25 BFC Kyrgyzstan Agriculture Finance Bulletin

03/2016

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25 K y r gy zsta n Agriculture Finance Bulletin Kyrgyz Farmers Receive KGS 375 Million in Preferential Loans Russia Allocates USD 2 Million to Agriculture and Tourism in Issyk-Kul Russian-Kyrgyz Development Fund Spends KGS 2.2 Billion for Small and Medium Businesses Kyrgyz Scientists Patent New Treatment for Animals with Foot-and-Mouth Disease

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Agriculture Finance Bulletin Edition #25, March 2016

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

Kyrgyz Farmers Receive KGS 375 Million in Preferential Loans ...................................................... 2 Kyrgyz and Turkish Ministers Met and Discuss Kyrgyz Bean Imports into Turkey .......................... 2

Foreign Aid ................................................................................................................. 2 3) 4) 5) 6) 7)

Russia Allocates USD 2 Million to Agriculture and Tourism in Issyk-Kul ......................................... 2 Kyrgyzstan to Receive USD 38 Million for Agriculture and Nutritional Development .................... 3 One Village-One Product Project Set to Expand in Kyrgyzstan ....................................................... 3 Seminar on Controlling Soil Pests Held in Russia for Kyrgyz Specialists .......................................... 3 Russian-Kyrgyz Development Fund Spends KGS 2.2 Billion for Small and Medium Businesses ..... 4

Private Sector.............................................................................................................. 4 8) 9) 10) 11) 12) 13) 14) 15)

Due to the Rise in Cotton Prices, Avran Farmers Resume Cotton Production ................................ 4 Frost Damages in Leilek District Estimated at KGS 1.3 Million ........................................................ 4 Kyrgyz Producers to Take Part in International Exhibition in Moscow ........................................... 4 Organic Products from Kyrgyzstan Can Fill a Niche in Russian Markets ......................................... 5 Kyrgyz Scientists Patent New Treatment for Animals with Foot-and-Mouth Disease .................... 5 Russian Company Rostselmash to Strengthen Partnership with Kyrgyzstan .................................. 5 Joint Construction Planned between Orenburg and Kyrgyzstan..................................................... 6 Fluctuations in Kyrgyzstan Livestock Numbers ............................................................................... 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

Phone: +41 44 784 22 22 Fax: +41 44 784 23 23

info@bfconsulting.com www.bfconsulting.com

BFC. Agriculture Finance Bulletin.

State Initiatives 1)

Kyrgyz Farmers Receive KGS 375 Million in Preferential Loans

March 11th, 2016, http://www.vb.kg/doc/336035_selskim_tovaroproizvoditeliam_vydano_lgotnyh_kreditov_na_375_mln_somov.html

The Kyrgyz Ministry of Finance reported that 971 agricultural processors were issued nearly KGS 375 million in preferential loans under the Financing of Agriculture-4 project. The project was established by the Kyrgyz Republic Government in 2016 for early spring field work and further development of animal husbandry, crop production, agricultural processing, and agricultural services. The target audience for the preferential loans is set to expand to other actors involved in the processing of agricultural products and other services in the field of agriculture (greenhouses, slaughterhouse, logistics centers, etc).

The project provides loans to agricultural producers on the following conditions: a 10% per annum interest rate, a 3-year repayment period, and an up-to-six-month grace period. In addition, loans can also be issued to individuals up to KGS 100,000 without collateral for a period of up to 12 months.

2)

Kyrgyz and Turkish Ministers Met and Discuss Kyrgyz Bean Imports into Turkey

March 2nd, 2016, http://kabar.kg/eng/economics/full/15391

Turdunazir Bekboev, Minister of Agriculture and Land Reclamation of the Kyrgyz Republic, met with the Turkish Minister of Food, Agriculture and Livestock, Faruk Chelik in Ankara. The two sides discussed the possible purchase of Kyrgyz beans by Turkish companies and hopeful reduction or elimination of a 19.3% customs duty imposed by Turkey for the import of Kyrgyz beans.

The two sides also expressed their desire for continued Kyrgyz-Turkish cooperation in political, tradeeconomic, cultural and humanitarian spheres, as well as in agriculture.

Foreign Aid 3)

Russia Allocates USD 2 Million to Agriculture and Tourism in Issyk-Kul

March 29th, 2016, http://novosti.kg/2016/03/rossiya-vydelila-kyrgyzstanu-2-milliona-dollarov-na-razvitie-turizma-na-issykkule/

Russia has allocated USD 2 million for the promotion of the agriculture and tourism sectors in Issyk-Kul, according to the Russian Embassy’s Press Secretary Daria Pakhomov. The 3-year project will develop fisheries and other agriculture in the area in view of directly supplying hotels and resorts located around the lake.

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4)

Kyrgyzstan to Receive USD 38 Million for Agriculture and Nutritional Development

March 19th, 2016, http://www.eng.24.kg/economics/179739-news24.html

The Minister of Finance, Adylbek Kasymaliev, and Acting World Bank Regional Director for Central Asia Mariam Sherman signed an agreement for the reserve of USD 35 million for a project aimed at enhancing agricultural productivity and improving nutrition in Kyrgyzstan.

The project aims at the rehabilitation and modernization of irrigation and drainage infrastructure on 60,000 hectares of land. 36,000 small farmers and farm families are expected to receive benefit from the project (affecting about 162,000 people).

Experts will advise farmers on increasing crop yields as well as a more efficient water management.

Consulting services are set to receive about 50,400 members of the water users associations and their households in 60 selected rural districts. In addition, the project will provide an informational campaign about qualitative nutrition, the provision of micronutrients for children and pregnant women, and household assistance in the development of home gardening.

The project is expected to last seven years.

5)

One Village-One Product Project Set to Expand in Kyrgyzstan

March 18th, 2016, http://www.vb.kg/doc/336516_proekt_odno_selo_odin_proekt_rasprostraniat_ne_tolko_na_issyk_kyle.html

The Kyrgyz Ministry of Economy has announced that the One Village-One Product project is being expanded into other regions of Kyrgyzstan. The project, implemented by the Japan International Cooperation Agency, is currently only operating in the Issyk-Kul province; however, a center in Bishkek will soon be providing production from local, raw materials for producers, services for the improvement of production in local communities, and consultation and information services. The center is also planned to provide assistance in product development, retail sales, and establishing business communication.

The project is aimed at mobilizing rural communities for bettering their lives by empowering themselves to establish and run their joint businesses. The project currently has more than 1,500 members united in one association and is producing various handicrafts and food products.

Sales in 2015 amounted to KGS 12,750,000 and are nearly KGS 37.5 million since project inception.

6)

Seminar on Controlling Soil Pests Held in Russia for Kyrgyz Specialists

March 14th, 2016, http://agro.kg/ru/news/8320/

A group of employees from the Kyrgyz Ministry of Agriculture and Land Reclamation took part in a research and practice seminar organized by Rosselkhoznadzor. The seminar was specifically for the Kyrgyz specialists and took place in Pyatigorsk, Russia.

At the seminar, participants received detailed information on protecting soil from pests, pests’ individual characteristics, and the harm these pests can cause. Participants also studied the particularities regarding the inspection and examination of regulated products and methodologies involved in pest identification.

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7)

Russian-Kyrgyz Development Fund Spends KGS 2.2 Billion for Small and Medium Businesses

March 9th, 2016, http://www.eng.24.kg/economics/179575-news24.html

The Russian-Kyrgyz Development Fund has signed an agreement on the continuation of targeted program for the financing of small and medium sized businesses and allocated to two state banks - Aiyl Bank JSC and RSK Bank JSC – an additional KGS 700 million. Early, in February, a third partner bank Kyrgyz Investment and Credit Bank CJSC - received KGS 350 million for small and medium sized business financing.

Aiyl Bank JSC and RSK Bank JSC had already used KGS 1.2 billion in the past five months, bringing the Russian-Kyrgyz Development Fund’s total investment in small and medium sized businesses in Kyrgyzstan to KGS 2.2 billion so far.

Priorities for the funds relate to the development of agriculture, clothing, textile and processing industries.

Private Sector 8)

Due to the Rise in Cotton Prices, Avran Farmers Resume Cotton Production

March 28th, 2016, http://www.gazeta.kg/news/kyrgyzstan/economy/58258-v-oshskoy-oblasti-nachali-vyraschivat-tureckiyhlopok.html

Due to a sharp rise in the price of cotton in 2015 – from KGS 30-32 to KGS 45 – farmers in Avran are once again sowing the crop. This year, 12 tons of seeds have been sown across 2,200 hectares, according to the region’s Rural Development Coordinator Payzulla Mirzabaramov. Businessmen from Turkey are conducting cotton growing seminars.

Last year, Avran exported 1,000 tons of potatoes, 40 tons of cherries, as well as plums and persimmons.

Most of the produce went to China and Kazakhstan. To increase exports further, a logistics center is needed. The population of Avran is 122,000. While during the Soviet era cotton was the main crop, farmers now grow a variety of fruit and vegetables. Avran currently has 200 greenhouses.

9)

Frost Damages in Leilek District Estimated at KGS 1.3 Million

March 22nd, 2016, http://ru.sputnik.kg/society/20160322/1023466426.html

Snowfall and frost damaged fruit trees (mostly apricot and cherry trees) in Leilek district on March 18 – March 19. Preliminary estimates are that 310 hectares were affected with damages to products of around KGS 1.3 million.

10) Kyrgyz Producers to Take Part in International Exhibition in Moscow March 15th, 2016, http://www.eng.24.kg/economics/179660-news24.html

Kyrgyz producers are set to take part in an international exhibition in Moscow, Russia. The integration trade and economic platform "Kyrgyzstan" will be officially opened on April 5 and will operate within the Page 4

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framework of the exhibition along with manufacturers from 26 countries and 52 Russian regions. The goal of the exhibition is give producers and entrepreneurs, as well as the business communities and farmers, the opportunity to enter the huge market of the Russian Federation, find business partners, and sign contracts.

Access to the Russian market has been a problem for Kyrgyzstanis for many years, and the exhibition is seen as great opportunity to enter the market. Many hope that such platforms will eventually be expanded to other areas in the Russian Federation, with the hope that, in the future, Kyrgyz stores will appear as an outlet for all kinds of products from Kyrgyzstan.

To date, dozens of Kyrgyz manufacturers, including sausage and dairy products, dried fruits, vegetables, legumes, canned food, honey, light industry goods have filed applications for participation in the exhibition. Organizers of the exhibition are ready and willing to assist participants in any way they can, including with document legalization, transportation services, and consultations.

11) Organic Products from Kyrgyzstan Can Fill a Niche in Russian Markets March 15th, 2016, http://www.eng.24.kg/economics/179661-news24.html

Kyrgyz organic products are believed to be able to fill a niche in the Russian market. Russian consumers are increasingly interested in organic products as concerns about health and the desire to buy ecologically pure products rises.

The Kyrgyzland association of exporters and importers considers the Russian market a huge opportunity for organic producers. Initial supply volumes will be small but also have an enormous growth potential with products such as carrots, apples, onions, cabbage, dried fruits and honey.

Russian partners have told the association that they are ready to buy everything produced in Kyrgyzstan to fill their consumers’ demands.

12) Kyrgyz Scientists Patent New Treatment for Animals with Foot-and-Mouth Disease March 14th, 2016, http://ru.sputnik.kg/Kyrgyzstan/20160314/1023151853.html

A team of scientists from Kyrgyzstan patented a drug-free treatment for infective diseases, including foot-and-mouth and brucellosis, in animals. The new method to treat sick animals is by utilizing a convalescent blood serum irradiated with low-intensity laser beams.

13) Russian Company Rostselmash to Strengthen Partnership with Kyrgyzstan March 12th, 2016, http://www.vb.kg/doc/336096_rostselmash_ykrepit_partnerstvo_s_kyrgyzstanom.html

Russian company Rostselmash, one of the largest manufacturers of agricultural materiel in the world, will increase exports to Kyrgyzstan as part of an agreement reached between the company and the Kyrgyz Minister of Agriculture and Land Reclamation.

General Director of Rostselmash, Valery Maltsev, expressed optimism about the cooperation and believes that Rostselmash could become not only leading provider of agricultural materiel for Kyrgyzstan but also vessel for training highly-qualified Kyrgyz specialists in agriculture, guaranteeing reliable services and information in Kyrgyzstan.

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14) Joint Construction Planned between Orenburg and Kyrgyzstan March 11th, 2016, http://tass.ru/transport/2730412

The Chui region of Kyrgyzstan and the Orenburg region of Russia are planning the joint construction of transportation and logistics centers. The two sides plan to exchange experience with the construction of storage centers and agricultural product packaging in both regions.

The main export of the Orenburg region to Kyrgyzstan are oil products, equipment, fertilizer, ferrous and non-ferrous metals, sunflower seeds. The Chui supplies Orenburg with various agricultural products.

The transportation and logistics centers hope to facilitate more efficient trade between the two regions.

The parties also plan to cooperate in tourism in addition to agriculture.

15) Fluctuations in Kyrgyzstan Livestock Numbers March 9th, 2016, http://ru.sputnik.kg/Kyrgyzstan/20160304/1022914537.html http://ru.sputnik.kg/Kyrgyzstan/20160309/1023028085.html

The National Statistical Committee of the Kyrgyz Republic has counted all livestock in the country and announced some fluctuations in the number of certain type of livestock. The overall numbers of donkeys, camels, rabbits and pigs have decreased in the country. At the same time, the numbers of cattle, horses, honey-bee colonies and sheep and goats have seen an increase. Read More Âť

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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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