Russian website looks at food security measures in Central Asia

The following is Sergey Arbenin's article "Threat of food crisis has no boundaries", published by the Russian news agency website Fergana.ru on 6 July: subheadings as published:

Crop rotation is a period in the agricultural practice during which cultivation and evaporation affect each field in sequence.

[Passage omitted: food crisis in the world]

A growth in prices for foodstuffs, above all, for bread in Kazakhstan in September-October last year came as a real shock not just for ordinary consumers. Nobody had foreseen this! Especially at a time when the most economically developed country in Central Asia [i.e. Kazakhstan] harvested a bumper crop of cereals amounting to 20.1m tonnes. The hike in prices which was followed by inflation (18.8 per cent a year) was caused by pressure on the domestic market by the consumer situation in CIS countries, which are the closest economic partners of Kazakhstan.

"It is necessary to work out specific measures and carry out specific actions to remove administrative and other non-tariff barriers to ensure the delivery of foodstuffs to our country. These measures should lead to a reduction in inflation and protect, above all, the interests of socially vulnerable segments of the population in the CIS," Kazakh Prime Minister Karim Masimov said then, commenting on the situation.

The country's agricultural potential did not allow it to meet the population's demand for essential foodstuffs on its own. This is why, to protect the domestic food market, the Ministry of Industry and Trade and the Agriculture Ministry suggested above all imposing restrictions on exports of certain groups of foodstuffs and reducing customs duties for the import of others. They also suggested the introduction of a system of subsidies and tax preferences, as well as extending tax exemptions regarding VAT to a number of sectors engaged in processing agricultural products. The fact that the state demonstrated its readiness to provide financial support to the development of the agricultural sector became the main factor in strengthening Kazakhstan's national food security system.

Ahead of the new harvest campaign in the country, it was announced that cultivated areas were considerably increased - by 700,000 hectares, including 600,000 hectares for sowing wheat. "If we used to have 18.9m hectares of the cultivated areas in the past, then in 2008, in accordance with the plans and forecasts of the regions, this figure will reach 19.6m hectares. Accordingly, areas sown with grain will be increased to 17m ha, including 13.5m ha that will be sown with wheat," Deputy Agriculture Minister Akylbek Kurishbayev told the public ahead of the spring field work. "This is the highest figure in the past 10 years, starting from 1998," he said.

[Passage omitted: Kazakhstan plans to harvest 17m tones of grain this year; agriculture is under strict state control in Uzbekistan and Turkmenistan]

To secure the introduction of modern technologies and equipment to agriculture and increase the country's potential to store and process cereals, it is necessary to pursue a "flexible agricultural policy", Turkmen President Gurbanguly Berdimuhamedow told a government meeting in July. It is expected that a programme for providing the population with food for 2008-2012 will be a response to threats to the [food] security. Speaking at the government meeting at the end of July, the minister of economics and development, Gurbanmyrat Gurbanmyratow, said that the programme was being prepared. Possibly, the programme will soften the current system of state orders for cereals and cotton in the country. This will enable agricultural producers to cultivate crops in a way they like, in accordance, above all, with demands on the market.

Uzbekistan spends great funds to ensure food security in the country. For example, this country was found to be the largest importer of flour in the world in the last season [as published]. In accordance with forecasts of the International Grain Council (IGC), the country may retain this position this year as well.

Mass exports of seasonal fruit and vegetables in Uzbekistan partially compensate imports of cereals, flour and other essential food products. Uzbek agricultural producers have already sent products worth 11.5m dollars to Russia and Kazakhstan since the beginning of this year. At the same time, Uzbekistan has imported foodstuffs worth 12.6m dollars to stabilize prices on the domestic market.

The association of companies engaged in wholesale trade, Uzulgurjisavdoinvest, which is the largest operator for procurement and export of fruit and vegetables [in Uzbekistan], has reported that it is going to sell 200,000 tonnes of imported flour, 35,000 tonnes of vegetable oil, 11,000 tonnes of sugar, over 10,000 tonnes of rice and other foodstuffs worth 160bn soms [about 120m dollars] altogether by the end of this year. The association's wholesale companies have concluded futures contracts worth 20bn soms [about 15m dollars] with farms. It is planned to procure 20,000 tonnes of agricultural products for the needs of the domestic market. Products worth 25m dollars will be exported [by the association]. So, external threats to the country's consumer market have been weakened to some extent.

Significant damage was inflicted on Tajikistan's food security last winter. The energy crisis in the country led to a production collapse at enterprises of small and medium-sized businesses and to a hike in prices for fuel, food and industrial products. Because the early harvest of fruit and vegetables and potatoes was destroyed due to various climatic cataclysms, many [Tajik] regions were in need of humanitarian aid. At the same time, even at best times the country imported more than 60 per cent of the goods consumed in the country from Iran, Russia, Kazakhstan and Uzbekistan.

[Passage omitted: Kazakhstan sent humanitarian aid to Tajikistan during the energy crisis]

Last spring, the sowing season was carried out in a rush in Kyrgyzstan. The state failed to fully supply farmers with fuel and lubricant materials at reduced prices, and credit institutions opted not to notice the needs of farmers. According to statistics, only 3 per cent of all credits goes to the countryside. Considering the country's interests of ensuring food security, Kyrgyzstan increased areas sown with cereals by 40,000 hectares to 400,000 ha on the whole. During the spring sowing work, the Ministry of Agriculture, Water Management and Processing Industry announced that the government would buy deficient amounts of grain from Kazakhstan.

[Passage omitted: the author quotes a Kyrgyz official as saying that Kyrgyzstan needs 1.1m tones of grain]

The government is trying to improve the situation. In recent months it announced the establishment of the Food Security Council and the Kyrgyz Agro-industrial corporation with its authorized fund of 1bn soms (30m dollars). It is said that the corporation will be engaged in importing grain and flour, production of flour and producing bread in large amounts. It will also intervene to improve the situation regarding supplies of grain and pasta products. The government has also given a loan of 100m soms (almost 300,000 dollars) to Ayylbank to grant easy payment credits to solvent farmers.

Apart from this, the president has signed [the decree] "On food security", which is aimed at dotting all the i's. It has been decided that Gosmatreserve [state reserves] will buy grain of the new harvest from farmers at the guaranteed prices of 0.48 dollars per 1 kg. This should promote growth in the production of cereals in the country, the Cabinet of Ministers thinks.

[Passage omitted: the author notes the need for CIS countries to unite efforts to ensure food security in their countries; world grain figures and forecasts]

Source: Ferghana.ru news agency website in Russian 0001 gmt 6 Aug 08