran to invest $100 Million in Kyrgyz Agriculture Projects .............................................................. 4 12) AFACI to Conduct Research on Kyrgyz Agriculture Sectors ............................................................. 5

Private Sector.............................................................................................................. 5 13) 14) 15) 16) 17) 18) 19) 20) 21) 22)

Meat and Milk Production Increases............................................................................................... 5 Russia to Reintroduce Kyrgyz Meat Imports ................................................................................... 5 In 2014, Farmers Were Issued Preferential Loans Worth KGS 5.1 Billion ....................................... 6 Fruit Exports Increase ...................................................................................................................... 6 KGS 10 Billion of Agricultural Products Exported to Date ............................................................... 6 Grain Harvest Falls by 388,400 Tons Year-on-Year ......................................................................... 7 Qatar to Import 200,000 tons of Kyrgyz Meat ................................................................................ 7 90% of Raw Cotton Crop Exported .................................................................................................. 7 Kyrgyz Eco-Friendly Agricultural Products Appealing to Consumers, says Agriculture Minister .... 7 Organic-Mineral Fertilizer Plant Produces First 100,000 Liters ....................................................... 8

BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Kyrgyzstan and Belarus Discuss Agricultural Trade Avenues

November 21st, 2014, http://kabar.kg/rus/economics/full/86549

During a CIS summit, Prime Minister of Kyrgyzstan Djoomart Otorbaev discussed trade opportunities with his Belarusian counterpart Mikhail Myasnikovich.

Citing a 28.1% reduction in trade turnover between 2012 and 2013, Otorbaev said there is a lack of economic cooperation between the parties - adding that trade turnover totalled USD 60.5 million from January to July 2014. Possible opportunities include developing imports of Belarusian tobacco, cotton and seed crops, and exporting Kyrgyz organic products, as well as cooperation in agricultural product processing, said Otorbaev.

The implementation of agreements regarding the accession of Kyrgyzstan to the Customs Union (CU) and the Common Economic Space (CES) were also discussed.

2)

Talantbek Uzakbaev: Agricultural Export Promotion Requires Implementation of Customs Union Sanitary Norms

November 20th, 2014, http://kabar.kg/eng/economics/full/11503

Deputy of Parliament Talantbek Uzakbaev said that, despite widespread interest in the country’s agricultural products, the government is not doing enough to promote exports.

Uzakbaev highlighted that the law on animal certification is yet to be implemented, adding that action must be taken to ensure that products adhere to the veterinary and phytosanitary regulations of the Customs Union before Kyrgyzstan’s accession.

3)

Kyrgyzstan to Export Several Bean Varieties to Turkey

November 18th, 2014, http://kabar.kg/eng/economics/full/11476

During a meeting with a Turkish delegation in Bishkek, the Kyrgyz Minister of Agriculture, Taalaibek Aidaraliev, proposed exporting beans to Turkey in exchange for agricultural equipment. Several bean varieties for which there is high demand in Turkey were chosen.

Aidaraliev was invited to Turkey for further trade negotiations.

4)

KGS 380 Million to Be Allocated to Irrigation System

November 17th, 2014, http://kyrtag.kg/news/detail.php?ID=319456&sphrase_id=21943

KGS 380 million are to be allocated to the expansion and maintenance of the irrigation network, said Finance Minister Olga Lavrov. Of the total, KGS 240 million will be used for the creation of new arable land, while the remaining KGS 140 million will be used for maintenance of the irrigation system, said the Minister.

BFC. Agriculture Finance Bulletin.

This year, about 700 hectares of land were rendered arable in Naryn and Talas, while a further 1600 ha will be introduced in the Burgondunsk massif in the Batken province in 2015, said Deputy Minister of Agriculture Janybek Kerimaliev.

The 2013-2017 National Development Strategy aims to introduce 50,000 ha of arable land in Kyrgyzstan.

5)

Food Security Outlook Good Says Minister of Agriculture

November 13th, 2014, http://kabar.kg/eng/economics/full/11429

The Minister of Agriculture and Land Reclamation, Taalaibek Aidaraliev, reported the food security outlook remains positive.

The State Material Reserves Foundation imported fertilizer in the spring, reducing its price to 5-7 KGS per kilo, while sugar and vegetable oil are currently being imported with aim of stabilizing prices, added the Minister.

6)

Kyrgyzstan Announces EUR 16 Million Livestock Identification Tender

November 13th, 2014, http://kyrtag.kg/news/detail.php?ID=318651&sphrase_id=21943

Kyrgyzstan has launched a tender for the identification and tracking of livestock, said Minister of Agriculture, Taalaibek Aidaraliev. Terms and conditions and technical parameters have been submitted to the relevant state agencies, said the Minister, adding that the tender will include the purchase of necessary equipment.

According to Aidaraliev, of the EUR 40 million loan obtained from Poland, EUR 16 million will be allocated to the tender.

Foreign Aid 7)

Ministry of Agriculture and IFAD Discuss Progress of "Livestock and Market Development 1" Program

November 21st, 2014, http://kabar.kg/society/full/86632

The Minister of Agriculture, Talaybek Aidaraliev discussed a progress report on the “Development of livestock and market 1” project produced by the International Fund for Agricultural Development’s (IFAD) supervisory mission. The project is funded by the organization.

The meeting was attended by Head of Mission Fritz Jepsen and ARIS Executive Director Kubanichbek Ismailov, amongst others.

IFAD’s supervisory mission is in Kyrgyzstan from the 5th to the 28th of November.

BFC. Agriculture Finance Bulletin.

8)

Delays in Construction of Meat Quarantine Center in Kyrgyzstan, says Saudi Ambassador

November 20th, 2014, http://kabar.kg/economics/full/86534

Saudi Arabia’s Ambassador to Kyrgyzstan, Abdurrahman bin Saeed Al-Juma, announced delays in the planned construction of a meat export center in Kyrgyzstan. Construction of the center, which includes quarantine, is part of a meat export deal reached between the countries.

A privately owned Saudi company is to build the center in Kyrgyzstan with funds from investors, while two hectares of land is to be allocated by the Kyrgyz Ministry of Agriculture. However, despite several meetings between company representatives and the Ministry, the land is yet to be allocated, said the Ambassador – adding that he hopes the issue is resolved during President Atambayev’s official visit to Saudi Arabia next month.

9)

Chinese Investors to Build $550 Million Fertilizer Plant

November 14th, 2014, http://kyrtag.kg/news/detail.php?ID=318916&sphrase_id=21943

A Chinese consortium has proposed to build a USD 550 million fertilizer plant in Tash-Kumyr, said Minister of Agriculture Taalaibek Aidaraliev. Initially, USD 600 million was to be invested, of which USD 500 million was to be allocated to construction and the remaining USD 100 million to installation.

However, after negotiations with the government, the Chinese party agreed to reduce the price to USD 550 million. The factory will produce 300,000 tons of fertilizer a year, eliminating Kyrgyzstan’s reliance on Russian and Uzbek imports, added the Minister.

Negotiations with an Iranian delegation regarding assistance with implementation of the proposed factory are underway, said Aidaraliev.

10) Tayirbek Sarpashev: China to Provide Assistance with Agriculture Projects November 13th, 2014, http://kabar.kg/rus/politics/full/86096

First Vice Prime Minister of Kyrgyzstan, Tayirbek Sarpashev, received a delegation of the Communist Party of the People's Republic of China (CPC) led by Vice-Minister of the International Department of the CPC. During the meeting, Sarpashev announced the joint implementation of major infrastructure and agriculture projects in Kyrgyzstan. As a result of the signing of a strategic partnership earlier in the year, China is a leading investor in Kyrgyzstan, said Sarpashev. Read More »

11) Iran to invest $100 Million in Kyrgyz Agriculture Projects November 12th, 2014, http://kabar.kg/eng/economics/full/11406

During a meeting with Kyrgyzstan’s Minister of Agriculture, Taalaibek Aidaraliev, the Governor of Mezandan province in Iran, Rabif Fallah Dzhellodar, said he was prepared to invest USD 100 million in up to 15 agricultural projects in the country. Areas of interest included hothouses, poultry farms, fisheries, fertilizer plants, and the construction of warehouses and cold stores. Governor Dzhellodar invited Minister Aidaraliev to Iran for further discussions on cooperation with his Iranian counterpart.

Minister Aidaraliev also stressed Kyrgyzstan’s readiness to export beans to Iran.

BFC. Agriculture Finance Bulletin.

12) AFACI to Conduct Research on Kyrgyz Agriculture Sectors November 10th, 2014, http://kabar.kg/eng/society/full/11378

Kyrgyzstan’s Minister of Agriculture Taalaibek Aidaraliev met with representatives of the Asian Food and Agriculture Initiative (AFACI).

The organization is to send a team of scientists to research 9 agriculture sectors in Kyrgyzstan, said Deputy Secretary General Lee Sang-Duk.

Private Sector 13) Meat and Milk Production Increases November 19th, 2014, http://kyrtag.kg/news/detail.php?ID=320245&sphrase_id=21943

In the first 10 months of 2014, meat and milk production has increased, reported Minister of Agriculture Taalaibek Aidaraliev.

300,700 tons of meat products were produced, an increase of 11,000 tons year-on-year, while all of Kyrgyzstan’s regions produced more meat, said the Minister. This is mainly due to the increase in livestock numbers as a result of the “Financing agriculture 2” project, said Aidaraliev. All regions produced more milk, to a total of 1.25 million tons – up 29,200 tons year-on-year, he added.

First Deputy Prime Minister, Tayirbek Sarpashev, said more must be done to implement existing agricultural investment projects and educate farmers during drought.

14) Russia to Reintroduce Kyrgyz Meat Imports November 17th, 2014, http://vesti.kg/index.php?option=com_k2&view=item&id=30990:v-rossiyu-otpravyatsya-7-tyis-tonnkyirgyizstanskoy-govyadinyi&Itemid=79

Kyrgyzstan is to begin a trial run of meat exports to Russia upon entry to the Customs Union on the 1st of January. The initial batch will total 7000 tons, announced the Ministry of Agriculture. A partial lifting of the ban of Kyrgyz meat imports was agreed in mid-October. Several countries had introduced restrictions on Kyrgyz meats imports due to concerns regarding Foot-and-Mouth Disease (FMD) in the country. Though fears have subsided, only Belarus and Kazakhstan have lifted restrictions.

While the test run will go ahead without a local meat certification laboratory, the Head of the Ministry’s Food Safety and Marketing Department, Jumabek Asylbekov, noted such a laboratory is a requirement of Kyrgyzstan’s accession to the Customs Union. Russia has agreed to build the lab and supply technicians, which are lacking in Kyrgyzstan. The laboratory will allow the resumption of meat exports, in turn combatting smuggling and high domestic prices, said Asylbekov - adding that Kyrgyzstan has about 5.5 million sheep and 2 million cattle, amounting to about 60% of the total during the Soviet era.

Laboratory construction costs were not disclosed.

BFC. Agriculture Finance Bulletin.

15) In 2014, Farmers Were Issued Preferential Loans Worth KGS 5.1 Billion November 14th, 2014, http://kyrtag.kg/news/detail.php?ID=318955&sphrase_id=21943

In 2014, KGS 5.18 billion were allocated to Kyrgyz farmers through the “Financing Agriculture 2” preferential agro lending program, announced the Ministry of Finance.

According to lender reports, since the project began, there have been 15,368 beneficiaries. Of the total, 1679 took loans worth KGS 403.3 million for crop production; 13,500 took loans worth KGS 4.75 billion for livestock; and 189 took loans worth KGS 697.6 million for seed, processing equipment, and breeding farm and cooperative development.

Under the terms of the preferential agro-lending program, interest rates for crop production and livestock are 10.34% over 2 years. The first 6.97% is due in 2014 and the remaining 3.37% in 2015.

Interest rates for seed, processing equipment, and breeding farm and cooperative development total 12.75% over 2 years. The first 8.2% is due in 2014, the remaining 4.55% in 2015.

From January until November this year, subsidies totalled KGS 336.7 million.

16) Fruit Exports Increase November 14th, 2014, http://kyrtag.kg/news/detail.php?ID=318882&sphrase_id=21943

The Ministry of Agriculture reported that fruit exports have increased - particularly of apples and apricots. In the last 9 months, apple exports to the Customs Union increased by 22%.

Kyrgyzstan exports up to 1500 tons of vegetables and melons every day, reported the Ministry, noting that this year’s yield of melons, vegetables and industrial crops is higher than in previous years.

As of September 9th, 1.2 million tons of fruit and vegetable were exported to Russia and Kazakhstan, said Minister of Agriculture Taalaibek Aidaraliev. In Russia, the produce is destined for the nearby regions of Omsk, Tomsk and Krasnoyarsk, he added.

17) KGS 10 Billion of Agricultural Products Exported to Date November 13th, 2014, http://kyrtag.kg/news/detail.php?ID=318591&sphrase_id=21943

Agricultural exports totalled roughly KGS 10 billion in the first 9 months of 2014, said Minister of Agriculture Taalaibek Aidaraliev.

According to the minister, the total included KGS 4.88 billion of processed products; including KGS 1.35 billion of dairy products; KGS 27 million of cooked and canned vegetables; KGS 46 million of pastas and similar products; KGS 116.2 million of alcohol and other beverages; KGS 1.31 billion of tobacco and tobacco products; and KGS 179 million of meat and meat products.

Other animal product exports totalled KGS 652.5 million, while crop exports totalled KGS 4.4 billion and fruit and vegetable exports totalled KGS 3.72 billion.

Raw cotton exports increased by 46.1%, totalling KGS 631.1 million. Oilseed exports declined from KGS 26.3 million to KGS 11.8 million year-on-year.

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18) Grain Harvest Falls by 388,400 Tons Year-on-Year November 13th, 2014, http://kyrtag.kg/news/detail.php?ID=318572&sphrase_id=21943

Minister of Agriculture Taalaibek Aidaraliev reported this year’s grain harvest totalled 838,200 tons, falling by 388,400 tons year-on-year. The grain was harvested from an area totalling 495,600 hectares and producing a yield of 1.69 tons per hectare or 0.79 t/ha less than in 2013.

The reduction in yield is the result of water shortages including drought and lack of irrigation resources, said the Minister. The Chui region was severely affected, with average yields of 1.53 t/ha, a drop of 1.25 t/ha year-on-year.

The wheat harvest totalled 622,000 tons from an area of 339,100 ha – a decrease of 265,000 tons yearon-year. The barley harvest decreased by 121,000 tons, to a total of 214,500 tons.

19) Qatar to Import 200,000 tons of Kyrgyz Meat November 12th, 2014, http://kabar.kg/eng/economics/full/11397

Qatar wants to import a minimum of 200,000 tons of meat from Kyrgyzstan, said its Ambassador Mohammed bin Arar al-Naimi; adding that a search for Kyrgyz companies with experience exporting to the Gulf has already begun. Kyrgyzstan’s Minister of Agriculture Taalaibek Aidaraliev said he would help with the search.

Qatar’s Ambassador also held meetings with representatives of agricultural associations and enterprises.

20) 90% of Raw Cotton Crop Exported November 10th, 2014, http://kyrtag.kg/news/detail.php?ID=317317&sphrase_id=21943

In the Soviet era, 210,000 tons of raw cotton was produced in Kyrgyzstan each year, of which 40% was processed domestically, reported Deputy Minister of Agriculture and Land Reclamation Erkinbek Chodueva. Today, an average of 80,000 tons of cotton is produced, of which 90% is exported. Though, this year, the harvest is expected to attain only 64,000 tons.

According to Deputy Minister of Energy and Industry Suyunbay Aitkulov, domestic processing capability is needed, as accession to the Customs Union provides enormous opportunity for the declining Kyrgyz textile industry.

21) Kyrgyz Eco-Friendly Agricultural Products Appealing to Consumers, says Agriculture Minister November 5th, 2014, http://kyrtag.kg/news/detail.php?ID=316262&sphrase_id=21943

The Minister of Agriculture and Land Reclamation, Taalaibek Aidaraliev, claimed the environmentally friendly nature of Kyrgyz agricultural products has led to an increase in actual and potential consumers, citing South Korea, China, Kazakhstan, UAE and Kazakhstan as current customers.

The Minister noted that Kyrgyzstan is a comparatively mountainous country with few polluting factories, with the exception of the thermoelectric plant and the cement factory. Traditional Kyrgyz methods of cultivation are environmentally friendly, said Aidaraliev, adding that, 10-15 years ago, most agricultural

BFC. Agriculture Finance Bulletin.

products were 100% organic – although in the last 5 years, the use of fertilizers and, in particular, nitrate has increased. The Minister sees great potential in the cultivation of organic produce in Kyrgyzstan.

22) Organic-Mineral Fertilizer Plant Produces First 100,000 Liters November 4th, 2014, http://kyrtag.kg/news/detail.php?ID=315997&sphrase_id=21943

The organic-mineral fertilizer plant built with the help of a South Korean company will produce its first 100,000 liters of fertilizer by the end of the year, said Minister of Agriculture Taalaibek Aidaraliev.

Production of the environmentally friendly fertilizer will increase tenfold to 1 million liters in 2015, he added.

Aidaraliev noted that the cost of the fertilizer would amount to 600 KGS per liter, compared to roughly 1500 KGS per liter for the imported bio-organic nano-fertilizer NAGRO currently in use.

Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com In this bulletin, BFC provides extracts from articles that have been published by others and as a result cannot be held responsible for such content.

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