Kazakhstan and Ukraine. Comparison of the agro-industrial complex of the countries - Part 1

Latifundist.com and Zernotorg.ua keep on the project "Ukrainian Agro it’s not an American one.". This time they studied Kazakhstan. Read the full article at: https://latifundist.com/en/spetsproekt/834-ukrainskoe-agro-vam-ne-kazahskoe-sravnenie-apk-ukrainy-i-kazahstana

The economy of one of the republics of the former Soviet Union has been actively developing in recent years. And much attention is paid to agriculture as one of the important industries in the Republic of Kazakhstan. The government actively supports farmers through subsidies and a preferential taxation system, allocates considerable funds for the development of the agro-industrial complex. From 2017 to 2021, the republican and local budgets allocated $ 5 billion to the country’s agriculture (not considering international assistance programs, etc.). Starting from 2021 to 2025, $ 11.4 billion will be allocated for the development of the agro-industrial complex of the Republic of Kazakhstan. It is expected that this will double the volume of agricultural production and the export of processed products. No matter how ambitious these plans are, the government seems to be implementing them, despite the coronavirus crisis and other problems.

Agroindustrial complex of Kazakhstan. Role in the country’s economy

Kazakhstan can be safely called the "new economic tiger" of Central Asia. Yes, the economy of this country has not yet reached the level of the development of other "Asian tigers" such as Singapore or South Korea. Nevertheless, among the countries of this region that were part of the Soviet Union, only Kazakhstan was able to increase the size of GDP by 6.3 times over the past 20 years and become one of the most successful republics of the former USSR.

Dynamics of nominal GDP, $ bln

In the early 2000s, according to the World Bank, the Ukrainian economy was 1.7 times larger than the economy of Kazakhstan. Now the size of the nominal GDP in Kazakhstan is almost $ 30 billion more than Ukrainian. The backbone of Kazakhstan’s economy is hydrocarbon production, and more than 70% of exports are oil and gas. Kazakhstan’s GDP, just like Ukraine’s, collapsed in 2014−2016 due to the fall in commodity markets. In Ukraine, the decline in GDP was also facilitated by the war and the loss of territories. Be that as it may, in Kazakhstan over the past years, reforms have been carried out, while in Ukraine, we only talk about such reforms that are selflessly imitated. This is a fact recognized at the level of the IMF, the World Bank and other international organizations, confirmed by the country’s macro indicators. Over the past 10 years, the average annual GDP growth rate of the republic amounted to 4.9%, which is higher than the growth rate of the world economy. The real sector is also showing positive changes. Since 2010, the share of the hydrocarbon cluster has decreased, and the Government of Kazakhstan is constantly working to reduce the economy’s dependence on oil and gas production. At the same time, over the past decade, the size of the manufacturing industry (mechanical engineering, light industry, food production, etc.), agriculture and transport has grown.

Development dynamics of sectors of the economy of Kazakhstan, million tenge

By the way, since 2010, the agro-industrial complex of Kazakhstan has been growing steadily by an average of 3.6% per year. At the same time, according to the Bureau of Statistics of the Republic of Kazakhstan, the number of people employed in agriculture decreased from 2.3 million to 1.2 million people during the mentioned period. That is why labor productivity in the Kazakh agro-industrial complex has grown to $ 6.6 thousand per person, which is 30% higher than the productivity of Ukrainian farmers.

Generally, the structure of the economy in Kazakhstan is very close to the standards of developed countries. Agriculture as a predominantly raw material industry with a short value added chain accounts for only 4.4% of the country’s GDP, compared to 9.9% in Ukraine. For example, in the USA and Canada which are market makers of the global agro-industrial complex, this figure is generally 1.4% and 1.7%, respectively.

Macro indicators of the agricultural sector of Ukraine and Kazakhstan in 2019

Climatic conditions

Kazakhstan is located in the interior of the mainland, so the climate here is sharply continental with little snowy cold winters and dry hot summers. On the border with Russia, the territory of the Republic of Kazakhstan is occupied by a forest-steppe, the middle zone is the so-called cold steppe. The south of the country is arid steppe, semi-deserts and deserts. The USAID average temperature cartogram gives an idea of where agricultural production is concentrated — it is the north of the country and the middle lane. It was here in the 50−60s that labor detachments from all over the USSR were sent to "raise virgin lands". It was raised, however, as in most megaprojects of the Soviet era, the efficiency was low. It turned out that the productivity of traditional crops grown in this region is low, and powerful wind erosion destroyed the top fertile soil layer.

As employees of the Kazakhstan office of Amazone informed us, very few winter crops are sown in the country. This is due to the fact that in winter the snow cover is too thin, and temperature minimums can reach -20 ° C. For example, according to the Bureau of Statistics, in 2019 the harvested area of winter wheat was only 0.5 million hectares, and spring wheat - 10.8 million hectares. At the same time, in Ukraine the picture is mirrored: 6.6 million hectares - the harvested area of winter wheat and 0.2 million hectares - spring wheat.

The south of the country is a zone of extreme agriculture. The average annual rainfall in the country is 260 mm. The lowest level of precipitation is in the southern regions, about 150 mm, the highest — in the northern regions, 330 mm. To understand how little this is, it is worth taking a look at our country. In Ukraine, the average annual rainfall is 500−600 mm, in 2019−2020 dry years in the south of the country there was 280−320 mm of precipitation. In order to resolve the issue of moisture supply for the republics, in Soviet times, they tried to implement another megaproject: irrigated agriculture in the southern part of Kazakhstan, as well as on the territory of Uzbekistan and Turkmenistan. This led to the drying up of the Aral Sea and a regional ecological disaster. By the way, Kazakhstan still uses part of this infrastructure. Today, 1.4 million hectares are under irrigation in Kazakhstan against 0.51 million hectares in Ukraine. At the same time, according to the strategy of the Government of Kazakhstan "Development of irrigated agriculture until 2030", it is planned to restore and overhaul the infrastructure for irrigation of 0.6 million hectares and commission up to 1.5 million hectares of new irrigated land.

Manufacturing technologies. Equipment

In the Amazone office, they say that due to climatic conditions, agricultural producers in Kazakhstan are trying to cultivate the soil to a minimum when growing grains and oilseeds. These are not the classic No-till or Mini-till we are used to. Basically, soil cultivation is carried out with disc headers or moldboardsless cultivators. For sowing crops, "paws" are used. Kazakhstani farmers still widely use seeders of the SZS type, which provide the very minimum tillage, while simultaneously cutting stubble and rolling the soil during sowing. In terms of the Amazone product line, the popularity of the Condor seeders has been growing recently, which allows the use of extensive cultivation technologies in arid regions with a continental climate.

In crop rotation, black fallow is widely used to increase yields.

At the same time, after harvesting, the fields are practically not cultivated for the winter, leaving high stubble to retain moisture and retain snow cover, since there is a factor of strong winds. Mineral fertilizers are applied very little due to the low amount of precipitation or their complete absence, which again affects the yield.

According to statistics in Kazakhstan, 85% of the tractor fleet and 68% of combines have a service life of more than 10 years, and the average wear and tear of the entire fleet of agricultural machinery is 76%. Therefore, the issue of saturation of the agricultural sector with high-quality equipment is acute. Amazone representatives told us that manufacturers from Russia and Belarus occupy a large share in the Kazakh market of agricultural machinery. For example, the production of the Kirovets and MTZ tractors is localized in the Republic of Kazakhstan. Among world brands, preference is given to John Deere, Buhler, and others.

The main types of agricultural products. Production and yield

Given the climatic features, Kazakhstan holds a leading position in the cultivation of drought-resistant crops and melons that tolerate heat well.

Kazakhstan production of major crops in 2019

Cereals, traditional for Ukraine, are also present in the crop rotation of Kazakhstani agricultural enterprises, but their yield is significantly lower than ours, therefore, significant gross harvests are provided due to large areas. For example, the area under wheat in 2019/20 MY in Kazakhstan amounted to 11.3 million hectares, and in our country — 6.8 million hectares, while Ukrainian farmers harvested 2.5 times more grain.

Experts note that Kazakhstani farmers, like Ukrainian ones, are open to new things: technologies, research, etc. The founder of the Agrotest laboratory, Ekaterina Gubina, for example, said that at the last international conference ISSPA (International Source Suppliers and Producers Association; "soil congress"), besides Ukrainians, representatives of the post-Soviet space were only from Ukraine and specialists from Kazakhstan.

The yield comparison of the main crops in 2019, tonnes per hectare

Plant growing. Main regions of production

In Kazakhstan, the cultivation of grain and oilseeds is concentrated in the north of the country in the forest-steppe zone, as well as in the east in the flat territories located in the foothills of Altai and the Tien Shan mountain system. The concentration of crop production in these regions is explained by a higher level of annual precipitation than the national average. The north and east of the country account for more than 80% of the gross harvest of grain and oilseeds.

Kazakhstan, the gross harvest of grain crops in 2019, thousand tons

Ukraine, gross harvest of grain crops in 2019, thousand tons

The queen of the fields — corn, never became popular in Kazakhstan due to the arid climate. Therefore, the grain cluster is mainly represented by wheat and barley, which provide 92% of the gross harvest.

Kazakhstan, the gross harvest of industrial crops in 2019, thousand tons

Ukraine, gross harvest of industrial crops in 2019, thousand tons

The production of industrial crops in Kazakhstan is more diversified in comparison with Ukraine. The country grows mainly drought and high temperature resistant oilseeds. In the structure of production, there are also typical for Ukraine sunflower and sugar beet, although the yield of these crops in Kazakhstan is significantly lower than in Ukraine.

Vegetable growing and horticulture are concentrated in the southern regions of Kazakhstan. Kazakhstan is in the world Top-10 in terms of the volume of melons and watermelons cultivation, the yield of which is 3.5 and 2.6 times higher than in our country, respectively. In the total volume of vegetable production in Kazakhstan, the largest share is taken by potatoes. In 2019, the country’s farmers harvested 3.9 million tons of potatoes. In general, in 2019 the gross harvest of vegetables in Kazakhstan amounted to 8.4 million tons against 30.5 million tons in Ukraine. During the same period, 0.4 million tons of fruit was harvested in Kazakhstan, and 2.5 million tons in Ukraine. Kazakhstani farmers prefer the cultivation of apples, apricots and grapes.

(To be continued)