20 BFC Kyrgyzstan Agriculture Finance Bulletin

10/2015

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20 K y r gy z s ta n Agriculture Finance Bulletin More than KGS 3 Billion to Farmers in 2015 Russian-Kyrgyz Development Fund Issues KGS 74 Million Swiss Government Supports Organic Production in Kyrgyzstan 74.2% of the Total Pasture Area in Use in Kyrgyzstan

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Agriculture Finance Bulletin Edition #20, October 2015

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

More than KGS 3 Billion to Farmers in 2015 ................................................................................... 2 Belarus Interested in Kyrgyz Agricultural Machinery ...................................................................... 2 Agriculture Development Needs a Systematic Approach ............................................................... 2 Prime Minister Sariev Attends Agricultural Logistics Center Opening ............................................ 3 EEU Membership May Boost Kyrgyz-Russian Ties........................................................................... 3

Foreign Aid ................................................................................................................. 3 6) 7) 8) 9)

Russian-Kyrgyz Development Fund Issues KGS 74 Million .............................................................. 3 Kyrgyzstan to Receive New Farm Equipment from Japan ............................................................... 4 Technical Assistance to Kyrgyzstan Exceeds USD 9 Million ............................................................. 4 Swiss Government Supports Organic Production in Kyrgyzstan ..................................................... 4

Private Sector.............................................................................................................. 5 10) Sowing of Winter Grain Crops about 40% Complete ...................................................................... 5 11) 74.2% of the Total Pasture Area in Use in Kyrgyzstan..................................................................... 5 12) Farmers Can Earn up to KGS 1 Million ............................................................................................. 5

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 »

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BFC. Agriculture Finance Bulletin.

State Initiatives 1)

More than KGS 3 Billion to Farmers in 2015

October 19th, 2015, http://www.vb.kg/doc/326815_za_9_mesiacev_na_jivotnovodstvo_fermery_polychili_kreditov_na_25_mlrd_somov.html

At least 8,425 farmers received KGS 3.2 billion in the form of soft loans since the beginning of 2015, the Ministry of Finance reported.

According to the report, KGS 2.5 billion was spent on the development of animal breeding; KGS 355.2 million on processing, seed production, breeding and agricultural cooperatives; and KGS 335.5 million on crop production.

Subsidizing the project has cost the national budget KGS 235.2 million since the beginning of 2015. The total budget for 2015 provides KGS 392.6 million for subsidizing the interest rates of commercial banks in providing concessional loans to farmers.

2)

Belarus Interested in Kyrgyz Agricultural Machinery

October 13th, 2015, http://www.vb.kg/doc/326437_belarys_vyrazila_zainteresovannost_v_postavkah_selhoztehniki_v_kr.html

According to a report from the Ministry of Foreign Affairs of the Kyrgyz Republic, Kyrgyz Republic Ambassador Kubanychbek Omuraliev met with Prime Minister Andrei Kobyakov of Belarus to discuss issues regarding the development of the Kyrgyz-Belarus bilateral cooperation and to exchange views on the expansion of trade and economic relations between Kyrgyzstan and Belarus. In particular, they spoke about the resumption of the Intergovernmental Belarusian-Kyrgyz joint commission on trade and economic cooperation, as well as increasing bilateral trade.

The Belarusian Minister also expressed interest in supplying agricultural machinery and municipal vehicles, buses, lorries, and lifts and the creation of farm equipment assembly operations in Kyrgyzstan.

3)

Agriculture Development Needs a Systematic Approach

October 13th, 2015, http://www.vb.kg/doc/326471_valeriy_dil:_dlia_razvitiia_selskogo_hoziaystva_neobhodim_sistemnyy_podhod.html

"Progressive advancements in agriculture need a systematic approach" said the Vice Prime Minister of Kyrgyzstan, Valery Dil, during a meeting at the Chabrec peasant farm in the Sokuluk District of Chui region. “As long as the Chabrec peasant farm is one of the top domestic enterprises in agriculture, we will remain interested in its involvement in this field," he said.

In addition to Chabrec, Dil visited the JSC Bishkek meat-packing plant where he became acquainted with the working conditions and the possibility of organizing a production line for the processing of beans: "Every year the republic grows a rich harvest of beans. In 2014, 82.5 thousand tons of beans were harvested, much of this was exported to other countries. Our farmers, however, could get more profits if the country had a modern production processor of beans."

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4)

Prime Minister Sariev Attends Agricultural Logistics Center Opening

October 13th, 2015, http://kabar.kg/eng/economics/full/14104

Prime Minister Temir Sariev took part in the opening of the agricultural logistics center of Agroproduct Asia LLC in the Sokuluk region of Chui region.

In his congratulations on the opening of this center, the Prime Minister said that this event is very important for the economy of Kyrgyzstan: "The opening of the logistics center, which is built in accordance with the most modern standards, is a great success. With the possibility of storing up to three thousand tons of fruit and vegetables, the logistics center will increase agricultural production and reduce losses during collection and storage," said Sariev.

He also said that such storage centers and the stocking of agricultural products will be opened in other regions of the country: "This year the Government is resolved to establish and develop trade and logistics centers of agricultural products. Thus, two international trade and logistics centers and seven regional centers will be developed by 2017," said Sariev.

5)

EEU Membership May Boost Kyrgyz-Russian Ties

October 1st, 2015, http://sputniknews.com/business/20151001/1027838135/kyrgyzstan-eeu-economy.html

Membership of Kyrgyzstan within the Eurasian Economic Union (EEU) will strengthen Kyrgyz-Russian relations and initiate mutual projects in agriculture and water power engineering, Sergei Kojemyakin of the Party of Communists commented.

Though Kyrgyzstan has great hydroelectric potential, the country has serious challenges with equipment maintenance as well as a lack of existing generating capacity, according to Kojemyakin.

“Moscow and Bishkek have made agreements about the construction of hydroelectric power sources and I hope that these projects will be realized. All the points in the case of their successful realization will lead to a serious increase of turnover of Kyrgyzstan with EEU countries,” Kojemyakin said.

The Eurasian Economic Union includes member-states Russia, Kyrgyzstan, Armenia, Belarus, and Kazakhstan. It is an integration association, to streamline the flow of goods and services between its member countries.

Foreign Aid 6)

Russian-Kyrgyz Development Fund Issues KGS 74 Million

October 27th, 2015, http://www.eng.24.kg/economics/177705-news24.html

The Russian-Kyrgyz Development Fund has issued KGS 74 million in loans for projects in small and medium business according to its press service.

17 applications under the program targeting small and medium enterprises in the Kyrgyz Republic have already been approved. The loans benefit at least 14 companies involved in the agricultural sector and manufacturing industries—including those involved in animal husbandry, crop production, greenhouse agriculture and agro-processing.

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BFC. Agriculture Finance Bulletin.

The Russian-Kyrgyz Development Fund signed an agreement on cooperation with Aiyl Bank and RSK Bank on September 2, 2015. Under the program, entrepreneurs can receive soft loans for development and production.

7)

Kyrgyzstan to Receive New Farm Equipment from Japan

October 26th, 2015, http://www.eng.24.kg/economics/177678-news24.html

Kyrgyzstan will receive new tractors and combines from Japan. Today a memorandum of understanding between Ayil Bank JSC and the Japanese engineering corporation IHI Star was signed during the official visit of Japanese Prime Minister Shinzo Abe. The signing of the document is expected to attract investment resources for the implementation of joint projects worth a total of USD 1.5 million. According to the Chairman of the Board of Aiyl Bank agriculture remains one of the top priorities of Kyrgyzstan.

"The Bank and IHI Star intend to join efforts in solving the problems of re-equipment and modernization of agricultural machinery," the Chairman said and added that the memorandum will give an impetus to expand trade and economic relations between Japan and Kyrgyzstan.

8)

Technical Assistance to Kyrgyzstan Exceeds USD 9 Million

October 16th, 2015, http://www.akipress.com/news:566863/

Technical assistance of the Food and Agriculture Organization to Kyrgyzstan, a FAO member country since November 1993, exceeded USD 9 million by 2015.

FAO launched its technical assistance program in Kyrgyzstan in 1997. FAO directed slightly more than USD 200,000 a year to support Kyrgyzstan's agricultural sector. The number of projects and size of assistance grew in Kyrgyzstan in 2009 after FAO decided to open a sub-office in Kyrgyzstan. A full FAO office began functioning in Kyrgyzstan in September 2012.

9)

Swiss Government Supports Organic Production in Kyrgyzstan

October 15th, 2015, http://www.akipress.com/news:566756/

The Deputy Head of the Embassy of Switzerland in the Kyrgyz Republic, representatives of the Ministry of Agriculture and Melioration of Kyrgyzstan, international organizations, the Federation of Organic Movement, the local administration, and organic farmers participated in the Organic Agriculture Forum “Production and marketing of organic products” in Jalal-Abad to promote organic agriculture in Kyrgyzstan . The participants of the event observed project results and visited several farm enterprises in the region which follow the principles of organic agriculture.

This event has been organized within the project “Organic Cotton Production and Promotion of Trade in Kyrgyzstan.” The Government of Switzerland has been funding this project since 2003 to promote organic farming in Kyrgyzstan and trade of organic products in international and domestic markets.

The project started with 38 farmers from Suzak, Bazar-Korgon and Nooken districts of the Jalal-Abad region. Today it has reached over 1000 organic farmers who produced more than 300 tons of cotton for export last year.

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BFC. Agriculture Finance Bulletin.

Private Sector 10) Sowing of Winter Grain Crops about 40% Complete October 28th, 2015, http://www.akipress.com/news:567463/

Agriculture Minister Talaibek Aidaraliyev recently told a press conference in Bishkek that massive sowing of winter grain crops is ongoing across Kyrgyzstan and about 40% complete. “Chui region takes the lead with 58,000 ha sown of a planned 112,500 ha,” he stated.

The Minister also reminded local beans producers who became accustomed to high beans prices when major consumer-countries of beans could not produce a required volume of beans that “bean prices are regulated by the world market depending upon the demand.”

11) 74.2% of the Total Pasture Area in Use in Kyrgyzstan October 9th, 2015, http://24.kg/obschestvo/20575_v_kyirgyizstane_ispolzuetsya_okolo_742_protsenta_pastbisch_ot_obschey_ploschadi_/

According to the Pasture Department of the the Ministry of Agriculture and Melioration of Kyrgyzstan, about 74.2% of the total area of pastures are being utilized in Kyrgyzstan, which currently has an acute shortage of land (9.147 million hectares).

“We need more land because of the increasing number of livestock," the department explained.

Abdumalik Egemberdiev, Director of the Pasture Department, noted that the borders of pastures in 443 districts receive financial assistance from the World Bank. "We need the same assistance in other 11 districts" stressed Egemberdiev.

On the other hand, people do not want to accept the new borders. "They believe that they could graze cattle in this area because their fathers and grandfathers did the same. Now we are raising awareness of this question with locals," he added.

12) Farmers Can Earn up to KGS 1 Million October 1st, 2015, http://www.vb.kg/doc/325681_sariev:_selhozproizvoditeli_mogyt_zarabatyvat_do_milliona_somov.html

Farmers can earn up to KGS 1 million cultivating orchards, Kyrgyz Prime Minister Temir Sariev announced during the presentation of the Food Programme on October 1, 2015.

According to Sariev, farmers growing crops can earn KGS 150,000 per month: "The question of strategic direction should include clear and precise answers. Concentrating on the more profitable crops increases employment, economic potential and revenues."

He stressed that in this way, farmers are faced with a choice: to grow grain, vegetables or fruit orchards.

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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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