KAZAKH MILK AND BEEF VALUE CHAINS

Analysis of the interactions, synergy and opportunities for

development of the cattle sector

Policy Dialogue on the Development of Kazakhstan’s Food Chains

Astana, 8 September 2011

Сomparative advantages of the cattle sector in Kazakhstan

• Kazakhstan’s great grassland resources• Many livestock keepers• Potential for feed production• Nearby markets for especially beef

The major constrains from economic and policy side

• Low productivity, resulting in high overhead costs per liter/kg beef

The major constrains from economic and policy side

• Fragmented production with high cost for aggregation

The major constrains from economic and policy side

• No clear pasture management and allocation system

• Tendency of government to overlook the producers of 90% of the milk and 85% of all beef

Possible solutions to mitigate the constraints: Production side

• Drastically improve day to day management of cattle

• Organize household farmers to reduce handling costs and improve quality

• Develop an ecologically sustainable pasture management system with year-round grazing and sufficient haymaking

• Promote the production of quality accessibly priced stock feeds

Possible solutions to mitigate the constraints by dairy processors’ association

• Set minimum standards for milk to be acceptable• Payment system based on quality• Provide other services to farmers

besides milk marketing only• Assist dairy companies to adopt

international standards

Possible solutions to mitigate the constraints by meat processors’ and traders

association

• Improve cold chain, especially for domestic markets

• Increase % slaughter under controlled conditions, give lease of markets to organized meat traders

• Develop a beef value chain with tracking and tracing and quality guarantees as catchment for export

Potential investment decisions for EBRD and other investors

• Make more smaller credits available to all farmers

• Equipment lease facilities for hay making, fodder production, milk collection, transport and processing

• Support private service provision to livestock sector

• Develop a practical training centre for fodder, milk and beef production

Needed policy adjustments

• Acknowledge household farmers as potential future medium-scale farmers

• Improve investment climate and conditions for feed mills

• Change the current pasture allocation and management system

• Change the rules for rural (micro)-finance and use future pasture and livestock management committees as guarantors