Overview

Agriculture plays an essential role in Kazakhstan’s economic, social, and environmental development.  Kazakhstan is Central Asia’s largest grain producer and only significant exporter.   Over a third of Kazakhstanis’ livelihoods depend directly or indirectly on the country’s extensive rangelands for food, fodder, fuel, and medicinal plants. Animal husbandry also remains an important economic activity with around 75 percent of all agricultural land used for grazing.  While sheep breeding dominates the sector, cattle, pig, horse, and camel production are all important sources of food and income.

In 2021, the agricultural sector accounted for approximately 5.1% of Kazakhstan’s economic production.  Approximately 45% of the country’s population lives in rural areas, and incomes of almost 30% of the economically active population are generated by employment in the agricultural sector.  According to the Statistics Committee of the Ministry of National Economy, out of the total number of 8.5 million employed, two million people work in the agricultural sector. Approximately 75% of the country’s territory is suitable for agricultural production, but only about 30% of the land is currently under agricultural production. 

The total value of Kazakhstan’s agricultural output was approximately USD 8.4  billion in 2021.    This was a decrease from the 2020 output value, which is believed to have been caused by the COVID-19 pandemic, as well as a drought. 

Agricultural Machinery and Information Technology

Nearly 90% of machinery currently in use in Kazakhstan is at the end of its lifecycle and needs to be replaced.  Tractors in use for more than 10 years account for 94% of the entire fleet, while harvesting combines in similar condition make up 77%.  Agricultural equipment imports are subsidized in Kazakhstan at 25% of the cost, at the same time financial leasing is provided at a 10 percent interest rate.  The rate of machinery renewal over the past 5 years ranged from 3–4.9%, but this rate should reach 6–8% annually.

In 2020, the Kazakhstani agricultural machinery and equipment sector was estimated to be valued at USD 500 million, of which USD 300 million was imported.  Russia is a market leader for agricultural machinery and equipment with a 40% market share.  The United States, Germany, Canada, the Netherlands, Belarus, Turkey, and China are other large suppliers. 

Local production of agricultural machinery and equipment is small but growing, owing much to Kazakhstan’s entry into the Eurasian Economic Union.  In recent years, Kazakhstan launched several assembly projects with firms from Russia, Ukraine, and Belarus, which are now producing equipment for the market.  Through various techniques, this equipment is considered “Made in Kazakhstan”, a distinction which allows local producers to avoid customs and duties and receive special subsidies. In contrast, imported agricultural equipment faces taxes and duties approaching 40% (including a recycling fee, which is to be reduced by half in latter 2022), making it difficult for western firms to compete with locally assembled equipment. The above-mentioned new recycling fee on imported heavy agricultural equipment was imposed by the Government of Kazakhstan in 2020, and increases costs to farmers who purchase equipment manufactured outside of Kazakhstan. 

After decades of underinvestment, agricultural businesses are increasingly seeking out modern production technologies, especially within the animal husbandry, meat production, and specialty crop production sectors.  Within animal husbandry, cattle producers are increasingly using herd management technologies, drones, and advanced veterinary techniques to improve production.  Businesses are also seeking slaughtering equipment, digital technologies, and food safety technologies to modernize meat processing facilities.  Specialty crop producers, including tree fruits, vegetables, and berries are investing in modern greenhouse operations, pesticides, new plant varieties, and drip and pivot irrigation to improve production.

Livestock Production and Animal Husbandry

Kazakhstani producers are investing more resources in modern breeding techniques, such as utilizing artificial insemination, sexing of embryos in dairy cows, and importing high-quality imported genetics to increase poultry, beef, dairy, and egg production.  They are also searching for high quality animal feed and feed additives to improve animal health and meat yields.    According to the Ministry of Agriculture’s 2021-2030 Policy Document, the government plans to train beef cattle producers to increase beef exports, while the National Agricultural Sector Development Project Plan 2021-2025 called for increasing average cattle weight, increasing average milk yield per cow, and increasing domestic production of several “socially significant food products,” including poultry.

In addition to traditional animal production, the government is also encouraging more investment in aquaculture.   Over the past seven years, the volume of fish raised has increased ninefold, from 800 tons to more than 7,000 tons.  There are about 180 fish farms in the country.  The government has announced plans to further increase aquaculture production by utilizing additional water resources and producing or importing aquaculture feed.

Grain Production

Kazakhstan remains Central Asia’s largest grain producer, capable of exporting approximately half of all the grain it produces each year.  Wheat is the country’s largest crop by acreage, accounting for 80% of grain production, but it also produces barley, cotton, sunflower seeds, and rice.  The country is also the region’s largest flour exporter by volume, shipping mostly to other Central Asian countries and Afghanistan.  According to the data of the Bureau of Statistics of Kazakhstan, wheat production amounted to 11.8 million tons in 2021 and despite the increase in sown areas this volume is 17.5% less than in 2020 (14.3 million tons). In its turn, production of barley in 2021 compared to 2020 decreased by 22.9%, to 3.7 million tons (4.8 million tons in 2020). These decreases may be partly the result if drought in 2021.

Most of Kazakhstan’s grain is produced in the three northern regions of Akmola, North Kazakhstan, and Kostanay, while large-scale production also takes place in East Kazakhstan, Abai, and Pavlodar.   Farms in these regions can be quite large, some reaching 500,000 hectares or more.  Producers in these regions rely on agricultural machinery, improved seed varieties, and multiple applications of fertilizers and pesticides to maintain production, while production in the south is smaller scale.

Agricultural Sector Financing 

Kazakhstan has substantial untapped agricultural potential, yet its agricultural sector is underdeveloped and under-financed.  Despite serving as the country’s major employer, the agriculture sector in Kazakhstan comes in a distant second to the industrial sector in attracting government attention for investment and support.

State owned company KazAgroFinance JSC is a leading organization in the market, providing leasing and financing services to the agriculture sector (since July 25, 2022, the company has been a subsidiary of Agrarian Credit Corporation). More than half of all agricultural machinery imported into Kazakhstan has been financially supported by KazAgroFinance.  To increase cooperation and provide easy access to information on local and foreign producers of agricultural equipment, KazAgroFinance created the Electronic Supplier Base that serves as a bridge between local agricultural sector and international equipment suppliers.  The database includes more than 350 suppliers and more than 10,000 projects supported.

Two additional state-owned financial organizations in the agriculture sector are the Fund for Financial Support of Agriculture JSC that provides micro credits for agriculture SMEs and rural populations, and the Kazakh Agrarian Credit Corporation, a financial institution providing loans and financial support to agricultural producers.    

Leading Sub-Sectors

• Agricultural chemical products and fertilizer applicators
• Grain farm machinery, grain storage and processing equipment, yield enhancement technologies
• Seeds and livestock genetics
• Innovative technologies in livestock and poultry industries, and veterinary products and services
• Food processing equipment
• Innovative water saving technologies in irrigation
• Precise agriculture equipment and technologies
• Technologies for weather monitoring and forecasting in agriculture

Opportunities

American products enjoy an excellent reputation in Kazakhstan.  U.S. equipment exports to Kazakhstan consist mostly of grain harvesting combines, reapers, sprayers, tractors, seeders, cultivators, and grain drying and cleaning equipment.  Best prospects include: 100-150 horsepower (hp) tractors and combines for the southern regions, tractors of greater than 250 hp and combines for the northern regions, pneumatic seeders, reapers, sprayers, grain drying and cleaning technologies, grain storage equipment and storage quality control systems, water-saving and irrigation technologies, engineering, design and veterinary services for cattle feed complexes and on-farm processing facilities.  There are also growing markets for U.S. food and agricultural imports, including beef, poultry, tree nuts, alcoholic beverages, livestock genetics, and planting seeds. 

Resources

• Trade Show: KazAgro/KazFarm 2022, Kazakhstan International Agricultural Industry Exhibitions, October 12-14, 2022, Nur-Sultan, Kazakhstan
• Trade Show: AGROWORLD QAZAQSTAN 2022, 16th Central Asian International Agriculture Exhibition, November 2-4, 2022, Almaty, Kazakhstan
• Trade Show: AgriTek 2023, 18th International Exhibition for Agriculture, Horticulture, Animal Husbandry and Stock Breeding, March 29-31, 2023, Nur-Sultan, Kazakhstan (in Ministry of Agriculture

For more information on agriculture equipment and services, contact Commercial Specialist Nurlan Zhangarin.

For agricultural commodities, contact USDA’s Foreign Agriculture Service (FAS) Specialist Zhamal Zharmagambetova.