Our country has long been producing grains much more than required to meet its own needs. For decades, the country has been able to export more than half of the crop harvested in its fields. Kazakhstan’s average annual gross grain harvest in 1966-1970 amounted to 20.668 million tons, in 1971-1975 to 21.662 million tons, in 1976-1980 to 27, 497 million tons, in 1981-1985 to 21.321 million tons. During these periods, none of the other Soviet Socialist Republics within the former Soviet Union could be compared with the Kazakh Soviet Socialist Republic in terms of the amount of grain produced per person. Some years, this share amounted to two tons in Kazakhstan. And in the other two largest grain-producing republics – in Ukraine and Russia – it never even reached one ton back then.
Already in 1992, when Kazakhstan had just gained state independence, the post-Soviet republic recorded a bumper cereal harvest. According to official data, more than 30 million tons of grain was collected in the country at that time.
Over the past three decades while Kazakhstan has been increasingly integrated into the international economy, our country’s grain production has significantly fallen, although the demand for it has been and remains very high in the world. The area of arable land, which comprised 35 million hectares in 1991, has decreased by 2019 to 25.8 million hectares, or by almost 10 million hectares. According to the US Geological Survey, it accounts for 1.38% of the world’s cultivated arable land and for 9.59% of Kazakhstan’s cultivated arable land. Compared to countries such as Ukraine, a relatively small percentage of land is used for crops, with the percentage being higher in the north of the country. 70% of the agricultural land is permanent pastureland.
Yet Kazakhstan continues to be one of the world’s largest grain producing and grain exporting countries. Its main crop is wheat, which it exports. But the situation is changing. There is a sizeable shift taking place from wheat, with wheat area projected to fall by 2 million hectares (14 percent) from 13.5 million hectares in 2012 to 11.5 million hectares in 2020. Most of that vacated area should be used for the cultivation of so called “feed crops” primarily feed grains, which are projected to increase by 1.5 million hectares (53 percent) from 2.8 million hectares to 4.3 million hectares in 2020. However up to now, there has not been any significant change in the wheat production and export of Kazakhstan.
In July 2018 USDA Foreign Agricultural Service/Astana forecasted Kazakhstani wheat production in the 2018/2019 agriculture year (July-June) at 14 mmt (million metric tons), 0.8 mmt lower than in 2017/2018 agriculture year, as wheat area sown fell. A month later, Kazakhstani wheat production estimates for the 2018/19 seasons were raised by USDA from 14 mmt to 14.5 mmt. In reality, the effective result far exceeded its expectations. In 2018, Kazakhstan harvested one of its heaviest grain crops (20.3 mmt) since 2011 that enhanced the country’s export potential appreciably. The country then produced almost 15 million tons of wheat, just above the relatively high level reached in 2017 (14.802 million tons). Yet such results did not mean returning to 1991 output levels.
That kind of progress now seems as an unrealistic prospect, not least because of marketing problems that limit the ability to export Kazakhstan’s surplus production. Kazakh exporters experience great difficulty in finding ways to enter the markets of States members of the Organisation for Economic Co-operation and Development (OECD).
They have no possibility of competing effectively in large markets with the high absorptive capacity, such as Turkey, Egypt, Pakistan, South Africa and Indonesia, let alone in European markets. The agrarian lobby in the developed, rich and powerful countries do not hesitate to use non-economic measures designed to prevent them having access to large and growing markets. We have many examples to invoke in this regard.
And here is one of them. In 2002, the United States and Canada addressed to the European Union the question of preventing the Kazakhstani wheat from entering its markets. This action caused the concomitant economic impact. Therefore it is not surprising that Kazakhstan’s grain producers have difficulties with sales of even the amounts of the wheat harvest, which have been significantly reduced in comparison with those of the late 1980s and early 1990s.
The production of staple cereals can therefore be expected to decline. Contributing further to the downward trend is the reduction in area planted following the enactment of the Kazakh government’s program for 2017-2021 which intends to reduce the wheat area planted from 12.4 million hectares to 10.1 million hectares in favor of more profitable oil crops. In compliance with the program, the government has stopped issuing subsidized credits for wheat production.
According to the International Grains Council (IGC) expectations, Kazakhstan’s aggregate cereal exports would amount to 9.5 million tons in the 2018/2019 agriculture year (against 9.8 million tons in the MY 2017/2018), including 8.5 million tons of wheat (against 8.4 million tons in the MY 2017/2018). The main consumers of the Kazakh produce are Uzbekistan, Tajikistan, Azerbaijan, Afghanistan, and Turkmenistan. It therefore means that the largest parts of Kazakhstan’s grain exports, mainly wheat and wheat flour, have been going to the post-Soviet countries. As you can see for yourself, not much has changed in this regard during the years of independence. Any prospects for the opening of new export markets are being diminished due to the use of sophisticated counter-measures by the leading agricultural powers. The protectionist policies, pursued by developed countries, limit access to export markets by developing countries. Let us take the example of the EU. United Europe is our republic’s biggest trade partner, with almost 40% share in its total external trade. But Kazakh exports to the EU are heavily dominated by oil and gas, which account for more than 80% of the country’s total exports. Imports from Kazakhstan greatly exceed the European Union’s exports to Kazakhstan. The growing problem of trade imbalances does not contribute to opening up market access for the Kazakh grains. Thus, EU trade defence measures on agricultural imports from Kazakhstan are proved to be effective.
Yet Kazakhstan is actively working to expand markets for its agricultural products. This has been recently announced by the Minister of Agriculture of Kazakhstan, Saparkhan Omarov.
“Negotiations are planned with Israel, Turkey, Kuwait, Oman, Japan, South Korea, the countries of the European Union. Last year, a roadmap was signed with the Chinese side to harmonize import requirements for export-oriented agricultural products from Kazakhstan”, he said.
Gulf Times, in article by Joey Aguilar entitled “Kazakhstan explores food export scopes for Qatar”, said: “Kazakhstan is keen on supplying Qatar with a wide range of food and agricultural products, Kazakhstan ambassador Askar Shokybayev has said.
“My country is a big producer of halal meat, wheat and organic foods such as apple, honey and flour, among others, without any chemicals or non-GMO,” the envoy told Gulf Times.
While bilateral relations between Qatar and Kazakhstan continue to flourish, he said both sides are also reviewing their co-operation in the field of agriculture, with a focus on halal food production.
Kazakhstan aims to become a major meat exporter by 2020, targeting to produce about 180,000 tonnes of beef, which will be exported to various countries.
Shokybayev hopes a direct flight between the two countries will be realised in the near future, which is expected to further enhance trade and investment ties.
“Alongside this, we are also looking forward to establish land and sea connections via Iran and its southern sea ports like Bandar Abbas to the seaports of Qatar,” he noted.
“These air and land, as well as sea connections, will for sure help boost exports and imports between Kazakhstan and Qatar.”
Shokybayev said Kazakhstan, with a Muslim-majority population of around 18mn, is a growing investment market, especially for Qatar”.