Current trends in agricultural trade policy in the Republic of Kazakhstan Ademi Yerasylova PhD, Kazakhstan Research Institute of Agro-Industrial Economy and Rural Development under the Ministry of Agriculture of the Republic of Kazakhstan IAAE Inter-Conference Symposium Agricultural Transitions along the Silk Road Restructuring, Resources and Trade in the Central Asia Region Almaty (Kazakhstan), 4 – 6 April 2016

1. Basic indicators of the industry of agriculture of Kazakhstan in Name GDP of the country, million dollars US Gross domestic product of Agriculture, million dollars US Agricultural share in GDP, % 4,55,14,44,64,4 Population, thousand people including those who live in rural areas, thousand people the proportion of the population living in rural areas, % Employed population, thousand people including in agriculture, thousand people the share of employment in agriculture from the total number of the employed population, % GDP per capita, million dollars US The average monthly wage for the whole economy, million dollars US The average monthly wage in agriculture, million dollars US Source: Committee of Statistics of the Ministry of National Economy of the Republic of Kazakhstan

2. Kazakhstan's foreign trade balance of agro food commodities (commodity nomenclature of foreign economic activity codes 1-24) for Name Export Import Trade balance Foreign trade turnover Source: Committee of Statistics of the Ministry of National Economy of the Republic of Kazakhstan Customs Control Committee of the Ministry of Finance of the Republic of Kazakhstan Customs Control Committee of the Ministry of Finance of the Republic of Kazakhstan million dollars US

3. Expansion of the Customs Union (CU) to Eurasian Economic Union (EAEU). Accession to the Eurasian Economic Union of Armenia in October 2014 and Kyrgyzstan in May In the countries of the Eurasian Economic Union, a single customs territory, within which customs duties and restrictions of economic nature shall not apply in bilateral trade in goods. These member countries of the Eurasian Economic Union apply common customs tariff and other regulatory measures in trade with third countries. 1. Accession to the Eurasian Economic Union of Armenia in October 2014 and Kyrgyzstan in May In the countries of the Eurasian Economic Union, a single customs territory, within which customs duties and restrictions of economic nature shall not apply in bilateral trade in goods. These member countries of the Eurasian Economic Union apply common customs tariff and other regulatory measures in trade with third countries. 2. From January 1, 2015 the legal basis for the application of the customs tariff in Kazakhstan is "Common Customs Tariff of the Eurasian Economic Union" and the "Protocol on the Common Customs Tariff regulation" under the Treaty on the Eurasian Economic Union. 2. From January 1, 2015 the legal basis for the application of the customs tariff in Kazakhstan is "Common Customs Tariff of the Eurasian Economic Union" and the "Protocol on the Common Customs Tariff regulation" under the Treaty on the Eurasian Economic Union. 3. In 2010, on the territory of Belarus, Kazakhstan and Russia within the framework of the Customs Union was introduced a single Customs Code with the unification of customs rates on imports from third countries and the removal of duties within the Customs Union. As a result, the weighted average rate for Kazakhstan's agro food commodities rose from 19.8% to 22.9%. 3. In 2010, on the territory of Belarus, Kazakhstan and Russia within the framework of the Customs Union was introduced a single Customs Code with the unification of customs rates on imports from third countries and the removal of duties within the Customs Union. As a result, the weighted average rate for Kazakhstan's agro food commodities rose from 19.8% to 22.9%. Russia's accession to the WTO in 2012, influenced the decrease in the weighted average customs duty rates in Kazakhstan on agri-food products to 16.9%. Russia's accession to the WTO in 2012, influenced the decrease in the weighted average customs duty rates in Kazakhstan on agri-food products to 16.9%.

4. The expansion of market capacity and the movement to establish a regional specialization and cooperation within the framework of the EAEU

5. Kazakhstan's accession to the WTO 1. From December 1, 2015 Kazakhstan is a member of the WTO 1. From December 1, 2015 Kazakhstan is a member of the WTO 2. Reduction of the weighted average of customs duties for agro food commodities to 10.2% (against 16.9% in CCT EAEU) 2. Reduction of the weighted average of customs duties for agro food commodities to 10.2% (against 16.9% in CCT EAEU) 3. From the agricultural commodity positions on the CCT 10-digit code of the EAEU Kazakhstan seized 578, followed by their decline to a level below the CTT of the EAEU. 3. From the agricultural commodity positions on the CCT 10-digit code of the EAEU Kazakhstan seized 578, followed by their decline to a level below the CTT of the EAEU. According to an article 42 of the EAEU of the Treaty, goods imported into territory of Kazakhstan from third countries with lowered custom duties, will be released in circulation only for the Kazakh market and are considered as conditionally cleared commodities in accordance with the Customs Code of the Customs Union. In order to import goods received the status of ‘EAEU commodity’ and that it can be supply to other countries of the Union, the importer will need to pay import customs duties at CCT rates of the EAEU According to an article 42 of the EAEU of the Treaty, goods imported into territory of Kazakhstan from third countries with lowered custom duties, will be released in circulation only for the Kazakh market and are considered as conditionally cleared commodities in accordance with the Customs Code of the Customs Union. In order to import goods received the status of ‘EAEU commodity’ and that it can be supply to other countries of the Union, the importer will need to pay import customs duties at CCT rates of the EAEU

6. Basic obligations of Kazakhstan binding tariffs at the WTO The reduction of import custom duties and expansion of tariff quotas for imports of beef, pork and poultry meat (commodity nomenclature of foreign economic activity codes 0201, 0202, 0203, 0207) The reduction of import custom duties and expansion of tariff quotas for imports of beef, pork and poultry meat (commodity nomenclature of foreign economic activity codes 0201, 0202, 0203, 0207) This will keep the sensitivity of agricultural products to the competition that occurs when you import. First of all, this trend refers to goods that are the most import-dependent This will keep the sensitivity of agricultural products to the competition that occurs when you import. First of all, this trend refers to goods that are the most import-dependent Poultry meat The increase in size on poultry meat quota from 110 thousand tons to 128 thousand tons and tariff reduction on the volume of incoming goods over the quota from 80 to 40% will facilitate the import from other countries at a cost lower than the current level, which reduces the competitiveness of domestic products and reduces possibilities of import substitution White sugar Growth rates for raw cane sugar from 0 to 5%, planned in order to protect the interests of producers will have a positive impact on the Kazakhstani enterprises producing white sugar from sugar beets. However, with the passage of time can worsen the situation of producers of white sugar from raw sugar. Thus, the increase in custom duties on raw materials for the production of the Kazakh white sugar leads to an increase in its final cost. Taking into account that the domestic sugar mills working mainly on imported raw materials, to ensure their full utilization, as well as considering the constant fluctuation of prices for raw sugar on the world market, for Kazakhstan it would be appropriate to retain the zero rate on this type of product Fruit Reduced rates of customs duties on apples in autumn will not allow the possibility of domestic producers to sell their products at a higher price and have an income from it. This may reduce the labor motivation of Kazakhstani producers, since a significant proportion of the harvest they will have to sell at a lower cost and to compete with producers of goods from abroad, who will deliver the fruit at a reduced price, as the rates of customs tariffs, will be low. Consequently, the limited internal protection will facilitate the import of large quantities of imported fruit in the long term

7. Kazakhstan assume responsibility for the revision of a number of government measures to support agriculture 1. The level of "de minimis" is set at 8.5%, which should save the state support the industry under the current "Agribusiness-2020" state program on in full. The total budget for the Programme billion tenge (about US $ 12 billion.) 1. The level of "de minimis" is set at 8.5%, which should save the state support the industry under the current "Agribusiness-2020" state program on in full. The total budget for the Programme billion tenge (about US $ 12 billion.) 2. Cancellation of tax benefits in the amount of 70% of the VAT paid for the producers and processors of agricultural products before January 1, 2018, however, the abolition of benefits will be replaced by direct payments as part of the "amber box". 2. Cancellation of tax benefits in the amount of 70% of the VAT paid for the producers and processors of agricultural products before January 1, 2018, however, the abolition of benefits will be replaced by direct payments as part of the "amber box". This will allow in terms of commitments to reduce competition and increase the adoption of certain measures to improve the efficiency of agribusiness subsidies: This will allow in terms of commitments to reduce competition and increase the adoption of certain measures to improve the efficiency of agribusiness subsidies: - Expansion of the progressive scale of subsidization for livestock intensification of production depending on the quality and quantity of production characteristics: the number of breeding stock, the average annual milk production / slaughter weight and the level of mechanization of production processes. - Expansion of the progressive scale of subsidization for livestock intensification of production depending on the quality and quantity of production characteristics: the number of breeding stock, the average annual milk production / slaughter weight and the level of mechanization of production processes. - Financial restructuring - refinancing of distressed debt of 292 agribusiness entities in commercial banks worth over 300 billion tenge. - Financial restructuring - refinancing of distressed debt of 292 agribusiness entities in commercial banks worth over 300 billion tenge.

The streams foodstuffs of Kazakhstan ths. tons ths. tons Exports foodstuffs from Kazakhstan Commodity Imports of food products in Kazakhstan 1 219,6 Grain and grain products (expressed in grain), including: 43, ,7Wheat1,1 34,8The barley13,1 1,8Oats0,1 0,2Corn0,5 44,2Wheat flour1,3 21,3Rice groats15,3 8,3Macaroni21,9 02Sunflower seeds17,0 0,3Potatoes3,0 0,2Sunflower oil94,0 12,1Vegetables and melons0,7 2,2Fruit3,2 0,0White sugar39,1 1,5Meat, including37,0 0,3beef9,6 0,06pork0,3 1,2meat of poultry27,1 362,2Milk and dairy products (in milk), including30,5 18,0Milk and cream, concentrated29,0 0,3Milk and cream, concentrated45,5 0,3Of butter5,1 0,4Cheese and cottage cheese13,0 0,4Fruit and vegetable preserves2,3 0,04Jams, fruit jellies,5,2 Note: Compiled by the author based on the data of the Customs Committee of the Ministry of Finance of the Republic of Kazakhstan

9. Existing measures of state support of export and export-oriented enterprises 1. Partial subsidizing the costs associated with the promotion of the Kazakh products to the foreign markets (advertising, participation in exhibitions, certification, and market research), the acquisition of the franchise, paid training. 1. Partial subsidizing the costs associated with the promotion of the Kazakh products to the foreign markets (advertising, participation in exhibitions, certification, and market research), the acquisition of the franchise, paid training. Concessional lending and leasing enterprises producing export-oriented products. Concessional lending and leasing enterprises producing export-oriented products. Insurance of leasing, factoring and trade transactions with foreign counterparties. Insurance of leasing, factoring and trade transactions with foreign counterparties. Providing trade finance export transactions by opening letters of credit on the bank of the importer of Kazakhstan goods Providing trade finance export transactions by opening letters of credit on the bank of the importer of Kazakhstan goods Export subsidies and other measures prohibited by the WTO Support shall not apply. Export subsidies and other measures prohibited by the WTO Support shall not apply.

10. New prospects for export sales of the most competitive conditions are opened for Kazakhstan For Kazakhstan receiving MFN to all WTO member countries opens the possibility to attract innovative, intensive and resource-saving technologies. For Kazakhstan receiving MFN to all WTO member countries opens the possibility to attract innovative, intensive and resource-saving technologies. Therefore, having large domestic market with significant potential in the agricultural sector, the country will be able to produce not only wheat, but also meat, especially marbled beef, vegetables (especially, heat-loving plants) and products of their processing, fruit (tinned products from them), horsemeat and koumiss, shubat (camel milk) etc. Therefore, having large domestic market with significant potential in the agricultural sector, the country will be able to produce not only wheat, but also meat, especially marbled beef, vegetables (especially, heat-loving plants) and products of their processing, fruit (tinned products from them), horsemeat and koumiss, shubat (camel milk) etc.

Thank you for attention!