15 BFC Kyrgyzstan Agriculture Finance Bulletin

05/2015

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15 K y r gy z s ta n Agriculture Finance Bulletin Farmers Receive Preferential Loans of KGS 2.5 Billion State-of-the-art Breeding Station to be Built with German Assistance 5 Veterinary and Phytosanitary Labs Worth USD 100 Million to be Built Bishkek to host the 3rd International Agricultural Exhibition “Aiyl-Agro”

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Agriculture Finance Bulletin Edition #15, May 2015

Contents State Initiatives ........................................................................................................... 2 1) 2) 3) 4) 5) 6) 7) 8) 9)

Farmers Receive Preferential Loans of KGS 2.5 Billion .................................................................... 2 4,000 Hectares to be Drip Irrigated ................................................................................................. 2 Domestic Drip Irrigation Production and Well Rehabilitation Required ......................................... 2 Draft Law on Pasture Management and Animal Husbandry to be Ratified .................................... 2 Minister of Agriculture Reports on Irrigation System, and Certification Laboratory Development 3 State-of-the-art Breeding Station to be Built with German Assistance .......................................... 3 Agriculture Should be Industrialized ............................................................................................... 3 Kyrgyzstan Suffers Fertilizer Shortage ............................................................................................. 3 104 Units of Agricultural Machinery Leased in 2015 ...................................................................... 3

Foreign Aid ................................................................................................................. 4 10) 11) 12) 13) 14)

5 Veterinary and Phytosanitary Labs Worth USD 100 Million to be Built ....................................... 4 “National Field Day” Agro Exhibition Held in Aravan Rayon ........................................................... 4 IDB to Fund USD 15 million Irrigation Canal in Talas ....................................................................... 4 Kyrgyz-Russian Development Fund Totals USD 500 million ............................................................ 4 5,000 Currant Cultivar Seedlings Tested in Issyk-Kul....................................................................... 5

Private Sector.............................................................................................................. 5 15) 16) 17) 18) 19) 20)

Aretsian LLC 8th Dairy Company to Export to the Customs Union ................................................. 5 Mudflow and Flood Defenses Cover 37% of Farmland ................................................................... 5 Batken to Export Apricots to South Korea....................................................................................... 5 Bishkek to host the 3rd International Agricultural Exhibition “Aiyl-Agro” ...................................... 6 EEU Standard Veterinary and Phystosanitary Laboratories to be Built .......................................... 6 Kyrgyzstan to Begin Bean Exports to Russia .................................................................................... 6

Note: The Agriculture Finance Bulletin presents a monthly roundup of headlines and news stories related to investments and financing flows to Kyrgyzstan’s agricultural sector.

This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Kyrgyzstan. Currently, BFC is implementing the Agricultural Lending Programme for KfW. Read more »

BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland

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BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Farmers Receive Preferential Loans of KGS 2.5 Billion

May 29th, 2015, http://www.gov.kg/?p=56273

Through the Financing Agriculture-3 project, to date, 5,725 loans worth KGS 2.47 billion were issued to farmers and processers of agricultural products, according to the Government Press Office.

2)

4,000 Hectares to be Drip Irrigated

May 22nd, 2015, http://novosti.kg/2015/05/v-minselhoze-namereny-zanyatsya-vnedreniem-kapelnogo-orosheniya/

An extensive drip irrigation program has been developed, beginning with the implementation of drip irrigation systems over 4,000 hectares, announced the Ministry of Agriculture.

The Ministry warned that water supply must be increased across the country before drip irrigation systems can deployed nationwide, adding that funding issues must also be resolved. Some of the upgrades will be financed through the Kyrgyz-Russian Fund, said the Ministry.

3)

Domestic Drip Irrigation Production and Well Rehabilitation Required

May 22nd, 2015, http://www.vb.kg/doc/313881_investorov_v_selskoe_hoziaystvo_predlojili_privlekat_novymi_tehnologiiami.html

The implementation of modern agriculture technology must be accelerated, according to Social Democrat MP Abdymanapov Kutushev.

While the financing of drip irrigation systems through the Kyrgyz-Russian Fund is beginning investigated, it is important to create the appropriate conditions for private investment, said the MP. Kyrgyzstan should have a domestic drip irrigation equipment production capacity, with recent accession to the Customs Union potentially leading to an increase in import duties on Turkish and Chinese equipment, added Kutushev.

In addition, large scale deployment requires an increase in arable land. Such increases need to be supported by legislation providing for the easy reclassification of land, added Kutushev. These systems require substantial water resources; with only 196 of the current 609 wells being functional, rehabilitation of the incapacitated wells would increase irrigated land by 17,800 hectares, according to Kutushev.

4)

Draft Law on Pasture Management and Animal Husbandry to be Ratified

May 21st, 2015, http://www.agro.kg/ru/news/6871/

President Almazbek Atambayev has approved ratification of the law “Improving pasture management and animal husbandry� drafted with the cooperation of the International Development Association (IDA).

As stipulated in the draft, the Ministry of Finance must inform the IDA on measures undertaken to effect the law.

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BFC. Agriculture Finance Bulletin.

5)

Minister of Agriculture Reports on Irrigation System, and Certification Laboratory Development

May 18th, 2015, http://kabar.kg/eng/society/full/13007

President Almazbek Atambayev and Minister of Agriculture Taalaibek Aidaraliev met to discuss springtime farming activities and progress on the implementation of irrigation systems spelt out in the National Sustainable Development Strategy of the Kyrgyz Republic for 2013-2017.

Minister Aidaraliev also reported on the development of agricultural product certification laboratories to Eurasian Economic Union (EEU) standards.

6)

State-of-the-art Breeding Station to be Built with German Assistance

May 15th, 2015, http://www.agro.kg/ru/news/6797/

Deputy Prime Minister Valeri Dil visited breeding stations and the Institute of Livestock and Pastures, where he met with academics and industry professionals to discuss livestock breeding solutions.

The visits are part of a German-Kyrgyz livestock development program, which envisages the creation of a state-of-the-art breeding station in Kyrgyzstan, said Dil. The Deputy Prime Minister also outlined a development plan for the breeding sector as a whole.

7)

Agriculture Should be Industrialized

May 13th, 2015, http://www.vb.kg/doc/312884_kyrgyzstany_rekomendovali_indystrializovat_selskoe_hoziaystvo.html

Kyrgyzstan’s agriculture sector has been neglected and needs to be industrialized, according to the Director of the Investment Round Table Association, Rafkat Hasanov.

Specialization is needed, so more support to be focused on the “One Village – One Product” program of the Japan International Cooperation Agency (JICA), said Hasanov, adding that the Ministry of Agriculture should strengthen cooperatives and increase export opportunities.

8)

Kyrgyzstan Suffers Fertilizer Shortage

May 8th, 2015, http://novosti.kg/2015/05/v-kyrgyzstane-malo-mineralnyh-udobrenij/

Kyrgyzstan needs to triple fertilizer stocks to meet demand, said Minister of Agriculture Taalaibek Aidaraliev. The price of fertilizer, mostly imported from Uzbekistan, has increased to KGS 25 per kilogram. While negotiations are underway to reduce prices, 78 tons of fertilizer are being distributed nationwide.

9)

104 Units of Agricultural Machinery Leased in 2015

May 7th, 2015, http://www.agro.kg/ru/news/6736/

Only 104 units of agricultural machinery were leased to farmers in 2015. To date, the figure should stand at 860, according to Prime Minister Temir Sariev. Those with objections to lease terms should present them to the government so they can be addressed, he added.

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BFC. Agriculture Finance Bulletin.

Foreign Aid 10) 5 Veterinary and Phytosanitary Labs Worth USD 100 Million to be Built May 26th, 2015, http://novosti.kg/2015/05/v-kyrgyzstane-dopolnitelno-otkroyut-pyat-veterinarnyh-laboratorij/

Deputy Minister of Agriculture Erkinbek Chuduev announced about the construction of 5 new veterinary and phytosanitary laboratories. Kazakhstan allocates a grant of USD 100 million for these purposes.

It is estimated the laboratories will increase the domestic supply of agricultural products by 50%, according to the Minister.

11) “National Field Day” Agro Exhibition Held in Aravan Rayon May 22nd, 2015, http://kabar.kg/eng/society/full/13069

National Field Day, a fruit and vegetable cultivation technology exhibition hosted by the Ministry of Agriculture and sponsored by USAID’s Agro Horizon Project, will be held in Aravan Rayon in Osh. The event will be attended by farmers, cooperatives, agricultural service providers as well as local and national government officials, including First Deputy Prime Minister Taiyrbek Sarpashev, Minister of Agriculture Taalaibek Aidaraliev, and Deputy Governor of Osh Oblast Ahmadjan Mahammadov.

Climate conditions in southern Kyrgyzstan are ideal for cultivation of organic and sustainable products suited for export. National Filed Day will help disseminate production and marketing methods, including arid climate, greenhouse and drip irrigation cultivation techniques.

The Agro Horizon Project - implemented by ACDI/VOCA - aims to improve productivity, competitiveness, and the business and policy environment in Osh, Jalalabad, Batken and Naryn.

12) IDB to Fund USD 15 million Irrigation Canal in Talas May 20th, 2015, http://kabar.kg/eng/society/full/13031

The Islamic Development Bank (IDB) will allocate USD 15 million for construction of the Sarymsak irrigation canal in Kara-Bura region of Talas oblast.

Once completed, an additional 2,000 hectares of land will be irrigated, while water supplies will increase for a further 1,600 ha, said Minister of Agriculture Taalaibek Aidaraliev.

A further 26 irrigation projects are included in the National Development Strategy for 2013-2107, said the Minister.

13) Kyrgyz-Russian Development Fund Totals USD 500 million May 19th, 2015, http://novosti.kg/2015/05/500-millionov-dollarov-sostavlyaet-ustavnyj-kapital-rossijsko-kyrgyzskogo-fondarazvitiya/

The Kyrgyz-Russian Development Fund will total USD 500 million, to be used for the issuing of preferential loans. Priority will be given to agriculture, textile and transport projects, as well as the creation of a logistics center.

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BFC. Agriculture Finance Bulletin.

14) 5,000 Currant Cultivar Seedlings Tested in Issyk-Kul May 4th, 2015, http://kabar.kg/eng/society/full/12894

5,000 currant cultivar seedlings provided by the M.A. Lisavenko Horticulture Research Institute of the Russian Academy of Agricultural Sciences were brought for testing to Toru-Aigyr in Issyk-Kul. The highyield cultivars can withstand freezing temperatures. If proven successful, they will be distributed across the region.

The seedlings were distributed through the KARAGAT+ program, a 3 year joint project of Kumtor Company and the AVEP Public Fund – an NGO focusing on innovation and sustainable development in rural Kyrgyzstan. The project aims to develop fruit and berry production.

AVEP experts will train farmers in modern currant growing and irrigation methods, and assist with the development of a network of nursery gardens, greenhouses and store houses.

Private Sector 15) Aretsian LLC 8th Dairy Company to Export to the Customs Union May 22th, 2015, http://www.vb.kg/doc/313898_eshe_odno_kyrgyzskoe_predpriiatie_nachnet_eksportirovat_moloko_v_kazahstan.html

Artesian LLC will become the 8th dairy product producer to export goods to Customs Union memberstates, reported the State Inspectorate for Veterinary and Phytosanitary Security.

The company will export its products to Kazakhstan.

16) Mudflow and Flood Defenses Cover 37% of Farmland May 22nd, 2015, http://www.agro.kg/ru/news/6898/

Only 37% of arable land is protected from mudflow and flooding, said the Minister of Emergency Situations Kubatbek Boron.

There are 2,067 dams and other flood and mudflow prevention mechanisms in Kyrgyzstan – these were built in the 1970s and are in need of repair, said the Minister. Flood and mudflow risks rises mainly from heavy rainfall and snowmelt.

17) Batken to Export Apricots to South Korea May 22nd, 2015, http://www.agro.kg/ru/news/6880/

Batken is to begin exporting apricots. An agreement was reached between South Korean representative Lim Hyun Kwang, Batken Plenipotentiary Zhenish Ra'zac and Deputy of Jogorku Kenesh Alisher Abdrakhmanov.

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BFC. Agriculture Finance Bulletin.

18) Bishkek to host the 3rd International Agricultural Exhibition “Aiyl-Agro” May 19th, 2015, http://kabar.kg/eng/society/full/13019

The 3rd International Agricultural Exhibition “Aiyl-Agro” takes place in Bishkek from 20-22 May. According to the Government Press Office, during the past two years, the exhibition has become the leading showcase of Kyrgyzstan’s agricultural technology.

The event was set up by the Kyrgyz government and is sponsored by Aiyl Bank and Rosgromash – the Russian Association of Manufacturers of Agricultural Machinery.

More than 50 companies from 16 countries will display roughly 100 units of the latest agricultural machinery and equipment.

19) EEU Standard Veterinary and Phystosanitary Laboratories to be Built May 19th, 2015, http://www.vb.kg/doc/313556_pankratov:_sityaciia_po_miasy_skladyvaetsia_ne_tak_horosho_kak_hotelos_by.html

Kyrgyz meat products can only be exported to the Eurasian Economic Union (EEU) once domestic veterinary and phystosanitary laboratories are brought to EEU standards, said Minister of Economy Oleg Pankratov.

With the support of Russia and Kazakhstan, laboratories will be standardized and border checkpoints modernized and refurbished, said Pankratov, after which the Kyrgyz veterinary and phytosanitary network will be recognized by the EEU.

20) Kyrgyzstan to Begin Bean Exports to Russia May 18th, 2015, http://www.vb.kg/doc/313410_v_rossiu_naladiat_eksport_fasoli_iz_kyrgyzstana.html

Kyrgyzstan will export beans to Russia once it accedes to the Customs Union. According to Abbas Biysakov, Director of Kyrgyz Biyin LLC – a bean producer – negotiations are being held with potential Russian partners in anticipation of the accession. While, in recent years, exports have been focused on Turkey, the latter’s recent position has forced Kyrgyz producers to search for alternative markets, added Biysakov. The company recently signed a contract with a Russia partner and will send a preliminary export of 60 tons.

The company intends to request the Ministry of Agriculture to assist bean producers in reaching further agreements with Russian partners.

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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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