RESTRICTED  
  
JOB/ACC/37/Rev.5  
 
10 July 2014  
(14-3950)  Page: 1/5  
  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.5 
 
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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 structural 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. development of agricultural science and technology,  construction of grain storage facilities; 
improvement of transport infrastructure; develo pment of water supply systems; improvement of 
producer's access to agricultural research and consulting services; enhancement of phytosanitary 
and veterinary safety systems, and etc.  The Prog ramme 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 developmen t as nearly 50% of country's population resided 
in rural areas.  Agriculture employed almost one third of the working population and was critical to 
addressing poverty and food security related challenges.  One of the principal objectives of the 
Government was to increase productivity of the agricultural sector as part of strategy  for 
economic  diversification.   
4. While the Government had started to implement market economy reforms in the agricultural 
sector after becoming a sovereign state, the develo pment 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 concentrated in small  households, which used 
outdated breeding methods  and low  levels of breeding stock .  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. In 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 JOB/ACC/37/Rev.5 
 
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  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 
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 and export subsidies 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 do mestic support to agriculture and providing the 
data on export subsidies.   
7. With regard to domestic support, the requested amount provided in the recent Domestic 
Support Tables would  allow Kazakhstan to undertake measures stipulated in the Government 
Programme "Agrobusiness  2020" designed to address current challenges in the agricultural 
sector.   
8. [While recognizing the possibility of having recourse to the non-exempt measures under the 
WTO Agreement on Agriculture, Kazakhstan while determining its support requirements and level 
of commitments, will would give place particular emphasis to on the use of measures of Annex 2  
in order to  that could  achieve the desired reform objectives pursued under the Agribusiness 2020 
plan by Kazakhstan in the field of agriculture .  The Working Party took note of this 
commitment.] 
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 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 JOB/ACC/37/Rev.5 
 
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  Kazakhstan to support agricultural producers though subsidizing part of high transportation costs 
to the global markets.   
10. 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.   
11. 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 regulatory 
basis for such policy was Annex 29 "Protocol on Measures of State Support to 
Agriculture" to the EAEU Treaty of 29 May 2014.  This Annex replaced 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 , which was terminated when the 
EAEU Treaty came into effect on 1 January 2015.  From 1 January 2015, the EAEU Treaty 
established uniform rules for the State support measures that affected mutual trade in agricultural 
products between the EAEU member States  and incorporated key provisions of the 
WTO Agreement on Agriculture.  In particular, the EAEU Treaty  classified state support measures 
in three categories:  (i) measures that did not distort agricultural trade between 
EAEU member States  ("Green Box"); (ii) measures that distorted trade to a larger extent (export 
subsidies); (iii) trade-distorting measures ("Amber Box").  The EAEU Treaty  also stipulated the 
requirements for application by the EAEU member States  of the above-mentioned categories of 
State support.  Measures falling under the first category were allowed to be applied by the  
EAEU member States.   Those measures, which fell under the second category, were prohibited 
to apply in mutual trade.  The amount of State support in the EAEU member States covered by 
the third category (Amber Box measures) should not exceed 10% of the gross value of 
production of  agricultural products  in the EAEU member States.   T h e  EAEU Treaty  also 
stated that when EAEU member States  joined the WTO, its commitment under the 
WTO Membership would prevail.   JOB/ACC/37/Rev.5 
 
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  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 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 programme  involving 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.  Theref ore, 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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