13-1079 
 JOB/ACC/37/Rev.1           27 February 2013 
                
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Working Party on the             O r i g i n a l :   E n g l i s h  
Accession of Kazakhstan  
 
 
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.1 
 
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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 stru ctural imbalances between prices and revenues, 
low profitability, underdevelopment of production and social infrastructure, low levels of 
development of structural and technical upgrading,  small-scale agricultural production, 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. 1052 "On Approval of Agriculture Development Program for 2010-2014" of 
12 October 2010. 
2. The Law No. 66 "On State Regulation of Agri culture and Rural Areas" established legal 
framework for State regulation of agriculture and development 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 policy objectives of the Government 
aimed at sustainable and competitive development of  agriculture. The Program was to be 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 em ployed 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 continental climate prevailed.  For this reason, 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 irrigation and dr ainage 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 coul d 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 JOB/ACC/37/Rev.1 
 
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  were in poor condition. Apart from that, areas usable for agriculture were being destroyed by one 
of the major global environmental 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. To address these challenges faced by agricultural sector of Kazakhstan’s economy, the 
Government had approved the Government program "Agribusiness 2020" on February 12, 2013. 
Within the scope of this program, the share of non-trade distorting support in the total financing of 
the sector was planned to be increased. For exam ple, currently the share of non-trade distorting 
subsidies in the total volume of support was about 10%, by 2020 this volume would be doubled. 
The main emphasis would be placed on science and infrastructure, e.g. construction of grain 
storage facilities, improvement of transport infrastructure, development of water supply systems, 
improvement of producer’s access to agricultural research and consulting services and 
enhancement of phytosanitary and vete rinary safety systems, and etc.  
7. In the course of plurilateral negotiations on  agriculture 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".  
8. As it was indicated in the domestic support tables, Kazakhstan was seeking the right to use 
a non-sequential base period of 2007, 2010 and 2011 for its domestic support 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 used the non-sequential years for the 
base period. 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 representative of 
Kazakhstan added that during the crisis, Kazakh stan's GDP growth dropped to 3.3% in 2008 and 
1.2% in 2009 in comparison to 8.9% in 2007, 7.3% in 2010 and 7.5% in 2011. According to the 
World 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 ex ternal debt repayments in the banking sector 
put the currency exchange stability in Kazakhstan under the pressure forcing the Government to 
devaluate the national currency, tenge, by 25% agai nst the US dollar. As a result of devaluation, 
agricultural 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 transport and storage infrastructure and high transportation 
costs, which significantly affected the competitiveness of Kazakhstan’s agricultural products. When 
delivering wheat to external markets, the wheat was transited through the Russian Federation via JOB/ACC/37/Rev.1 
 
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  railways. The distance to the closest Russian po rt was 1,200 km. In average, the transportation 
cost of wheat from the territory of Kazakhstan to the indicated distance was about 130 US 
dollars per tonne. Therefore, it was highly important for the Government of Kazakhstan to support 
agricultural producers by reducing high transportation costs to the global markets.  
10. Furthermore, the representative of Kazakhstan requested the right to use export subsidies 
over the period of implementation of the prog ram "Agribusiness 2020". No export subsidies would 
be applied by Kazakhstan by 1 January 2021. Such 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.  
11. In response to a request by some Members for more information on the Customs Union 
Framework Agreement on Agriculture Policies, the representative of Kazakhstan stated that the 
Single Economic Space (SES) Agreement on Co mmon Rules for State Support of Agriculture 
adopted by the Decision of the CU Commission No. 482 on 8 December 2010 was a framework agreement, which established uniform rules for the State support measures that affected mutual 
trade of the CU member-States. The Agreement 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); (iii) trade-distorting 
measures ("Amber Box").  The Agreement also stipulated the requirements of the SES Parties for 
each of these categories. Measures falling under the first category were allowed to be applied by 
the SES Parties. Those measures, which fell into 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 production in a 
SES Party. The Agreement also stated that when a SES Party joined the WTO, its commitment under the WTO Membership would prevail.  
12. 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 reserv e, 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 purposes. 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 Supporting 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.  
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