Kazakhstan Agriculture Ministry mulls annual planning of drought costs

Kazakhstan Agriculture Minister Assylzhan Mamytbekov is suggesting to annually plan budget expenses in preparation for possible drought, Tengrinews.kz reports. "It is preferable for the government to plan expenditures for this purpose (drought) annually, rather than urgently allocate money (every time this is a severe drought) to overcome the consequences that Kazakhstan farmers face," the Minister said at the meeting. According to Mamytbekov, several step were taken to tackle negative consequences of the recent drought: 676 loans totally worth around 25.8 billion tenge ($172 million) were prolonged, which allowed agricultural producers to prepare for the coming season, while the insurance companies made partial insurance payments to the producers in the amount of around 1.3 billion tenge ($8.7 million). "The last year's drought once again showed the drawbacks in the existing insurance system in agriculture. Small mutual insurance associations cannot compensate the farmers' losses in case of a bad year. That's why we are initiating legislative changes to make only insurance companies eligible to insure risks in farming. In such case the state will partially finance the insurance rate to make it more affordable for agricultural producers," Mamytbekov said. The Minister added that grain crops represent a majority of Kazakhstan-produced agricultural goods. The drought had a strong influence on the gross output of grain crops cutting it by 30% from 2011 results to a little over 0.9 trillion tenge ($6 billion) in 2012. By Shynar Ospanova