13-2477 
 JOB/ACC/37/Rev.2                  13 May 2013 
                
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Working Party on the    
Accession of Kazakhstan           Original:  English 
 
 
WORKING PARTY ON THE ACCESSION OF 
KAZAKHSTAN TO THE WTO 
SUBMISSION BY THE REPUBLIC OF KAZAKHSTAN 
Revision 
 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/Rev.2 
 
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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, including stru ctural imbalances between prices and revenues, 
low profitability, underdevelopment of production and social infrastructure, low levels of 
technological upgrading, small-scale agricultural pr oduction, lack of private investments, shortage 
of qualified personnel and etc. She furthermore stated that the following legal acts had been 
adopted to address these challenges:  
- Law No. 66 "On State Regulation of Agriculture and Rural Areas" of 8 July 2005;  
- Resolution No. 151 "On Approval of Agriculture Development Program for 2013-2020 
'Agribusiness 2020'" of 12 February 2013. 
2. The Law No. 66 "On State Regulation of Agri culture and Rural Areas" established legal 
framework for State regulation of agriculture an d development of rural areas.  The Programme 
adopted by Resolution No. 151 "On Approval of Agriculture Development Program for 2013-2020 
'Agribusiness 2020'" of 12 February 2013 stipulated key middle-term and long-term policy 
objectives of the Government aimed at sustainable and competitive development of agriculture. 
Within the scope of the Programme, particular emph asis was placed on science and infrastructure, 
e.g. construction of grain storage facilities; im provement of transport infrastructure; development 
of water supply systems; improvement of producer's  access to agricultural research and consulting 
services; enhancement of phytosanitary and veteri nary safety systems, and etc.  The Programme 
was financed at both republican and local levels.  
3. The representative of Kazakhstan added that agriculture was a key sector and played a 
significant role in economic and social development of the country as nearly 50% of Kazakhstan's 
population resided in rural areas.  Agriculture employed 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. At the same time, development level of this sector still remained below the pre-reform 
stage, especially in the livestock production sector. For instance, the number of livestock 
population was 40% lower than that in 1991.  This reduction was mostly caused due to the reason 
that over 80% of livestock was kept by households which used manual works and low quality 
cattle breeds.  As a result, average productivity of dairy cows in Kazakhstan was four times lower 
than that in the countries with the industrial type  of production (in Kazakhstan - 2,000 litres per 
cow a year; in the developed countries - 7,000 litres per cow a year).  
5. As regard to crops, the representative of Kazakhstan said that Kazakhstan was located in an 
area of risky farming where dry and sharp continenta l climate prevailed.  As a result, over the past 
few years, dry lands had accounted for about 86% of the country's total area.  Currently, the area 
of irrigated lands in Kazakhstan was 1.5 times lower than the levels of 1991.  About 
800 thousands hectares were not used due to the following reasons:  (i) high concentration of 
salts in the soil; (ii) deterioration of the irrigati on and drainage systems; (iii) shortage of water JOB/ACC/37/Rev.2 
 
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  resources; and, (iv) lack of financial resource s 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 today about 
74% of cultivated lands were in poor condition. Apart from that, areas usable for agriculture were being destroyed by one of the major global enviro nmental disasters - Aral Sea.  Disappearance of 
Aral Sea resulted in rapid salinization, degradation and desertification of the neighbouring areas, 
where the major population was engaged in agricultural sector.  
6. The representative of Kazakhstan stated that during the WTO accession process, Kazakhstan 
provided data on domestic support to agricultur e starting from the period of 1996-1998 through 
the recent years from 2006 to 2012.  Kazakhstan used the most recent and consecutive base 
period of 2010-2012 for calculation of its domestic support. 
7. 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 transport and storage infrastructure and high transportation 
costs, which significantly affected the competitiveness of Kazakhstan’s agricultural products.  
When delivering wheat to external mark ets, the wheat was shipped through the 
Russian Federation or to/through China via railways .  On average, the transportation cost of wheat 
from the territory of Kazakhstan to the closest Russian port was about US$130 per metric tonne 
and the distance was 1,200 km.  The volume of wheat shipped to/through China was insignificant 
and constituted less than 3% of country's total volu me of wheat exports.  Therefore, Kazakhstan's 
request for export subsidies was based on the transportation costs related to wheat shipments 
transiting through the Russian Federation.  It was highly important for the Government of 
Kazakhstan to support agricultural producers though subsidizing part of high transportation costs 
to the global markets.   
8. Furthermore, the representative of Kazakhstan requested the right to use export subsidies 
until 1 January 2018.  The requested transition period would allow Kazakhstan to undertake 
construction and modernization of grain storage facilities and transport infrastructure and to 
address the challenges with delivering wheat to  the world markets without the need for export 
subsidies.  
9. In response to a request by some Members for more information on the Customs Union 
legislation on agriculture policies, the representative of Kazakhstan stated that the Single 
Economic Space (SES) Agreement on Common Rules for State Support of Agriculture adopted by 
the Decision of the CU Commission No. 482 on 8 December 2010 was enacted as of 1 January 2012.  The Agreement established uniform rules for the State support measures that 
affected mutual trade in agricultural products between the SES Parties and incorporated key 
provisions of the WTO Agreement on Agriculture.  In particular, the Agreement classified state 
support measures in three categories:  (i) measures  that did not distort agricultural trade between 
SES Parties ("Green Box"); (ii) measures that distorted trade to a larger extent (export subsidies); JOB/ACC/37/Rev.2 
 
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  (iii) trade-distorting measures ("Amber Box").  The Agreement also stipulated the requirements for 
application by the SES Parties of the abovementi oned categories of State support.  Measures 
falling under the first category were allowed to be applied by the SES Parties.  Those measures, 
which fell under the second category, were prohibited to apply in mutual trade.  The amount of 
State support in the SES Parties covered by the third category (Amber Box measures) should not exceed 10% of the gross value of agricultural pr oduction in a SES Party.  The Agreement also 
stated that when a SES Party joined the WTO, its commitment under the WTO Membership would 
prevail.  
10. In response to a question on the relationship  between measures recorded in the Supporting 
Table DS:1 on the creation of public stockholdi ng for food security purposes and DS:5 (market 
prices support for procurement to the state reserve), the representative of Kazakhstan explained 
that the state grain reserve was annually renewed by the "Food Contract Corporation", which 
performed the function of the Government agent responsible for establishment, renewal and 
disposal of the state reserve for food security pu rposes.  Budget outlays spent on storage of the 
state reserves and transporting grain from private elevators to elevators managed by the "Food 
Contract Corporation" were recorded in the Su pporting Table DS:1.  The difference between the 
purchase price of wheat procured to the State re serve and external price of wheat was calculated 
in the Supporting Table DS:5.  Furthermore, the representative of Kazakhstan explained that 
Kazakhstan's national food security program invo lving state procurement of grain and release of 
such grain at administered prices, did not meet the criteria stipulated in paragraph 3 of Annex 2 of 
the WTO Agreement on Agriculture.  Therefore, the above-mentioned measure was included into 
the AMS calculations in the Supporting Table DS:5.  Budgetary outlays associated with 
accumulation of the State reserve and storage costs were reported in the Supporting Table DS:1 
for transparency purposes only. 
 
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