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Kazakh Minister of Agriculture may stop subsidising grain exports 05 февраля 2015, 03:10

The Minister of Agriculture of Kazakhstan has proposed to abandon subsidization of grain exports in favour of other developments in agriculture.
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Photo courtesy of gscn.com.cn Photo courtesy of gscn.com.cn

Minister of Agriculture of Kazakhstna Asylzhan Mamytbekov has proposed abandoning the subsidization of grain exports, Tengrinews correspondent reports. The Minister spoke about it during a board meeting on January 29 in Astana.

"We must give up the ideas like build terminals in Poti (Georgia) and Vladivostok (Russia) and subsidizing transportation of wheat. The state was spending more than 15 billion tenge ($81 million) on this yearly. We better spend this money on supporting our farmers, developing seed production and purchasing equipment. It is better to subsidize leasing than to subsidize railways, Russian railways as well. The tariff for the transportation of grain from Kostanay or from Astana to Novorossiysk is at about $100-$120," Asylzhan Mamytbekov said.

The Minister noted that the Kazakh market was changing, so diversifying the agricultural space was need to balance the supply and demand.

"The area sowed by wheat has been reduced by 2.4 million hectares as compared to 2009. In turn, areas under other, higher priority crops were increased: oilseeds, grain feed, legumes,” he said. He noted that the price for wheat was quite reasonable this year: “A result of the diversification,” he said.

Another reason to diversify the crops was the demands generated by livestock production.

“Livestock production is developing in Kazakhstan and this requires certain changes in the cropping pattern. Hence, one cannot say that this diversification is only due to administrative pressure or changes in the subsidy policy. Most of all, this change is dictated by the market, because livestock development creates a demand for certain crops," the Minister of Agriculture said.

According to the official statistics, the total capacity of granaries in Kazakhstan at the moment makes 25.1 million tons. As of January 1 this year, there were about 13.2 million tons of grain stored in the country. Granaries were 52.6 percent full.

Reporting by Assel Satayeva, writing by Dinara Urazova

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