Nursultan Nazarbayev speaks about Kazakhstan's agricultural sector

Kazakhstan&rsquos President Nursultan Nazarbayev has expressed some concerns about Kazakhstan&rsquos agricultural sector, Tengrinews reports.

The Kazakh leader spoke about Kazakhstan's agriculture at the plenary session of the Foreign Investors&rsquo Council held in Astana on June 4.

&ldquoAgricultural sector has traditionally been of great importance for our country. It employs many people and it is one of the major sources of the economic diversification. (&hellip) Direct investments are the main driver of growth of the agriculture. No one here has ever done here what you have proposed today in terms of introduction of new scientific and technical methods into the agriculture. (...) I am very concerned that this large sector of our economy is not in a good condition today. 40 percent of our population live there (in rural areas) and 22 percent work in the agricultural sector. You can see that urbanization process goes fairly slow, but we are not in a hurry,&rdquo Nazarbayev said at the meeting.

Kazakhstan has one of the world&rsquos best conditions for development of agriculture, he noted. The total area of the country&rsquos farmland is 215 million hectares, which, according to the Kazakh president, accounts for more than 4 percent of the world's resources. Kazakhstan, along with Australia and Canada, are the world&rsquos leaders in terms of the area of arable land per capita. "The diversity of natural climatic zones and natural soil allows us to be competitive in different agricultural areas: in production of wheat, rice, oilseeds, fodder crops, meat and dairy products," Nazarbayev said.

According to the Kazakh President, 8-10 million tons of wheat is exported annually from Kazakhstan to Central Asian and European countries. &ldquoDuring the Soviet times, we could not even dream about it. There was always a shortage of wheat, although sometimes we produced more than we do now. Overall, Kazakhstan exports (wheat) to 70 countries,&rdquo Nazarbayev added.

However, Kazakhstan still imports many products, which it could produce on its own. &ldquo16 billion dollars will be invested in our food sector. This is a lot for our country. Just over the past four years, the state invested more than 5 billion dollars in the agricultural sector. At the same time, very little of this potential is being used at present. Agriculture has not become a driver of our country's economy or has played a significant role in the diversification of our economy yet. Import has grown 45 percent over the last five years and has exceeded four billion dollars per year. We import more than a half of the food products that we consume &ndash cheese, poultry meat, over 40 percent of sausages and butter. It is bad of us &ndash all the mentioned products are also produced in Kazakhstan,&rdquo Nazarbayev noted. 

Speaking of the ways to address the problem, Nazarbayev declared that Kazakhstan&rsquos three agricultural universities would be merged into a single research center to boost the country's agriculture. &ldquoThere are three large agricultural universities in our country. I gave instructions to merge them into a single scientific and educational center. (...) The center will mainly aim at development of applied research, training of personnel and introduction of modern technologies. We intend to attract leading international partners to make the Kazakh agricultural research center a regional leader. In addition, it will serve as an experience for the entire region and for the entire post-Soviet space to follow," Nazarbayev said.

Kazakhstan&rsquos President also expressed gratitude to foreign companies that are making significant contribution to the development of Kazakhstan's agriculture. &ldquoPhilipp Morris company is creating an agricultural business center in Almaty oblast, where farmers will be learning new technologies of growing crops, drip irrigation in greenhouses and the use of fertilizers. Such projects will receive the widest possible support from the state," Nazarbayev said.

He said that there was a guaranteed market for those willing to invest in Kazakhstan's agriculture. &ldquoThere is a great potential for the processing industry. Today, only one percent of all our grain is used to produce pasta (in Kazakhstan). Kazakhstan can expand production of its own brands. (...) We have tremendous opportunities for the development of the country&rsquos agriculture. Over the past few years, less than one percent of all the foreign investment we were getting was going into agriculture," the Kazakh President said.

Nazarbayev also noted that around $200 billion had been invested in Kazakhstan&rsquos economy over the last 10 years. &ldquoThis demonstrates trust (of investors) to our country. Good investment climate is important. We are among the top 20 countries by investment attractiveness. Creation of a favorable investment climate remains among our priorities. According to investors, who are working in our country, our country now offers excellent conditions for investment,&rdquo Nazarbayev said.

Among the best conditions are &ldquoexemption from corporate income tax, land tax for a period of 10 years, property tax for 8 years&rdquo. Moreover, investors are guaranteed the stability of the tax legislation. &ldquoIn addition, the government has decided to compensate 30 percent of the capital costs upon commissioning of enterprises. I think that it is rare when countries create such conditions for investors,&rdquo Nazarbayev said.

Reporting by Aidana Uspova, writing by Assel Satubaldina, editing by Tatyana Kuzmina