RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/KAZ/7/Add.2 
17 October 2005 
 
 (05-4743) 
Working Party on the 
Accession of Kazakhstan Original:   English 
 
 
 
ACCESSION OF KAZAKHSTAN 
 
Questions and Replies concerning  
Domestic Support and Export Subsidies in the Agricultural Sector  
 
Addendum  
  
 The following submission, dated 11 October 2005, is being circulated at the request of the 
Delegation of the Republic of Kazakhstan. 
  
 
_______________ 
 WT/ACC/SPEC/KAZ/7/Add.2 
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 - Base Period
 
Question 1 We welcome Kazakhstan's revised supporting tables (WT/ACC/SPEC/KAZ/6/Rev.3) and the 
additional information provided on programs. 
There are a number of important outstanding issu es in the factual part of this exercise on 
domestic support, which has some way to go before it will be appropriate to discuss 
commitments.  Accordingly the comments, quest ions and suggestions we have provided are 
offered in order to hasten the process, in part icular by pointing to the need for a recent and 
representative base period in the current decade. 
Kazakhstan's supporting tables continue to incl ude data for a distant base period (1996-98), 
which we do not regard as representative.  We wo uld note that the vast majority of countries 
that have acceded to the WTO under Article X II of the WTO Agreement have had base periods 
that end within four years of the conclusion of their accession processes. 
To conform to this requirement and in the interes ts of transparency, we request Kazakhstan to 
submit supporting tables with more recent support data, from 2000 onwards, to enable the 
Working Party to make an adequate assessment  of the support regimes it has in place. 
Answer:
 
Review of representative periods taken as base pe riods for computation of the domestic support by 
various countries having acceded to the WTO, shows that countries had a certain freedom of choice in 
selecting the "base" period, and that all base periods  represent the time interval between creation of a 
Working Party and completion of its work. 
Analysis of Green Box and Amber Box as well as th e development programs (DS:2) shows that the 
base period proposed by Kazakhstan is representative and demonstrates continuity of the agricultural 
policies of Kazakhstan. 
From the qualitative point of view, all Green Box and Amber Box programs are long-term, reflecting 
continuity of the agricultural policies of the Republic  of Kazakhstan.  At the same time, it shows that 
agrarian sector of Kazakhstan encounters the same  specific problems and challenges.  These programs 
address such challenges and solve these problems. 
The Republic of Kazakhstan considers that the data provided, including the description of the national 
system of domestic support to agriculture, allows making an adequate assessment and giving a clear 
and precise picture of the agricultural policies of Kazakhstan, their context, succession and continuity. 
The period of 1996-1998 is the optimal one.  Peri od from 1999 to 2002 covers the years after the 
crisis, when the country was short of financial res ources and the agrarian sector's funding was of low 
priority.  That is why Kazakhstan reiterates its position to take 1996-1998 as the base period. 
Insufficient support would reduce the proceeds of th e agrarian industry sector, and therefore, a 
decreased standard of life and drastic social stratification. 
Currently support of agriculture is important as well, because of the existing threat of the economy 
monopolization (oil and gas sector) and symptoms of the so-called "Dutch disease", low rate of 
urbanization, gaps in income levels of  the rural and urban population, etc.  WT/ACC/SPEC/KAZ/7/Add.2 
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 Question 2 
We would note that a recent and representative base period would more accurately represent 
how Kazakhstan's agricultural policies are currently applied; the context in which those policies 
are currently applied; the level and compositio n of support currently provided; and the level 
and composition of current agricultural production. 
We would be prepared to show some flexibility in the choice of three consecutive years in the 
current decade for a recent and representative base period. 
Answer:  
Kazakhstan provides information on do mestic support measures in the synoptic table.  See also the 
reply to the question above. 
Question 3 In the explanatory note, Kazakhstan says that it has made a summary of all programs of 
domestic support for the period 1996-2004 and that , as the "main programs" are still in place, 
the summary confirms the period 1996-1998 is  the representative period for current 
agricultural policy.  Kazakhstan has, however,  also provided information on programs in 
2000-2004, some of which appear to have starte d from 2000 or later.  We would note further 
that, in the plurilateral meeting on agriculture held on 8 June 2005, Kazakhstan explained that the crosses in the table relate to programs that  are still running, implying that new programs 
not notified in tables for years in the last d ecade may have been introduced in the current 
decade. 
We invite Kazakhstan to substantiate its view  that the period 1996-1998 is the representative 
period of current agricultural policy by providing  supporting tables for three consecutive years 
in the current decade. 
Answer:
 
Analysis and summarizing of all programs of dom estic support of agriculture for the period of 
1996-2004 in the submitted synoptic table c onfirm the position that the 1996-1998 period is 
representative for the current agricultural policies.  This applies to Green Box, Amber Box, and 
development programs (DS:2).  All main programs of domestic support of agriculture keep their 
continuity during the entire period in question.  The information covers all support programs which 
are present in Kazakhstan in 1996-2004. The crosses in the table are related to the programs which 
exist and are applied in the period of 1996-20 04 and do not imply existing of new programs. 
- Currency for scheduling commitments  
Question 4 
We note that Kazakhstan has included entries in local currency (tenge), US dollars and SDRs. 
We request that Kazakhstan prepare for the sch eduling of its commitments in local currency 
terms, based on calculations in suppo rting tables in local currency terms. WT/ACC/SPEC/KAZ/7/Add.2 
Page 4  
 
 Answer:
 
Preparing the materials on domestic support of agriculture, the Republic of Kazakhstan used 
the Agreement on Agriculture and Annexes thereto as the guide.  In this view, please note that the 
data on support are presented in monetary terms, wh ich is in full conformity with requirements of 
Article 1 of the Agreement on Agriculture as well as Annex 3 thereto.  For the transparency concerns 
we also provided this data in the national currenc y (tenge), convertible cu rrency (US$), and SDR 
because of the low stability of the exchange rate. 
Question 5 
The base period data need to be in terms of the support that farmers actually receive, which is 
why support provided should be recorded only in local currency terms.  We would remind 
Kazakhstan that it is required under Article 1 and Annex 3 of the Agriculture Agreement to 
record support levels in monetary te rms, which means in local currency. 
We expect that Kazakhstan will follow the le ad of the vast majority of WTO Members by 
conforming to this standard. 
Answer:  
As for representing the base period data in terms of the support that farmers actually receive, we 
provided this data in the local currency (tenge), and also in US$ and SDR for th e transparency of this 
data. 
Article 1 of Annex 3 to the Agreement on Agricultu re does require recording the support in monetary 
terms, but it does not require that countries must ma ke their records of the support measures in local 
currency only. 
We take into account the existing practice of th e acceded countries.  Analysis shows that many 
countries use convertible currency.  Former Yugos lav Republic of Macedonia, Croatia and Bulgaria 
took their commitments in Euro (€).  Armenia t ook its commitments in US$.  Moldova and Latvia 
took their commitments in SDR.  Also note the well know fact of using various currencies other than national ones under the Uruguay round.  Therefore, the common practice for the WTO is to make 
records in monetary terms, but in various currencies. 
In Kazakhstan's opinion, taking commitments in a convertible currency makes absolutely no obstacle 
to the efficient control of adherence to the commitments after accession (moreover, use of a 
convertible currency makes commitments more predic table and transparent because of elimination or 
mitigation of the inflation).  Otherwise, it is un likely that there would be any examples of using 
various hard currencies as well as special drawing rights (SDR). 
It should be noted that 80 per cent of export from Kazakhstan consists of raw materials, and their 
price situation at the world market is liable to acut e fluctuations.  That is why the stability of the local 
currency will depend on current prices on products in  question at the world market. In this view, 
Kazakhstan is also willing to consider the option of  taking domestic support commitments in the local 
currency, but fixed in prices of certain years.  This is what has been used by Mexico upon its 
accession to the WTO.  WT/ACC/SPEC/KAZ/7/Add.2 
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 - Financial support  
Question 6 The Agriculture Agreement does not require comm itments from any Member in relation to the 
Member's use of agriculture support where the support provided is financed by external sources, e.g., under international development assistance programs. 
We would ask Kazakhstan to provide advice as to whether any data notified to its supporting 
tables may have been financed directly or indi rectly from sources other than the government of 
Kazakhstan.  If such support has been ext ernally financed, we would ask Kazakhstan to 
separately identify the government of the Republic  of Kazakhstan's own financial contributions 
to these measures and include only those financ ial contributions in its supporting tables. 
Answer:
 
There was no direct or indirect financing of the pr ograms notified in the support tables for the base 
periods from sources other than the budget of the Re public of Kazakhstan.  The financial resources 
(see reply to Question 12) specified in table DS:2 "Development Programs" as investment subsidies 
are loans of the Asian Development Bank. They  were lent to Kazakhstan for the purchase of 
agricultural equipment and must be repaid by K azakhstan.  Most of the loans were obtained on 
commercial terms under the state guarantee, repa id by the Government of the Republic of 
Kazakhstan. 
There were also payments by non-governmental fo reign loans under the guarantee of the Republic of 
Kazakhstan. The support tables include payments from the national budget to cover foreign loans 
obtained for the purchase of agricultural machin ery and technological equipment under the state 
guarantee. Due to the insolvency of agricultural manufacturers, the government repaid the principal 
and interests and other payments by the said loans. 
- Supporting Table DS:1 - Measures exempt from the reduction commitment -  
"Green Box"  
Question 7 
We appreciate the additional information provided on programs and the efforts made to clarify 
the categorization of the programs.  However,  the programs relate to the period 1996-1998 and 
no information is provided on whether such progr ams are currently in existence or whether the 
manner in which the programs are applied have since changed.  For example, we point to an important conclusion emerging from the pl urilateral session on agriculture held on 
9 November 2004 – that the program giving rise to the single largest item of green box support 
in 1996-1998 (grain procurement for the national  reserve) is currently applied in a way that 
would require its transfer to the amber box. 
We therefore ask that concerns over the need fo r data relevant to recent programs be addressed 
by the provision of data for a recent base period. 
Answer:
 
The Green Box programs relating to the 1996-1998 peri od currently exist and have been applied in 
the consistent way.  So, the programs of suppor t of agricultural science, agricultural crops seed 
varieties testing, crops and animal diseases control measures, agricultural education, assessment of the 
meliorate condition of irrigated lands, keeping the land cadaster, monitoring of lands and their WT/ACC/SPEC/KAZ/7/Add.2 
Page 6  
 
 fertility, determining the variety and sowing quali ties of seeds, improvement of irrigation and 
drainage systems and drinking water supply fac ilities, funding of programs on ensuring the national 
food security and soft lending of small and medium  sized business support have been applied from 
1996 to 2004.  
Knowledge dissemination and cons ulting services programs have been applied from 1997 until today. 
As for the program of creation of the national stoc k given a certain ratio of the fixed price to the 
external reference price, the program for the nati onal reserve grain procurement may be qualified as a 
price support program.  At the same time grain shall be purchased taking into account the current market prices at free market of grain and such  purchases shall be approved by resolution of the 
Government of the Republic of Kazakhstan.  In acco rdance with the note to paragraph 3 of Annex 2 to 
Agriculture Agreement, the Republic of Kazakhsta n qualifies this program as a Green Box program, 
i.e. forming a stock for the food security purposes, ev en if its implementation procedure varies.  Upon 
accession to the WTO and provided that the program itself and its implementation procedures remain, it will be included into the rele vant green and amber box tables. 
From the quantity point of view, although the program  for the national stock gr ain procurement is one 
of the highly financed programs, however, it does not have prevailing significance. 
Question 8 
We appreciate the information provided on the progr am entitled "State stocks for food security 
purposes". 
We would appreciate further clarification of this program.  We note that Kazakhstan has 
previously indicated that the program involve d government procurement of grain at market 
prices to ensure food security goals.  We would appreciate further information on whether grain 
procurement "at fixed prices" remains a cu rrent practice, how the program works, and 
whether it provides price support for grain producers. 
If price support continues to be provided, it would be appropriate for Kazakhstan to schedule 
this support when providing supporting tabl es for a recent and representative base period. 
We seek clarification as to how export pri ces for grain are set by the Food Contract 
Corporation. 
Are export prices for grain set in compliance with paragraph 3 of Annex 2 of the 
Agriculture Agreement, requiring that sales from food security stocks be made "at no less than 
the current domestic market price fo r the product and quality in question"? 
Answer:
 
Every year the Government of the Republic of Kazakhstan sets a fixed purchase price for the 
government procurement of grain, ensuring forming the national grain reserves.  The price is based on the current market price situation.  Whenever the ma rket conjuncture has drastic fluctuation in regard 
of actual delivery terms, the price may be corrected. 
The Government shall form and annually replen ish the national food grain resources through the 
agent AO Prodcorporation (hereinafter referred to as the Corporation) by means of procurement on 
the account of the national budget.  The Government  of the Republic of Kazakhstan sets volume and 
prices for the grain procurement in the beginning of every year.  WT/ACC/SPEC/KAZ/7/Add.2 
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 With the purpose of renewal of the national grain stock and support of local agricultural 
manufacturers the Corporation procures 500,000 tons of grain to the national reserve every year since 
1998. 
Currently this mechanism provides for spring and su mmer financing of grain supplies on the basis of 
making forward contracts.  In autumn the purchase of  grain is carried out by the direct purchase of 
grain. 
Efficiency of grain production depends on the accur acy of carrying out of agricultural and technical 
activities before and during the sowing campaign.  The funds obtained during the spring and summer 
allow farmers making the spring field campaign in due time and at the proper agricultural technical 
level. 
The established purchase price on grain is the referen ce price for the domestic grain market.  When 
setting the purchase price on grain they take into account that the price shall cover the production 
costs of agricultural producers and to ensure some minimal level of profitability for further 
development.  This mechanism is required for pr ice regulation under the conditions of overproduction 
of grain, and for prevention of price damping. On the other hand, the price shall ensure the 
competitiveness of Kazakh grain at the world market. 
According to Rules on Organization and Implementati on of State Procurement of Grain and Services 
for Grain Storage and Transportation, approved by Government Resolution No. 371 of 27 March 2004, oblast akims shall create working gr oups in oblasts for assessment of conformity of 
potential grain suppliers with the established requirements. 
Resident legal or natural persons with legal capacity for conclusion of a public 
procurement Agreement, registered in the relevant  tax authority, shall be eligible for the state 
procurement of grain. 
Potential grain suppliers offering to supply grain in to the national reserves shall submit the relevant 
documents to the working group. 
The working group shall consider applications as they  are filed and see if they are complete and meet 
the eligibility requirements, then make a list of potential grain suppliers in the oblast recommended 
for participation in the state procurement of grai n, affirm it with signatures of the working group 
executive and members, and submit the list to the commission with the documents enclosed. 
The commission examines submitted documents within  five days, sums up the results of the state 
procurement, and makes the list of grain suppliers.  The commission sends the list of grain suppliers 
to the Corporation for conclusion of public proc urement Agreements.  The Corporation makes public 
procurement Agreements with the grain suppliers in accordance with the list of grain suppliers.  
The Agreements on public procurement of grains are based on a model Agreement. 
During the years when the autumn price on grain of the new harvest is higher than the spring 
advancing price, the Corporation asks the Government  of the Republic of Kazakhstan to increase the 
purchase price, initiating the mechanism of additional pa yment.  In 2003, for instance, grain suppliers 
were paid US$ 65 per ton in the spring.  In the autumn the prices went high and the Corporation 
additionally paid US$ 35 per ton; the additional payments made US$ 6.8 million. 
Sale prices on grain by the Corporation depend on the structure of expenditures and conditions of 
grain supply.  When the grain is supplied unde r the EXW (frank-elevator) terms under Incorterms 
2000, the sale price consists of the grain purch ase price, storage costs and the Corporation's 
commission.  When grain is supplied under the DAF terms (delivered at frontier):  purchase cost, WT/ACC/SPEC/KAZ/7/Add.2 
Page 8  
 
 storage costs, cost of shipment (loading, transpor tation, certification, customs clearance, etc), and the 
Corporation's commission.  The following are payment terms for sale of grain:  100 per cent advance payment or a paid letter of credit of a first-class bank.  
Export prices depend, first of all, on internal and external evaluations, such as purchase prices on 
domestic market, comparative analysis with the wo rld market prices, demand at potential markets of 
sale of Kazakh grain in the view of competition and exporters' bids. 
Question 9 
We appreciate the information provided on the program entitled "preferential credits for small 
and medium-sized business, including farms", no tified with reference to paragraph 11 of 
Annex 2 of the Agriculture Agreement. 
We would be interested in information on th e eligibility for receiving the preferential credits 
under this program, including the criteria used to make the credits available. 
Answer:
 
Loans for farming development.  Farmers produci ng agricultural products are eligible for the 
repayable budgetary funds provided by the Fund fo r Financial Support of Agriculture for support of 
rural small and medium-sized business.  There was a privatization in Kazakhstan due to the formation 
of the agrarian sector.  Currently the private sector owns over 90 per cent.  However, at the first phase 
the newly created farms encountered big problems.  That is why the government has elaborated the program for crediting of farmers with the pu rpose of supporting the small rural private 
entrepreneurship. 
Loans from the budgetary funds for the term of five years with 10 per cent of annual interest may be 
allocated for: 
− introduction and operation of a new technolog y in production of agricultural products; 
− purchase of tractors, agricultural machines, fuel and lubricant materials, seeds, fertilizers, 
herbicides, pesticides, veterinary prepar ations, and high pedigree livestock; and 
− introduction of new equipment for processing and storage of agricultural products. 
The loans for the development of farms and farming house holds were allocated at a competitive base 
by the decision of the Interagency Council at the oblast branch of the National Fund for Financial 
Support of Agriculture. 
The farmers shall meet the following cond itions in order to obtain such loans: 
− probability of recoupment of add itional expenses and possibility of due return of the financial 
assistance rendered; 
− achieving the highest production indices as compared to other farms functioning in this 
natural and climatic zone; 
− state certificate for the right to use the land; and 
− business plan, contract for the supply of equipment, sale of raw materials and products, etc. 
The Interagency Council at the oblast branch of the National Fund for Financial Support of 
Agriculture takes the decision either to refuse or gr ant the financial assistance in a certain amount and 
for a certain period, and informs the farmer on the decision.  WT/ACC/SPEC/KAZ/7/Add.2 
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 Question 10 
We wonder if there is any overlap between the programs "assessment of seed varieties and 
sowing characteristics of seeds and planting materials" claimed under paragraph 2(e) of 
the Agreement on Agriculture, and "assessment  of quality of seeds of agricultural crops" 
claimed under paragraph 2(a). 
We would be grateful if Kazakhstan could clarify this matter. Answer:
 
These are two separate programs; there is no overlap and duplication between them.  Program 
"assessment of seed varieties and sowing characteristics of seeds and planting materials" refers to checking the quality of seeds and if they are good for sawing, whereas "assessment of quality of seeds 
of agricultural crops" program refers to the intellectual property protection, i.e. the copyright for a 
variety of an agricultural plant.  
- Tables DS:2 – Measures Exempt from Reduction Commitments – Special and 
Differential Treatment – Development Programs  
Question 11 
Our comments on programs that Kazakhstan has sought to notify in this table are offered 
without prejudice to our position that Kazakhstan should abide by the self-selection that it has 
made of its development status in relation to  the whole WTO Agreement, in terms that are 
recognized by the WTO and that are consistent  with WTO practice.  Being a developing 
country only for the purposes of one Agreement (in this case, the Agriculture Agreement) out of 
the many WTO Agreements is not recognized by the WTO, is inconsistent with WTO practice, 
is without precedent and would, in our view, be totally inappropriate in this accession or any 
other accession.  If accepted, this would set a precedent in the WTO that developing country 
treatment would no longer be able to be special and differential for developing countries, and as 
a result, developed countries would be able to lay claim to special and differential for developing countries in relation to any WTO Agreement, wi th damaging consequences for special and 
differential for developing countries under the WTO in  the future.  Our position is unchanged:  
we would be prepared to consider developi ng country treatment for Kazakhstan under the 
Agriculture Agreement provided that it self-selects  as a developing country in relation to the 
whole WTO Agreement. 
We would be grateful for advice as to whether further consideration has been give to this 
matter. 
If Kazakhstan does not self-select as developing country in relation to the whole 
WTO Agreement, we would expect the transfer of all programs notified to Supporting Table DS:2 to relevant tables in the Amber Box. 
Answer:
 
Kazakhstan does not apply for the full status of a developing country, however would like to obtain 
the right for the application of paragraph 2 of Artic le 6 of the Agriculture Agreement as an exception, 
taking into account the precedent of granting this preferential treatment to an acceding country (Kyrgyz Republic). WT/ACC/SPEC/KAZ/7/Add.2 
Page 10  
 
 Kazakhstan is in the transition a nd development programs are very important for the diversification 
processes.  Kazakh farmers cannot afford buying equi pment and fertilizers because they lack financial 
resources, and bank loans are expensive and not very av ailable.  Subsiding interest rates for the credits 
is very important for the further development of farming. Besides, such programs impose less burden 
to the national budget, and provide incentives for the market tools of support (repayable loans). That 
is why Kazakhstan would like to continue applying these programs without restrictions. 
The currently used agricultural m achinery and equipment has been doubl e worn out, that is why it is 
better to spare such programs like leasing, for instance, from reduction. 
Besides, Kazakhstan is located on the way of inte rnational drug traffic and has regions of wild 
narcotic plants in its territory, and this is why Kazakhstan is curre ntly introducing the program for 
replacement of narcotic plants with other pl ants, which entitles Kazakhstan with the right for 
application of this program under Agriculture Agreement. 
Question 12 
Under (a), Investment subsidies generally avai lable to agriculture, Measure 1, Preferential 
credit to agriculture, is described as subsidi es granted in the framework of an ADB loan. 
We seek clarification as to whether these subsidies were derived from the ADB loan. Answer:
 
Under the Agreement on Program Loan between Kazakhstan and the Asia n Development Bank 
ratified by Presidential Decree No. 2685 of 14 Dece mber 1995, the ADB allocated US$ 100 million to 
the Government of the Republic of Kazakhstan for the development of rural small and medium-sized 
business and development of agricultu ral products processing industry. 
The loan was disbursed in two equal tranches by US$ 50 million each.  Agricultural producers 
obtained loans for leasing of technical equipmen t for agricultural products processing depending on 
the cost of projects for the term of up to four years with one year grace period and 9 per cent annual interest, including: 
− commission of the Ministry of Finance of the Republic of Kazakhstan:  7 per cent; and 
− margin of the banks involved - 2 per cent. 
The first tranche (1996-1997) was used for th e purchase of minitechnology for processing of 
agricultural products: mills, bakeries, meat and m ilk processing lines, juices and macaroni products 
production units, and other types of equipment. 
Agent of the Ministry of Finance, Small Enre preneurship Development Fund CJSC (the Fund), 
allocates the money from the second tranche of the ADB loan (US$ 50 million) through the 
authorized banks. 
The Loan is intended for crediting purchase of  equipment for production and processing of 
agricultural products, agricultural machines for machin es and technical equipment stations, creation of 
wholesale food markets and other market infrastructure, as well for financing the necessary circulating assets.  WT/ACC/SPEC/KAZ/7/Add.2 
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 End-use borrowers obtained loans through the auth orized second level banks in US dollars, with 
collateral, under the follo wing terms and conditions: 
− term:  five years, with grace period up to two years depending on the term; 
− annual interest rate: up to 11 per cent, including 7 per cent commission of the ADB, 
0.5 per cent, for the Fund, and 3.5 per cent, for the bank; and 
− up to 60 per cent of the loan may be used for the replenishment of circulating assets of the 
specific project. 
Question 13 Under (b), Input subsidies generally available to low-income or r esource-poor producers, 
regarding (1) Reduction of costs of mineral fertilisers, seed protectants, herbicides and 
pesticides for agricultural enterprises, we note that Kazakhstan states that funds were allocated 
to agricultural enterprises.   
We would be grateful for further information as  to whether all agricultural enterprises were 
eligible for these payments, and whether they  were all regarded as either low-income or 
resource-poor producers. 
Answer:
 
Transition and related process of privatization ha d a significant impact upon the agricultural economy 
of Kazakhstan.  Most of agricultural enterprises turned  out to be insolvent and ceased to exist, and the 
survived enterprises got into a hard financial situ ation. Many enterprises could not enter the normal 
market relations and increase their productions in  the new economic environment without external 
financial assistance.  To financially support enterp rises, Resolution of Cabinet of Ministers No. 1447 
of 22 December 1994 created the State Fund for Fi nancial Assistance to Agriculture with the main 
goal to finance recovery measures for low-income  agricultural producers through the system of 
Agroprombank (Agricultural industr ial bank) and other banks serving agricultural enterprises, as well 
as to keep accounting of financial obligations of the recovered enterp rises and to define the procedure 
for repayment. 
Reduced cash receipts of farms deprived them from the opportunity to purchase mineral fertilizers and 
other chemicals.  Consumption of mineral fertili zers, for instance, reduced from 1,039 thousand tons 
in 1986 to 11.5 thousand tons in 2000.  In 1990 th ey used 19.7 kilograms of mineral fertilizers per 
hectare of crops, and in 2000, only 0.1 kg per hectare.   State Enterprise "National Research Centre of 
Agrochemical Service of Ministry of Agriculture of  the Republic of Kazakhstan" reports that most of 
the surveyed arable land has very lo w and extremely low humus content. 
Question 14 
We would be grateful if Kazakhstan could clar ify what it means by agricultural enterprises 
receiving such input subsidies.  Are these the agricultural producers, or enterprises that 
facilitate the provision of inputs to agricultural producers but do not engage directly in agricultural production? 
Answer:
 
The subsidies are designated to partially reimburse the cost of mineral fertilizers, protectants and 
herbicides purchased by local agricultural producers from sellers of mineral fertilizers, protectants and 
herbicides. WT/ACC/SPEC/KAZ/7/Add.2 
Page 12  
 
 The subsidies encourage low-inco me agricultural producers to purc hase mineral fertilizers, because 
small and medium-sized farms cannot afford buying mineral fertilizers at the full cost, whereas large 
agricultural producers have such a possibility. 
Use of mineral fertilizers contributes to keeping the soil fertility, increasing the yield capacity, quality 
of agricultural crops, and efficiency of the ag rarian sector, as well as development of small and 
medium-sized farms. 
Mineral fertilizers, protectants and herbicides at a reduced price are available to the agricultural 
producers who have paid the non-subsidized part of th e cost of mineral fertilizers, within the funds 
allocated to the Ministry of Agriculture from the national budget for the corresponding year.  Only 
agricultural producers directly engaged in agricultu ral production are eligible for such subsidies. 
Question 15 We note that under (2) Reduction of cost of  mixed fodder for agricultural enterprises, 
specialized breeding farms were financed.  
We would appreciate more information about this  program, and whether it was available only 
for specific enterprises. 
Answer:
 
In 1993-1996 the number of livestock and cattle-breed ing products has been drastically reduced and 
their productivity was decreasing.  Output of ca ttle-breeding products (raw materials) could not 
satisfy the demand of the domestic market.  The loss of integrated with the industrial, food and 
processing industry sectors resulted in the general re duction of the industry and development of the 
market based on unorganized sm all and seasonal production of cattle -breeding products.  Primitive 
and outdated production tec hnology and obsolete equipment prevaile d in the sector.  The quality of 
fodder decreased because of the failure to comply  with the requirements of the provision technology. 
They no longer produced and used fodder with high concentration of protein.  Production and consumption of rich fodder (silo) drastically redu ced.  Application and development of fodder crops 
rotation was suspended, natural pastures - especi ally remote areas - were used inefficiently. 
It was necessary to take measures to support those breeding farms that still had valuable livestock, and 
where it was possible to save the genetic fund of livesto ck only with help of those farms.  With that 
purpose subsidies were available only to breeding farm s in hard financial situation, which could not 
afford mixed fodder for poultry, pigs and cattle breeding. Those farms had no chances to survive 
without the assistance in purchase of fodder. 
The Ministry of Agriculture used to  approve the list of such farms.  The enlisted farms, as well as 
oblast level joint stock companies specialized in br eeding, were allocated the subsidies 5,000 tenges 
per ton of mixed fodder.  
To receive these funds, on the tenth day of every month oblast agriculture departments and GAK Asyl 
with State Breeding Inspection of the Ministry of Agriculture submitted the information, of established form, on the purchase of mixed fodder to  the Chief Department of Livestock Breeding 
Policies Elaboration, which, in its turn, submitted aggregated information on the allocation of funds 
for price reduction of mixed fodder to the National Fund, on the basis of which the National Fund transferred the due amount to its oblast branches and GAK Asyl, which, in its turn, financed the 
relevant breeding farms.   WT/ACC/SPEC/KAZ/7/Add.2 
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 - Supporting Table DS:4 – Calculation of the total Aggregate Measurement of Support  
Question 16 We note there has been a substantial reduction in the AMS total from the previous version of 
these tables.  This appears to rel ate to changes in non-product specific support reflected in table 
DS:9.  However, there need to be entries for wh eat market price support in this table, even 
though the amount of such support was zero. 
Answer:
 
Kazakhstan takes account of this comment and w ill make the necessary amendments in the table. 
Question 17 
We would be grateful for a written explanation of the high prevalence of round figures in the 
support provided in Tenge.  Experience of budg etary practice does not lend support the idea 
that budgetary allocations would be spent up to exactly the entire amount budgeted, even when 
considered more or less fully utilised.  In such  cases, small shortfalls or small overruns would 
occur. 
Are the figures provided actual expenditures or budgeted expenditures? 
Answer:  
These are actual expenses.  The programs were implemented using the money right up the last tenge 
during the period of shortage of financial resources,  which used to be a common practice those days. 
Because of lack of revenues, some budgeted pr ograms were sequestered, which explains round 
figures.  Those years encountered the biggest problems,  because of the financial deficit, which used to 
be covered on the account of external loans and privatization. 
Question 18 If budgetary allocations were spent up to exactl y the entire amount budgeted (right up the very 
last Tenge to yield round numbers), why was this  much more prevalent in the Amber Box than 
in the Green Box (Supporting Table DS:1)? 
Answer:
 
Amber Box measures are subsidies directly influenc ing the price of products.  Such programs are 
limited in number and amounts in Kazakhstan.  That is why all budgeted funds are fully used. 
- Supporting Table DS:5 – Market Price Support  
Question 19 Kazakhstan has now included entries on wheat, which seem to show a negative number for the 
support provided.  The support provi ded should be notified as zero. 
Answer:
 
Kazakhstan takes account of this comment and w ill make the necessary amendments in the table. WT/ACC/SPEC/KAZ/7/Add.2 
Page 14  
 
 Question 20 
We would be grateful if Kazakhstan could indi cate whether market price support has been 
provided to any product other than wheat after 1998. 
Answer:
 
After 1998 the market price support has been provide d to cattle-breeding (beef, pork, milk, dry milk, 
cheese, butter, skins, wool) products and crops (wheat, rice, barley, sunflower). 
-  Supporting Table DS:9 – Non product specific support  
Question 21 Kazakhstan has removed a number of items from this table – fertilisers, plant protection, mixed 
fodder and farm development – which we presume are now included in other areas of the tables. 
Could Kazakhstan please account for the item s transferred out of Supporting Table DS:9? 
Answer:
 
The revised tables included item "Fertilizers, plant protection" as "Reduction of the cost of mineral 
fertilizers, protectants, herbicides and pesticides"  into DS:2, and item "Farming development" as 
"Preferential credits for support of small and medium-sized business, including farms" into 
paragraph 11 of DS:1.  
Question 22 
The table includes forgiven and unclaimed debts which were included in the previous table.  
There is also a new entry on unclaimed amounts of interest due from agricultural enterprises. 
We would be grateful for direct confirmation that the debt liabilities of the agricultural 
enterprises concerned were actua lly reduced to the full extent of the support that has been 
notified to this table under the item s for forgiven and unclaimed debts. 
We would also be grateful for direct confirmati on that Kazakhstan has scheduled these items on 
the understanding that a debt forgiven once cann ot be forgiven again – once forgiven, the debt 
involved is gone forever and cannot be subject to future claims to repayment of principal or payment of interest by the holders of the debt  and, therefore these claims and future claims 
which may be derived from them cannot be forgiven in the future. 
Answer:
 
Debts of agricultural producers were indeed reduced in the amount of forgiven debts specified in this 
table, and the amount of the support included in the item "unclaimed interest for deferred and 
outstanding debts of agricultural producers" is the revenue unclaimed by the Government and 
obtained by agricultural producers as result of use of  forgiven debts as loan s, i.e. the support amount 
is the calculation result of the difference between the market interest rate and the preferential interest 
rate (which is zero in this case) multiplied by  the sum of debt (without forgiven debts).  WT/ACC/SPEC/KAZ/7/Add.2 
 Page 15 
 
 
 -  Annex 1 (WT/ACC/SPEC/KAZ/6/Rev.3)  
Question 23 This annex appears to repeat information that is  intended for earlier do mestic support tables, 
but for a longer period. 
We would be grateful if Kazakhstan could provide clarification of the meaning of the crosses 
entered in the table. 
Answer:
 
The crosses entered in the table me an that such programs were available in the particular year. 
- Export Subsidies  
Question 24 
Our expectation remains that Kazakhstan will bind export subsidies at zero. Answer:
 
Kazakhstan considers that being a land-locked coun try does require application, to the reasonable 
extent, certainly, of such instrument as export subs idies, which is till now legitimate from the view 
point of the WTO rules for the trade in agricultural goods.  We plan to apply such export subsidies for 
the limited number of goods.  In this connection it is necessary to remind that according to the 
Article 9:4 of the Agriculture Agreement, devel oping countries are exempt from any commitments on 
this type of export subsidies.  Moreover, as we see, in the current Doha Round these countries stand 
up for the preservation of this right in the near fu ture.  As well known, Kazakhstan  may be equated 
with the developing countries according to the ma jority of objective parameters of the economic 
development.  
Preservation of minimum export subsidies would allow to create equal competitive environment for 
Kazakh exports and to accelerate the transition of the economy of the Republic of Kazakhstan. 
As for the Doha Round, eliminati on of export subsidies is still bei ng negotiated.  As well known, the 
countries have so far taken no legal commitments. 
At the same time Kazakhstan is willing to be flex ible and bearing in mind the trends on discussing 
this issue under the Doha Round, would like to reta in application of export subsidies for a certain 
transition period which would be coordinated with the terms of elimination adopted following the 
Doha Round. 
Question 25 
We welcome Kazakhstan's efforts to provide export subsidy data.  We would encourage 
Kazakhstan to build on this information by pr oviding more recent and representative data on 
export subsidies to determine current policies. 
Answer:  
Kazakhstan currently works on additional information concerning export subsidies of the recent years.  WT/ACC/SPEC/KAZ/7/Add.2 
Page 16  
 
 Question 26 
We note that Kazakhstan has not provided further details on export subsidies in its explanatory 
note at the end of the latest agriculture tables. 
Answer:
 
This explanatory note is related to the synoptic ta ble of support programs and represents analysis and 
continuity of agriculture support programs of the Republic of Kazakhstan.  It is applied to the 
programs of Green Box, Amber Box and development programs (DS:2). 
- Draft Working Party Report (WT/ACC/SPEC/KAZ/9)  
Question 27 In relation to the discussion of agriculture in  the draft report, this section will require a 
considerable amount of further work at the appr opriate time, and we consider this section to be 
work in progress that will not be able to be finalised until the domestic support issues under 
discussion in the plurilateral process have been resolved. 
Answer:
 
Kazakhstan is willing to continue ne gotiations on further work on the draft report.  In this regard we 
count on the consideration of interests of our c ountry, which is settling difficult problems in the 
course of transition to market economy and building of a developed economy. 
Question 28 
We seek the inclusion of the following text on agricultural export subsidies in the draft report: 
The representative of Kazakhstan confirmed that  agricultural export subsidies would be bound 
at zero in Kazakhstan's Schedule of Concessi ons and Commitments for Goods.  She also 
confirmed that any export subsidies applied to  agricultural products would accordingly be 
eliminated by the date of accession.  The Working Party took note of these commitments. 
Answer:  
Please see the answer to the Question 24.  
__________