Agricultural Sector


Agriculture is considered to be one of the key sectors of the Kazakh economy. Kazakhstan is rich in land resources: more than 74 percent of the country’s territory is suitable for agricultural production, representing 5.5 percent of GDP and employing over 20 percent of the labour force, with 43 percent
of the population living in rural areas.

Kazakhstan is one of the world’s major wheat and flour exporters. It is among the 10 largest wheat producers. The main grain crop is milling wheat, which is typically high in quality and protein. There is a growing trend for Kazakhstan to export its grain internationally. In 2011, the country netted a record crop – nearly 27m tonnes , which enabled it to set its grain export target at nearly 15m tonnes for the 2011/2012 marketing year.

Kazakhstan also exports large amounts of cotton, leather and wool. In seven years, agricultural exports may reach the level of Eastern European countries. The total area of agricultural land resources in Kazakhstan is 222.6 million hectares (ha). Of these, 24 million ha (10.8 percent) are covered by tilled fields, five million ha (2.2 percent) by hayfields and 189 million ha (85 percent) by pasture. The rural population is 7.3 million people, which represents 43 percent of the total population. Meanwhile, according to the World Bank, Kazakhstan’s labour efficiency in agriculture is five times lower than in Eastern Europe, even lower than Russia and Ukraine.

Other food crops include barley, maize, rice, potatoes, soybeans, sugar beet, cotton, tobacco, sunflower, flax and mustard. Cotton is the most important industrial crop grown on the irrigated land of southern Kazakhstan. Orchards and vineyards are widespread. The rich soil and climate provide ideal conditions for growing wheat, barley, rice, corn, millet and buckwheat. In 2012, the total crop area reached 21.3 million ha. Corn and beans will be sown on 16.5 million ha while oilseed will occupy 1.7 million ha.

To satisfy the demands of the livestock industry, forage cultures were expanded by 95,000 ha; areas for fruit and vegetables grew by 25,000 ha and by 17,000 ha for sugar beet. Effective methods of cultivation were employed actively in 2011. Moisture–and resource-saving technologies were introduced in order to cultivate 11.2 million ha, which amounts to 68 percent of the total sown area. That is more than the previous level by 650,000 ha, or six percent. In addition, 8.1 million ha of grain, or nearly half of the cultivated area, were planted with modern crops.

For a country with a long nomadic history, it is not surprising that stockbreeding is the traditional and
dominant agricultural sector. No less than three quarters of all agricultural land is used for grazing. Sheep breeding is predominant, while cattle breeding and the raising of pigs, horses and camels are also well developed. Animal husbandry typically accounts for about 45-50 percent of the production value in agriculture in Kazakhstan. Primary meat products include beef, veal, chicken, horse, lamb, pork and rabbit.

The livestock sector is gradually growing. During 2011-2012, the output of meat rose by 3.0 percent, egg production went up by 12.6 percent and milk output rose by 1.4 percent. Similarly, herd sizes are recovering after a period in the 1990s in which livestock were being slaughtered for meat but not replaced. As of 1 January 2012, in comparison with the previous year, the number of head of cattle increased by 1.1 percent, sheep by 3.5 percent, horses by 3.1 percent, hogs by 2.3 percent and birds by 1.1 percent.

In 2010-2011, National Holding KazAgro allocated KZT 94.3 billion ($629.3 million) for 86 projects, including the construction of greenhouses, poultry farms, feedlots, meat-packing factories, milk farms, infrastructure for grain exports and the development of processing industry. As of 1 January 2012, 32 projects worth KZT 29 billion ($193 million) were completed, which created 2,000 jobs.
One such project is a joint venture established between Global Beef Consultants LLC (Bismarck, North
Dakota) and the Kazakh government. Since 2010, the joint venture has imported 2,040 Angus and Hereford cattle from North Dakota. Ultimately the number of cattle is planned to reach 40,000. The $50 million project also includes the construction of two 2,500-animal breeding facilities and a feedlot.

Kazakhstan is already the fourth-largest importer of North Dakota products, mostly farm machinery. The state exported $40.3 million in goods last year, up from $25 million in 2005. The government of North Dakota opened a trade office in Kazakhstan. The Kazakhstan government is looking for
agricultural investors from the United States. It has allocated land to be rented by foreign investors for as long as 10 years. Modern technologies are also being brought to Kazakhstan from the United States.

In order to support this industry, the government is implementing several programs to improve the investment climate for farming in Kazakhstan. In 2011, government subsidies for agriculture amounted to KZT 58 billion ($387 million), which is greater than the KZT 13.6 billion ($90.7 million) allocated in 2010. To support seed production, the government allocated KZT 2.2 billion ($14.7 million), higher than the KZT 108 million ($720,721) in 2010. More than KZT 4.2 billion ($28.0 million) were budgeted for livestock breeding programs, higher than KZT 740.4 million ($4.9 million) in 2010. Almost KZT 13.1 billion ($87.4 million) were spent on improving the productivity and quality of livestock production, which considerably exceeds the level of subsidies in 2010 – KZT 76 million ($507,173).

“KazAgro” National Holding

The main mission of KazAgro is to stimulate agro-industry development by effective management of agrarian joint-stock companies. The company elaborates strategic plans for development, mid-term plans for the companies’ financial activity, investment programs and the budget of the year; ensures achievement of purposes, including maximization of the companies’ financial results; participates in the realization of financial and administrative management of the companies’ projects; assists in attraction of external and internal investments; develops and monitors indicators of the companies’ activity efficiency; takes corrective measures in case of the companies’ failure to achieve their purposes and efficiency parameters; introduces of international principles of corporate management; selects and motivation of the companies’ top managers.
The Holding consists of the following companies and affiliated structures: Food Contract Corporation, KazAgroFinance, Agrarian Credit Corporation, Mal Onimderi Corporation, Foundation for financial support of agriculture, KazAgroMarketing and KazAgroGarant.