National Project for the Development of the Agro-Industrial Complex in Kazakhstan in 2021-2025

Decree of the Government of the Republic of Kazakhstan dated October 12, 2021 #732

Project information

Name

National Project for the Development of the Agro-Industrial Complex in Kazakhstan in 2021-2025 (hereinafter referred to as the National Project or the Project)

Goal 

To create a competitive agro-industrial complex by increasing labor productivity by 2.5 times, doubling the export of agricultural products, and providing people with domestically produced food products

Implementation period

2021-2025 


Expected economic effect

  • Labor productivity increases to 6.2 million tenge per one person employed in agriculture

  • Export of agricultural products increases to $6.6 billion, bringing the share of processed products to 70%

  • Wages of agricultural workers rise from 115.4 thousand tenge in 2019 to 230.8 thousand tenge in 2025

  • Income of 1 million rural residents increases

  • 350 thousand farmers and households are involved in the ecosystems; the income of 1 million rural residents increases

  • Up to 500 thousand people will get jobs, including:

– 100 thousand permanent jobs

– 400 thousand seasonal jobs.

Expected social effect 

People are provided with food products (including essential food products) by 80% and more.


The amount of financing needed for the implementation


Financing from the state budget:

2021 –  471,9 billion tenge

2022 – 414,1 billion tenge

2023 –  485,6 billion tenge

2024 – 674,8 billion tenge

TOTAL – 2 703,3 billion tenge


Extrabudgetary funds:

2021 – 807,6 billion tenge

2022 – 1 052,5 billion tenge

2023 – 1 028,3 billion tenge

2024 – 472,2 billion tenge

2025 – 739,4 billion tenge

TOTAL – 4 100,0 billion tenge

National Project Developer

Ministry of Agriculture of the Republic of Kazakhstan

State bodies responsible for the project implementation

  • Ministry of Finance; Ministry of Education and Science; Ministry of Industry and Infrastructure Development; Ministry of Trade and Integration; Ministry of National Economy; Ministry of Ecology, Geology and Natural Resources; Ministry of Labor and Social Protection; Ministry of Digital Development, Innovation, and Aerospace Industry

  • Akimats of regions and cities of Nur-Sultan, Almaty, and Shymkent

  • Agency for Regulation and Development of the Financial Market (by agreement)

  • Atameken National Chamber of Entrepreneurs (by agreement)

  • Baiterek National Managing Holding (by agreement)

  • National Agrarian Scientific and Educational Center (by agreement).

National Project Manager

Minister of Agriculture of the Republic of Kazakhstan

National Project Supervisor

Roman Sklyar, Deputy Prime Minister of the Republic of Kazakhstan


Baiterek Holding’s subsidiaries contributing to the program implementation

The Holding’s subsidiaries implement the State Program providing financial services at the expense of budgetary, own, and borrowed funds. The State Program is implemented by the subsidiaries, which previously belonged to the KazAgro National Management Holding. KazAgro merged into Baiterek Holding in March 2021. These companies are licensed to carry out certain types of banking operations.

The Agrarian Credit Corporation (hereinafter – ACC) issues loans for investment projects, finances spring field and harvesting works, and funds second-tier banks, credit partnerships, microfinance organizations, and leasing companies that then finance agribusinesses.

Funding is provided at a rate from 1.5% per annum (at the expense of budgetary funds for sowing and harvesting campaigns) to 7% per annum, taking into account subsidized remuneration rates (at the expense of extra-budgetary funds allocated for the production and processing of agricultural products). The maximum loan term is 12 years, depending on funding sources.

In December 2021, the Fund for Financial Support of Agriculture (hereinafter – FFSA) was merged into the ACC. The FFSA’s functions of issuing microcredits and insuring projects in the agro-industrial complex were taken over by the ACC.

KazAgroFinance (hereinafter – KAF) leases agricultural machinery at a remuneration rate of up to 6% per annum for a period of up to 10 years, depending on the type of machinery. The KAFsubsidizes up to 25% of the cost of agricultural machinery. The money can also be used to pay an advance payment.

By the order of the President, 100% of KAF shares were transferred to the ACC on July 25, 2022.

The loans issued by Baiterek Holding’s subsidiaries have a grace period for repayment of the principal debt, depending on the industry the financed project belongs to. The Holding’s subsidiaries provide more favorable conditions for property pledges than second-tier banks. The subsidiaries also accept hard-to-sell property in rural areas as collateral.

Feel free to visit the subsidiaries’ websites or regional branches to get more information on the financial support programs.

Financing of the agro-industrial complex

                                                             Billion tenge

  In 2021     As of July 1, 2022     1st half of 2023
The amount of financing  464,2
241,4 364,5 
ACC (including FFSA) 322,5 182,6
271,3 
KAF  141,7
58,8
93,2 

At the end of 2022, ACC and KAF allocated funds in the amount of 522.3 billion tenge to finance the agro-industrial complex, which is 13% more than in 2021. Of these, the ACC financed the subjects of the agro-industrial complex in the amount of 351.2 billion tenge, the CAF for 171.1 billion tenge.

According to the results of the first half of 2023, ACC and KAF allocated funds in the amount of 364.5 billion tenge to finance the agro-industrial complex, which is 51% more than the same period in 2022. Of these, the ACC financed the subjects of the agro-industrial complex in the amount of 271.3 billion tenge, the KAF for 93.2 billion tenge.

Of the total funding for the 1st half of 2023, small and medium-sized businesses account for 96.7%. The total number of active borrowers in the loan portfolio of ACC and KAF reached 89 thousand.

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