12-6406  JOB/ACC/37          2 0  N o v e m b e r  2 0 1 2  
 
 
Working Party on the             Original:  English  
Accession of Kazakhstan  
 
 
WORKING PARTY ON THE ACCESSION OF 
KAZAKHSTAN TO THE WTO 
 
Submission by the Republic of Kazakhstan 
 
 
 The following submission is being circulated to Members of the Working Party, at the request 
of the Delegation of the Republic of Kazakhstan.   
 
 
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 JOB/ACC/37 
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  - Agricultural policies 
1. The representative of Kazakhstan stated that  her Government implemented agricultural 
policies in such a manner as to address challenges that  occurred in agricultural sector during the years 
of centrally planned economy, such as structural  imbalances between prices and revenues, low 
profitability, underdevelopment of production and social  infrastructure.  She furthermore stated that 
the following legal acts had been a dopted to address these challenges:  
- Law No. 66 "On State Regulation of Agriculture and Rural Areas" of 8 July 2005;  
- Resolution No. 1052 "On Approval of Agricu lture Development Program for 2010-2014" of 
12 October 2010. 
2. The Law No. 66 "On State Regulation of Agricu lture and Rural Areas" established legal 
framework for State regulation of agriculture and de velopment of rural areas.  The Program adopted 
in the Resolution No. 1052 "On Approval of Agriculture Development Program for 2010-2014" of 12 October 2010, stipulated key middle-term po licy objectives of the Government aimed at 
sustainable and competitive development of agricultu re.  The Program was to be financed at both 
republican and local levels.  
3. The representative of Kazakhstan said that agriculture was a key sector and played a 
significant role in economic and social developmen t of the country as nearly 50% of Kazakhstan's 
population resided in rural areas.  Agriculture empl oyed almost one third (28.3%) of the working 
population and was critical to addressing poverty and food security related challenges and also had 
potential for diversification of the economy.   
4. Furthermore, while the Government had started to implement market economy reforms in the 
agricultural sector after becoming a sovereign State,  development level of this sector still remained 
below the pre-reform stage, especi ally in the livestock production sector.  For instance, the number of 
cattle was by 40% lower than in 1991.  This reduc tion was mostly caused due to the reason that over 
90% of cattle was kept by households which used manual works and low quality cattle breeds.  As a 
result, average productivity of dairy cows in Kazak hstan was four times lower than in the countries 
with the industrial type of pr oduction (in Kazakhstan - 2,000 litres pe r cow a year; in the developed 
countries - 7,000 litres per cow a year).  
5. As regard to crops, the representative of Kaza khstan said that Kazakhstan was located in an 
area of risky farming where dry and sharp continental climate prevailed.  For this reason, over the past 
few years, dry lands accounted for about 86% of th e country's total area.  Currently, the area of 
irrigated lands in Kazakhstan wa s 1.5 times lower than the leve ls of 1991.  About 800 thousands  JOB/ACC/37 
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  hectares were not used due to the following reas ons:  (i) high concentration of salts in the soil; 
(ii) breakdown of the irrigation and drainage systems; (iii) shortage of water resources; and, (iv) lack 
of financial resources and modern equipment.  Approximately 90% of agricultural producers were 
small farms and households and could not purchase high quality seeds, up-to-date agricultural 
equipment and other inputs needed for modern and intensive agricultural production.  All these factors 
led to deterioration of the soil quality - as of to day about 74% of cultivated  lands were in poor 
condition.  Apart from these, areas usable for agriculture were bei ng destroyed by one of the major 
global environmental disasters - Aral Sea.  Disapp earance of Aral Sea resulted in rapid salinization, 
degradation and desertification of the neighbouring areas, the major population of which was engaged 
in agricultural sector.  
6. In the course of plurilateral negotiations on ag riculture that took place on 19 July 2012, 
Kazakhstan presented domestic support and export subsidies tables for the most recent period of 2007, 
2010 and 2011.  The information could be  found in the following documents: 
WT/ACC/SPEC/KAZ/6/Rev.6 "Domestic Support and Export Subsidies in the Agricultural Sector" 
and JOB/ACC/12/Rev.1 "Consolidated Document on Domestic Support Programmes of the Republic 
of Kazakhstan".  
7. A new Agriculture Development Program for the period up to 2020 was in the process of its 
development.  The Program was aimed at addressi ng in a long-term perspective the challenges in 
agricultural sector related to low levels of deve lopment of structural and technical upgrading, 
unsatisfactory levels of development of infrastruct ure, small-scale agricultural production, financial 
instability, lack of private investments, shortage of qualified personnel, etc.  
8. As it was indicated in the domestic support ta bles, Kazakhstan was seeking the right to use 
non-sequential base period of 2007 , 2010, 2011 for its domestic s upport commitments.  In this 
respect, some Members of the Working Party asked  the representative of Kazakhstan to explain why 
the latest version of the supporting tables had as th e base period non-consecutive years.  In response, 
the representative of Kazakhstan said that the data for 2008 and 2009 were not included into 
calculation due to the reason that these years were the years, when Kazakhstan's economy was 
severely hit by global financial crisis and, as such, were not "representative" for domestic support 
commitments.  Furthermore, the representativ e of Kazakhstan added th at during the crisis, 
Kazakhstan's GDP growth dropped to 3.3% in 2008 a nd 1.2% in 2009 in comparison to 8.9% in 2007, 
7.3% in 2010 and 7.5% in 2011.  According to the Worl d Bank, Kazakhstan faced economic crisis 
due to the sharp fall of oil and commodity prices in the world market.  In the beginning of 2009, large 
external debt repayments in the banking sector put the currency exchange  stability in Kazakhstan JOB/ACC/37 
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  under the pressure forcing the Government to devalu ate the national currency, tenge, by 25% against 
the US dollar.  As a result of devaluation, agri cultural producers' foreign currency debts increased 
by 25%.  
9. With regard to export subsidies,  Kazakhstan requested the right to use such subsidies due to 
its landlocked geographical location, the vastness of  its territory, remoteness from major agricultural 
markets, insufficient infrastructure and high transp ortation costs, which significantly affected the 
competitiveness of Kazakhstan’s agricultural products.  When delivering wheat to external markets, 
the wheat was transited through Russian Federation via railways.  The distance to the closest Russian 
port was 1,200 km.  In average the transportation cost of wheat to the indicated distance was 
US$136 per tonne at price level of approximately US $260/tonne.  Therefore, it is highly important for 
the Government of Kazakhstan to support agricultu ral producers by reducing high transportation costs 
to the global markets.  The representative of Kaza khstan further stated that a request for 10-year 
transitional period was critical for Kazakhstan b ecause to address the challenges the Government 
required a sufficient time-frame.  
10. In response to a request by some Members for more information on the Customs Union 
Framework Agreement on Agriculture Policies, the re presentative of Kazakhstan stated that the Single 
Economic Space (SES) Agreement on Common Rules of  State Support of Agriculture adopted by the 
Decision of the CU Commission No. 482 on 8 Dece mber 2010 was a framework agreement, which 
established uniform rules for the State support m easures that affected mutual trade of the 
CU member-States.  The Agreement incorporat ed key provisions of the WTO Agreement on 
Agriculture. In particular, the Agreement classifi ed state support measures in three categories:  
(i) measures that did not distort agricultural trade between CU member-States ("Green Box"); (ii) measures that distorted trade to a larger exte nt (export subsidies); (iii) trade-distorting measures 
("Amber Box").  The Agreement also stipulated the requirements of the CU members for each of 
these categories.  Measures falling under the first cate gory were allowed to be applied by Parties.  
Those measures, which fell into the second category, were prohibited to apply in mutual trade.  
The amount of State support in the CU member-States covered by the third category should not exceed 10% of the gross value of agricultural products produced by each of the CU country.  The Agreement also stated that when any CU member joins the WTO, its commitment under the 
WTO Membership would prevail.  
11. One Member sought explanation on how future  program and policy orientation would be 
consistent with the re-orientating to less distorti ng means of support.  In response, the representative 
of Kazakhstan stated that Kazakhstan was seeking th e right to fix the amount of current total AMS at  JOB/ACC/37 
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  requested level for the reason that in accordance with the new Agriculture Development Program 
until 2020, the Government of Kaza khstan was planning to increase investments into agriculture, in 
particular into livestock sector development by 20 20.  Although, there would be no any dramatic shift 
in policy balance under the Program, Kazakhsta n was planning to increase investments into 
agriculture with the priority spending on infrastructure and research. 
12. In response to a question on the relationship between measures recorded in the Supporting 
Table DS:1 on the creation of public stockholding for food security purposes and DS:5 market prices support for procurement to State reserves, the repr esentative of Kazakhstan explained that the State 
reserve of grain was annually renewed by the "F ood Contract Corporation", which performed the 
function of the Government agent responsible for es tablishment, renewal and disposal of the State 
reserve for food security purposes.  Budget outlays spent on storage of State reserves and transporting 
grain from private elevators to elevators managed by  the "Food Contract Corporation" were recorded 
in the Supporting Table DS:1.  The difference betwee n the purchase price of wheat procured for the 
State reserve and external price of wheat w as calculated in the Supporting Table DS:5.  
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