A DECREASE IN ARABLE LAND AND RICE PRODUCTION CAN LEAD TO AN INCREASE IN IMPORTS AND PRICES

The agency for the protection and development of competition of the Republic of Kazakhstan conducted an analysis of the rice wholesale market. The analysis showed that the market is highly concentrated, where the main producers (more than 20) are located in the Kyzylorda region.

There is a decrease in own production and an increase in the share of imports in dynamics over the years from 4 to 12%.

Due to the lack of water and rising costs, there is a deliberate decrease in acreage.

This was the main reason for the high dynamics of domestic price growth. If in 2022 the increase in rice prices was 36%, in 2023-39%, which significantly exceeds the overall level of growth in prices for socially important food products, which was 3.4% last year.

Antimonopoly response measures ensured a decrease in the dynamics of price growth during the calendar year. On the basis of price collusion, 6 rice producers were brought to administrative responsibility in the form of a fine of 68.7 million tenge.

However, the root causes of the decline in production and the rise in rice prices remain. This is a shortage of irrigation water, an increase in prices for agricultural machinery, fertilizers and imported packaging, and untimely provision of subsidies.

In this regard, the antimonopoly authority made proposals to the Ministry of Agriculture on the inclusion of rice in the list of priority crops in the allocation of subsidies, the organization of Water Supply Planning in the southern regions, increasing the share of concessional lending to rice producers, direct procurement of rice by retail chains and the development of domestic production of fertilizers and packaging materials.

 

More details of the analysis can be found here:
https://www.gov.kz/memleket/entities/zk/documents/details/593570?lang=kk