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Wheat Exports to Double – but Kazakstan Could Do Better

Despite forecasts that Kazakstan will double its exports of wheat next year, NBCentralAsia analysts say the agricultural sector is still not working to full capacity.

At the first ever International Grain Forum, held in Astana on November 29-30, the suggestion was floated that Kazakstan could become one of the top five world exporters of grain, given the rising trend in yields since 2000.

This year, the wheat harvest increased by five million tons to reach 18 million tons, meaning the country will be in a position to export up to eight million tons in 2007. The main purchasers of Kazak wheat are Russia, Azerbaijan, Ukraine and the Central Asian countries.

Some observers argue that Kazakstan is not making the most of its potential as a producer because arable lands have degraded, there are problems with the irrigation systems, and the country’s domestic and foreign markets are unstable.

“Kazakstan has huge potential as an agricultural producer – not least because there’s a lot of unused land – but that potential isn’t being exploited to the full,” said one agriculture expert. “What that means is that our producers aren’t making taking advantage of agricultural technologies or heeding the recommendations they get. If they did that, it could increase production.”

During the first decade of Kazakstan’s independence, the amount of land planted under wheat fell to around ten million hectares – about half what it was in the Seventies and Eighties. Much of this fallow land became unusable. A gradual process of bringing land back into cultivation began only in 2000, through a system of state subsidies worth about 200 million US dollars a year.

The Kostanay, North Kazakstan and Akmola regions produce up to 70 per cent of total wheat output, but they are defined as high-risk zones prone to frequent droughts. Irrigation remains a problem.

Analysts say production of wheat could be boosted if there was a more competitive market environment and there were better sales mechanisms in place.

“Internal competition is poorly developed in our country. When there is no competition, there is no development,” said member of parliament Yerasyl Abylkasymov. “Another problem is that we don’t have enough grain silos and elevators, because they have all been bought up by private businessmen who now charge the earth to store and process grain.”

(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)

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