#43 Kyrgyzstan Agriculture Bulletin, BFC (Russian Edition)

09/2017

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43 K y r gy zsta n Agriculture Bulletin EEU technical regulations facilitate investments, exports Chinese investors building agricultural complex in Chui Potential for Kyrgyz agriculture high, with work Proposal to create new agricultural association

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

EEU technical regulations facilitate investments, exports .............................................................. 2 Plan for tenfold increase in fish production unveiled ..................................................................... 2 Kyrgyz livestock healthier than ever before .................................................................................... 2

Foreign Aid ................................................................................................................. 3 4) 5) 6) 7) 8) 9) 10)

Chinese investors building agricultural complex in Chui ................................................................. 3 ‘Small Business Initiative’ stakeholder meeting held ...................................................................... 3 FAO project to help secure land tenure rights ................................................................................ 4 USAID helps open new meat processing plant in Naryn ................................................................. 4 Bishkek hosts annual Asian Land Forum ......................................................................................... 4 JICA project to bolster dairy monitoring systems ........................................................................... 5 RKDF’s first leasing operation supports milk producers ................................................................. 5

Private Sector.............................................................................................................. 6 11) 12) 13) 14) 15) 16)

Potential for Kyrgyz agriculture high, with work ............................................................................. 6 Fruit procurement center opens in Osh .......................................................................................... 6 Proposal to create new agricultural association ............................................................................. 6 Kyrgyz farmers going pesticide-free ................................................................................................ 7 Production from livestock increases ............................................................................................... 7 Mobile app helps farmers with crop information ........................................................................... 7

Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related 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 Bulletin

State Initiatives 1)

EEU technical regulations facilitate investments, exports

September 16th, 2017, https://24.kg/english/62892_EEU_technical_regulations_facilitate_investments_and_exports/

The Ministry of Economy has developed a detailed booklet on the export of agricultural products to countries of the Eurasian Economic Union (EEU) as part of an effort to make it easier for domestic producers to understand and deal with EEU regulations. EEU technical regulations have facilitated increased investments into Kyrgyzstan’s agricultural sphere and brought the sector more in line with international standards, making exports easier.

Kyrgyzstan introduces EEU technical regulations gradually. There are 34 technical regulations in the country at present; however, 18 of them entered into force a little more than a month ago. Their adoption eliminates a number of technical and administrative barriers for Kyrgyz products to reach EEU markets. The technical regulations release suppliers of products that meet requirements from having to obtain additional permits for export and sale in other EEU-member countries.

In total, 42 technical regulations have been approved by the EEU, with 35 having entered into force.

2)

Plan for tenfold increase in fish production unveiled

September 16th, 2017, https://24.kg/english/62916_Kyrgyzstan_plans_tenfold_increase_in_production_of_fish_products_/

A proposal for a program for the development of Kyrgyz fisheries and aquaculture until 2027 has been submitted for public discussion. The proposal aims at creating a modern and sustainable fisheries management system as well increasing the production of fish products at least tenfold by 2027. This will also serve to increase food security, improve the diet of citizens and create new jobs for the rural population.

Currently, production of domestic fish products is a little more than 20% of domestic consumption, with total production of fish in 2016 amounting to 2,020 tons.

3)

Kyrgyz livestock healthier than ever before

September 12th, 2017, http://kabar.kg/news/zdorovye-pastbishcha-i-skot-zalog-sotcial-no-ekonomicheskoi-stabil-nostikyrgyzstana/

As a leading part of the agricultural sector, the development of livestock in Kyrgyzstan is important and has required collaborative efforts between the national government, local governments and pasture users in order to ensure that the sector continues to grow and remains healthy. This is especially important given Kyrgyzstan’s status as a Eurasian Economic Union (EEU) member, which is expected to only increase the demand for Kyrgyz animals and animal products.

Central to these efforts has been ensuring the stability of the epizootic situation. The State Inspectorate for Veterinary and Phytosanitary Security is responsible for the epizootic situation in the country and has been largely successful in this regard, especially after seeing a massive budget increase in 2017 (from KGS 61 million in prior years to KGS 131 million in 2017). During the first six months of 2017, veterinary specialists have been able to work with more than 15 million animals (compared to approximately 2.5 million last year), including performing over a million exams, giving more than 13 million vaccines and providing more than 600 thousand deworming and other preventative treatments.

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BFC Agriculture Bulletin

The state also allocates vaccines, free of charge, for such diseases as foot-and-mouth disease, anthrax, smallpox and rabies, among others. Additionally, the state has increased the efforts of checkpoints and laboratories. These efforts have resulted in a safer Republic in relation to dangerous and infectious animal diseases as outbreaks of infectious diseases in Kyrgyzstan have not been registered for the last 2 years.

In the first half of 2017, Kyrgyzstan produced 174,100 tons of live-weight meat, 1.8% more year-on-year.

The number of livestock is also growing in the country, except for goats and sheep. Cattle growth was reported at 2% in 2016, yaks at 4% and horses at 21%.

Foreign Aid 4)

Chinese investors building agricultural complex in Chui

September 25th, 2017, http://kabar.kg/news/v-kyrgyzstane-kitaitcy-stroiat-agrokompleks-za-2-mlrd-iuanei/

Chinese investors are utilizing CNY 2 billion (approximately USD 300 million) to build an agricultural complex in the Chui region of Kyrgyzstan. The project, called Iska-Asia, has already procured 500 hectares of land and will help develop the agricultural sector of Kyrgyzstan, specifically organic production. It is planned that half of the production will be sent to the Chinese market, and the other half will be exported to Eurasian Economic Union (EEU) countries.

5)

‘Small Business Initiative’ stakeholder meeting held

September 25th, 2017, https://www.tazabek.kg/news:1406533

The European Bank for Reconstruction and Development (EBRD) held the first stakeholder meeting in Bishkek to mark the start of the ‘Small Business Initiative’ (SBI) program. The program aims to support the development of local small- and medium-sized enterprises (SMEs) in Kyrgyzstan and Tajikistan.

Within the SBI program, EBRD is implementing three core sets of activities to bolster SME growth and competitiveness in both countries: investment, advice, and policy dialogue.

On the investment side, the program has already signed an agreement with two partner banks in Tajikistan for the innovative ‘Women in Business’ program and has worked to enhance EBRD’s RiskSharing Facility (RSF) to provide financing to SMEs together with partner banks as well as establish new investments with three SMEs. Regarding advice, the program has set up 97 advisory projects for SMEs and supported local consultant agencies in both countries to improve their services for small businesses.

As far as policy, EBRD has supported investment councils in both countries and is currently stepping up support for the Kyrgyz government’s ‘Taza Koom’ initiative.

The SBI program is possible due to a contribution from the Swiss government (via the Swiss State Secretariat for Economic Affairs) in the amount of EUR 4.5 million along with EUR 1.5 million from the EBRD Shareholders Special Fund to Support Activities in the Kyrgyz Republic and Tajikistan.

EBRD considers a vibrant SME sector as essential to a healthy economy, and supporting SMEs is a key strategic priority for the bank in both countries.

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BFC Agriculture Bulletin

6)

FAO project to help secure land tenure rights

September 21st, 2017, http://www.fao.org/europe/news/detail-news/en/c/1038428/

The Food and Agriculture Organization of the United Nations (FAO) is kicking off a new project in Kyrgyzstan and Tajikistan for the secure tenure of land, fisheries and forests. The project will assist the two countries in implementing the ‘Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security’ that was adopted by the Committee on World Food Security in 2012.

The guidelines promote secure tenure rights and equitable access to land, fisheries and forests as a means of eradicating hunger and poverty, supporting sustainable development and enhancing the environment. Having secure and equitable access to natural resources will also allow people to produce food for their own consumption and increase income.

The FAO project, financed by FAO’s Multi-donor Fund, will run through December 2017. In addition to awareness-raising workshops, a screening methodology will be developed, data will be collected, consultations will be held and a roadmap for implementing the guidelines will be prepared for each of the two countries. In Kyrgyzstan, FAO will work with the Union of the Water Users Associations of the Kyrgyz Republic, a nongovernmental organization.

7)

USAID helps open new meat processing plant in Naryn

September 18th, 2017, https://www.usaid.gov/kyrgyz-republic/press-releases/sep-18-2017-partnership-kyrgyz-private-sectorusaid-expands

In partnership with the United States Agency for International Development (USAID), Adal Azyk, one of the largest meat processing companies in the country, has opened a new slaughterhouse in the Kochkor district of the Naryn region. The facility is one of only two in Kyrgyzstan that are compliant with international food safety standards and which hold the Hazard Analysis and Critical Control Points (HACCP) certification that international buyers require. The new facility, with a processing capacity of over 10,000 heads per year, is expected to become one of the largest commercial buyers of local cattle, boosting the incomes of more than 1,500 farmers.

Through similar partnerships, USAID has worked with over 55 private agro-businesses across Kyrgyzstan to expand markets, improve productivity and increase incomes for farmers and producers. These partnerships have mobilized over USD 22.5 million in private local investments for the benefit of tens of thousands of farmers in the Naryn, Osh, Jalal-Abad and Batken regions.

8)

Bishkek hosts annual Asian Land Forum

September 12th, 2017, http://ekois.net/v-kyrgyzstane-vpervye-prohodyat-aziatskij-zemelnyj-forum-i-regionalnaya-assambleyamezhdunarodnoj-koalitsii-zemli/#more-23801

The annual Asian Land Forum and International Land Coalition assembly met in Bishkek. This year’s topic was “Managing Land Resources for People: Ensuring the Use of Communal Lands for Improving the Livelihoods of Local Communities”. The event brought together the most prominent organizations in the region to discuss the results and challenges of implementing local community initiatives in Asia, including land reform and existing land policy issues in the sub-region of Central Asia. It also served to provide an opportunity for participants to exchange ideas on best practices and to strengthen cooperation in Asia. It is expected that participants will address issues raised at the event with their governments and work towards improving land use management and strengthening the use of communal lands in a way that increases the livelihoods of rural communities.

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BFC Agriculture Bulletin

The event also included a visit to places using advanced farming techniques in sustainable pasture management and the development of horticulture in the Issyk-Kul region as well as another visit to the Kungai Ala-Too mountain forests in order to become acquainted with sustainable forest management.

This was the first time Kyrgyzstan hosted the annual event, which was attended by more than 100 representatives from Bangladesh, Cambodia, Ethiopia, India, Indonesia, Italy, Kazakhstan, Kyrgyzstan, Mongolia, Nepal, Pakistan and the Philippines as well as international organizations and development partners. The event was organized by the Association of Forest Users and Land Users of Kyrgyzstan and the International Coalition of the Earth - Asia (ILC), with the support of the International Fund for Agricultural Development (IFAD), the Kyrgyz Ministry of Agriculture, the National Association of Pasture Users and the Central Asian Mountain Hub/ Mountain Partnership (CAMH/MP).

9)

JICA project to bolster dairy monitoring systems

September 8th, 2017, http://mineconom.gov.kg/index.php?option=com_content&view=article&id=7463&catid=63&lang=ru

A team of experts from Japan International Cooperation Agency (JICA) has finished a survey in Kyrgyzstan as part of a project to develop the human resource capacity in Kyrgyz laboratories in order to improve the quality of milk and dairy products. While in Kyrgyzstan, the team also exchanged views and opinions with government officials during a series of meetings.

The aim of the project is to improve the systems for assessing the conformity of both the quality and the safety of milk and dairy products with the technical regulations of the Eurasian Economic Union (EEU).

This will be accomplished by analysis and monitoring throughout the entire dairy value chain. The project will last for three and one half years.

10) RKDF’s first leasing operation supports milk producers September 6th, 2017, http://kabar.kg/news/pervaia-lizingovaia-operatciia-rkfr-podderzhka-proizvoditelei-moloka-vkyrgyzstane/

Farmers in Kursu, a village in the Issyk-Kul region, that are engaged in the dairy sector have been provided with milking equipment through the new ‘Financing Leasing Operations through Microfinance Organizations’ credit product of the Russian-Kyrgyz Development Fund (RKDF). The Fund also provides for highly-qualified specialists to help farmers develop a diet for animals, prevent diseases and address issues in improving breeds — all of which lead to significant improvement in milk quality and quantity.

Leasing operations were conducted by the micro-credit agency BT Innovations as part of an agreement with RKDF. Cooperation between the two has given farmers the opportunity to access much-needed technologies, information, advice and trainings.

Kyrgyzstan produces more than 1.5 million tons of milk, only 4% of which is produced by large enterprises; the rest is produced by private households, each producing a different quality of milk.

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BFC Agriculture Bulletin

Private Sector 11) Potential for Kyrgyz agriculture high, with work September 27th, 2017, http://kabar.kg/news/sel-skoe-khoziaistvo-kyrgyzstana-missiia-vypolnima/

Agriculture is a key sector of the Kyrgyz economy, accounting for 15% of GDP. Despite the importance of agriculture, there remains an enormous untapped potential for it to grow even more. To do this, the agricultural sector needs to overcome problems related to both livestock and crop production.

The main directions for livestock currently involve the breeding of dairy and meat cattle, sheep and goats, horses and poultry; however, indicators for these industries are low, mainly due to the low genetic potential of animals, the lack of modern technologies for keeping and feeding animal and the insufficient care provided for animal health. For crop production, market priorities are not taken into account when sowing, and the Ministry of Agriculture does not develop recommendations for farmers in terms of which crops to grow. Moreover, farmers seldom conduct soil analyses and tend to grow cereals instead of the more profitable technical and vegetable crops. Additionally, agricultural machinery in the country is old, having an average age of 13-18 years (with an operating life of 7-10 years). All of this serves to hinder agricultural development by causing decreasing soil fertility and yield and increasing the spread of pests, diseases and weeds.

With Kyrgyzstan’s accession into the Eurasian Economic Union (EEU), the potential of the agricultural sector is higher than ever before. In order to reach this potential, however, changes need to be made.

First, there needs to be clear specialization that takes into account the natural and climatic, organizational, production, investment and other characteristics of the regions. This will help reduce costs and increase competitiveness. It would also be beneficial for economic entities to organize agricultural cooperatives. The country also needs to consolidate and increase the efficiency of land and water resource use. Finally, state regulatory policies need to be improved, especially those regarding legal and financial credit relations, agricultural purchasing and processing and the introduction of new technologies.

12) Fruit procurement center opens in Osh September 25th, 2017, http://vesti.kg/index.php?option=com_k2&view=item&id=47879:yuzhnyie-fruktyi-v-bolshih-obemah-neproblema&Itemid=134

In Aravan (Osh region), a fruit procurement center has opened with a capacity for up to 1,000 tons. The opening of the new center will organize economic efforts and should help partially resolve the issue of commodities being only on a small-scale, a central problem when it comes to exports. The center will contribute to the economic growth of the region and help Kyrgyzstan establish a firm position in various markets and consolidate other efforts to grow the export potential of the country.

13) Proposal to create new agricultural association September 14th, 2017, http://agro.kg/ru/news/13058/

The development of agriculture in the Kyrgyz Republic can significantly improve the well-being of many Kyrgyz citizens. However, agricultural science is not developing; training is poorly conducted; and agriculture is not a priority for young people. For this reason, some are encouraging farmers to create a new association, the Agroindustrial Union of Kyrgyzstan. The aim of the association would be to help agriculture become the top priority for the future development of Kyrgyzstan, especially for the sugar beet, vegetable oil, horticulture, vegetable growing and poultry farming industries.

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Specifically, the association would work to: (1) develop a legislative framework for stimulating the development of agriculture and agricultural processing, (2) increase the role of the Ministry of Agriculture, especially in developing programs for agricultural development, (3) facilitate experience and knowledge exchanges with farmers and (4) train young people in the agricultural sector.

14) Kyrgyz farmers going pesticide-free September 14th, 2017, https://ru.sputnik.kg/Radio/20170914/1035189719/ehshboto-k

Agricultural entrepreneur-producer Ular Omor Ashboto stated during a recent interview that Kyrgyz farmers intentionally do not use pesticides when growing crop, meaning that domestic food products are (and always have been), for the most part, environmentally friendly.

While many think that farmers have done this as an economic decision to save money, many farmers Ashboto has spoken with are actually doing it because of an acute understanding that eco-friendly goods can be sold for a higher profit. It should be noted that, although many farmers are not using pesticides, many are being encouraged to use fertilizers to improve yield indicators.

15) Production from livestock increases September 12th, 2017, http://www.agroprod.kg/index.php?newsID=518

As of September 1, 2017, Kyrgyzstan has produced nearly 240,000 tons of live-weight meat, a 1.7% yearon-year increase. The growth in meat production was due to a 2.4% increase in the number of cattle, a 3.9% increase in the number of horses, a 1.6% increase in the number of poultry, a 1.6% increase in the number of sheep and goats and a 1.5% increase in the number of pigs. An increase in live-weight meat production was recorded in all regions of the country.

Milk production amounted to 1,060,900 tons, a 2.1% year-on-year increase. The increase is attributed to a 1.7% increase in the number of dairy cows in the country. As with meat production, all regions of the country recorded an increase in milk production.

Egg production is also up when compared to last year. 361.3 million eggs were produced, a 108.9% yearon-year increase. Although all regions recorded growth in egg production, significant increases came in the regions of Chui (113.1% increase), Osh (105.9% increase), Issyk-Kul (103.8% increase), Jalal-Abad (103.0% increase) and Naryn (102.6% increase). Wool production also grew to 12,619 tons, 102% of last year’s production level during the same period. The index of average wool obtained from one sheep remained at last year’s level of 2.4 kilograms.

16) Mobile app helps farmers with crop information September 7th, 2017, http://www.kyrgyzkorm.kg/news/mobilnoe-prilozhenie-kormovye-kultury-ot-a-do-ya-ot-agro-asia.html

Within the framework of the Bai Alai project being carried out by Helvetas Swiss Intercooperation and MSDSP Kyrgyzstan, Agro Asia is working with Tajik-based Nexigol Musovir to launch a new mobile application to help in the cultivation of fodder crops. Currently, the application gives information on diseases and pests as well as ways to protect crops against them (including organic plant protection materials) for eight types of fodder crops.

The application is available in both the Kyrgyz and Russian languages and is free to download.

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