September 2, 2011

Kazakhstan to fund 2012 agriculture with US$2.3 billion

Kazakhstan is looking to raise its budget spending on agriculture by 7%, or US$2.3 billion, in 2012, Finance Minister Bolat Zhamishev said on August 27, on the country's draft three-year budget.

A total of US$6.5 billion is to be earmarked to finance agriculture in 2012-14: US$2.3 billion in 2012, US$2 billion in 2013 and US$2.17 in 2014.

In August, KazAgro National Company vice chairman, Kairat Aituganov, said that starting from 2012, Kazakhstan would stop subsidising crops.

"We believe subsidies to wheat growing are not effective. The state has decided to stop subsidies to crops growing, he said on his working visit to Kostanai oblast," he said.

"At the same time the Agriculture Ministry is considering a programme of cheap loans secured against land. US$123.2 million is to be earmarked out of the state budget to finance the project," according to Aituganov.

A day before Aituganov's comments President Nazarbayev had publicly announced that from year to year it has been more complicated to sell grain.

If a tonne of meat is fivefold more expensive than a tonne of grain it is a viable initiative. Lands under grain should be transformed to accommodate forage crops.