Within 3 years it is planned to expand the network of milk collection points through concessional lending in Kazakhstan

Operator of the lending program is JSC "Fund for Financial Support of Agriculture", which is included in the structure of national holding "KazAgro". Within 3 years it is planned to fund the creation of 668 milk collection points, including 160 - in 2016. More than 600 million tenge were allocated for these purposes.

It is planned to solve several problems with the application of this measure. The first - the creation of an additional source of income for rural residents through the sale of milk; second - supply of milk processing enterprises with raw materials, which because of its deficit are currently loaded on the average by 60%. According to the Ministry of Agriculture projected three-year program will increase the load capacity of the milk plants to 84%, which will increase production of processed products by 30%. Thus, it will create more than 2.1 thousand jobs, and the budget will get over 1 billion of permanent tax revenue annually.

To help farmers and processors

As it was noted by the Chairman of the Board of the Fund Zhandar Omarov, local milk factory, having its own network of collection points of milk, can’t ensure 100 per cent capacity utilization. Among the possible reasons he calls the lack of working capital for the expansion of the network of collection points, poor organization of farmers in terms of collection and delivery of milk to the plants, transport and logistics complexity and simply shortage of raw materials in the countryside. "I was recently in the Zhambyl region. There is a factory "Kokzhiek 2020", they are loaded to 25% with a maximum capacity of 160 tons per day. It comes to the point, that some plants by raw milk from Mankent the South Kazakhstan region. It is a long distance... But in Mankent the process is more organized, although it was possible to organize it in the Zhambyl region. It comes to the point that milk factories buy cattle for farmers, so that they could return the debt with milk. "Kokzhiek" organizes such a program", - said Mr. Omarov, on a conference on the development of agricultural cooperatives (AIC) at the National Chamber of Entrepreneurs "Atameken".  According to him, only in Zhambyl region there are 20 dairy plants, which are loaded by an average of 38%.

This confirms the director of the Chamber of Entrepreneurs of Zhambyl region Karlygash Aralbekova. According to her, the regional enterprises can’t get raw materials from local sources, since others outrun them. "We have studied this question, we went to the areas and talked with farmers. We have such a problem that the Merken cheese factory can’t operate at full capacity due to lack of milk. Why? Because such companies as "FoodMaster" come to Kordai and buy almost all raw materials", - she says.

To solve this problem was created Merken agricultural cooperative to unite 42 farms, it will receive funding for the purchase of 1000 heads of cattle, said the head of the regional chamber.

As part of state measures, the Fund for Financial Support of Agriculture provides lending on favorable terms for the creation of milk collection centers and purchase of milk tankers. Borrowers can be milk processing enterprises themselves and individual entrepreneurs, who have private farms and agricultural cooperatives.

The maximum loan amount for the equipment of one milk collection station with capacity of 2000 liters – is four million tenge, for the purchase of milk tanker - seven million tenge. The interest rate on the loan - 6% per annum, the loan term is up to 54 months. Collateral can be purchased equipment and other movable and immovable property. The main requirement in the issuance of a loan - an agreement on guaranteed sales of raw milk to processing plants.

According to Zhandar Omarov, diary plants themselves during the presentation of the future measures of state support, expressed their willingness to buy raw materials from private farms and agricultural cooperatives. "It was decided how many milk collection points will have to be opened before the end of the year. As applications for a loan will come, we are ready to consider them in the shortest time and to allocate funds through our branches in the regions", - said abctv.kz the head of the Fund for Financial Support of Agriculture.

In view of the complexities of small farms to ensure continuous sales, it is offered to motivate them to unite in agricultural co-operatives so that they can form large party trademarks for consumers. Thus, within the same program is foreseen a second direction of lending for agricultural cooperatives for a maximum amount of up to 50 million tenge for the purchase of equipment and technology for service-procuring organizations for meat, dairy, fruit and vegetable products. The interest rate on the loan is 6% per annum, the loan term is up to 84 months.

And the third direction of the program is aimed at developing feedlots. The loan is provided at the rate of 6% per annum for up to 48 months for the purchase of cattle and the necessary fodder.

Caution measures for business

Executive Director of the Dairy Union of Kazakhstan Vladimir Kozhevnikov warns against unreasonable approach when creating new milk collection points and calls to take into consideration the interests of business, which has already invested in its own network.

"Today, large dairy factories have established their milk collection system. For example, "FoodMaster” has 76-78 milk collection points, which it has equipped. There's everything from reception and finishing with the veterinary and sanitary control. Today, local executive bodies in order to carry out this program establish new milk collection stations, beside the existing ones. And force farmers to sell the milk to the new ones, using the administrative resource. After all, the problem is that it is necessary to establish milk collection stations, where there are none, rather than where it already exists", - said Vladimir Kozhevnikov.

"It is necessary to find those areas where there is still milk and where the distance to the processor is not more than 200 kilometers. Today Pavlodar plant "Sut" buys milk every day in Pervomaika of Tselinograd at the distance of 500 kilometers, because there are good volumes. But you won’t carry two tons at this distance, because the logistics will be too expensive", - says the representative of the Dairy Union.

Ideally, he said, the production of raw materials and processing should be within one project.

Vladimir Kozhevnikov also expressed the view that the official statistics on how much milk is produced within the country, does not reflect the real picture, "I remember the speech of the minister Asylzhan Mamytbekov when he first came to the post. He frankly admitted that today 1.5 million milk was added to the real figure. Today, the statistics shows the production at the level of 5.1 million milk - I do not believe this. Since this calculation is made as follows: there is a cow, it has an average yield, but no one knows if this cow is milked or not, is it a meat or milk breed".

Other concerns expressed the chairman of the agricultural cooperative "Rodnaya dolina" Talgat Sultanov from Pavlodar.

He led the scenario if an agricultural cooperative upon receipt of funding is not obliged to supply the raw material to a milk factory: "In Russia, within the same measures of support to cooperative, there was not provided compulsory link between cooperatives and a milk factory. There is a situation that many agricultural cooperatives at a relatively low expenditures organize their own small processing. In fact, the bulk of the milk goes past the plants, because they themselves bottle milk, and sell it in retail chains. It turns out that the current diary plants remain without raw materials and cooperatives take their niche. And such a situation leads to the fact that the creation of an agricultural cooperatives has not led to loading of a milk factory".

Peasants motivate to unite

As it was noted in the National Chamber of Entrepreneurs and development institutions, an outreach should be conducted among private farms should on the benefits of working in associations.

"Our regional chambers need to work to raise awareness among small farmers about the benefits of amalgamation in the agricultural cooperatives. This is not an easy job, it is necessary to hold it in all districts and villages. Next you need to ensure that the newly created cooperatives have the necessary information about available financial instruments for development cooperation, including about the instruments of the Fund for Financial Support of Agriculture ", - said at the meeting, Deputy Chairman of NCE Nurzhan Altaev.

According to him, large retail chains in the republic within the framework of the negotiations have voiced their need for agricultural production, and declared their readiness to buy it in bulk from agricultural cooperatives. "We must somehow inform cooperatives about the need", - said the deputy chairman of NCE.

Regional Chamber of Entrepreneurs and Service Centers will assist in preparation of documents for the newly established agricultural cooperatives and their registration in the authorized bodies.

According to NCE, in 12 regions of the country with its help were registered 283 agricultural cooperatives, which combine 6335 private farms and about 700 peasants / farmers. The highest concentration of amalgamation of private farms was observed in East Kazakhstan region - 31%, West Kazakhstan - 14%, Aktobe - 14%, and North Kazakhstan - 10%.

Dina Yermaganbetova