Kazakhstan: Wheat Production and Crop Diversity Policy

According to August data from the State Statistical Agency of Kazakhstan (SSA), wheat was sown on 12.4 million hectares for 2016/17, marking the first year-to-year increase since 2009 and reversing an uninterrupted 6-year decrease during which wheat area dropped by 20 percent. The decline was due in large part to government policy that encouraged agricultural producers to diversify their crop mix by planting less wheat and more forage and oilseed crops. The 2016 rebound in wheat area is attributed to a temporary termination of subsidies for competing crops. Based on the combination of more planted area and outstanding yield prospects, wheat production for 2016/17 is estimated at 16.5 million metric tons, up 20 percent from last year.

Final sown area for 2016/17
According to the SSA data, wheat occupies 57 percent of the total 2016/17 sown area in Kazakhstan, down from 69 percent in 2009/10. Three territories in north-central Kazakhstan (Akmola, Kostanai, and North Kazakhstan) consistently account for about 80 percent of the country’s total wheat area. Over 95 percent of Kazakhstan’s wheat output is spring wheat. The area planted to wheat reached a record 19.6 million hectares in 1969, then declined for thirty years before bottoming out at 8.7 million hectares in 1999 and climbing again to 14.8 million in 2009. Non-wheat grains (chiefly barley) account for 14 percent of 2016/17 area, oilseed crops for 9 percent, and forage crops (including perennial grasses, annual grasses, and alfalfa) for 17 percent. A small amount of total sown area (1 to 2 percent) is planted to food crops, including vegetables, potatoes, and melons.

Crop diversification policy
The Ministry of Agriculture has for years been working to increase crop diversification in Kazakhstan. The strategy is essentially based on decreasing the amount of area planted to wheat (while at the same time maintaining a high level of wheat production through technology-driven increase in yield) and increasing the area of forage crops and oilseeds. One of the early factors driving diversification was government support for the country’s livestock and poultry industries, which generated an increase in the demand for feed crops.

Another factor influencing the Ministry’s diversification policy is related to the country’s geography. Since Kazakhstan is a landlocked country, the logistical difficulties and costs of delivering wheat from the main production zone to distant export markets are high. The government would prefer to boost the domestic consumption of grain through increased feeding of livestock and, as a result, replace exports of wheat with exports of higher value meat products. This would generate increased production of feed crops such as barley, corn, and soybeans.

The Ministry is also taking steps to increase the share of oilseed crops farmers use in their crop rotations. Kazakhstan’s major oilseed crops are sunflowers, flax, safflowers, rapeseed, and soybeans. The Ministry includes oilseeds among the “priority” crops (along with corn, barley, and forage crops) and this is reflected in the high subsidies offered by the government to boost the area planted to oilseeds. The use of direct subsidies is one of the government’s most effective tools for implementing its policy of crop diversification, and many farmers confirm that the extensive government support and the high direct subsidies for non-wheat crops is a major factor influencing their planting decisions. Over the past ten years, total oilseed area has tripled from 0.67 million hectares in 2007 to 2.04 million hectares in 2016.

Wheat production for 2016/17
The Ministry of Agriculture cancelled per-hectare crop subsidies on January 1, 2016. The subsidies were quickly reinstated by the new Minister within a few months, but this occurred too late to influence farmers’ planting decisions for 2016. As a result, sown wheat area increased from 11.7 million hectares for 2015/16 to 12.4 million this season. Spring planting proceeded rapidly, and emerging crops benefited from favorable moisture conditions. USDA estimates that harvested wheat area for 2016/17 will total 12.0 million hectares. (The State Statistical Committee of Kazakhstan reports sown area, whereas USDA reports harvested area.) A portion of the sown area will typically remain unharvested – usually 1 to 3 percent, but sometimes as much as 8 percent – due to drought during the growing season or unfavorable harvest weather.

Crop conditions were favorable for spring wheat throughout the growing season. Satellite-derived vegetation indices (normalized difference vegetation index or NDVI) were substantially higher than last year in Akmola, Kostanai, and North Kazakhstan, the three major spring-wheat territories. Although the graphs show that values for 2016 were visually similar to 2011, detailed NDVI analysis indicates that final yield for 2016 will likely not reach the record levels achieved in 2011.

According to data from the Ministry of Agriculture, grain harvest was about 90 percent complete as of September 27 and proceeding at a more rapid pace than the three previous years. Cumulative bunker yield is reported at 1.50 tons per hectare – 26 percent above the yield from the same date last year but 6 percent below the level of 2011. (Bunker weight is based on the weight of the grain prior to cleaning and drying. Final net weight for wheat in Kazakhstan is about 90 percent of bunker weight.) Ministry harvest data include all grains, not only wheat, but since wheat accounts for about 80 percent of the total grain area, the reported total-grain yield provides a fairly good indicator of wheat yield as well.

The information presented in the discussion about crop subsidies was extracted largely from attaché reports published by the USDA Office of Agricultural Affairs in Astana, Kazakhstan over the past three years. The valuable contribution of Zhamal Zharmagambetova, agricultural specialist at the Astana office, is gratefully acknowledged. To view the individual attaché reports, please refer to the links provided below.

Grain and Feed Update (Astana) 7/15/16
Grain and Feed Annual (Astana) 4/15/16
Grain and Feed Update (Astana) 10/28/15
Grain and Feed Annual (Astana) 4/10/15
Grain and Feed Update (Astana) 8/4/14

Grain and Feed Annual (Astana) 4/1/14

Grain and Feed Update (Astana) 7/16/13
Grain and Feed Annual (Astana) 4/1/13
Grain and Feed Update (Astana) 1/29/13
Grain and Feed Update (Astana) 7/25/12
IPAD trip report, August 2009

Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD's Agricultural Production page or at PSD Online.

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