THE KYRGYZ REPUBLIC DATA COLLECTION … › pdf › 12149449.pdf英文 087295.2003.26.3.6...
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英文 087295.2003.26.3.6 作業;清田
THE KYRGYZ REPUBLICDATA COLLECTION SURVEY ON
AGRICULTURAL MECHANIZATION
FINAL REPORT
March 2014
JAPAN INTERNATIONAL COOPERATION AGENCY(JICA)
TASK CO., LTD.KATAHIRA & ENGINEERS INTERNATIONAL
THE K
YR
GY
Z REPU
BLIC
DATA
CO
LLECTIO
N SU
RVEY
ON
AG
RIC
ULTU
RA
L MEC
HA
NIZATIO
N FIN
AL R
EPORT
March 2014
THE KYRGYZ REPUBLIC
KGJR
13-008
i
Maps of Study Areas
ii
Photos
Plow (3-row)
Osh province, Karasuu district, Tashirova Machine Station
Plow (4-row) Talas province, Talas district, private farmer
Disc harrow Chisel plow and tooth harrow Chui province, Alamedin district, Adogine Machine Station
Tooth harrow Talas province, Karabura district, private farmer
Seeder (24-row) Osh province, Karasuu district,
Tashirova Machine Station
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Seeder (4-row for beans)
Talas province, Bakayata district, private farmer
Seeder (6-row) Osh province, Nookat district, Machine Station
Cultivator
Osh province, Karasuu district, Tashirova Machine Station
Boom sprayer Talas province, Bakayata district, private farmer
Cultivator Broadcaster Osh province, Nookat district, farm
iv
Bean thresher
Made in Turkey, Production year is unknown Talas province, Bakayata district, private farmer
Combine harvester, 1999 (by 2KR) Osh province, Karasuu district,
Tashirova Machine Station
Combine harvester, Ukraine 1989
Osh province, Uzgen district, Tameka Machine StationSeed sorter (for wheat, barley)
Chui province, ZhAiyl district, Reimbek Machine Station
Oil squeezer (electric) Talas province, Bakayata district,
private farmer
Forage harvester Osh province, Nookat district, farm
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Mower, made in Germany, year unknown, purchased 20 years ago
Osh province, Uzgen district, Tameka Machine Station
Rake Mower (reciprocating type) Chui province, Alamedin district, Adogine Machine Station
Baler, Production year is unknown Talas province, Talas district, private farmer
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Trailer Osh province, Nookat district, Farmers cooperative
Mobile workshop Talas province, Talas district, Machine Station
Educational and scientific organization for mechanization
Disassembling tractor engines in practical room Training workshop Vocational school in Talas
(Used textbooks from the Soviet period; most are not updated)
Incised tractor model (the Soviet model) Parts of agricultural machinery,
classroom with diagrams Tokmok technical college
(The agricultural mechanization course at this school closed two years ago due to declining enrollments and government budget cuts.)
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CONTENTS Maps of Study Areas
Photos
Contents
List of Figures and Tables
Abbreviations / Units of Measurement
Summary……………………………………………………………………………………………….S1
Pages 1. Collecting Information and Study Summary ................................................................................... 1
1.1 Background of the Study .......................................................................................................... 1
1.2 Purpose of the Study ................................................................................................................ 3
1.3 Research Methodology............................................................................................................. 3
1.4 The Team Members and Study Schedule ................................................................................. 5
2. Overview of the Agricultural Sector in the Kyrgyz Republic ......................................................... 6
2.1 Ecological Conditions .............................................................................................................. 6
2.2 Orientation of Agricultural Sector ........................................................................................... 7
2.2.1 Trend in the Agricultural Sector ............................................................................................ 7
2.2.2 Trend in Agricultural Production .......................................................................................... 9
2.3 National Policy of the Agricultural Sector ............................................................................. 13
2.4 Structure and Role of Agrarian Sector ................................................................................... 14
3. Present Agricultural Mechanization and Problems ....................................................................... 17
3.1 Utilization of Agricultural Machinery ................................................................................... 17
3.1.1 The Number of Agricultural Machinery .............................................................................. 17
3.1.2 Agricultural Machinery Services ........................................................................................ 19
3.2 Agricultural Machinery Market ............................................................................................. 21
3.2.1 Import and Export of Agricultural Machinery, and the Domestic Market .......................... 21
3.2.2 Spare-Parts Supply .............................................................................................................. 32
3.2.3 Import Procedure and Standards ......................................................................................... 33
3.2.4 Agricultural Machinery Market in Kazakhstan ................................................................... 34
3.3 Maintenance of Agricultural machinery ................................................................................ 38
3.3.1 Maintenance Situation of Agricultural Machinery Before Independence ........................... 38
3.3.2 The Present Maintenance Situation of Agricultural Machinery .......................................... 39
3.3.3 Persons In-Charge of Maintenance and Training ................................................................ 43
3.4 Financing System for Agricultural Mechanization ................................................................ 44
3.4.1 Government Finance Institutions .......................................................................................... 45
3.4.2 Other Finance Institutions..................................................................................................... 54
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3.5 Customs Union ....................................................................................................................... 57
3.5.1 Background and Summary of the Customs Union .............................................................. 57
3.5.2 Impact on Agriculture and Agricultural Mechanization...................................................... 61
4. Analysis of Obstacle Factors to Agricultural Mechanization ........................................................ 63
4.1 Problems of Each Stakeholder ............................................................................................... 63
4.1.1 Ministry of Agriculture and Land Reclamation (MA & LR), Department of Agricultural
Mechanization and Electrical Supply .................................................................................. 63
4.1.2 Kyrgyz National Agrarian University, Faculty of Engineering and Technology ................ 63
4.1.3 Technical Colleges and Vocation Schools (agricultural machinery courses) ..................... 63
4.1.4 Agricultural Machinery Suppliers ....................................................................................... 64
4.1.5 Repair Engineers for Agricultural Machinery ..................................................................... 65
4.1.6 Aiyl Bank ............................................................................................................................ 66
4.1.7 Farmers ................................................................................................................................ 69
4.1.8 Agricultural Machinery Service Agencies .......................................................................... 71
4.2 Problems of the Agricultural Machinery Market ................................................................... 71
4.3 Problems of Maintenance of Agricultural Machinery ............................................................ 72
4.4 Problems of Financing for Agricultural Mechanization ........................................................ 73
4.5 Causal Relationship of Subjects Concerning All of Agricultural Mechanization .................. 75
Current Status of the Government and Donors Against the Issues of Agricultural Mechanization
....................................................................................................................................................... 78
Investigation of the Kyrgyz Government and Donors ........................................................... 78
Kyrgyz Government ............................................................................................................ 78
Major Donors ...................................................................................................................... 78
Other donors (Turkey, China, Eurasian Development Bank) ............................................. 80
Intervention of the Japanese Government .............................................................................. 82
Non-Project Type Grant Aid and Grant Assistance for Underprivileged Farmers (2KR) .. 82
JICA Training ...................................................................................................................... 83
Consideration of Directions and Fields for Support Programs for Agricultural Mechanization ... 85
Approach for Promotion of Agriculture Mechanization ........................................................ 85
Fields and Direction of Japanese Government Support on Agriculture Mechanization ........ 88
Possibility of Business Expansion of Japanese Agricultural Machinery Manufacturers ....... 90
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Attachment Attachment 1: List of Interviewees
Attachment 2: Number of Tractors and Combine Harvesters in Each Province
Attachment 3: Brochure of Manufacturers
Attachment 4: Financial Status of Aiyl Bank
Attachment 5: Results of Questionnaire Survey
Attachment 6: Crop Calendar of Main Crop
Attachment 7: Analysis of the Farmhouses that Procured Tractors
List of Figures and Tables
Figure 1-1 The Work Flow of the Research ............................................................................... 3
Figure 2-1 Proportion of Each Industry in GDP ........................................................................ 8
Figure 2-2 The Organizational Structure of the Ministry of Agriculture ................................. 15
Figure 2-3 Departments of Agricultural Mechanization and Electrical Supply ....................... 16
Figure 3-1 Number of Tractors and Combine Harvesters In Operation in Kyrgyz .................. 19
Figure 3-2 Aiyl Bank Leasing Procedure ................................................................................. 53
Figure 4-1 Issues Relevant to Agricultural Producers .............................................................. 69
Figure 4-2 Index of Retail Prices for Fuel, Flour, Lamb .......................................................... 70
Figure 4-3 Conditions for Selection for Agricultural Machinery Purchases ............................ 71
Figure 4-4 Schematic Analysis of the Problems on Agricultural Mechanization (1) ............... 76
Figure 4-5 Schematic Analysis of the Problems on Agricultural Mechanization (2) ............... 77
Figure 6-1 Direction of Promotion of Agriculture Machinery and the Assistance of Japan .... 90
Table 2-1 Land Use by Province ................................................................................................ 7
Table 2-2 GNI Per Capita and Comparison with Other Neighboring Countries ........................ 8
Table 2-3 Percentage of Employment by Industry ..................................................................... 9
Table 2-4 Export and Import of Agricultural Products and Foodstuffs.................................... 10
Table 2-5 Comparison of Fundamental Indicators by Province ............................................... 12
Table 2-6 Information on the Production of the Main Types of Farming by Region .............. 12
Table 3-1 Number of Agricultural Machinery and the Deficient Number for 2013 ................ 17
Table 3-2 Number of Agricultural Machinery and Implements by Province in 2013 .............. 17
Table 3-3 Number of Combine Harvesters per 1,000 ha of Cereals Planted Area ................... 18
Table 3-4 Tariff of Agricultural Machinery Services by Region ............................................. 20
Table 3-5 Main Suppliers of Imported Agricultural Machinery .............................................. 25
Table 3-6 The Number of Tractors and Combine Harvesters in Kyrgyz in 2013 .................... 28
Table 3-7 Retail Prices of Agricultural Machinery (1)............................................................. 29
Table 3-8 Retail Prices of Agricultural Machinery (2)............................................................. 30
Table 3-9 Annual Planted Area and the Number of Agricultural Machinery in Kyrgyz and
Kazakhstan .............................................................................................................. 35
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Table 3-10 The Number of Tractors Sold in Kazakhstan in 2013 .............................................. 36
Table 3-11 The Number of Combine harvesters Sold in Kazakhstan in 2013 ........................... 37
Table 3-12 Disbursement of Counterpart Fund Accumulated from Non-project Grant and 2KR
................................................................................................................................. 45
Table 3-13 List of Loan Products for Supporting Agriculture ................................................... 47
Table 3-14 List of Leasing Products for Supporting Agricultural Mechanization ..................... 48
Table 3-15 Amount of Aiyl Bank Leasing by Agricultural Machinery ..................................... 50
Table 3-16 Amount of Aiyl Bank Leasing by Year ................................................................... 50
Table 3-17 Amount of Aiyl Bank Leasing by Province ............................................................. 51
Table 3-18 Agricultural Financing Products available in Private Banks ................................... 54
Table 3-19 Leasing Performance of Private Banks in 2013 ....................................................... 55
Table 3-20 Overview of Customs Union Member Countries and the Kyrgyz ........................... 58
Table 3-21 Possible Effects of Kyrgyz Accession to the Customs Union ................................. 58
Table 3-22 Trade Between Kyrgyz and CU Countries, and % of Total Kyrgyz Exports and
Imports with each CU Member ............................................................................... 60
Table 3-23 Main Trade Between Kyrgyz and CU Members by Category ................................. 60
Table 3-24 Changes in Duties Due on Adoption of Common External Tariffs, non CIS Imports
................................................................................................................................. 61
Table 4-1 Assets of Aiyl Bank ................................................................................................. 66
Table 5-1 Results of Non-project type Grant Aid and 2KR ..................................................... 84
Table 6-1 Problems and Countermeasures for Agricultural Mechanization in Kyrgyzstan ..... 93
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Abbreviations
Abbreviations Official titles
ADB Asian Development Bank
CIS Commonwealth of Independent States
EBRD European Bank for Reconstruction and Development
EU European Union
FAO Food and Agriculture Organization
FOB Free On Board
GDP Gross Domestic Product
GNI Gross national Income
GOST State Standards of the Soviet Union
GOST-R State Standards of the Russia
ISO/IEC International Organization for Standardization / International Electrotechnical
Commission
JICA Japan International Cooperation Agency
KICB Kyrgyz Investment and Credit Bank
MA & LR Ministry of Agriculture and Land Reclamation
MTZ Open Joint Stock Company “Minsk Tractor Works”
NGO Non-Governmental Organization
ODA Official Development Assistance
PPP Public-Private Partnership
UNDP United Nations Development Programme
USAID The United States Agency for International Development
VAT Value Added Tax
WTO World Trade Organization
WB World Bank
2KR Second Kennedy Round: Grant Assistance for Underprivileged Farmers (Former Grant Aid for the Increase of Food Production)
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Units of Measurement
Units Title Description
<Area>
ha hectare 1 ha=100 m2
m2 square meter 1 m2=0.01 ha
<Power>
hp Horse power
kWt kilowatt 1 kWt = 1.34102 hp
<Currency>
USD U.S. Dollar 1 USD=50 som=102 Yen (Feb. 2014)
Som Kyrgyz som 1 som = 2 Yen (Feb. 2014)
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Summary
1. Background and Objectives of the Study
The agricultural sector occupies the largest part of the economy in the Kyrgyz Republic
(hereinafter Kyrgyz). In Kyrgyz, 66% of the total population lives in rural areas, and half of the
labor force in the country is engaged in agriculture. Agriculture plays an important role in the
sustainable development of the economy.
As most of the agricultural machinery in Kyrgyz has been used for more than 20 years, it
seems as if the available machines will decline over the years because they are decrepit.
Inasmuch as deficit agricultural machinery causes the loss of opportunities to harvest crops
during harvest season, installation of new agricultural machines is significant as a measure to
increase agricultural profit. The Ministry of Agriculture and Land Reclamation (hereinafter MA
& LR) decided on a agricultural mechanization policy as one of the main agricultural
development strategies, and established an agricultural loan program to purchase agricultural
machinery for farmers at low interest rates through state commercial banks in recent years.
Therefore, the promotion of agricultural mechanization is expected to be income generating for
farmers by increasing agricultural production, and thereby stimulate the economy through the
encouragement of agricultural exports.
Regarding the situation described above, this study will investigate to reveal the state of the
agricultural mechanization policy and its current status and problems, the situation of farmers’
access to agricultural machinery (in particular, the financial system such as loans for
agricultural machinery to farmers by government agencies), and the present condition of the
agricultural machinery market and maintenance. It will also analyze the possibility of Japanese
agricultural machinery manufacturers to expand business in Kyrgyz and its challenges.
Throughout this investigation, this study aims to collect basic information to analyze the
challenges of implementing policies and systems aimed at the development of agricultural
mechanization, and to contribute to define a direction for JICA’s cooperation strategy with
Kyrgyz.
2. Brief Description of Research Results
The following describes the challenges and problems in each field:
During the research in Kyrgyz, a general policy to increase the level of mechanization of
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agriculture had not been determined. Since January 2014, the new minister of agriculture
has acceded, and at the present day, preparatory work for the new mechanization policy
has been executed. Only in a description of agricultural sector strategy, is the promotion of
machinery leasing explicitly stated in national development strategy as a strategy of
agricultural development.
For over 20 years after independence in 1991, the number of agricultural machinery has
been decreasing. In particular, the number of tractors declined from 30 thousand to 20
thousand units.
Agricultural machines are purchased in cash, by leasing and loans. Popular machines
among farmers are Belarusian tractors (80 hp, price approx. 1 million Kyrgyz soms) and
Chinese tractors (90 hp, price approx. 1.1 million Kyrgyz soms), which are selected by
price, performance, availability of parts and ease of operation. Also, in small numbers,
large-scale farmers acquire European and American tractors (220 hp, price approx. 8
million Kyrgyz soms) which have high power for large farmlands.
Due to a lag in agricultural machinery renewal and the low level of machines’ liquidity,
supplies for secondary markets are not sufficient and the price of them remains high.
Individual farmers who have limited land area do not have enough information on
agricultural machines for rice, for example.
Since 2011, the state bank "Aiyl Bank" started to provide low-interest leases to farmers for
the purchase of agricultural machinery, and since then the sales of machines has been
increasing. However as of January 2014, due to the lack of financial resources of the bank,
approximately 150 farmers who passed leasing probation have been waiting and still
cannot obtain the machines in a timely manner.
Despite the high combine harvester price, which is 4 times more expensive than the tractor,
their leasing conditions are the same as the tractor. This severe condition leads to a low
level of combine leasing.
In recent years, some large-scale farmers who are able to purchase machines in cash are
emerging.
Regarding the procedure for the leasing probation, the bank paid much more attention to
farmers’ existing capital and financial situation rather than to future capacity of income
generation by installation of agricultural machinery, such as additional income growth of
agricultural machine services and the decrease of harvest losses due to appropriate
harvesting.
S-3
Suppliers of agricultural machinery in Bishkek provide repair services to customers across
the country by using mobile workshops and spare parts inventory.
Farmers can purchase Belarusian and Chinese tractors’ spare parts not only of the regular
dealer brand, but also from outside normal channels such as spare parts shops at the bazaar
where farmers can buy genuine parts and cheap imitation parts.
Most farmers are engaged in repair, maintenance and dismantling of agricultural
machinery by themselves. This led to causing the possibility of down-skilling by
inappropriate operation.
Farmers do not have sufficient knowledge, skills and experience in agricultural machines,
farm management and cultivation techniques.
Because 30 percent of harvested crops are lost by using obsolete harvesting machines,
already-low yield by low-productivity became much lower.
Due to the lack of equipment for postharvest treatment, processing and crop warehouse,
there is no opportunity to increase value-added products.
There are some farmers who cannot access agricultural machinery services due to its high
service fees and the decrease in the total number of machines.
In regional vocational schools and colleges, there are cases of student shortages and the
closing of courses on agriculture, because of obsolete training equipment and outdated
facilities for students.
Irrigation infrastructures were built during the Soviet era, therefore many of them are not
working well due to their decrepit state. As a result of this situation, farmers’ income
became more unstable because farmers have to depend on unpredictable rainfall for their
cultivation.
3. Directions of Agricultural Mechanization
Based on the above challenges, the direction of development of agricultural mechanization in
Kyrgyz can be defined as follows, "Improving the quality of agricultural machinery
(performance), and increasing agricultural productivity by increasing the number of machines".
In other words, "An increase in agricultural productivity by renewal of the outdated agricultural
machinery, as well as to accelerate the process of installation of new machines to cover the lack
of mechanized operations". By achieving the direction of agricultural mechanization, the
reduction tendency of the machinery numbers will be stopped, and furthermore, appropriate
timing cultivation, reduction of harvesting losses and expansion of cultivated land areas will be
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improved. These transfigurations can contribute to the final sector targets, “Increasing
agricultural production”; “Improvement of productive efficiency”; and “Settlement of social
issues of small-scale farmers”.
Currently, a leasing program is one of the main sources of agricultural machinery renewal
and new purchases except for large scale-farmers, and this significant role of the program is
expected to continue. However, since the current scale of the program is not sufficient to supply
enough machines, the program needed to be scaled up. In addition, there are some challenges
not only in the leasing program itself, but also with MA & LR, farmers and financial agencies.
The following describes some of the tasks and countermeasures according to the degree of
priority and importance.
Strengthening Structures and Systems to Enhance Agricultural Mechanization
No description about priority measures and policies for improving the situation of agricultural
mechanization had been clearly mentioned in a policy paper when the study team investigated
in the country except for the promotion of a leasing program and public-private partnerships:
PPPs. From now on, basic policy making is a prerequisite to promote agricultural
mechanization by providing notification of the procedure of the mechanization strategy:
determine to whom, when and how to act, towards other government agencies, private sectors,
international donors, NGOs and others stakeholders, in order to promote their cooperation.
Additionally, the government also has to develop an organizational structure, in particular,
strengthening human resources development.
Agricultural machinery and equipment are just one part of agricultural inputs, therefore it is
also necessary to pay attention to the availability of other inputs such as seeds, fertilizers and
pesticides, the interaction between other departments of the Ministry, i.e. about the diffusion of
new cultivation techniques and improvement of agricultural management, and the development
of cooperation with other agencies for training.
Strengthening the Leasing Program
Since the leasing program that aims to purchase agricultural machinery has begun by the state
agricultural bank, Aiyl Bank in 2011, renewal of agricultural machinery has been proceeding
steadily. But there are some obstacles to the development of leasing activity, such as a lack of
underlying assets, lack of human resources, strict leasing conditions and procedures for leasing
probation. As of January 2014, approximately 150 farmers who finished and passed leasing
probation are still waiting to receive new machines because the bank does not have enough
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underlying assets for new machines. At present, most of the leasing machines are tractors which
are cheaper than combine harvesters, but still only a limited number of farmers can afford to
buy these machines. Hence, it is necessary to rethink the condition for leasing and procedure for
leasing probation in order to expand targeted beneficiaries, without decreasing the collection
rate.
In the future, the demand for agricultural machinery is expected to shift from tractors to
combine harvesters. There are still difficulties in increasing the numbers of combine leasing due
to its strict leasing condition which is the same as the tractor, even though combines are much
more expensive than tractors. Thus, the leasing conditions of combine harvesters also need to be
reconsidered for further development of the leasing program. Moreover, the government needs
to regard the creation of accessibility to machinery services for small-scale farmers by providing
incentives such as tax benefits, especially in a small density farmland area like the southern part
of the country.
In Kyrgyz, there is approximately a demand for 25,000 tractors for renewal or additional
purchase which counts in the total deficient numbers and more than 20 year old tractors. 2,500
tractors leased per a year will be needed to fulfill these demands within the decade, but only
about 650 tractors (totaling 13 million USD) were leased by Aiyl Bank in 2013. In order to
introduce 2,500 units a year just through leasing by Aiyl Bank, the bank will need to increase
funding and the number of staff needs to be quadrupled. Although private banks have also
engaged in leasing programs, annual interest rates are about 15 percent higher than the Aiyl
Bank’s one. So users of other commercial banks’ loan are quite limited currently. In order to
expand the leasing programs of private banks to leverage funds and human resources of private
commercial banks, the government should also consider at least setting equal leasing conditions
by interest subsidy. Fostering human resources that are related to leasing probation for state
banks and private commercial banks and increasing capital with low interest rates from donors
are necessary for development. Additionally, banks should reconsider criteria for leasing
probation which is currently neglected in the management plan after investment, such as cost
reduction by installation of agricultural machinery, decrease in opportunity cost by appropriate
timing cultivation, and income generation by machinery service. As a result of this
transformation of leasing probation, more farmers can afford the leasing programs.
From other aspects, the banks should support farmers through development and the provision
of agricultural insurance as a financial product for farmers who rely on unstable rain-fed
cultivation.
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Increasing the Capacity of Farmers
As for leasing from Aiyl Bank, the last 3 financial years should result in profitable operations.
And if farmers pay 30% of the total machinery costs in advance, farmers are not required to
provide collateral for leasing services. Although a certain number of farmers cannot meet the
current terms of the lease like the above conditions, there are possibilities for a favorable
financial status for leasing, by improving cultivation technology, the selection of cultivated
crops, and improving management practices. It is necessary to introduce cultivation technology
and improve farm management skills of these farmers to increase the number of leasing users.
In most cases, farmers who have agricultural machines purchase spare parts, conduct repair and
maintenance themselves, sometimes including engine overhaul. Without having enough
knowledge, skills, experience and the appropriate tools, there is the likelihood that the operation
will lead to deterioration in functioning. Therefore, farmers should be trained to correct their
operations, the manner of repair and the methods of maintenance. If so, farmers can continue to
use their agricultural machines more efficiently by maintaining existing performance levels.
Although there is no public agricultural extension service in Kyrgyz, there are many vocational
training schools of agriculture and technical colleges around the country. At these schools and
colleges, students can study about cultivation techniques, agricultural machinery operation,
repair and maintenance by using actual machines. It is significant to the encourage capacity
building of these organizations. The government should consider establishing short term courses
for farmers during agricultural off-season to improve cultivation technologies, repair and
maintenance techniques of agricultural machinery, and agricultural management skills.
Improving Infrastructure to Ensure Stable Production
The decrepit state of irrigation facilities leads to a decline in the function and efficiency of them,
thus farmers have tended to choose rain-fed cultivation in recent years. To ensure agricultural
income generation and the improvement of income stability, it is imperative that there is proper
maintenance and rehabilitation of decrepit infrastructures.
3.1 Directions of Japanese ODA
Basically, Japanese cooperation should be conducted with the above described development
directions. Despite the existing problems about resources in the host country, the following
describes the scope of possible cooperation:
(1) Technical cooperation for the development of agricultural mechanization strategies and
institutions (experts and trainings)
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(2) Increase in leasing capital and advice for the leasing institution (loan, experts and
trainings)
(3) Provision of 2KR agricultural machinery for the leasing program
(4) Supports for agricultural finance and agricultural insurance institutions except for leasing
(experts and trainings)
(5) Supports for improvement of farming practice (agricultural technologies, management
skills) (technical cooperation project)
(6) Renewal of training equipment (agricultural machinery, tools, textbooks, repair facilities)
in vocational training schools and technical colleges (grant assistance for grassroots
projects)
(7) Supports for the provision of maintenance equipment of irrigation infrastructures, or
rehabilitation of irrigation facilities (loan and grant)
Schematic Description of Japan's Cooperation for the Promotion of Agricultural Mechanization
S-8
Description of Japanese Cooperation
Scope of cooperation Method Contents Consultations on agricultural policy
Dispatch of experts
Consultation on formulation of agricultural policy, including measures for agricultural mechanization
Promoting a greater understanding for Japanese development assistance
Analysis and consultation on the proposals for cooperation with Japan
PR activities of Japanese cooperation in the agricultural sector
Improvement of cultivation technologies and farm management
Technical cooperation, Dispatch of experts, Trainings
Investigation of cultivation methods, method of treatment after harvesting and storage technologies (identifying issues and consideration of measures)
Research methods of management and the financial conditions of farmers (identifying issues and consideration of measures)
Investigation of the agricultural market (by region, province, city and country)
Instruction in writing business plans and setting of business objectives against farmers (target markets, product selection (crops), sales methods, required equipment, investment analysis, etc.)
Instruction of various records (cultivation record, account book, etc.)
Instruction of cultivation technologies and farming management
Consultations on financial policy
Dispatch of experts, Trainings
Consultation for agricultural machinery leasing which suits the actual situation of farming management (appropriate leasing conditions, contents of preferential treatment for machinery services, contents and standards of leasing probation)
Installation consulting leasing conditions in accordance with the state of the farm, the priority measures to increase services technology, standards and content expertise
Consulting and development of agricultural financial services
Dispatch of experts, Trainings
Development and improvement of agricultural insurance and agricultural loan
Provision and upgrading of training equipment in vocational technical schools
Grassroots projects
Provision and upgrading of training equipment in vocational technical schools (hand and specialty tools, measuring instruments, welder and other primary repair and maintenance equipment)
Equipment provision for the maintenance and management of irrigation facilities
Grant projects Provision of equipment including construction machines for maintenance and operation of irrigation facilities
Rehabilitation of decrepit irrigation facilities Rehabilitation of irrigation facilities
Loan and grant projects
Rehabilitation of decrepit irrigation facilities
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3.2 Possibilities of Japanese Manufacturers to Expand Business in Kyrgyz
Regardless of the types of agricultural machinery and equipment supplied to the Kyrgyz
market, the market size of Kyrgyz is quite limited due to its population. Therefore it is difficult
to expect the sufficient return on investment (marketing costs, formulation of dealer channels,
spare parts provisioning, after-sales service, etc.). The Kyrgyz market should be considered in
the complex neighboring countries such as Kazakhstan and others.
In order to verify and demonstrate machinery performance (accuracy and efficiency of
operations, fuel consumption, and so on), the manufacturer should try to examine their
machines under the on-site farming condition by using opportunities to test their machines in
Kyrgyz, like participating in agricultural machinery exhibitions. The government of Japan can
partially support these types of efforts by the private sector of Japanese manufacturers by
offering an incentive for expanding business into Kyrgyz.
1
1. Collecting Information and Study Summary
1.1 Background of the Study
The agricultural sector occupies the largest part of the economy in the Kyrgyz Republic
(hereinafter Kyrgyz). The sector accounts for 22.1% of the total gross domestic product and
approximately 14 % (213 million U.S. dollars) of the total export value in 2011. In Kyrgyz,
66% of the total population lives in rural areas, and half of the labor force in the country is
engaged in agriculture. Agriculture plays an important role in the sustainable development of
the economy. Despite this situation, the income of farmers remains at a low level, which is
approximately 35 % to 50 % compared with other industries. As a result, most of the rural
population lives in conditions below the poverty line level. Therefore, the reduction of poverty
in rural areas is considered one of the most important tasks.
In Kyrgyz, after the collapse of the Soviet Union in 1991, collective farms (kolkhoz) and
state farms (sovkhoz) were dismantled, and land was distributed to individual farmers who own
land as small segmentalized farms, depending on the number of persons in a household. This
agrarian reform caused some negative effects such as the loss of efficient market access due to
the elimination of the national buyback program, high-cost structures, loss of financial access,
and the decline of agricultural inputs. As a result of this transformation, inefficient small-scale
farming became mainstream in agriculture in Kyrgyz.
According to the statistical data of the Ministry of Agriculture and Land Reclamation
(hereinafter MA & LR) in 2013, 87% of agricultural machinery in Kyrgyz is over 20 years old.
In Kyrgyz, there are approximately 20,000 units of tractors. Of these, 17,000 tractors are over
20 years old, and others are comparatively new including 842 units supplied by Japanese
non-project grants and Japan Second Kennedy Round (hereinafter 2KR) grant aid programs, and
also supplied by approximately 2,500 units by Chinese grant aid which matters. According to
the FAO’s survey data, 30% of harvested crops are lost due to shortages in agricultural
machinery and this caused opportunities lost to the timely harvest of crops. Hence, expansion of
agricultural machinery is significant as a way to increase agricultural production. According to
the MA & LR, the total number of agricultural machinery supplied from 1995 to 2009, was
5,252 units (including implements), of these 2,870 tractors. Financial assistance for agricultural
machinery from international donors are: first place, Chinese grants and second place, Japan;
others are the World Bank, the USA, and Turkey. Most of the machinery supplied are
Belarusian and Polish products, but in recent years German and American machinery is
2
increasing through the USAID program. The machinery from these countries represents
approximately 10 % of the required number of tractors. Although the majority of currently used
machines are from the former Soviet Union, it is assumed that the number of machinery in
working condition will be reduced from year to year as a result of further their decrepit
condition.
In the field of agricultural development of Kyrgyz, JICA has been working on the following
projects, “The study on effective management of agriculture and the processing industry in the
Kyrgyz Republic” (2004-2007), “The Project for The Support for The Dissemination of Biogas
Technologies” (2007-2011), Regional Training “Agricultural Mechanization for Central
Asia and Caucasus” (2009-2013), “Project for promotion of exportable vegetable seed
production” (2013-present), “Dissemination of organic farming in Kyrgyzstan” (Grass-roots
cooperation project) (2013 - present).
Japanese assistance totals approximately 10 billion Japanese yen for the provision of
agricultural machinery, fuels and fertilizers through “Non-Project Grant Aid for Structural
Adjustment Support” from 1994 to 2002, and “Grant Assistance for Underprivileged Farmers
(former Food Aid)” from 1996 to 2005. However, currently these programs have stopped due to
a low execution rate of counterpart funds in Kyrgyz.
The MA & LR decided on an agricultural mechanization policy which was supported by
FAO as one of the main agricultural development strategies, and established an agricultural loan
program which was operated by MA & LR previously, to purchase agricultural machinery for
farmers at low interest rates through state the commercial bank, Aiyl bank, in recent years.
(Japanese 2KR’s counterpart fund also was utilized for this program.)
Under these circumstances, the promotion of agricultural mechanization in Kyrgyz is
expected to generate income growth for farmers by increasing agricultural production, and
thereby stimulate the economy through the encouragement of agricultural exports. This future
expectation matches JICA’s direction of Kyrgyz assistance (promotion of agriculture and
business for fostering exporting industry which targeted mainly agriculture and related
industries).
In addition, by collecting basic information such as the government’s policies which relates
to agricultural mechanization, the overall policy direction, institutional validity of agricultural
machinery’s provision and leasing, and the current situation of rural areas, and analyzing them,
it can be expected to encourage the consideration of future cooperation approaches more
efficiently.
3
1.2 Purpose of the Study
A main purpose of this study is basic data collection for the mechanization of agriculture in
Kyrgyz. In order to conduct data collection and the development of directions, it is necessary to
consider the contents of the previous chapter, “1.1 Background of the study”. It is also
necessary to clarify the situation of farmers’ accessibility to agricultural machinery (especially
in the accessibility of financial institutions such as the loan or leasing system to purchase
agricultural machines by the government), agricultural machinery markets and the current
situation of the maintenance of machines, and the possibility of the Japanese agricultural
machinery manufacturer (hereinafter “Japanese manufacturer”) to expand business into Kyrgyz
and its challenges.
This study aims to analyze issues of obstacle factors for policies, institutions and
implementations to promote agricultural mechanization in Kyrgyz, and basic data collection for
the development of the JICA’s cooperation directions.
1.3 Research Methodology
The below figure is the work flow of the research. This research used a combination of
several approaches based on the below work flow. First, the team investigated the current
situation in Kyrgyz. Second, it analyzed identified issues, and examined countermeasures by
considering the current situation of the government, donors and private sectors. Lastly, the team
investigated the direction of agricultural mechanization development on the basis of Kyrgyz
agricultural development strategies.
Figure 1-1 The Work Flow of the Research
Confirmation of current situation
Identify issues and analysis
Consideration of countermeasures
Directions of development
Agricultural development strategies of the government
Situation of the government, donors, private sectors against the issues
Circumstances of agriculture and mechanization (statistics, reports, interviews, questionnaires)
4
(1) Literature research, basic information and existing data analysis
The JICA study team visited the MA & LR, the Ministry of Finance, the Ministry of
Education and Science, the Ministry of Work, Migration and Youth, the Kyrgyz National
Agrarian University, other donor agencies, banks, agricultural machinery dealers, and spare
parts shops. By visiting these places, the team collected various types of reports, plans,
regulations, statistical data, price information and so on. After that, the team reviewed and
analyzed this information and other literature and data.
(2) Field research
In addition to reviewing and analyzing the above literature and data, the JICA team
conducted interviews in order to understand the actual situation of agricultural mechanization.
During the field research, the team visited the Department of Agricultural Development,
corporate farms and agricultural cooperatives in Talas province, Chui province and Osh
province. Interview contents focused on the situation of cultivation, information about holding
machines, the usage situation of machines, the situation of maintenance, the circumstances of
machinery services to other farmers and the availability of spare parts and so on.
(3) Field questionnaire research by local consultants
Local consultants researched a total of 72 units of farmers in 7 provinces (10 to 12 units in
each province), including the areas that the JICA team could not visit to collect the information,
about the situation of cultivation, the information about holding machines, the usage situation of
machines, the situation of maintenance, the circumstances of machinery services to other
farmers, the availability of spare parts and the possibility of future machinery purchase by the
questionnaire. From among the range of middle and small-scale farmers in those areas,
interview objects were selected by farmers who have agricultural machinery, recipient farmers
of machinery services and farmers who cultivate without machines with the cooperation of
stakeholders in the districts and villages. Regarding large-scale farmers, the JICA team
conducted interviews during the field research.
(4) Data arrangement and analysis
Collected basic information and the research results based on the above methodologies were
analyzed in three sub-sectors: the market, maintenance and finance, and also analyzed according
to each stakeholder who relates to mechanization, and then identified issues of mechanization.
Afterwards, the JICA team considered suitable countermeasures for each challenge in
5
accordance with Kyrgyz government’s directions of agricultural development. As a result of this
procedure, the team coordinated the direction of Japanese cooperation and assistance.
1.4 The Team Members and Study Schedule
The JICA team was organized by 6 members. The following are the study team members and
their assigned areas.
Mr. Yasunobu Kudo (TASK Co., Ltd.)
Leader/Agricultural Policy
Mr. Kiyohito Kobayashi (Katahira & Engineers International)
Market research of Agricultural machinery
Mr. Koji Yamaguchi (TASK Co., Ltd.)
Maintenance of Agricultural machinery
Ms. Masako Suzuki (Katahira & Engineers International)
Financial institution
Mr. Mamoru Hatano (TASK Co., Ltd.)
Social research in rural areas/Project coordinator
Mr. Rasul Abdukadirov (Katahira & Engineers International)
Translator (Russian)
The field research was scheduled for 50 days, from January 9, 2014 to February 27, in
Bishkek, Chui province, Talas province, Osh province for field research (farms, farmers’
cooperatives, agricultural machinery dealers, banks, etc.), and field questionnaire research by
local consultants in all 7 provinces (10 to 12 units in each province). Additionally, the team
visited the capital city of a neighboring country, Almaty in Kazakhstan to collect related
information from agricultural machinery dealers and Japanese trading companies.
6
2. Overview of the Agricultural Sector in the Kyrgyz Republic
2.1 Ecological Conditions
Kyrgyz lies in the northern latitude, 39 degrees and 44 degrees, and to the eastern longitude,
69 degrees and 81 degrees. Kyrgyz is a landlocked country which is surrounded by China (east),
Kazakhstan (north), Uzbekistan (west), and Tajikistan (south-west). It has a total area of
199,000 square kilometers (approximately half the size of the Japanese land area). Kyrgyz is a
mountain country where 94% of the total land area is at an altitude over 1,000 meters, and 40%
is at an altitude over 3,000 meters. Only one-sixth of the land area is at an altitude below 1,500
meters and these areas are mainly the outskirts of the northern mountain area, a moisture-laden
windy area, and the southwest Fergana Basin peripheral area. In Kyrgyz, forest areas are just
only 3% of the land area.
Climate of Kyrgyz
The country’s climate is wholly a continental arid climate, with low precipitation, annual and
daily temperature ranges are wide. Due to climate conditions, it will have high temperatures
during the summer season and have harsh cold winters. Below altitudes of 2,000 meters are
semi-desert or steppe, and above altitudes, a subalpine zone. Moreover, above 3,000 meters is
the vegetation zone, alpine meadow. As mentioned before, most of the land areas in Kyrgyz are
at an altitude over 1,000 meters, and there are Pamir mountains and Altai mountains. Therefore,
the temperature difference is extreme by area too.
Although the country’s annual average precipitation is 553 mm, real differences are
significant, like in temperature. The differences vary from approximately 150 mm in the
Fergana Basin area to 1,000 mm in the mountainous areas. From a perspective of the differences
by province, in Chui province, Talas province and Osh province, rainfall mainly occurs during
the spring season from February to May, and summer season is generally dry season.
Meanwhile, in Yssyk-kul province and Naryn province, mainly mountainous areas, rainy reason
is generally from spring to summer, and dry season is from November to February, during
winter season. This kind of reverse phenomenon is one of the main characteristics of an alpine
climate, and by utilizing this characteristic it is popular for livestock pasturing in the highland
areas during summer season, which is generally cool and rainy. In terms of agriculture in
Kyrgyz, rainfall is limited to certain terms in each province, so there are severe limitations for
rain-fed cultivation.
7
Land Use in Kyrgyz
The current situation of land use in Kyrgyz is shown in Table 2-1. The total land area is
199,900 square kilometers (19,990,000ha) and of this arable land area, including fallow land
and uncultivated land, is 1,276,800 ha, which accounts for 6.4% of the total land mass.
Regarding land area and sown land area by province, since most of the land areas in Naryn
province and Yssyk-kul province are mountainous areas, there is limited arable land in the
province. Therefore the provinces have lower proportions of sown areas against a high
proportion of land areas, than other provinces. On the other hand, Chui province has just 10% of
the total land area, but sown area is more than 30% of the nation. As shown by these numbers,
Chui province has a larger scale of sown area per capita compared to the southern area and
mountain area, and comparatively large-scale land use. However, as mentioned above, most
land in Kyrgyz is mountainous area, hence there are limited flatlands for large-scale cultivation.
Table 2-1 Land Use by Province (2013)
Source: MA & LR
2.2 Orientation of Agricultural Sector
2.2.1 Trend in the Agricultural Sector
Gross National Income (GNI) per capita in the country is 2,230 USD (2012) and has
increased steadily in recent years. However, compared to other Central Asian countries, the
figures are still the second lowest after Tajikistan (See Table 2-2). The United Nations indicated
Kyrgyz as a Landlocked Developing Country (LLDC), disconnected from the ocean, so the
country is geologically unfavorable from a perspective of transportation, and has special needs
for development. In 2011, 5.0 % of the total population in Kyrgyz lived under the poverty line
(1.25 USD per day constitutes the poverty line), and 21.6 % of the population lives with less
than 2 USD a day. Although the current figures are dramatically improving compared to 22.9 %
(1000ha)% of the
nation(1000ha)
% of thenation
(1000ha)% of thenation
(1000ha)% of thenation
(1000ha)% of the
nation(1000ha)
% of thenation
The Kyrgyz Republic 19,990 1,276.8 1,170.4 4.4 2.8 100.4
Chui 2,020 10.1% 419.4 32.8% 406.2 34.7% 1.2 27.5% 2.0 71.4% 10.1 10.1%
Talas 1,140 5.7% 117.5 9.2% 103.4 8.8% 0.0 0.2% 0.4 14.3% 14.0 13.9%
Yssyk-kul 4,310 21.6% 191.3 15.0% 176.3 15.1% 0.5 11.4% 0.04 1.4% 14.5 14.4%
Naryn 4,520 22.6% 121.0 9.5% 102.4 8.7% - - 0.1 3.6% 18.5 18.4%
Osh 2,900 14.5% 188.5 14.8% 175.1 15.0% 2.0 45.5% 0.2 5.4% 9.6 9.6%
Jalal-abad 3,370 16.9% 165.5 13.0% 146.3 12.5% - - 0.04 1.4% 19.5 19.4%
Batken 1,700 8.5% 73.6 5.8% 60.7 5.2% 0.7 15.9% 0.03 1.1% 14.3 14.2%
Abandoned farmlandLandarea Sown area Planted area Fallow land Perennial grass land
8
(below 1.25 USD a day) and 45.8 % (below 2 USD a day) in 1995, almost one-fifth of the
population still lives in poverty. Especially, in the rural areas, 40.4 % of people live under the
rural poverty line (percentage of the rural population living below the national rural poverty
line), which means that poverty in Kyrgyz is not equally distributed around the country, but
concentrated in the rural areas. 1
Table 2-2 GNI Per Capita and Comparison with Other Neighboring Countries
(Unit: USD)
Country 2004 2005 2006 2007 2008 2009 2010 2011 2012
Kyrgyz 1,610 1,660 1,780 1,970 2,110 2,150 2,070 2,180 2,230
Kazakhstan 7,240 7,850 8,690 9,510 9,650 10,010 10,440 11,070 11,780
Uzbekistan 1,830 2,000 2,170 2,520 2,810 2,930 3,120 3,390 3,670
Tajikistan 1,270 1,370 1,480 1,630 1,770 1,800 1,890 2,040 2,180
Turkmenistan 4,060 4,430 5,230 5,890 6,630 6,940 7,390 8,260 9,070
Source: World Bank, “World Development Indicator”
As shown in Figure 2-1, the proportion of the agricultural sector contributing to the GDP has
tended to decrease recently from 30 % in 1990 and 40 % in 1995 to 19 % in 2010. However,
from a perspective of the labor population, 34 % of the population is still engaged in the
agricultural sector (Table 2-3). As the sector has high employment capacity, the agricultural
sector is still a basic country industry.
Source: World Bank, “World Development Indicator”
Figure 2-1 Proportion of Each Industry in GDP (%)
1 World Bank, “World Development Indicator”
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1995 2000 2005 2010
Service
Industry
Agriculture
9
Table 2-3 Percentage of Employment by Industry (%)
1990 1995 2000 2005 2008
Agriculture 32.7 47.2 53.1 38.5 34.0
Industry 27.9 16.7 10.5 17.6 20.6
Service 39.4 36.1 36.5 43.9 45.3
Source: World Bank, “World Development Indicator”
2.2.2 Trend in Agricultural Production
Since most of Kyrgyz land areas are mountainous and steppe, Kyrgyz has a long history with
livestock pasturing. After the independence from the former Soviet Union, the government has
encouraged wheat production at lower altitude areas in order to encourage the ratio of national
food self-sufficiency and to prevent destruction of the environment through overgrazing. After
the production drop due to disruption resulting from independence in early 1990s, food
production has shown the tendency to steadily increase. However in the latter 1990s,
agricultural production gradually decreased due to structural issues caused by land reform and
the structural transformation from large-scale farming to small peasant farming. Along with the
increase in wheat production, shifting from wheat production to more profitable crops, such as
barley and maize, increased gradually. Also in the cultivation area for cash crops such as cotton,
beat and tobacco, crop changes from cash crops to vegetables and fruits have been encouraged
due to a decrease in purchase price and an increase in agricultural inputs prices, including
fertilizer, in recent years.
Since 2002, agricultural production in Kyrgyz has stagnated, and the proportion of the
agricultural sector contributing to the GDP has decreased from 34% in 2000 to below 20% in
2010 (Table 2-1). While agriculture is the basic industry in Kyrgyz, supply of agricultural
products by domestic production is not sufficient to fulfill national demands for agricultural
products. Most agricultural product consumption exceeds its national production. Therefore,
national consumption depends on imports from other countries (Table 2-4).
Food imports are increasing and along with the rise in food demand, Kyrgyz imports wheat
and its flour from Kazakhstan, fruits from China and milk and dairy products from Russia.
Grain production, which occupies more than 60% of the arable land area, has been decreasing
by 18% in production since 2004, due to the inflow of cheap wheat to Kyrgyz, mainly from
10
Kazakhstan, and their quantities are increasing in recent years2. Regarding the current tendency
of agricultural exports, vegetables and fruits from Russia, and milk and dairy products from
Kazakhstan are increasing. In the former Soviet Union, cotton cultivation was encouraged in the
Fergana Basin peripheral area and cotton was the main agricultural export product until 2003,
but recently it has shown a dramatic decline. Although beef cattle and poultry were also former
major export products of Russia and Kazakhstan, export quantities were considerably
diminished because of the establishment of sanitation requirements for Kyrgyz’s products in
these countries. However, there is a generous amount of border trade that occurs with China and
Kazakhstan, invisible in statistical data; these restricted items also are distributed and it is
expected to increase several fold the agricultural products and food trading scale, as shown in
Table 2-4.
Table 2-4 Export and Import of Agricultural Products and Foodstuffs
(100 million USD)
2007 2008 2009 2010
Exports 201.2 218.6 188.2 165.1
Imports 376.5 538.7 506.6 426.2
Balance -175.3 -320.1 -318.4 -261.1
Source: FAO, 2011, “The Kyrgyz Republic opportunities and challenges to agricultural growth”
Trend in agricultural production by province
Kyrgyz consists of seven provinces and two municipalities. The following is an overview of
agricultural production by province (see Table 2-5, 2-6).
Chui province is the most popular area of agricultural production in Kyrgyz, using the border
plain field area near Kazakhstan. Production volume of wheat, barley, maize and vegetables are
the biggest in the country, and yields of main agricultural products are at a higher level than
other provinces. Although the sown area accounts for 32% of the nation, farm households are
just 17% of the total number in Chui province. This means that farmland per one farm
household is comparatively larger than other provinces, and larger scale farming is implemented
in this province. Also, livestock farming, especially beef cattle and yak are popular in this area
against a background of demand for dairy products in Bishkek city and Kazakhstan.
In Talas province, wheat, beet, potato, vegetable, tobacco and pasturage are main products. In
recent years, especially, the cultivation of white haricot beans is growing and many farmers
2 FAO, 2009, “The Kyrgyz Republic, farm mechanization and agricultural productivity”
11
have a willingness to cultivate the crop due to higher cash income compared to staple food like
wheat. Additionally, potato production is the second largest in the country and its yield is also at
a high level.
In Yssyk-kul province, wheat, potato, beet, vegetable and apple are the major crops of this
area. This province has a relatively high altitude area like Naryn province, hence the agricultural
style tends to be wheat, barley and potato production and stockbreeding, suitable for the
highland area. In particular, potato cultivation occurs in an overwhelming majority of the nation,
which is the top production and on sown land, in addition to producing a high yield level.
In Naryn province, farmers generally cultivate wheat, potato and vegetable. Since this
province is located in the highland area, there are climate and farmland limitations. Due to the
limitation of arable land, livestock, including horses, sheep and goats are popular here.
Therefore wool and meat are signature agricultural products in this province. Besides barley
cultivation, feedings stuffs are also comparatively popular in this province.
In the south provinces, cultivation items vary from the northern areas and include wheat,
cotton, tobacco, vegetable, fruits (apple, berries) and rice. Maize, which is not appropriate for
the highland area, is third in production and cultivation in this area of the country, and yield is
relatively higher than other provinces. While this province includes the highly populated Osh
city, and market accessibility is favorable, agricultural machinery holding numbers are the
second highest after Chui province.
Wheat, cotton, tobacco, potato, vegetable, grape, and oilseed are cultivated in Jalal-abad
province and livestock (especially sheep, goat, cattle) are also popular here. The province is
located in Fergana Basin and the peripheral area; vegetables and fruits have been cultivated here
in recent years against a background of a warm climate. Although the cultivated area accounts
for just 13% of the nation, the number of farm households constitutes 25% of the country.
Farmland per person is relatively smaller than other provinces, and small-scale farmers are a
majority in this province.
In Batken province, tobacco, cotton, maize, rice, grape, apricot and wheat are cultivated. In
particular, fruit production is the highest in the country. This province has the smallest farmland
per capita, although, some specific crops, such as fruit, are popular by utilizing the limited
farmland space and the favorable climate in this province.
12
Table 2-5 Comparison of Fundamental Indicators by Province
Note: The data of Chui includes the data of Chui city and the data of Osh includes the data of Bishkek city. Source: National Statistics Committee, MA & LR
Table 2-6 Information on the Production of the Main Types of Farming by Region
(production, crop area, yield)
Note: The data of Chui includes the data of Chui city and the data of Osh includes the data of Bishkek city. Source: National Statistics Committee, MA & LR
2012
Povertyrate
(people) (%)(Number
of houses)(%) (1000ha) (%) (1000ha)
(%)(%)
The Kyrgyz Republic 5,663,100 100% 357,127 100% 19,995 100.0% 1,170.4 100.0% 37%
Chui Northmiddle 1,733,000 30.6% 58,824 16% 2,030 10.2% 406.2 34.7% 17%
Talas Northwest 239,500 4.2% 21,620 6% 1,140 5.7% 103.4 8.8% 40%
Yssyk-kul East 453,400 8.0% 31,796 9% 4,310 21.6% 176.3 15.1% 28%
Naryn Southwest 268,000 4.7% 38,391 11% 4,520 22.6% 102.4 8.7% 40%
Osh Southeast 1,434,500 25.3% 82,146 23% 2,920 14.6% 175.1 15.0% 51%
Jalal-abad Middlewest 1,076,700 19.0% 89,430 25% 3,370 16.9% 146.3 12.5% 51%
Batken Southwest 458,000 8.1% 34,960 10% 1,700 8.5% 60.7 5.2% 34%
Province Area
2013 2013Total landarea
2013
PopulationNumber of farm
householdCultivation area
Production(ton)
Planted area(ha)
Yield(Mt/ha)
Production(ton)
Planted area(ha)
Yield(Mt/ha)
Production(ton)
Planted area(ha)
Yield(Mt/ha)
Production(ton)
Planted area(ha)
Yield(Mt/ha)
The Kyrgyz Republic 799,800 377,424 2.119 233,800 123,287 1.896 446,400 74,451 5.996 1,379,200 84,880 16.249
Chui 366,800 150,867 2.431 154,700 71,633 2.160 139,100 22,555 6.167 34,400 2,526 13.618
Talas 25,600 12,064 2.122 2,400 1,556 1.542 34,500 5,675 6.079 102,500 7,314 14.014
Yssyk-kul 136,900 71,595 1.912 38,700 22,559 1.716 - - - 552,800 32,416 17.053
Naryn 36,200 17,978 2.014 19,600 10,131 1.935 500 94 5.319 80,900 5,762 14.040
Osh 139,100 67,463 2.062 9,800 6,876 1.425 108,400 16,239 6.675 164,100 10,788 15.211
Jalal-abad 62,000 34,755 1.784 2,700 2,896 0.932 125,900 23,234 5.419 267,600 15,673 17.074
Batken 33,100 22,702 1.458 5,900 7,636 0.773 38,000 6,654 5.711 176,900 10,401 17.008
Beef cattle Dairy cattle Swine Sheep,Goat Horse Livestock
Production(ton)
Planted area(ha)
Yield(Mt/ha)
(head) (head) (head) (head) (head) (head)
The Kyrgyz Republic 820,900 42,793 19.183 1,032,472 534,740 10,130 4,260,446 318,014 2,921,587
Chui 338,600 18,038 18.771 249,939 120,227 48,536 563,647 47,923 1,709,179
Talas 76,800 3,798 20.221 65,353 33,107 789 487,388 23,513 271,319
Yssyk-kul 44,800 2,690 16.654 184,907 93,667 9,015 771,457 81,096 790,532
Naryn 5,700 491 11.609 133,518 70,925 0 916,046 93,232 171,800
Osh 116,500 6,572 17.727 317,534 161,392 329 988,525 82,862 795,740
Jalal-abad 203,300 9,136 22.253 266,614 142,686 374 1,090,140 53,857 848,268
Batken 35,200 2,068 17.021 119,800 61,690 37 473,993 6,257 256,793
ProvinceVegetable
ProvinceWheat Barley Maize Potato
13
2.3 National Policy of the Agricultural Sector
During the Kyrgyz research, a general policy to increase the level of mechanization of
agriculture had not yet been determined. According to the “National Sustainable Development
Strategy 2013-2017” the National Committee formulated as a development strategy principle
for the national level and “The Government’s Program and Plan on Transition of Kyrgyz
Republic to Sustainable Development 2013-2017” also formulated by the government, the four
targets for the agricultural sectors, which are below:
- Increase the output of the agricultural complex, improve the product quality and ensure
food security in the country
- Improve the efficiency of agricultural production and the competitiveness of products
for the entire agricultural complex
- Improve the fiscal return on the agricultural complex
- Solve the social issues of peasants
Furthermore, in the “National Sustainable Development Strategy 2013-2017”, there are eight
specific objectives describing these four goals. Regarding agricultural mechanization, in the
section of second objectives, “improve the quality of servicing and technical services for
agriculture, creating conditions for technical and technological modernization of agricultural
production”, the strategy describes policy measures such as “increase the availability of
agricultural equipment through the expansion of networks and improve the quality of services
of major agricultural equipment providers, created under principles of public-private partnership
with the subsequent transfer of the state to the private sector”.
Also, in “The Government’s Program and Plan on Transition of the Kyrgyz Republic to
Sustainable Development 2013-2017”, “provision of services and market infrastructure for
agricultural production” is indicated as a field target. In this field, “establishment of loan
institutions for purchase of agricultural machinery and machine stations, and encourage
agricultural management by public private partnership” is described as a specific measure, as
well as being in common with previous strategy.
According to the plan for agricultural investment projects, twenty four projects are planned
for 2013 to 2017. Of these two projects, are aims for agricultural mechanization, such as
“funding for financial leasing of agricultural equipment” and 2.5 million USD are calculated for
the budget of 2013 to 2014, as an estimated cost.
There are no specific descriptions of government strategies about the agricultural
14
mechanization except for the above plans. Although MA & LR designed development policy
about agricultural sector by cooperating with FAO in 2012, the government did not approve of
the policy plan due to the lack of concreteness of the investment plan. Currently, MA & LR is
working on preparing agricultural development policy-making, including agricultural
mechanization policy again under the supervision of the new Farm ministry who was assigned
in January 2014, but the specific planning calendar for approval has not been decided yet.
2.4 Structure and Role of Agrarian Sector
Figure 2-2 and 2-3 are the organizational structures of the Ministry of Agriculture and the
Departments of Agricultural Mechanization and Electrical supply (hereinafter Mechanization
Department). The total numbers of MA & LR staffs are 70. Of this total, the Mechanization
Department has only four staff members in the central office. Furthermore, 24 members also
belong to the Mechanization Department who are dispatched to local offices, and they cover all
seven provinces, including 40 districts.
The Mechanization Department originally worked on registration and inspection of
agricultural machinery as its main function. The department changed as a Mechanization
Department after the organizational change in 2012. Its current work functions are below:
• Implementation of agricultural mechanization policies, policy-making in related fields
• Research the current situation of agricultural machinery and demands
• Project planning by issue and apply for assistance from donor agencies
• Education and training for agricultural machinery experts (cooperate with university
and colleges to foster mechanics and operations)
• Electrification in rural areas (provide small electricity stations: water power, solar
power, wind power, biogas)
• Apply for assistance from donor agencies in terms of agricultural mechanization,
adjustment of assistance from donors
• Provision of agricultural machinery information to dealers and farmers
• Inspection of new agricultural machinery, cooperate with suppliers (manufacturer,
dealer)
The work functions of the Mechanization Department vary as described above, but there are
limitations regarding the staff and the budgets. Therefore, the above work functions are not
sufficiently implemented.
When the organizational change occurred in 2012, registration work for agricultural
15
machinery was transferred to the State Registry Agency, which was placed under the Interior
Ministry with some staff members from the Mechanization Department. Since there is no
facility for machinery inspection, MA & LR is not working on it.
Currently, MA & LR is mainly working on the promotion of the agricultural machinery
leasing project as an implementation policy (monitoring, publication to farmers), survey for
types and numbers of national machinery demands, statistical data collecting and assistance
requests to donors, including assistance for underlying assets (preparing the requests for South
Korea and Poland) and assistance for equipment (preparing the requests for Japan 2KR). In
addition, they are also providing information of agricultural machinery to farmers and dealers
based on agricultural manufacturers’ information about their products.
Source: MA & LR
Figure 2-2 The Organizational Structure of the Ministry of Agriculture
16
Source: MA & LR
Figure 2-3 Departments of Agricultural Mechanization and Electrical Supply
17
3. Present Agricultural Mechanization and Problems
3.1 Utilization of Agricultural Machinery
3.1.1 The Number of Agricultural Machinery
Table 3-1 shows the number of major agricultural machinery and the number it is deficient, in
Kyrgyz. About 90% of agricultural machinery used at present has been in use for more than 20
years, since before independence. Since a substantial number of obsolete agricultural machinery
is included in Table 3-1, the actual deficient number is larger than the number included in the
table.
Table 3-1 Number of Agricultural Machinery and the Deficient Number for 2013
Machinery Total Age:
≧20yearsAge:
<20yearsRequired Deficient
Tractor 20,369 17,722 2,647 27,953 7,584Combine harvester 2,359 1,882 477 4,830 2,471Corn harvester 99 99 - 510 411Forage harvester 454 454 - 1,463 1,009Seeder 2,530 2,430 100 4,123 1,593Tooth harrow 1,770 1,770 - 78,274 76,504Cultivator 2,272 2,272 - 7,739 5,467Plow 7,239 5,646 1,593 5,479 - Disk harrow 191 191 - 2,124 -1,933Trailer 8,736 8,561 175 16,773 -8,037Mower 1,882 1,882 - 2,294 -412Rake 617 617 - 1,293 -676Baler 1,054 1,054 - 1,147 -93
Total 49,572 44,579 4,992 154,002 106,190Source: MA & LR (the Department of Mechanization estimates the required number)
Table 3-2 shows the number of major agricultural machinery and implements by province.
They are distributed according to the cultivated area of each province. Almost all of the
agricultural machinery was distributed to the provinces when Kolkhoz and Sovkhoz were
dissolved before independence, and have been used in the same areas for more than 20 years.
Table 3-2 Number of Agricultural Machinery and Implements by Province in 2013
Kyrgyz (Total)
Chui Talas Issyk -Kul
Naryn Osh Jalal- abad
Batken
Cultivated area (1,000ha)
1170.4 406.2 103.4 176.3 102.4 175.1 146.3 60.7
Tractor 20,369 6,099 1,574 3,477 1,692 3,498 2,914 1,124
Less than 100 hp 5,379 2,796 3,034 1,662 3,212 More than 100 hp 754 118 443 30 277
Tooth harrow 17,700 6,675 317 1,376 1,405 3,900 3,668 59Plow 7,239 1,947 656 1,592 704 868 1,072 400
18
Kyrgyz (Total)
Chui Talas Issyk -Kul
Naryn Osh Jalal- abad
Batken
Seeder 2,530 1,058 153 431 224 376 241 47Cultivator 2,272 579 291 275 - 473 570 84Broadcaster 286 154 32 38 20 - 27 15Sprayer 429 240 39 96 14 14 26 -Trans-planter 510 301 39 105 - 31 15 19Rake 617 219 48 106 126 81 37 -Baler 1,054 515 34 170 123 72 48Forage harvester 454 396 23 33 - - -Trailer 8,736 2,966 647 1,358 910 1,286 515Combine harvester 2,359 889 149 553 269 206 54Potato digger 403 43 31 310 8 - 3Seed cleaner 462 19 119 43 29 12
Source: MA & LR
Table 3-3 shows the number of combine harvesters and the planted area of wheat and barley.
The cultivated area may be the target area of combine harvesters. In case the harvesting
performance of the combine harvester is set for 250ha/month/unit and the harvesting time is set
for only 1 month, the required number of combine harvesters will be 4 unit/1,000ha.
Considering the required number, Osh province has a slight shortage of combine harvesters and
the deficit number in Batken province is more than 50%, while other provinces have a sufficient
number. However, the JICA Study Team assumes that the number of actual working combine
harvesters is less than the number in Table 3-33, according to its interview surveys of farmers
and concerned people in the agricultural sector, and the questionnaire survey in the provinces.
Table 3-3 Number of Combine Harvesters per 1,000 ha of Cereals Planted Area
Chui Talas Issyk -Kul
Naryn Osh Jalal- abad Batken
Wheat area (1,000ha) 151 12 72 18 68 35 23Barley area (1,000ha) 72 2 23 10 7 3 8Total area (1,000ha) 223 14 94 28 74 38 30The number (unit/1000ha) 4.00 10.88 5.87 9.57 3.22 5.46 1.78
Source: The JICA Study Team, based on data provided by MA & LR
Figure 3-1 shows the number of tractors and combines harvesters in use in 1999 – 2013.
After 2011, the number has been reduced every year. This is because MA & LR has urged
owners to deregister obsolete machinery since 2011, in order to know the actual number of
machinery that is in working condition. Before that, most obsolete machinery used to be
3 A farmer in Osh province said that only 2 out of 8 combine harvesters are in working condition in his area.
19
registered. The registration campaign is still in progress. Although the number of registered
machinery is getting closer to the actual number of working machinery in the last 3 years, the
number gap is still wide. The number of farmers procuring agricultural machinery by lease has
been increasing due to the progress of the Aiyl Bank leasing scheme which began in 2011.
Statistical data shows that about a thousand units of machinery were leased in 2013. It is,
therefore, believed that the number of actual obsolete machinery might be larger than the
number reported in the statistics. Since independence in 1991, the number of tractors, according
to the statistics, has reduced by about 30%, from about 30 thousand units to about 20 thousand
units; the actual situation is assumed to be worse. Kyrgyz agriculture is confronted with a
critical situation.
Source: MA & LR
Figure 3-1 Number of Tractors and Combine Harvesters In Operation
in Kyrgyz (1991 - 2013)
3.1.2 Agricultural Machinery Services
Field work services by agricultural machinery (agricultural machinery services) are provided
across the country to farmers who do not have their own machinery. Major service-providers are
individual farmers, corporate farms and agricultural cooperatives, while a few company or
cooperatives specializing in services also provide services. The services include various types of
works, such as plowing, harrowing, leveling, seeding, inter-cultivation, fertilizer application,
pesticide spraying, harvesting, forage harvesting and packing, bean threshing, etc. Since farmers
do not have every type of machinery, the farmers exchange possible services with one another.
0
5000
10000
15000
20000
25000
30000
35000
1991 92 93 94 95 96 97 98 99
2000 01 02 03 04 05 06 07 08 09 10 11 12 13
Tractor
Combine
20
Table 3-4 shows the tariff of agricultural machinery services by region. While the
information in the table is collected from a limited number of reliable respondents in the study’s
questionnaire survey, the statistical reliability of the data is inadequate. However, it may
represent a rough trend in the service charges in Kyrgyz. Table 3-4 shows that the service
charges in the southern region (Jalala-bad, Osh and Batken provinces) are generally higher than
in the northern region (Chi, Talace, Issyk-Kul and Naryn provinces). While the charges are
settled by cash for tractor services, some farmers pay in-kind for harvested crops per ha for
combine harvester services. There are 2 types of service charges: included fuel or excluded fuel.
Even the charge of included fuel is determined in accordance with the current fuel price.
On the other hand, human power is still mainly used for weeding (beets, maize, white haricot
beans, potatoes and vegetables), harvesting (rice, beans, cotton, potatoes, sunflower and cereals)
and water management in the field. Although there are several works that can be done by
machinery among the above works, the mechanization is not well advanced, because most
farmland is too small to operate machinery efficiently or many farmers do not have access to the
services due to lack of service providers nearby.
Table 3-4 Tariff of Agricultural Machinery Services by Region (included Fuel)
(Kyrgyz som/ha)
Work Region Minimum Maximum Average Fuel (L) Number of
data Plowing Northern Region 1,000 3,200 1,742 25 16
Southern Region 600 3,280 2,074 25 24
Total 600 3,280 1,875 25 40 Harrowing Northern Region 700 1,200 1,000 10 6
Southern Region 1,500 1,500 1,500 10 1
Total 700 1,500 1,021 10 7 Seeding Northern Region 650 4,000 1,411 10-15 14
Southern Region 700 3,000 1,650 10-15 4
Total 650 4,000 1,464 10-15 18 Harvesting Northern Region 800 5,500 2,244 25 18
Southern Region 1,500 3,000 2,400 25 5
Total 800 5,500 2,150 25 23 Hay harvesting
Northern Region 1,000 3,000 1,564 30 11
Southern Region 2,000 2,000 2,000 30 1
Total 1,000 3,000 1,600 30 12
Note: Fuel price is 40 Kyrgyz som/L (as of January 2014)
Source: The JICA Study Team’s questionnaire survey
21
3.2 Agricultural Machinery Market
3.2.1 Import and Export of Agricultural Machinery, and the Domestic Market
(1) Tractors and combine harvesters
Kyrgyz Avtomash Radiator Company(Kyrgyzavtomash)in Bishkek city had assembled
tractors under an agreement with the Belarusian manufacturer (MTZ:Minsk Tractor Works)in
2008-2009. Kyrgyzavtomash, however, has suspended the assembly since 2010 because MTZ
tractors imported directly from Belarus became cheaper than the assembled tractors by the
company. Thereafter, Kyrgyzavtomash became the sole sales agent of MTZ in Kyrgyz.
Presently, there is no manufacturer producing agricultural tractors and combine harvesters in
Kyrgyz.
Agricultural machinery importers in Kyrgyz are based in Bishkek or the suburbs of Bishkek.
They usually have a machinery parking area and spare-parts storage attached to their sales
shops.
Tractors and combine harvesters which were imported from Belarus before independence in
1991 are still widely used among individual farmers. Since farmers have been using them since
the Soviet era and their basic design has not changed in a long time, the farmers themselves
usually undertake the machinery maintenance and repair work. The basic design of MTZ
machinery exported to Kyrgyz has not changed much since the Soviet era4. The old-fashioned
design results in poor fuel efficiency of MTZ machinery that may be 10-20% less efficient than
other manufacturers’ products. Several farmers also complain that the actual output power of
MTZ machinery is less than what is nominal, indicated in specifications. Kyrgyzavtomash has
started to provide operational training and maintenance services to its customers as the sales
agent of MTZ since 2010.
1,200 units of small Chinese tractors granted by the Chinese Government in 2006 were leased
to farmers through the Kyrgyz Aiyl Service. The tractors were not utilized well due to the
following reasons, and the lease project failed since many farmers could not pay off their lease5.
• The size of the tractors did not meet the requirements of many farmers who took the lease
• It was difficult to find spare-parts to fix tractor mechanical problems
In 2011, 267 units of Chinese tractors(YTO-904)procured by China’s official assistance
4 MTZ exports newly designed machinery which fulfills the EU emission regulations in European countries 5 Reference: Farm mechanization and agricultural productivity in the Kyrgyz Republic, FAO (2009).
22
were again leased to farmers through Aiyl Bank. Thereafter and at present, YTO tractors are
also sold by YTO Trade Expo, which is an overseas outlet of YTO6 and other sales agents. In
recent years, Chinese tractors have a good reputation because of their improved quality and
organized after-service and spare-parts supply system of the YTO Trade Expo. Moreover,
Chinese made non-genuine spare-parts are more accessible to customers in various markets in
Kyrgyz. The number of farmers, who appreciate the performance of YTO tractors more than
MTZ tractors, is increasing in Kyrgyz.
The Eurasia Group KG who is an importer and seller of John Deere tractors started its
business since 2007. John Deere tractors have become popular among large-scale corporate
farms since then. Some large-scale farms that manage more than 100 ha have started to
introduce large-sized and high-efficiency tractors, i.e. John Deere tractors or other tractors made
by Europe and United States manufacturers, because they are very concerned with working
quality and efficiency and fuel consumption when they choose tractors. German tractors and
combine harvesters and Russian combine harvesters are also sold in Kyrgyz, although the unit
sales are still not very high.
(2) Implements
While old implements introduced during the Soviet
era used to be replaced by Russian or Belarusian
implements, European products have been popular since
the late 2000s. Initially, the European products were
imported and sold mainly by small traders who did not
have a proper after-sales system. Since 2010, traders
who can provide a full-scale after-sales system, such as
repairing services and storing spare-parts, have entered
the sales business. In recent years, many traders have
started to sell Turkish products. They have a similar performance as the European products,
even though the prices are cheaper and have a wider variety of products. The Chinese products,
mainly the plow and seeder, are usually sold together with YTO tractors.
(3) The market in the northern region (Chui and Talas Provinces)
Agricultural machinery dealers in Bishkek pay the most serious attention to the market in the
6 YTO Group Corporation
Implements from Turkish Manufacturers Plow, Seeder, Potato-planter, etc.
23
northern region. The number of corporate farms in
Chui province is larger than the number in other
provinces, and the management size of the corporate
farms is also relatively large. Since 2010, the corporate
farms have started to introduce John Deere tractors and
combine harvesters since the corporate farms are very
concerned with the higher performance (working
quality and efficiency) of these machinery. Major crops
grown on the farms are wheat, barley, maize and potatoes.
The percentage of corporate farms and individual farmers that have combine harvesters is
high, if their management size is large. They also provide agricultural machinery hire services
along with tractors and combine harvesters. Surrounding farmers who do not have the
machinery are able to enjoy the services by bearing the necessary costs. MTZ or YTO tractors
have been popular among individual farmers since 2011. They have been leased by the Aiyl
Bank leasing scheme.
While many farmers grow white haricot for exporting
to Turkey and Bulgaria in Talas Province, high
profitability of the crop contributes to higher income for
farmers. The number of farmers who buy agricultural
machinery by their own funds instead of from the Aiyl
Bank leasing scheme has increased in recent years,
because of the high profitability.
White haricot is harvested manually, and shelled by a
bean thresher after drying. Many of the threshers are
home-built and have become old. This situation causes
low quality products, such as broken beans, after threshing. White haricot is often grown by
crop rotation combined with alfalfa.
(4) The market in the southern region (Osh Province)
The management size of farmers in the southern region is smaller than the size in the northern
region. Since the number of agricultural machinery per farmer is insufficient, the hiring service
schedule is jointly arranged by district (rion) and village (aiylokmotu) administrations in order
to use the existing tractors efficiently.
John Deere corn harvester working in a corporate farm in Chui Province
Home-built Bean Thresher owned by an individual farmer in Talas Province
24
Even though there are corporate farms and
individual farmers who provide the agricultural
machinery hiring services, a small number of service
providers cannot fulfill the demand from the large
number of farmers in the region. This situation may
cause a late sowing or harvesting, and eventually a
low crop productivity. While a combine harvester
service from Uzbekistan used to be available before
the closure of the border with Uzbekistan in 2010, the
service has been beyond the reach of farmers since then.
High demand for small-sized (4-rows) combine harvesters, instead of the 6-rows which are
popular in Kyrgyz, is confirmed in the region, since many farmers manage less than 1 ha of
farmland. The total number of combine harvesters is too small to fulfill the actual demand of
farmers.
In the Uzgen area, paddy rice is widely grown. There may be a demand for the rice combine
harvester since farmers manually harvest the rice presently. When a trial operation with the
Chinese combine harvester was carried out, many stones in the paddy field disturbed the smooth
operation. The combine harvester has not been used after the trial.
Osh province is a center of cotton production as the
TTZ 3-wheel tractors made in Uzbekistan, developed for
cotton production during the Soviet era, are still used in
Osh province. They have become old since they were
produced more than 30 years ago.
The southern region borders China, and YTO tractors
are more popular among farmers than in the northern
region. The YTO tractors, brand-new and used, are
imported not only by the authorized dealers in Bishkek,
but also by unauthorized dealers or individuals.
(5) Main suppliers of imported agricultural machinery
The main suppliers of imported agricultural machinery in Kyrgyz are shown in Table 3-5
Tractor (YTO904, 80hp) owned by individual farmer in Osh Province
A 3-wheel tractor developed for cotton production during the Soviet era
25
Table 3-5 Main Suppliers of Imported Agricultural Machinery
Suppliers Agricultural Machinery Sold
Machinery Manufacturer Country of Origin
Kyrgyz Avtomash Radiator (Kyrgyzavtomash)
Tractor MTZ Belarus
Combine harvester GOMSELMASH Belarus
Implements* Europe (German, Italy, Poland, etc.), Turkey, Russia, etc.
Eurasia Group KG (Head office in Switzerland)
Tractor JOHN DEERE
USA (200hp or more) German (80-199hp) China (Up to 79hp)
Combine harvester USA
Implements JOHN DEERE USA
KUHN France
YTO Trade Expo Tractor
YTO China Implements
Atalyk Group
Tractor
ROSTSELMASH Russia Combine harvester
Implements
Kyrgyz Agro Market Tractor SAME
DEUTZ-FAHR
German (Medium and Large) Italy (Medium) Turkey (Small and Medium)
Implements BOZKURT AGRO KFT Turkey
Farmani Company (having affiliation with the “Kyrgyz Agro Market”)
Tractor SAME DEUTZ-FAHR
German (Medium and Large) Italy (Medium) Turkey (Small and Medium)
Combine harvester KRONE German
Implements AMAZONE German
KRONE German and others
Central Asia Machinery (Head office in Kazakhstan, Turkuazmachinery)
Tractor NEW HOLLAND
USA and UK (Large) Turkey and China (Medium) Uzbekistan (Standard)
Combine harvester Poland
Implements various Turkey
K.O. Standart Agroservice
Tractor CLASS
German Combine harvester
Implements LEMKEN
Note: *Operated by the tractor’s power for plowing, seeding, fertilizer application, harvesting, hay pressing, etc.
Source: The JICA Study Team
Kyrgyz Avtomash Radiator (Kyrgyzavtomash)
Kyrgyzavtomash is the biggest agricultural machinery
supplier in Kyrgyz. While it was a state agricultural
machinery factory during the Soviet era, it was
Tractor-park attached to a dealer’s office MTZ82.1(80hp)
26
privatized after independence. The present owner acquired it in 2007. Kyrgyzavtomash mainly
produced radiators for trucks and tractors, and air-conditioners when it was acquired. Although
Kyrgyzavtomash started to assemble MTZ tractors in 2008, it has changed its business model
from assembling to importing MTZ tractors and combine harvesters since 2010. As for radiators,
Kyrgyzavtomash still produces them for exporting to MTZ and GOSELMASH in Belarus and a
truck manufacturer in Russia. Its importing business continued to expand after 2011, and the
sales of the importing business and the radiator production was almost equal (about 25million
USD each) to 2013. While Kyrgyzavtomash has increased its sales items of tractor implements
since 2013, Turkish made items have increased their share due to a reasonable balance between
price and quality and performance.
Among the sales of imported agricultural machinery in 2013, sales through the Aiyl Bank
leasing scheme made up about 40 % of the total sales, while the % through the other private
banks’ leasing scheme was about 5% and the % of general sales, but the owned supply-chain
was about 55% of the total sales. Kyrgyzavtomash has its own favorable leasing scheme like the
Aiyl Bank scheme, targeting good customers. Among agricultural machinery suppliers in
Kyrgyz, only Kyrgyzavtomash maintains preferable treatment for good customers. The lease
conditions vary according to the customers as follows:
Interest rate: 0 – 7 % per year
Repayment term: 1 – 5 years
Since Kyrgyzavtomash is the exclusive distributor of MTZ in Kyrgyz, it can set prices of
MTZ machinery at its own discretion. Actually, it usually pays close attention to the prices in
Kazakhstan.
Kyrgyzavtomash has a workshop and 16 mechanics
attached to its head office. It has also 2 mobile workshop
vehicles. The vehicles can reach to any place in Kyrgyz
within 1 day, 2 – 3 days during the peak season, after
receiving an offer. An additional workshop vehicle may be
deployed in 2014. Kyrgyzavtomash has 2 branch offices in
Osh Province with 1 staff and at the Talas office (2 staff).
Sales promotion, spare-parts supply and after-sales
services are their main business activities. A stock of
spare-parts imported from Belarus equivalent to 700 thousand USD in its warehouse allows
Kyrgyzavtomash to quickly response to costumer’s request for spare-parts.
Pre-shipment inspection and adjustment of a combine–harvester (MTZ 82.1) by
Kyrgyzavtomash mechanics
27
Eurasia Group KG
Eurasia Group KG, has a head office in Switzerland,
established in 2009 as a branch office in Kyrgyz. It has 9
staff, including 3 mechanics, and sells John Deere tractors
and combine harvesters, and KUHN implements. While
Eurasia Group KG sells agricultural machinery mainly in
the northern region (Chui, Talas and Naryn Provinces), it
has a plan to establish a sales office in Osh Province in
2014 as a business base in the southern region. The sales
through the Aiyl Bank leasing scheme makes up about only
10 % of the total sales, while the % of general sales by its supply-chain in cash or by loan is
about 90%.
Eurasia Group KG has 2 mobile workshop vehicles, and keeps a stock of about 3,000 items,
of spare-parts, equivalent to 1 million US$. The stock is managed by a database system, and
supplementary parts are ordered by the company’s branch offices in Kazakhstan and Europe.
Eurasia Group KG runs a farming business on its own farm. The planted area was about 120
ha in 2013. The company also carries out adaptability tests of agricultural machinery for
farming conditions in Kyrgyz, i.e. weather, soil and crops, as well as demonstrations for local
farmers on the farm. It has a plan to start the same business activity in the southern region.
YTO Trade Expo
YTO Trade Expo was established in 2006 as an
overseas outlet of YTO, when 1,200 units of YTO tractors
were distributed by a Chinese cooperation scheme. It has
3 staff, including 1 mechanic, and sells YTO tractors and
implements. It covers all parts of the country, although it
does not do much business in the southern region7. While
the tractor itself is sold only in US$, it is possible to buy
spare-parts in Kyrgyz som. The YTO Trade Expo has a
warehouse to stock spare-parts and consumables, such as
V-belt, filters, tire, etc.
7 Many YTO tractors are directly imported by local dealers or individuals in Osh Province in the southern region.
John Deere tractor(220hp)owned by the Chui State Agricultural Corporation
Tractor garage attached to the sales office YTO904 (90hp) on the right hand side
and YTO954 (95hp) on the left hand side
28
Atalyk Group
Atalyk Group is a dealer of Rostselmash tractors,
combine harvesters and implements. It is actually a
corporate farm privatized in 1994 after the dissolution of
kolkhoz, and manages 3,000 ha of farms and dairy farms.
It received agricultural machinery, such as tractors,
roll-balers, etc. from USAID for supporting dairy farming
in 2013. It also brews wine and beer. Sales of agricultural
machinery are still minimal at present.
Rostselmash tractors compete directly with John Deere tractors because their horsepower is
almost similar each other. Due to this, Atalyk Group is not diligent in the tractor business. As
for combine-harvesters, Rostselmash products have an advantage over the engine quality, which
is less-trouble at the initial stage, compared to products in Belarus, although the former is 10 –
20 % more expensive than the latter. Atalyk Group has a business plan to promote the sales of
implements in 2014.
Table 3-6 shows the number of tractors and combine-harvesters sold in Kyrgyz in 2013 by
major suppliers.
Table 3-6 The Number of Tractors and Combine Harvesters in Kyrgyz in 2013
Dealerships Machinery Manufacturer Number
(unit) Remarks
Kyrgyz Avtomash Radiator
(Kyrgyzavtomash) Tractor MTZ 860
Including 691 units of MTZ82.1(81hp)
Combine-harvester GOMSELMASH 40
Eurasia Group KG Tractor JOHN DEERE
-※1 No data available. Total sales amount is 250 million USD Combine harvester -※2
YTO Trade Expo Tractor YTO 120※3
Mainly YTO904 (90hp) and YTO954 (95hp)
Atalyk Group Tractor ROSTSELMASH
1 280hp (for own use)
Combine harvester 14
Farmani Company Tractor DEUTZ-FAHR 5 150hp
Central Asia Machinery Tractor NEW HOLLAND
7 130-210hp
Combine harvester 3
Total Tractor 993
Combine harvester 57
※1:Estimated, about 8 units based on the sales amount (not counted) ※2:Estimated, about 3 units based on the sales amount (not counted) ※3:It does not count the imported YTO tractors by local dealers or individuals in Osh and other provinces Source:The JICA Study Team
Machinery Park attached to the office Combine-harvester (NIVA)
29
Table 3-7 and 3-8 show the retail prices of agricultural machinery sold in Kyrgyz.
Table 3-7 Retail Prices of Agricultural Machinery (1)
Machinery Manufacturer Model Power
(hp)
Price
(1 USD = 50 som)
Tractor
MTZ
320.4 33.5 672,000 som
82.1 81 1,020,000 som
892 89 1,175,000 som
1523 150 2,736,000 som
JOHN DEERE
6150 150 110,000 USD
7930 220 160,000 USD
8345RT 330 240,000 USD
YTO
250 25 6,500 USD
450 45 10,600 USD
904 90 22,000 USD
954 95 24,000 USD
ROSTSELMASH 280 280 129,000 USD
DEUTZ-FAHR
55 55 34,000 USD
65 65 42,000 USD
75 75 50,000 USD
85 85 60,000 USD
120 118 90,000 USD
150 148 112,000 USD
NEW HOLLAND
T6.160 131 105,000 USD
T7.200 155 125,000 USD
T7.260 215 175,000 USD
CLAAS 530 140 86,000 USD
Combine harvester
ROSTSELMASH NIVA 155 85,000 USD
VECTOR410 207 168,000 USD
GOMSELMASH GS812 210 4,000,000 som
JOHN DEERE 9770STS 360 385,000 USD
NEW HOLLAND TC5050 170 120,000 USD
CLAAS 150 158 123,000 USD
KRONE BIGX500 500 408,000 USD Note: the prices were collected in February 2014. The prices vary according to the options and the exchange rate
Source:The JICA Study Team
30
Table 3-8 Retail Prices of Agricultural Machinery (2)
Manufacturer Implements Spec. Price
(1 USD = 50 som)
TD ALMAZ (Russia)
Plow 3line 1,800 USD
Plow 4line 2,500 USD
Plow 5line 3,500 USD
UMANFERMMASH(Ukraine) Disk harrow 3m 5,800 USD
KOMPOZIT-GROUP (Ukraine)
Seeder with fertilizer 28line 13,500 USD
Chisel plow 4.2m 7,500 USD
Agrichemical sprayer 12-18m
1,000litter 3,500 USD
Agrichemical sprayer 8-18m
2,000litter 5,000 USD
Rotary mower 125cm 2,500 USD
Rotary mower 190cm 3,600 USD
Wheel-finger side rake 4m 1,300 USD
Wheel-finger side rake 4m 4,100 USD
Potato digger - 5,500 USD
PLOTSK PLANT (Belarus) Disk mineral fertilizer broadcaster 0.7ton 5,200 USD
SAZHATEL KARTOFELYA (Ukraine) Potato planter 2line 2,400 USD
GOMSELMASH (Belarus)
Pull-type forageharvesting combine 2.6m 34,000 USD
Pull-type mower-crusher 4.2 14,500 USD
Mower chopper 1.5 7,000 USD
Package baler 5-8ton/h 14,500 USD
Potato harvester 0.84-1ha/h 72,000 USD
Corn harvester - 37,000 USD
PHM (Turkey) Beet harvester Hopper Cap.2,000kg 28,000 USD
KOSTKA (Poland) Package baler 5-8ton/h 14,500 USD
SIPMA (Poland) Package baler 5-8ton/h 12,000 USD
YTO (China) Plow 3line 1,500 USD
BOZKURT AGRO KFT (Turkey)
Seeder 24line 12,500 USD
Seeder 26line 13,500 USD Pneumatic Seeder with fertilizer 4line 12,500 USD
Corn harvester - 6,750 USD
Agrichemical sprayer 10m
600litter 2,400 USD
Potato planter 2line 6,750 USD
Potato planter 1line 4,750 USD
Rotor rake - 3,700 USD
Rake 5line 1,000 USD
Rotor mower 125cm 2,750 USD
Rotor mower 185cm 3,000 USD
31
Manufacturer Implements Spec. Price
(1 USD = 50 som)
BOZKURT AGRO KFT (Turkey)
Rotor mower 250cm 4,500 USD
Tooth harrow 70tooth 4,000 USD
Disk harrow 28line 5,400 USD
Fertilizer spreader 500litter 1,500 USD
Standard plow 4line 4,000 USD
Beet harvester - 31,000 USD
Corn harvester - 6,750 USD
KRONE (Germany)
Forage and dischargeWagon 95m3 70,000 USD
Disk mower 4m 10,500 USD
Roll baler - 24,700 USD
AMAZONE (Germany) Seeder with rotary harrow 3m 50,700 USD Note)The prices were collected in February 2014. The prices vary according to the options and the exchange rate
Source:The JICA Study Team
Used agricultural machinery market
There is no sales shop exclusively for used agricultural
machinery in Kyrgyz. A big bazaar for used agricultural
machinery sales (Kudaibergen Bazaar) is, however, open
every week from Friday to Sunday in a suburb of Bishkek
city, and individual owners bring their used agricultural
machinery to be sold. Tractors are mainly sold at the bazaar.
A weekly paper for used cars (Avtogid) published
every Wednesday provides information about used
agricultural machinery sold.
While the retail price of the latest model of Belarus tractor, MTZ-82.1 (80hp), which is the
most popular tractor in Kyrgyz is about 1.1 million Kyrgyz som for a brand-new tractor, the
price of a used MTZ-82 produced in 1990, the equivalent model to MTZ-82.1, is about 450
thousand Kyrgyz som and the price of a used MTZ-80 produced in 1986, also the equivalent
model to MTZ-82.1, is about 330 thousand som. These prices suggest that a 24 year old tractor
still maintains about 40 % of the original value, and even a 28 year old tractor still maintains
about 30 % of the original value. It implies that tractors, even the used tractors, are in very short
supply in Kyrgyz. In general, all machinery loses its original performance ability, and requires
additional maintenance as it get older. It is, therefore, necessary to evaluate the residual
economic value of machinery based on its performance and necessary maintenance costs. As for
An article in a weekly paper (Avtogid) on Jan. 22, 2014 advertises that a MTZ-80(produced in 1989)is 6,500
32
tractors, the performance loss over the years is smaller than that of combine harvesters and other
agricultural machinery, and the maintenance costs are relatively small due to availability of
cheaper spare-parts and easy maintenance usually done by the owner. This allows tractors to be
used that have a light economic burden even after 20 years of age, although their working
efficiency decreases. The short supply of tractors and the above conditions must be major
reasons for the high price of used tractors on the Kyrgyz market.
3.2.2 Spare-Parts Supply
Most agricultural machinery suppliers in Kyrgyz have a stock of spare-parts, mainly
consumable parts. They can also supply un-stocked spare-parts within several days to 1 week
after an order.
Also many shops in bazaars sell spare-parts of
agricultural machinery made in Belarus, Russia and China.
While Bishkek and major local cities have an auto-parts
bazaar in their suburb areas, the shops that sell spare-parts
of agricultural machinery are usually adjacent to the
auto-parts bazaar. Almost all spare-parts sold in such shops
are non-genuine parts produced in China. Although the
quality is inferior to genuine-parts, many individual farmers
and corporate farms who repair their own machinery
themselves buy the non-genuine parts because of their cheaper price. The shops also sell some
disassembled parts of old machinery produced during the Soviet era. Some simple and
consumable spare-parts like the cutting edge of a plow and a cutting knife of a combine
harvester are produced in Kyrgyz. If spare-parts are not available in the local market, farmers go
to Bishkek bazaar to find the required spare-parts.
In bazaars, there are specialized shops to repair alternator and fuel pumps that cannot be fixed
by farmers themselves. The shops are further specialized by origin countries of the products,
such as Belarus, Russia, Europe, etc.
Almost all spare-parts for agricultural machinery presently used in Kyrgyz are available in
domestic markets. In other words, only agricultural machinery that has a smooth spare-parts
supply system can survive, since such a supply system is a fundamental condition for the
efficient operation at a lower cost.
A shop selling spare-parts of agricultural machinery in a suburb of Bishkek city
33
3.2.3 Import Procedure and Standards
(1) Import procedure
The State Custom Service8 is responsible for custom clearance. It has 10 custom posts under
6 custom offices covering the entire country. Customs inspection for almost all imported
agricultural machinery are done by the Bishkek custom post, while some mainly from China
through Osh Province are inspected by the Osh custom post. The inspection consists of a
documentary examination and a visual examination. All custom procedures are completed
within 1 – 2 days after arrival, and then a consignee picks up the imported commodity. The
consignee should bear the custom fee, 0.15% of the commodity value, while all agricultural
machinery and the spare-parts are exempted from customs duty. Individual farmers or corporate
farms who import agricultural machinery for their own use are also exempt from VAT, although
the suppliers should bear the VAT, 12% of the commodity value. Some suppliers like
Kyrgyzavtomash and Eurasia Group KG have a bonded warehouse. If a customer of the
suppliers directly takes the imported machinery from the bonded warehouse, the customer can
be exempted from VAT. In this case, the custom procedures are taken one commodity at a time.
It takes a long time, more than 3 days for the procedures to be completed, if many customers
rush to the bonded warehouse at the same time.
Currently, the Kyrgyz Government has declared accession to the Customs Union (hereinafter
the CU). Agricultural machinery imported from non-member countries of the Customs Union
shall be liable to a customs duty, 15% of the value for machinery with power more than 18kW
(about 24 hp) and 5% of the value for machinery with power less than 18kW after the accession.
(2) Technical standards
During the Soviet era, newly developed agricultural machinery used to be tested in 33
agricultural mechanization research stations, covering all the Soviet Union in order to confirm
the adaptability to various crops and growing conditions. In Kyrgyz, the research station in Kant
carried out the adaptability test. The research station has stopped its research activity since it
was transformed to a corporate farm after independence.
Officially, Kyrgyz standards have replaced the old Soviet standards, the GOST standards,
although some modification in accordance to the local conditions is allowed. In the case of
tractors, the technical specifications such as, minimum height, maximum operational speed, fuel
8 The State Custom Service website:http://www.customs.kg/index.php?lang=ru
34
tank capacity, guarantee period, etc. are stipulated in GOST 19677-8. However, the standards
system actually loses substance. The Kyrgyz Government established the Center for
Standardization and Metrology under the Ministry of Economy, and the Center carries out the
transition from the GOST standards to the new standards compatible to ISO/IEC in accordance
with WTO TBT (Technical Barriers to Trade).
Upon the accession to the CU, all equipment and machinery had to be issued a certificate or a
conformity declaration which proves conformity with the technical regulations stipulated in
No.823 TR CU 010/2011 of the Resolution of the Committee of the Customs Union. An
additional certificate may be required according to the type of equipment or machinery. While
the procedures are complicated, Japanese exporters can contact a private certification body in
Japan for the proxy application9.
3.2.4 Agricultural Machinery Market in Kazakhstan
(1) Agriculture
The JICA Study Team conducted a brief study in Kazakhstan in order to the understand the
agricultural machinery market in a neighboring country.
Out of 1.6 million ha of cereals in the cropped area in Kazakhstan, wheat is grown in 1.3
million ha. Wheat is mainly grown in Akmola, Kostanai and North Kazakhstan Provinces.
Those 3 provinces are the wheat production centers of the country and produce about 80% of
the national production. Agricultural producers are divided into the following 3 categories.
Farms owned by a stock company (large-scale management by corporation)
Farms owned by a limited company (medium-scale management by individual)
Individual farmers (small-scale)
The Kazakhstan Government has started an agricultural development loan scheme to support
private producers since 2000. Since the borrowers of the loan are concentrating on large-scale
producers, the loan consequently promoted the centralization of farmland. While the number of
the borrowers is about 200 in total, only the top 10 – 20 borrowers occupy about 60 % of
national farmland.
The Kazakhstan Government has launched the Program for the Development of Agriculture
in the Republic of Kazakhstan for the years 2013 – 2020, “Agribusiness 2020” in 2013.
According to the program, the Government intends to reduce the wheat area and to promote
9 JETRO website:https://www.jetro.go.jp/world/russia_cis/ru/qa/01/04J-110101
35
crop diversification, especially by promoting oil seeds. A bumper harvest of wheat in 2011/12
might be a major factor causing the crop diversification policy. The Government spent
considerable amount of subsidy on wheat transportation during the year in order to address the
shortage of storage facilities in the country. While Kazakhstan exports its wheat surplus mainly
to neighboring countries in Central Asia, their market size is not very big. Export to Europe or
other Asian countries is, however, not feasible due to high transportation costs. The
Government aims to establish a subsidy-free agri-business structure by promoting crop
diversification instead of wheat production with a heavy subsidy10.
(2) Agricultural machinery market
Renewal of agricultural machinery is an urgent issue in Kazakhstan, since the age of 80 % of
tractors and combine harvesters exceed the durable years, 13 – 14 years in general. The
Government promotes an agricultural machinery leasing program in order to accelerate the
renewal. Table 3-9 shows the annual planted area, and the number of tractors and combine
harvesters in Kyrgyz and Kazakhstan.
Table 3-9 Annual Planted Area and the Number of Agricultural Machinery in Kyrgyz and Kazakhstan
Kyrgyz 2010 2011 2012 2013
Planted Area (thousand ha) 1,146 1,159 1,166 1,170
Tractor unit 23,835 22,662 21,104 20,369
unit/thousand ha 20.8 22.9 18.1 17.4
Combine
Harvester
unit 2,979 2,694 2,636 2,359
unit/thousand ha 2.6 2.5 2.3 2.0
Kazakhstan 2009 2010 2011
Planted Area (thousand ha) 21,425 21,439 21,083
Tractor unit 156,037 156,656 155,580
unit/thousand ha 7.3 7.3 7.4
Combine
Harvester
unit 48,032 49,503 46,997
unit/thousand ha 2.2 2.3 2.2
Source: The JICA Study Team based on information from official statistics in Kyrgyz and Kazakhstan
10 Present Situation and Prospects of Agriculture in the Republic of Kazakhstan, Report on Food Balance in Foreign Countries, October 2013, the Ministry of Agriculture, Forestry and Fisheries, Japan.
36
The total annual planted area in Kazakhstan is about 18 times of that of Kyrgyz. Out of the
area, cereals are grown in about 1.6 million ha. Since the top 20 large-scale farms occupy about
60 % of the total farmland, the average size of cereals planted area on the large farms might be
48,000 ha with a simple calculation. The figure implies that a concentration of farmland limited
to producers has progressed a lot compared to the situation in Kyrgyz.
As for the number of tractors per unit area in 2011, there is only 7.4 units/thousand ha in
Kazakhstan, while there are 22.9 units/thousand ha in Kyrgyz. These figures suggest that the
working efficiency of tractors in Kazakhstan is 3 times better than the efficiency in Kyrgyz.
However, the number of combine harvesters per unit area is almost the same in both countries,
2.2 units/thousand ha in Kazakhstan and 2.5 units/thousand ha in Kyrgyz. It is estimated that the
working efficiency of combine harvesters in Kazakhstan is also higher than that of Kyrgyz, the
same as the tractors, considering the inefficient operation on small farmland and the time loss of
frequent transportation to other farmland in Kyrgyz. Such inefficient operation may cause an
actual shortage of combine harvesters in Kyrgyz, and raise the problem of a late-harvest.
While agricultural machinery made in CIS countries, such as Russia, Belarus, Ukraine, is
popular in Kazakhstan, the machinery made in USA or Europe is expanding the market share in
recent years.
Table 3-10, 3-11 show the number of tractors and combine harvesters sold in Kazakhstan in
2013.
Table 3-10 The Number of Tractors Sold in Kazakhstan in 2013
Manufacturer Origin Country Model Number (unit) Sub-total Total
MTZ Belarus 80,82,920,952 1,300
1,550 1221,1025,2121 250
VERSATILE Canada - - 89
JOHN DEERE USA, EU, Asia - - 68
XTZ Ukraine
150K-09 22
54 17221 27 150,220-10 4 200 1
KIROVETS Russia K-700、K-744P - 30
CASE Italy - - 21
FOTON China - - 16
CLAAS Germany - - 11
NEW HOLLAND USA, UK, Turkey - - 7
CHALLENGER USA, EU, Brazil - - 6
Others - - - 5
Total - - - 1,857
Source: The JICA Study Team
37
The number of tractors sold in 2013 in Kazakhstan is 1,857 in total. While the number of
Belarus MTZ tractors with 80 – 90 hp is 1,300; the number is about 70 % of the total number.
The number of USA and Europe tractors with more than 200 hp is 202, which is equivalent to
only about 11%. Since an agricultural development loan program has been provided mainly to
large-scale corporate farms after 2000 in Kazakhstan, the demand for big sized tractors has
almost saturated the market in recent years. It is estimated that the present demand for the
tractors is coming from relatively small-scale individual farmers. The number of sold tractors in
2013 is only 1.2 % of the total number in Kazakhstan. The % is even smaller than the % in
Kyrgyz, 3.8%. An insufficient number of tractors are renewed in Kazakhstan, the same as in
Kyrgyz11.
Table 3-11 The Number of Combine harvesters Sold in Kazakhstan in 2013
Manufacturer Origin Country Model Number (unit)
Sub-total Total
ROSSELMASH Russia
VECTOR 273
401 AKROS 92 CK-5A NIVA,NIVA-Effect
36
AGROMASHHOLDING Kazakhstan ESSIL
- 320 GOMSELMASH Belarus
PALESSE
LIDAGROPROMMASH LIDA
CLAAS Germany - - 103
JOHN DEERE USA, EU - - 102
AGROMASH Russia
YENISEI-1200 87
98 YENISEI-1200PM 7
YENISEI-950Ruslan 4
CASE Italy - - 15
NEW HOLLAND USA - - 11
CHALLENGER USA - - 9
SAMPO Finland - - 1
Total - - - 1,060
Source: The JICA Study Team
The number of combine harvesters in 2013 in Kazakhstan is 1,060 in total. Out of the total,
there are 819 units of combine harvesters, equivalent to 77 % of the total, made in Russia and
Belarus. All the remaining combine harvesters are products made in Europe and the USA.
While the number of sold combine harvesters in 2013 is only 2.3 % of the total number in
11 6.7% of the total number of tractors should be renewed annually, if all the existing tractors are renewed at 15 years of age, which may be a reasonable number of durable years for tractors.
38
Kazakhstan, the % is almost similar to Kyrgyz, 1.9 %. As with the tractors, an insufficient
number of combine harvesters has been renewed in Kazakhstan. As for the implements, Turkish,
European and USA products are becoming popular in addition to products in Russia, Belarus
and Ukraine, just like the market in Kyrgyz.
3.3 Maintenance of Agricultural machinery
3.3.1 Maintenance Situation of Agricultural Machinery Before Independence
The agricultural policy of the former Soviet Union Government increased food production
based on the Kolkhoz and the Sovkhoz farming system. The utilization of agricultural
machinery played an important role in conducting farming practices effectively. As such, both
the farming systems had a good plan for the maintenance and repair services of agricultural
machinery use, in order to avoid the machinery breakdown that occurred chiefly during a busy
farming season.
At that time, the Government supplied spare parts and materials needed for agricultural machinery
to implement maintenance and repair services smoothly in accordance with the proper plans, and
agricultural machinery was periodically renewed around every ten years. Moreover, the Government
constructed the following three facilities to implement maintenance and repair of agricultural
machinery.
(1) A large-scale facility that has machine tools for the overhaul of agricultural machinery and
production farm implements and spare parts.
(2) A medium-scale facility that has machine tools to implement maintenance of agricultural
machinery and the production farm implements and spare parts.
(3) A small-scale facility that has basic machine tools to implement maintenance and repair of
agricultural machinery.
The three facilities mentioned above were established in the strategic farm areas of (1) Provinces,
(2) Districts and (3) Villages. Currently, these facilities are generally called a ‘Machine Station’
and/or ‘Machine Center’ since the purpose of the facilities is to implement the maintenance and
repair services of agricultural machinery. In this report, these facilities are called machine stations.
The machine stations of (1) and (2) have machine tools such as a lathe machine, milling machine,
arc welding, drilling machine, hydraulic press, chain block (electric/manual), forging equipment,
fuel injection and nozzle testers and other measuring instruments, hand tools, and storage facilities
for spare parts and iron materials for agricultural machinery. Moreover, both machine stations have a
39
mobile workshop to implement maintenance and repair, chiefly during a busy farming season in the
field. In the case of the machine station (3), the farming areas are relatively small and a small
number have agricultural machinery; the station has an arc welding, grinding machine, and drilling
machine etc. to conduct daily maintenance services.
At the time, agricultural machinery were introduced at machine stations, as well as engineers were
posted to operate the stations’ activities adequately. It was imposed on the workers to study the
operation and maintenance of agricultural machinery at a special educational institute, to work in
these stations, and workers after graduating from the institute, had learned on-the-job training
methods from skilled engineers at the stations. In addition, experts of agricultural machinery were
dispatched from Russia and other countries to the machine stations to further train workers on the
use of high level technology.
There was agricultural machinery maintenance before independence. It can be said that Personnel
Training education for operators and engineers was implemented sufficiently at the time. After
independence, engineers who had been working at the stations, were indispensable to currently
implement the operation, maintenance and repair of agricultural machinery in Kyrgyz.
3.3.2 The Present Maintenance Situation of Agricultural Machinery
After independence, large-scale farmland was divided into individual farmland depending on the
number of family members, and the agricultural machinery, equipment and buildings of machine
stations controlled by the Government were sold, according to the privatization policy. Therefore,
presently there are no public maintenance and repair services of agricultural machinery.
In this study, it was confirmed that many agricultural machinery introduced in the former Soviet
Union period are still utilized, but this does not mean they work efficiency. Some decrepit machines
are used by assembling parts collected from several agricultural machines. Such repair methods are
seen in many developing countries. In the case of the MTZ tractors made in Belarus, which were
introduced to Kyrgyz before independence, these tractors have compatible parts to tractors that are
presently produced and sold on the market, and repair and maintenance are relatively easy to do
since the machinery mechanism is very simple.
Currently, several agricultural machinery parts, introduced before independence, are still available
in markets. According to an agricultural machinery parts supplier, the Chinese are selling parts that
are produced in their country for Kyrgyz due to high demand for agricultural machinery. It can be
said that there are certain levels of techniques for repair and maintenance of agricultural machinery,
since the old-model of agricultural machinery is still being utilized.
40
(1) The situation of machine stations
Machine stations have already been privatized and incorporated as private companies since
independence. As mentioned above, machine stations have enough equipment and machine
tools for maintenance, repair services, fabrication of spare parts and steel-metal marking of
agricultural machinery. However, the facilities and machine tools at machine stations are old
since they have been utilized since the Soviet Union period. Therefore, proper maintenance
continuance and/or renewal of facilities and machine tools are issues that will resolve future
problems. In addition, the skilled-engineers have been working at the stations since the Soviet
Union period. Since it has been 23 years, most of them are an aging population. Currently,
skilled-engineers are teaching their agricultural machinery techniques and know-how of
maintenance to the younger generations.
Repair of the transmission The tractor was introduced in 1970’s
Forging equipment (An electric blower and an anvil. There is a grinding machine at the center)
Kara-suu District, Osh Province: Tashirova machine station (founded in 1995)
Maintenance of a tractor, Purchased for 700,000som in 2013, YTO904 Made in China
Cultivator (the cutting edges of the ridger were made of recycled car leaf spring)
The machine station in Nookat District, Osh Province
41
Left: Fuel injection tester Right: Fuel nozzle tester
Lathe machine: Made in Russia The manufacturing year is unknown.
Alamedin District, Chui Province: Adygene machine station (funded in 2006)
(2) The situation of individual farmers
Farmers are operating and repairing agricultural machinery themselves. Most of them have
hand tools, and some of them have machine tools, such as arc welding machines, grinding
machines, drilling machines and so on, for the maintenance of agricultural machinery. On the
farms, although they do not have measuring tools such as a torque-wrench, a cylinder gauge and
so on, they do repair machinery engines as overhaul work. Such farmers have learned repair
techniques not only during the Soviet Union period, but also when they studied the techniques
themselves and/or when they studied at vocational training schools. However, machinery
repaired by farmers are not performing properly for farm work. It may be that these agricultural
machines have a lower power output and breakdown frequently since repair is conducted
without proper measuring tools in outside dusty conditions. This farmer’s work is one issue that
needs to be improved for proper repair and maintenance of agricultural machinery.
Repairing spear parts of a combine harvester. The cylinder-head is put directly on the ground. A farmer in Talas District, Talas Province.
Maintenance of a 1970s model year tractor. The farmer worked as an engineer at a machine station.
In Talas District, Talas Province.
42
Maintenance of a tractor (oil change etc.) A farmer in Kara-suu district, Osh Province
Spare parts at a farmer’s house basement storage in Uzgen district, Osh province.
Farmers seldom have spare parts.
(3) The situation of the private sector
In this study, there were no private sector repair shops, chiefly for agricultural machinery.
Some of the suppliers have their own workshops. Regarding the situation of the private sector,
private repair engineers who do not have their own workshops, visit a farmer’s house directly
and/or farming fields to implement repair and maintenance of agricultural machinery.
Most of the repair engineers had worked at machinery stations. They engage in contract
overhaul work, mostly of Belarus made tractors. The necessary parts should be basically bought
by the farmers. The repair engineer provides advice as consulting services for the selection of
necessary parts. The price of overhauling a tractor is about 10,000som. There are repair
engineers in several areas of the country.
In the case of repair and to test fuel injection pumps and injection nozzles, farmers ask private
workshops. In the markets of Bishkek city, there are workshops for repairs. Farmers should also
buy the necessary parts. The repair charge is about 2,500 to 3,000som, except the cost of
necessary parts. The surveyors visited a workshop adjacent to a spear shop for agricultural
machinery in the market of Bishkek city. The workshop had two fuel injection pump testers.
One of the two was a used tester made in Russia and the other was new, made in China.
43
A fuel injection pump tester, made in China A fuel nozzle tester, made in Russia (second hand)
A repair shop adjacent to spear shops of agricultural machinery in Bishkek city
3.3.3 Persons In-Charge of Maintenance and Training
The old agricultural machinery introduced during the Soviet Union period are presently being
utilized in Kyrgyz. Engineers who have been working at the machine stations have a very
important role in maintenance. However, 23 years have passed since independence. Even
though engineers have skilled techniques and knowledge of maintenance work, this knowledge
is outdated. As such, engineers are teaching their skilled know-how to the younger generations.
For training personnel in the field of agricultural mechanization, there are two training courses
that are being conducted by the Ministry of Education and Science, and the Ministry of Labor,
Migration and Youth. Students can enroll in the training courses after a 9-year compulsory
education and they can obtain a high-school certificate after the completion of the training
courses. The training courses have problems, such as educational budget issues, old text-books
and practical materials, and so on, that do not meet the demands of students. Therefore, the
number of students has been decreasing. The outline of the training courses is as follows.
3-year agricultural machinery course at the technical colleges under the Ministry of Education
and Science
There are 9 colleges in the country and there are several training courses, such as economic
science, electrical engineering, environment conservation, agrarian economy and so on. There
are only two colleges that have an agricultural machinery course in the cities of Osh and
Bishkek. There was an agricultural machinery course in Tokmok of Chui province but the
course was closed two years ago due to the lack of a budget and the decreasing number of
enrolled students. In the first and second years of study, the students have a general education
and study agricultural machinery. In the third year, they specifically study agricultural
44
machinery. Upon the completion of the 3-year curriculum, they obtain jobs as assistant teachers
of the college and vocational school (as mentioned below) and farms (corporation and/or as a
successor), and some of them go on to universities.
3-year agricultural course at the vocational schools under the Ministry of Labor, Migration and
Youth
There are 65 vocation schools in the country and there are several training courses, such as an
electrical engineering, information-communication, industrial technology, service industry,
agriculture course and so on. Agricultural machinery is one of the subjects of the agricultural
training course. In the first and second years of study, the students have general education
subjects, the same as the technical college. There are many agricultural course subjects, such as
horticulture, livestock, orchard, veterinary and so on. On the subject of agricultural machinery,
students study the basic structure of machinery, the operation of a tractor with implements, and
maintenance of machinery. The students obtain a tractor’s driving license after completing the
course.
The vocational schools conduct a 6-month course in agricultural machinery as short-term
training. The training schedule is arranged accordingly. The course subjects are not only for
studying the mechanism of machines and operation techniques, but also so students can obtain a
tractor’s driving license. Therefore, there are many students taking the short-term training
course for the purpose of obtaining the license. (The categories of the license have changed into
three since last year. A: less than 40hp, B: 40 to 70hp, C: more than 70hp.) Upon the completion
of the 3-year curriculum, students obtain jobs as successors to farms, corporate farms,
agro-processing industries, and some go on to attend university. The following two projects
have been implemented at the vocational schools.
‘Dissemination of Organic Farming’ is an on-going project at the 43rd vocational school,
implemented by grant assistance for the grass-roots project of JICA.
ADB assisted the vocational schools for the improvement of educational materials from
2009 to 2013. In this program, 10 tractors made in China (FORTON) were introduced at
the schools.
3.4 Financing System for Agricultural Mechanization
Agricultural finance is a monetary method to support farmers and agribusiness. The financing
system includes various types of loan schemes provided by the government and private
institutions, as well as small-scale financial services, such as microfinance targeting low-income
45
and needy people. Agricultural insurance is a component of the system.
Agricultural finance services are provided by the Government institutions, as well as by the
private institutions including microfinance institutions in Kyrgyz. Both the Government sector
and the private sector do not have an agricultural insurance product.
3.4.1 Government Finance Institutions
(1) The State Fund for Economic Development
The State Fund for Economic Development was established under the Ministry of Finance. It
is engaged in financing social and economic development projects by managing the
Government and international-donor funds, and in managing repayment of donor loans.
Although it is not a financing institute exclusively for agriculture, a part of the fund is disbursed
to agricultural supporting projects. While China is the biggest donor to Kyrgyz at present, the
share is 50 % of the fund managed by The State Fund for Economic Development. The other
donors to Kyrgyz are the World Bank, ADB, Russia, Japan (counterpart-funds of Non-project
Grant and 2KR), Sweden, the Islamic Development Bank, and Netherlands and Pakistan, even
in small monetary amounts. The State Fund employees 172 staff, and it has a nationwide branch
network covering 40 districts and 7 provincial capitals.
While the Kyrgyz Government used to procure agricultural machinery by a Japanese
Non-project Grant and 2KR, agricultural machinery was sold to farmers with an interest-free
loan. Since 2000, the Government has started to recover the counterpart-funds of both Japanese
grants, and the State Fund for Economic Development has been engaged in managing the funds.
The accumulated money was disbursed 4 times as shown in Table 3-12. While it has started
financing Aiyl Bank for supporting the agricultural machinery loans and the agricultural
machinery leasing scheme since 2010, 115 million Kyrgyz som (equivalent to 23 million
Japanese yen) was released for the leasing scheme from the 2KR counterpart fund in 2012.
Table 3-12 Disbursement of Counterpart Fund Accumulated from Non-project Grant and 2KR
Year Disbursement Item UnitAmount Exchange
Rate (thousand som) (UAD)
2002 Tractor(MTZ) 63 36,430 790,326 46.0949
2007 Combine harvester
(Niva) 70 124,531
3,508,034 35.4988
2008
Tractor(LTZ60A) 306 168,844 4,283,413
39.4181 Plow 306 11,047 280,252
Trailer 102 20,109 510,146
46
Year Disbursement Item UnitAmount Exchange
Rate (thousand som) (UAD)
2012 Aiyl Bank Leasing
Scheme - 115,000
2,426,099 47.4012
Total 847 475,961 11,798,270
Source: The State Fund for Economic Development
(2) Aiyl Bank
Aiyl Bank is a state bank, established in December 2006, aimed at the development of
agriculture. The precursor of the bank is Kyrgyz Agricultural Financial Corporation (KAFC)
which was established by the Kyrgyz Government in 1997 with cooperation from the World
Bank. The bank has 29 branches, 19 regional offices, 48 village stations, 46 deposit counters
and 9 mobile cash desks across the country. It is engaged in almost all financial-support projects
for agricultural development supported by the Government and international donors. The major
donors are the World Bank, ADB, EBRD, Reiffeisen Fun and UNDP.
The total financed amount of Aiyl Bank is 3,264.32million Kyrgyz som as of the end of 2012.
Out of the total, 2,467.1 million Kyrgyz som, about 76% of the total, is financed for the
agricultural sector. The Aiyl Bank’s finance scheme is mainly divided into two components.
One is a loan scheme and the other is a leasing scheme.
1) Loan scheme
Various types of loan products for supporting crop production, livestock, horticulture, inland
fish cultivation, forestry, agribusiness, etc. are provided by Aiyl Bank. While the major target
clients are corporate farms and individual farmers, some loan products are channeled to women
and poverty groups. Most loan products are supported by Government subsidies or international
donor funds. The interest rate is 10 – 25 % a year and the maximum repayment term is 10 years.
Among the loan products in Table 3-13, “plant growing” is available for procurement of
spare-parts of agricultural machinery and the “Raifizen Foundation for cooperative development
in Kyrgyzstan”, the “procurement of agricultural machinery, construction and reconstruction of
production facilities” and the “agro business and marketing” available for procurement of
agricultural machinery, including used machinery.
47
Table 3-13 List of Loan Products for Supporting Agriculture
For corporate farms12
AGRICULTURAL LOANS
Name of Loan Product Currency Annual Interest Repayment Term
Plant growing Som 10% 2 ~ 10 years Raifizen Foundation for cooperative development in Kyrgyzstan Som 18% ~ 19% 2 ~ 10 years
Rural finance project – 2 (financed by International Development Association (IDA) through MoF)
Som 10%Max. 7 years
USD 10%
Mal Charba Nasyyasa Som 10%
Max. 7years USD 10%
Procurement of agricultural machinery, construction and reconstruction of production facilities
Som 18%Max. 7 years
USD 16%
Promoting agricultural productivity Som 10% 2~5 years
SPECIAL AGRO LOANS
Name of Loan Product Currency Annual Interest Repayment Term
ADB loan product Som 10%
Max. 10 years USD 10%
Financing cooperatives - members of the Union of Cooperatives in Kyrgyzstan Som The Bank’s Rate Max. 3 years
SOCIAL AGRO LOANS
Name of Loan Product Currency Annual Interest Repayment Term
Kumtor Ton Som 12% Max. 3 yearsUNDP Summary Som 12% Max. 5 yearsTalas Loans (financed by Public Fund Social Development in Talas Oblast) Som 12% Max. 2 years
New Zealand – Naryn (financed by Kyrgyzstan New Zealand Rural Trust Fund) Som 12% Max. 2years
BUSINESS LOANS
Name of Loan Product Currency Annual Interest RepaymentTerm
Support and development business women (ADB)
Som 20%2~4 years
USD 18%Agro Business and marketing (financed by International Development Association (IDA) through MoF)
Som 10%-21%2~10 years
USD 16%-19%
Support of small and medium business development – production and processing – Ondurush nasyyasay
Som 18%Max. 5 years
USD 16%
Support of small and medium business development – livestock breeding and sale, agricultural purchase – Kamdoo nasyyasy
Som 21%-25% Max. 3years
USD 20%-22%
For individual farmers13
12 Aiyl Bank official website : http://www.ab.kg/ru/bankovskie-uslugi-uridicheskim-licam/krediti 13 Aiyl Bank official website : http://www.ab.kg/ru/bankovskie-uslugi-chastnim-lisam/krediti
48
AGRO LOANS
Name of Loan Product Currency Annual Interest Repayment Term
Kumtor-Chakan Loan Som 20% Max. 2 years
Group loans Som 10%
Max. 2 years USD 10%
Source: Aiyl Bank
2) Leasing scheme
The Kyrgyz Government has a policy to promote leasing of agricultural machinery in order to
accelerate the renewal of machinery. In recent years, the leasing schemes are becoming popular
as a financial tool for supporting agricultural mechanization. Aiyl Bank has been engaged in the
government leasing scheme for agricultural machinery since 2011. The amount of the lease
from Aiyl Bank in 2012 occupied 99 % of the total lease amount including the amount from
other financial institutions. While Table-3-14 shows lease products for agricultural
mechanization, the major target customers are individual farmers, agricultural cooperatives and
corporate farms.
Table 3-14 List of Leasing Products for Supporting Agricultural Mechanization
Name of Product Currency Annual Interest
(down payment)Repayment
Term Target Machinery Financial Source
State lease-1 Som 6% (30%) 7% (20-29%) 9% (10~19%)
Max. 7 years
Phase-1 : Chinese tractor (YTO904) Phase-2: Agricultural Machinery (exclusively for combine harvester from 2013)
Phase-1 : Chinese grant (30 milion CNY = 4.66 million USD) Phase-2 :Counterpart fund of Phase-1 Decree No.382, July 11, 2011
State lease-2
Som
8% (30%) 9% (20~29.9%)11% (10~19.9%)
Max. 7 years
Agricultural Machinery
Counterpart funds of Japanese Non-project grant and 2KR: 115 million Kyrgyz somCounterpart fund of Chinese grant: 80 million Kyrgyz som om Total : 3.9 million USD Decree No.487, July 13, 2012
State lease-3
Turkish grant (about 5million USD) Decree No.88, Feb. 19, 2013
49
Name of Product Currency Annual Interest
(down payment)Repayment
Term Target Machinery Financial Source
Leasing of State Development Bank of China
USD 15% (30%) 16% (20~29%) 17% (10~19%)
Max 5 years
Agricultural Machinery (exclusively for YTO models)
Loan from the China Development Bank 3 million USD
Agro business and marketing Program of support of agricultural cooperatives
Som
18% (30%)19% (20~29.9%) 20% (10~19.9%) 2.5~5
years
Agricultural Machinery, Storage Facility, Agricultural Structure, etc.
The World Bank (This project is closed-out) ・Granted 30% of the total price (Up to 50 thousand USD) ・Max. lease amount: 0.5million USD USD
12% (30%)13% (20~29.9%) 14% (10~19.9%)
Source:The JICA Study Team, conducted based on the Aiyl Bank official website14, Financial Statement 2012 and
concerned government decrees
a. General conditions of the lease (not applied to the World Bank program)
Down-payment: Not less than 10%, depending on the total value
Mortgage: Not necessary, in case the down-payment is more than 30% of the total
value.
Necessary, in case the down-payment is less than 30% of the total value
(should be real estate like houses; however land is excluded)
Repayment term: Original principal: 2 times/year, Interest: quarterly payment
Grace period: Original principal: 9 months, Interest: 3 - 6 months
(depending on cropping/production season by target commodity)
Insurance: All clients have been liable for insurance at the expense of the clients since
Jan. 2013. The clients must choose an insurance company from 3 affiliated
companies of the Aiyl Bank.
2.4% of the total value for covering the damage of machinery. Single
payment at the time of contract.
Mechanization
services
“State leasing 3” targets mechanization service providers, such as Machine
Technical Stations. Clients of the lease are obliged to provide a certificate
from the relevant Aiylokmotu (village) to confirm that the client is
providing mechanization services in the area.
VAT & Sales tax: Exempted if the amount of the lease is more than 0.2 million Kyrgyz som.
14 Aiyl Bank official website : http://www.ab.kg/ru/bankovskie-uslugi-chastnim-lisam/krediti
50
Booklet about the leasing Consulting room in a branch office
of Aiyl Bank The Leasing Department at
the headquarters of Aiyl Bank
b. Actual performance of the leasing
Table 3-15 – 3-17 show the actual performance of the leasing by agricultural machinery, by
year and by provinces. The average unit amount of the lease is about 0.92 million Kyrgyz som
(18 thousand USD) for tractors, about 3.93 million Kyrgyz som (78.6 thousand USD) for
combine harvesters and about 0.31 million Kyrgyz som (6.2 thousand USD) for implements.
Table 3-15 Amount of Aiyl Bank Leasing by Agricultural Machinery
Source: Aiyl Bank
Table 3-16 Amount of Aiyl Bank Leasing by Year
Year
Equipment
2011 2012 2013 Total
No. Sum (som) No. Sum (som) No. Sum (som) No. Sum (som)
Tra
ctor
s
МТZ 17 16,660,000 198 201,141,264 424 426,597,600 639 644,398,864
YTO 263 196,440,749 94 75,196,583 86 70,910,250 443 342,547,582
Others 0 0 1 9,899,150 2 4,378,588 3 14,277,738
Combines 2 6,480,000 9 40,941,820 17 62,555,445 28 109,977,265
Attachments 2 216,000 44 9,056,657 51 20,846,867 97 30,119,524
Total 284 219,796,749 346 336,235,474 580 585,288,750 1,210 1,141,320,973
Source: Aiyl Bank
No. Sum (som) No. Sum (som) No. Sum (som) No. Sum (som) No. Sum (som) No. Sum (som)
MTZ 94 96,007,372 236 235,963,624 284 287,228,716 25 25,199,152 0 0 639 644,398,864
YTO 284 212,218,067 5 1,571,613 0 5 2,984,652 149 125,773,250 443 342,547,582
Others 2 4,378,588 0 0 0 1 9,899,150 0 3 14,277,738
9 35,347,538 14 51,114,227 0 5 23,515,500 0 28 109,977,265
53 13,169,561 38 16,255,874 0 6 694,089 0 97 30,119,524
442 361,121,126 293 304,905,338 284 287,228,716 42 62,292,543 149 125,773,250 1,210 1,141,320,973
Total
Combines
Attachments
Total
State lease-2 Program
Equipment
State lease-3 WB leaseChine Development Bank
(1USD = 50som)State lease-1
Tra
ctor
s
51
Table 3-17 Amount of Aiyl Bank Leasing by Province
Year
Province
2011 2012 2013 Total
No. Sum (som) No. Sum (som) No. Sum (som) No. Sum (som)
Chui 76 62,572,149 74 92,286,569 120 139,779,496 270 294,638,214
Talas 31 23,620,767 35 41,414,548 82 76,904,104 148 141,939,419
Issyk-Kul 37 27,636,151 18 17,758,151 58 54,151,347 113 99,545,649
Naryn 18 13,444,614 18 16,206,922 32 30,824,633 68 60,476,169
Osh 54 41,499,227 83 77,858,608 108 102,026,098 245 221,383,933
Jalal-Abad 48 36,085,381 81 63,516,076 112 107,877,703 241 207,479,160
Batken 20 14,938,460 37 27,194,600 68 73,725,369 125 115,858,429
Total 284 219,796,749 346 336,235,474 580 585,288,750 1,210 1,141,320,973
Source: Aiyl Bank
c. Leasing procedure
Farmers wishing to obtain a lease should visit Aiyl Bank for the first consultation after the
selection of agricultural machinery for leasing. During the first consultation, the visited farmers
can obtain a detailed explanation about the leasing conditions from the bank. If farmers can
accept the conditions, the next procedure is taken for the qualification examination by the bank.
For the qualification examination, a person in charge of Aiyl Bank makes a visit to the farmer’s
house and farmland to check his/her financial condition and property. Only if both the farmer
and bank have confirmed the farmer’s reliability of repayment, is an official application made
for the farmer. It is, therefore, unusual that the application be refused in the final analysis
conducted by the headquarters of Aiyl Bank.
It is impossible to confirm the % of farmers who could get the lease, for farmers who had the
first consultation, since Aiyl Bank does not have data on the number of farmers. According to
the information from a branch office of the bank, only 1 farmer can obtain a lease out of 3 – 4
applicants in a month; even the number varies season to season. The qualified farmer for the
lease is a farmer who makes a consistent profit, more than the expected amount of repayment. It
is, however, difficult to standardize the qualification examination, since different farmers have a
different farm management status, such as land property, farmland area, growing crops, land use,
agricultural mechanization, etc. Aiyl Bank staff suggests that more than 90 % of the lease
beneficiaries have more than 20 ha of farmland, including rented land, and they have a certain
income from agricultural mechanization services provided by using existing machinery.
52
Procedure Remarks
1 Selection of machinery
The farmers intending to lease machinery are given a free hand to choose the machinery except for when the lease is applied to machinery provided by aid. Only brand-new machinery is applicable.
A machinery list by Aiyl Bank is made considering agricultural condition by region
The number of allocated machinery to each branch office is determined by actual demand, cultivated area, leasing performance, etc.
2 The first consultation
Farmers who intend to apply for the lease make a request to the branch office in the area
There are 4 - 5 staff handling the leasing in the case of medium-scale branches
The staff explain the lease conditions to participated farmers Qualification Examination:
Financial status is the most important checking point. Property, income (including non-agricultural income and pension), expenditure (family expenses, school expenses, etc.), etc. are analyzed by interviews and by a site visit survey.
Repayment capacity of a farmer is evaluated not only by the property of farmland, but also other income generation items, such as the rented farmland area and performance of mechanization services, etc.
If a farmer is disqualified by the qualification examination, the farmer cannot apply for the lease
Contents of the consultation and the request from branches or provincial offices are reported to the headquarters
3 Application Qualified farmers of the qualification examination can make an application for the lease
Required documents (individual farmers); Application form, passport, marriage certificate, letter of consent from spouse, registration for farming, property certificate (car, house, livestock, etc.) and others if necessary
More than 90% of the applicants are individual farmers. Corporate farms should prepare additional application documents, and contents of the documents vary according to the type of cooperative farms
4 Qualification Examination by the headquarters
Indispensable conditions are 3 consecutive-years of surplus at financial closing and not tax-delinquent for individual farmers, as well as for corporate farms
Influence of other debt is evaluated by the result of cash flow analysis
5 Approval It is unusual that the application is refused by the headquarters of Aiyl Bank at this stage.
6 Leasing contract
Leasing contract is concluded at the branch offices concerned.
53
Procedure Remarks
7 Down payment As most customers make a down payment of more than 30% of the machinery value, a mortgage is not applicable in most cases
8 Sales contract between the bank and suppliers
All orders are made from the headquarters on a daily basis. Suppliers:
Kyrgyz Avtomash Radiator, YTO, Atalyk Group, John Deere, Standard Agroservice, Kyrgyz Agro Market, Central Asia Machinery, etc.
9 Payment to suppliers
In case of a leasing scheme supported by the China Development Bank, the bank directly makes a payment to YTO.
10 Machine delivery
Customers pick up machinery from suppliers It takes 2 – 3 months, sometimes about 6 months, from the application
to the delivery
Source: The JICA Study Team
Source: The JICA Study Team
Figure 3-2 Aiyl Bank Leasing Procedure
Under the leasing schemes, the payment for agricultural machinery is made by Aiyl Bank. The
bank maintains ownership of the machinery even after the machinery is delivered to the
customers. Re-leasing is not allowed. The ownership is transferred to the customers when they
pay off the lease obligation. Almost all clients pay their lease obligation without delay, and
presently the recovery rate is almost 100%. Aiyl Bank visits all customers 2 times in a year for
the monitoring. The bank staff makes a comment that the customers are increasing their
understanding of the leasing system through consultation with the bank during the monitoring.
According to farmers who leased agricultural machinery from Aiyl Bank, they do not
experience a big problem with preparing necessary documents and in the leasing procedure.
Since Aiyl Bank treats many customers for the leasing, it has established a systematic and
smooth procedure compared to other financing institutions.
Ministry ofFinance
Ayil BankHead Office
Ayil BankRegional Office
Leasee
MachinarySuppliers
④ Evaluation
② Consultation
Fundings
③ Application
⑤ Утверждение ⑥ Contract
⑦ Prepayment
③ Application
⑦ Prepayment
54
3.4.2 Other Finance Institutions
(1) Agricultural financing services of private banks
Table 3-18 shows private banks that provide agricultural loans or leases, and their financial
products. They impose the following terms and conditions on the products in general.
<Loan>
・ Interest rate: about 20% a year
・ Repayment term: Max. about 5 years
・ Repayment schedule: monthly (harvesting time is considered in some cases)
<Leasing>
・ Interest rate: about 16 – 24 % a year
・ Repayment term: Max. 5 years
・ Down payment: 30 % of the value
・ Repayment schedule: monthly (harvesting time is considered in some cases)
Table 3-18 Agricultural Financing Products available in Private Banks
Agricultural loan
Bank Objective Currency Amount Annual Interest
Repayment Term
Bai Tushum Bank(The name before Jan. 2014 was “Bai Tushum and Partners”)
Livestock, Dairy products, Seeds, Crops
SomUSD
10,000 som or more
Som 20% USD 17%
3~60months
Kyrgyz Investment and Credit Bank (KICB)
Agriculture SomUSD
0.2~5 million USD
Som 18~26% USD 16~25%
12~24months
Commercial Bank Kyrgyzstan
Agribusiness SomUSD EUR
2.5~ 20 som 50~500 thousand USD/EUR
Som 21~32% USD 17~27% EUR 13~21%
3~36months
Project “Support to improve agricultural productivity” financed by the Ministry of Finance (Crops, Livestock, Agro-processing)
SomUSD
More than 50 thousand som or 1,000 USD
Som 16~18%、USD 10~12%
12~24months
BTA Bank Expenses for purchasing livestock, seeds, and equipment, labor wages, etc.
SomUSD
Up to 1 million USD
Depends on repayment schedule and the market rate
3 years (5years in some cases)
55
Agricultural loan
Bank Objective Currency Amount Annual Interest
Repayment Term
IDA project “Agribusiness and Marketing” (Equipment for the production, processing and storing)
Som USD
Up to 250 thousand USD
18~20% (Floating interest)
Max. 5 years
Optima Bank Livestock, Agricultural inputs, Agricultural machinery, etc.
SomUSD
More than 50 USD
More than 14%
3~60months
Leasing
Bank Objective Currency Amount Annual Interest
Repayment Term & Down Payment
Bai Tushum Bank Equipment for agricultural cooperatives or corporate farms
SomUSD
0.15 ~ 15 million som
Som 24% USD 20%
5 years Min. 30% of the value
Kyrgyz Investment and Credit Bank (KICB)
Vehicles, Agricultural machinery, Sewing machines, etc.
SomUSD
5 ~ 100 Thousand USD
Som 18% USD 16%
6 months ~5 years Min. 40% of the value
Commercial Bank Kyrgyzstan
Vehicles, Agricultural machinery, etc.
Som USD EUR
Depends (no limit)
Som 21~22% USD 17~18% EUR 14~15%
1~7 years30% of the value
Other
Bank Objective Currency Amount Repayment Amount
Repayment Term
Eco Islamic Bank (No interest is allowed because of Islamic financing. It actually provides sales financing)
Livestock, Forage, Agricultural machinery, etc.
Som More than 50,000 som
1.4 times of the original amount after 3 years
1~36months
Source: The JICA Study Team, conducted based on the Banks’ websites or the interview survey.
Table 3-19 Leasing Performance of Private Banks in 2013
Bank Number Machinery
Bai-tushum Bank 62 Tractor:12 units, Implements: 50 sets
KICB 1 Rice combine harvester (Chinese made, 20 thousand USD)
Eco Islamik Bank 17 Tractor: 3 units, Implements: 14 sets
Total 80
Source: The JICA Study Team, conducted based on the interview survey for the MA & LR and the concerned banks.
56
Due to the change in the tax system in 2012, VAT and interest tax have not been applicable
to leasing. After the change, a favorable environment to promote leasing services is created in
Kyrgyz because even a private bank has been able to reduce the interest rate. Some banks intend
to expand their leasing services. However, they may have the disadvantage of high interest rates
compared to Aiyl Bank, if they run the leasing machinery leasing service. They differentiate
their leasing services to the non-agricultural sector, such as construction, industry and the
medical sector.
(2) Microfinance
The microfinance system in Kyrgyz has been developed since 1994 with cooperation from
the World Bank, UNDP, ADB and international NGOs. As a result, laws and regulations
concerning the microfinance institutions have been enacted, and the financing system is
controlled under the jurisdiction of the central bank in order to promote a proper and organized
operation.
According to the Association of Microfinance Institutions (AMFI), there are 249
microfinance institutions across the country as of September, 2013, and 32 institutions are
members of AMFI. The institutions spread into nearly every rural side in the country. The total
financed amount is 23,862.4 million Kyrgyz som (484.55 million USD) covering 459,572
debtors in 2013. The average financed amount is 51,923 Kyrgyz som (1,054 USD)/debtor. The
average annual interest rate is 30.47%, while the average repayment team is 15 months.
Quarterly reports of AMFI suggest that 49 – 67 % of the total financed amount went to the
agricultural sector. Many benefited farmers bought livestock, while some of them bought seeds,
fertilizers, fuel, etc., according to the interview survey. Since the amount of microfinance is not
much and the interest rate is high, financing is not useful to procure agricultural machinery.
Considering the number of microfinance debtors, 8 % of the population or every 12.5
individuals could reach for financing in 2013. It is believed that microfinance provides good
financial access to local people and impoverished groups, and plays a significant role in
improving the farming of small-scale farmers.
57
3.5 Customs Union15
3.5.1 Background and Summary of the Customs Union
In the 1990s, Kyrgyz GDP declined approximately 20-25% due to the division of economic
cooperatives from former Soviet Union countries, as a result of the country collapse. Russia
tried to encourage economic integration with Commonwealth of Independent States: CIS
countries in order to form one united economic block. However, this attempt did not achieve the
desired progress due to conflicts between the CIS countries, caused by the discrepancy in
political principles and taxation policies. Hence, Russia intended to frame the economic block
with attractive countries for economic integration, and to implement a non-tariff policy by
signing a bilateral free-trade agreement with Belarus, Kazakhstan, Kyrgyz and Tajikistan.
Furthermore, Russia concluded the CU with Belarus and Kazakhstan, to encourage economic
unification. In 2010, the actual enforcement treaty of the CU between three countries was
launched, and in December of this year, Kyrgyz expressed a sense of accession to the CU. The
next year, in October 2011, at the meeting of the Eurasian Economic Community, the summit
approved that Kyrgyz accede to the CU, and agreed to implement specific procedures for the
accession.
The main purpose of the CU is to eliminate customs between the member countries, and to
liberalize intraregional transfers of goods (free trade). On the other hand, from a perspective of
external measures, unite member countries’ custom rates externally in order to create one
economic block. The main functions of the economic zone are the abolition of tariffs for trading
between member countries, the elimination of inspections related to customs, foreign goods,
animal and plant quarantine and hygiene, the installation of common standards, and the
unionization of common external tariffs. If Kyrgyz joins the CU, the country needs to adopt
these functions in the future.
Table 3-20 shows a comparison of the economic overview of Kyrgyz and the CU member
countries. As shown in the table, economic scale of Kyrgyz is significantly smaller than the
15References:
Eurasian Development Bank Eurasian Integration Yearbook 2012, “Assessing the economic effect of Kyrgyzstan’s accession to the Customs Union” Japan Association for Trade with Russia & NIS, 2012, “Research for the Customs Union: Russia, Belarus, Kazakhstan” USAID, 2008, “Economic Consequences of the Customs Union for the Kyrgyz Republic”
58
other countries. There is a huge gap of GDP per capita between Kyrgyz and the CU countries.
Kyrgyz reveals a high degree of dependence on foreign trade, and high population growth. As
demonstrated in the table, Russian economic scale is extremely large among these countries.
Since the superiority of Russia is obvious, Russia will assume a leading role in the future as
well. This situation indicates that the establishment of a Russian centered framework for the CU
may have negative effects on Kyrgyz due to differences of economic scale and the situation.
Table 3-20 Overview of Customs Union Member Countries and the Kyrgyz
2008 Kyrgyz Belarus Kazakhstan Russia
GDP(10 billion USD) 5.0 60.3 135.6 1676.6
Agriculture (%) 26% 9% 6% 6%
Industry (%) 17% 39% 42% 39%
Service (%) 57% 53% 52% 54%
GDP growth (%) 7.6% 10.0% 3.3% 5.6%
GDP per capita (thousand USD) 0.95 6.23 8.72 11.81
Export, % of GDP 61% 54% 61% 28%
Import, % of GDP 95% 65% 40% 17%
Population (million) 5 10 16 142
Population growth (%) 1.1% -0.2% 0.1% -0.1%
Source: USAID, 2008, “Economic Consequences of the Customs Union for the Kyrgyz Republic”
Although the importance of Belarus is comparatively low in a trading partner role, Russia and
Kazakhstan are the significant markets of Kyrgyz for exports, and at the same time, the
countries are also major exporters of fuels for Kyrgyz. Besides, Russia is not only a source
country of energy, but also a host-nation of Kyrgyz labor forces, and a massive loan supply
country. For all these reasons, Kyrgyz accession to the CU is strongly influenced by the
intention of Russia (see Table 3-21).
Table 3-21 Possible Effects of Kyrgyz Accession to the Customs Union
Positive aspects
Promotion of economic activities with the CU member countries (non-tariff trading, access to the
CU members’ markets)
Increase of participating countries in the CU (expansion of economic block)
Promotion of development
59
Encourage the development of the domestic textile industry (through high rates of external tariff
rates imposed on imported products from China)
Limited impact on agricultural sector (the import of agricultural inputs such as seed, fertilizer, fuel,
machines and export of agricultural products are mainly traded with member countries)
Expansion of trading with the CU member countries, Kazakhstan (current obstacle factors of trading
between Kazakhstan and Kyrgyz, including strict standards such as common external tariffs,
customs and sanitary inspections will be eliminated)
Increase of Russian assistance and grants
Possibilities to offer more open or smooth entry to Kirgiz labor immigrants in Russia (ease barriers
against member countries)
Negative aspects
Decline in trading with external countries (tariff rate for external countries will rise, the average
will approximately double by the implementation of CET: Common External Tariff)
Decrease the government tax revenues (VAT, import duties)
Decrease in decision power in terms of trading policies (concern about the possibilities that are
favorable policies for Russia)
Decrease in intermediate trading from China (intermediate trading which shows that large
proportions may decrease by a rise in the customs duty)
Installation of uniform standards in terms of quality, animal and plant quarantine, sanitation (more
strict standards than the current standards)
Increase in consumer commodity prices by the installation of common external tariffs (although
there are no changes regarding the commodities imported from member countries, imports from
external countries will increase)
Difficulties regarding political negotiations (Kyrgyz is a WTO member country, so if tariff rates
imposed on external countries increase by accession to the CU, the conflict with the WTO treaty
will result.)
Source: The JICA Study Team based on the references16
Kazakhstan has already joined the CU. The customs tariff rate between member countries
became zero percent. Regarding agricultural machinery imports from external countries, the
machines and implements that compete with member countries’ products are established at high
tariff rates between 0-15%, and a competitive rate was not set for low tariff rates.
60
Table 3-22 Trade Between Kyrgyz and CU Countries (Million USD), and % of Total Kyrgyz Exports and Imports with each CU Member
(Million USD) 2005 2006 2007 2008
Trade turnover with CU countries 812 1188 1755 2417
Export 252 317 440 506
Russia (%) 7.2 5.4 5.7 5.2
Kazakhstan (%) 6.2 5.8 5.0 3.1
Belarus (%) 0.1 0.1 0.1 0.6
Import 560 871 1315 1911
Russia (%) 20.3 23.1 23.7 25.1
Kazakhstan (%) 9.4 7.1 8.6 6.1
Belarus (%) 0.4 0.6 0.6 0.7
Balance of exports and imports -308 -523 -875 -1405
Source: USAID, 2008, “Economic Consequences of the Customs Union for the Kyrgyz Republic”
Table 3-23 Main Trade Between Kyrgyz and CU Members by Category
Source: USAID, 2008, “Economic Consequences of the Customs Union for the Kyrgyz Republic”
There are some export commodities, shown in the Table 3-23, that were originally imports
from China. Currently, Kyrgyz imports goods cheaply from China and about 75% of them are
re-exported to other Central Asian countries and Russia for the acquisition of foreign currency.
However, if Kyrgyz accedes to the CU, China will become an extra-regional country, and tariff
rates for outside regions will be adopted. As a result of this change, most items will have an
increase in tariff rates compared to the current rates, and this intermediate trade business style
will not work out. Actual trade quantities between China and Kyrgyz are significantly greater
than the statistical data. Therefore, if intermediary trade significantly decreases, this will have a
tremendous negative impact on Kyrgyz economy.
Export 2008
Minerals 28%
Textiles and articles of textiles 27%
Vegetable products 12%
Articles of stone, gypsum, cement, asbestos, and mica
8%
Electric machinery, equipment and appliances; electric technical equipment
6%
Food products, alcoholic, and non-alcoholic beverages
4%
Natural or cultured pearls, precious or semi-precious stones
4%
Animal or vegetable fats and oils 2%Miscellaneous 9%
Import 2008
Minerals 57%
Wood, articles thereof, wood charcoal, cork, and articles
3%
Machinery, equipment and mechanisms: electrical equipment
3%
Transport vehicles (road, air and water) 3%
Food products, alcoholic, and non-alcoholic beverages
8%
Vegetable products 7%
Chemicals and articles of base metals 6%
Base metals and articles of base metals 5%
Other 8%
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3.5.2 Impact on Agriculture and Agricultural Mechanization
In Kyrgyz, approximately 34% of the labor population is engaged in agriculture (including
food processing), but most of the population is small-scale farmers, and there are difficulties in
sufficiently acquiring agricultural inputs and spare parts for machines. In 2008, the agricultural
sector consisted of 26% of the GDP and 12% of total exports.
Table 3-24 illustrates the assumption of changes in duties when Kyrgyz accedes to the CU.
Table 3-24 Changes in Duties Due on Adoption of Common External Tariffs, non CIS Imports
Source: USAID, 2008, “Economic Consequences of the Customs Union for the Kyrgyz Republic”
Significant agricultural inputs (fuel, seed, fertilizer, agricultural machinery) are imported
from CU member countries, and main agricultural products for export (fruits, vegetables, dairy
products) are mainly exported to CU member countries. Therefore, the impact of Kyrgyz
accession seems to be limited in terms of the agricultural sector. Note, however, that there are
invisible border trades with China, including agricultural products and food stuffs. The
accession may influence the negative effect against the smooth implementation of trade, and
there is concern that inflation of food commodity prices is a possibility.
In Kyrgyz, most of the agricultural machines currently used were made during the former
Soviet Union era and are more than 20 years old. In recent years, renewal of these agricultural
machinery, especially tractors, are gradually prevailing from the assistance of international
donors and leasing programs with a central focus on Aiyl Bank. Recent renewed tractors tend to
be Belarusian machines due to its ease in spare parts procurement and mechanism similarities to
the former Soviet Union. But Chinese tractors are also easy to procure due to geographical
conditions and the Chinese government boost through grant aid of Chinese tractors. As such, the
number of Chinese tractors in Kyrgyz has become increasingly steady in recent years.
However, if Kyrgyz accedes to the CU, the tariff rate imposed on general machinery imports
Chapter TitleKyrgyzTariffs
CU Tariffs DifferenceImport Value,
KG TariffImport Value,
CU TariffDifference in
Tariff Due
Total 5.1 10.6 5.5 1885.5 1986 100.5Agriculture 7.9 10.8 2.9 121.4 127.3 5.9
Live animals and animal produce 7.5 15.9 8.4 38.9 42.2 3.3Vegetable products 6.7 8.2 1.5 35.6 36.1 0.5Animal or vegetable fats and oils 9.5 5.9 -3.6 5.5 5.3 -0.2Foodstuffs, alcoholic and non-alcoholicbeverages, vinegar and tobacco
7.7 13.3 5.6 41.4 43.7 2.3
Industry 4.3 10.8 6.5 1764.1 1858.7 94.6Foodstuffs, alcoholic and non-alcoholicbeverages, vinegar and tobacco
7.1 9.2 2.1 44.8 45.7 0.9
Minerals 4.1 4.6 0.5 22.5 22.6 0.1Machinery, equipment and appliances 2.7 5.9 3.2 383.4 395.7 12.3
62
from outside countries, including China will shift from 2.7% to 5.9%, a 3.2% increase from the
current situation. Regarding agricultural machinery, it will be expected to rise from 0% to 15%16,
so incentives for imports from Europe, China and the USA will decrease, and imports of
agricultural machinery seems to be concentrated on Belarus agricultural machinery. Other
potential problems are the procurement of spare parts from China. Most farmers purchase their
machine’s spare parts at bazaar shops. Most of these parts are manufactured in China not only
for Chinese agricultural machines, but also for Belarusian and Russian machines. In short,
Chinese spare parts are propping-up the former Soviet Union’s old agricultural machinery by
the provision of parts. Thus, if trading between China and Kyrgyz becomes less smooth by the
implementation of strict standards or price inflation, the accession will be influential on
agricultural mechanization from a perspective of parts procurement.
Although there are concerns about the accession to the CU, mentioned above, the official
timing of the accession is not obvious at this point, and changes in tariff rates are just an
estimation. Also, it is expected to establish a transition term for the tariff rate change of around
3 to 5 years when Kyrgyz joins the CU. Therefore some machine dealers have optimistic
expectations about the influence of agricultural machinery renewal.
16 In the case of Kazakhstan, tariff rates are different depending on the agricultural machinery. Especially, it is possible for there to be a high tariff rate for competitive machines imposed on member countries.
63
4. Analysis of Obstacle Factors to Agricultural Mechanization
4.1 Problems of Each Stakeholder
4.1.1 Ministry of Agriculture and Land Reclamation (MA & LR), Department of
Agricultural Mechanization and Electrical Supply
As mentioned in the above chapter, operations of the Department of Agricultural
Mechanization and Electrical Supply vary, however there are only four workers at the head
office. Under the current institutions, it is hard to cover all operations of the department. In
addition, there was one office staff for each district around the country before the organizational
change in 2012. Due to the organizational reform, the operations partly shifted from one
department to another department and 11 office staff were transferred to the Agency of National
Registration, which falls under the Interior Ministry. As a result of this transfer, 29 staff
members are covering 40 districts, and this situation poses problems for the sufficient operation
of the department.
Data collection, which required time in the survey, was not sufficiently implemented, such as
the number of agricultural machinery, the situation of usage and problems of agricultural
mechanization at the field level, and information sharing, including agricultural mechanization
policies for stakeholders and institutional change. Since it is difficult to implement effective
policy making without collecting accurate information, the government needs to take measures
for institutional improvement.
4.1.2 Kyrgyz National Agrarian University, Faculty of Engineering and Technology
Kyrgyz National Agrarian University is the only agrarian university in Kyrgyz, and faculty of
engineering and technology conduct research in agricultural machinery.
Currently the faculty is using decrepit machines of the former Soviet Union for research
works, lectures and practical trainings without enough of a budget allocated, hence there are
difficulties in launching new research activities and the development of human resources using
new machines and equipment.
4.1.3 Technical Colleges and Vocation Schools (agricultural machinery courses)
Both schools, founded during the Soviet Union period, had a very important role in
implementing agricultural machinery courses to train personnel, such as engineers at the
Kolkhoz and Sovkhoz farms. Presently, the teaching materials introduced during that time have
64
been not renewed. They are outdated. Many students are not interested in the coursework of
these schools. Therefore, both schools are faced with a decrease in students and educational
budget. Moreover both schools are not well-coordinated with the Ministry of Agriculture, which
has an important role in the country’s agricultural mechanization. As a result, the educational
program courses have run smoothly. The following points are problems that need to be
addressed to train personnel on agricultural mechanization.
Decrease the number of students specializing in agricultural machinery
Reduce the educational budget for courses
Since most teaching materials were introduced during the Soviet Union period, the
training courses do not engage the student’s study interest
The teaching materials shortage and its contents do not meet the needs of the present
farming system, and the school facilities are old
There is no proper coordination for training agricultural machinery specialists of the
Ministry of Agriculture, although specialists implement vocational school trainings
4.1.4 Agricultural Machinery Suppliers
Since the latter half of 2000s, agricultural machinery suppliers, who provide full-scale service,
have launched business operations in Kyrgyz. While there were a limited number of suppliers
and available manufacturers in the beginning, various types and models of agricultural
machinery from different manufacturers are presently sold. The suppliers listed in Table 3-5 are
official distributors of agricultural machinery in Kyrgyz. All of them operate their business in
Bishkek or its suburbs. In addition to the official distributors, there are several retail shops that
sell machinery of YTO, a Chinese manufacturer.
Since many suppliers have established an after-sales service system to provide repair,
spare-parts supply and quality guarantee, customers have gradually appreciated the improved
service compared to the previous situation. The following issues may remain to improve
customers’ convenience for buying agricultural machinery.
The suppliers concentrate on Bishkek city because domestic demand for agricultural
machinery in the Kyrgyz is relatively small compared to Kazakhstan and other countries.
Farmers living out of Bishkek have to make frequent visits to Bishkek to arrange for the
purchase and receiving of agricultural machinery. The farmers especially in the southern region,
i.e. Osh, Jalal-abad and Batken provinces, are burdened with frequents visit due to the poor
accessibility of Bishkek city. The MTZ tractor, a Belarus manufacturer, has been very popular
65
across the country since before independence. Farmers, therefore, have easy access to
information about MTZ tractors, such as working performance, fuel consumption, etc. even
though there is not a MTZ supplier nearby. However, they do not have enough information
about agricultural machinery produced by the other manufacturers. It is recommended that a
manufacturer, except for YTO, whose tractors are popularly sold in the southern region by small
retailers or individuals, who wants to promote the sales in Kyrgyz, should expand its supply
network in Osh, which is the central city in the southern region.
Eurasia Group, which sells John Deere agricultural
machinery in Kyrgyz, makes unique sales promotion
efforts, such as demonstrations on its own farm. Such a
sales technique may be useful in order to generate brand
awareness of agricultural machinery which is not popular
among Kyrgyz farmers. Eurasia Group has a plan to
expand its supply network to Osh city, as well as to open
a demonstration farm in the southern region.
While there is no limitation of manufacturers on Aiyl
Bank’s agricultural machinery leasing scheme, most of the machinery leased by the scheme are
Belarus made. The reason is that farmers have limited access to information about agricultural
machinery other than Belarus made machinery because a machinery list and machinery
pamphlets provided by Aiyl Bank mainly consist of Belarus machinery. It is necessary for
suppliers selling agricultural machinery other than Belarus made to prepare a machinery list and
pamphlets of their machinery for Aiyl Bank and other private banks in order to enhance their
sales and marketing.
A company loan arranged by only Avtomash is processed for limited corporate farms that are in
good financial condition. Many of them actually have the ability to buy agricultural machinery
in cash. Although the loan is a good sales promotion tool, the volume of the market for the loan
is limited to about 10% of the total sales of Avtomash.
4.1.5 Repair Engineers for Agricultural Machinery
As mentioned above, in this study, it was confirmed that there are private repair engineers for
agricultural machinery, but they do not have their own workshops. Most of them worked as
engineers during the Soviet Union period and presently they are rapidly increasing in an aging
population. Therefore, training the young generation is one issue to be addressed so that the
Demonstration of John Deere tractor
66
maintenance and repair work can be properly implemented in the future.
Machine stations and car service shops widely exist in the country. As such, this is one of
the ways these facilities can be fully utilized for maintenance and repair of agricultural
machinery. Moreover it is also necessary to obtain investment funds to introduce specialized
facilities and machine tools in order to improve the maintenance and repair services of
agricultural machinery.
4.1.6 Aiyl Bank
(1) Lack of Working Capital for Leasing
The number of lease subscriptions is increasing every year since 2011 when Aiyl Bank
started its leasing scheme for agricultural machinery. While demand for the lease is high, the
number of possible subscriptions depends on the volume of working capital. Since the working
capital of Aiyl Bank is insufficient, the lease does not presently meet the demand. According to
the interview survey, about 150 farmers have obtained approval for the lease throughout Kyrgyz.
They are presently awaiting the delivery of agricultural machinery. Although the potential
demand is larger than the actual demand, a lot of potential applicants do not make an application
due to the prolonged process from application to delivery.
Resource money for the lease has been accumulated with the cooperation from China (grant
& loan), Japan (counterpart funds of non-project grant aid and 2KR) and Turkey (grant). In
addition, the Eurasia Development Bank (EDB) has committed to disburse 20 million USD for
supporting the lease, and other donors, i.e. Poland, Korea, ADB and Islamic Development Bank,
are considering similar support. Nevertheless, there is still a great financial demand for the lease
considering the insufficient number and aging agricultural machinery.
Table 4-1 Assets of Aiyl Bank (million som)
Year 2009 2010 2011 2012 2013
Amount 2,550 2,960 4,041 4,330 7,381
Source: Aiyl Bank Financial Statement
(2) Lease Conditions
The past record shows that 90% of the leasing amount is paid for tractors. Although demand
for combine harvesters is also high, the following difficult conditions allow quite a limited
number of farmers to access the lease of combine harvesters.
High price of combine harvesters
67
Conditions of the down payment and repayment term are the same as the conditions for
tractors, although the price is much higher
While the minimum amount of the down payment is 10% of the total value, collateral is
required if the debtor makes a down payment only less than 30% of the total value. Although
real estate may be mortgaged, land is not applicable. It is very difficult for many farmers to
secure an amount enough for the mortgage from their houses due to their low value. In the rural
area, the hypothetical value of houses is only 40 – 50% of the assessed value. The 30% of down
payment for tractors, which are even cheaper than combine harvesters, is a difficult condition
for general farmers to meet. Many potential applicants for the leasing give up the application
due to the hard down payment condition. It is recommended that the conditions should be
relaxed in order to promote leasing. For example, a decreased down payment condition for
collateral-free leasing to 20% and a prolonged repayment term of up to 10 years.
(Example) Combine Harvester
In a case: Price: about 400 million Kyrgyz som, Down payment: 30% of the value, Interest rate: 8% a year, Repayment term: 7 years
Down payment: 1.2 million Kyrgyz som (24 thousand USD)
Annual payment: about 0.6 million Kyrgyz som (12 thousand USD)
Tractor In a case:
Price: about 100 million Kyrgyz som, Down payment: 30% of the value, Interest rate: 8% a year, Repayment term: 7 years
Down payment: 0.3 million Kyrgyz som (6 thousand USD) Annual payment: about 150 thousand Kyrgyz som (3 thousand USD)
(Reference)
17
The average monthly income of a farmer in 2012: 5,309 Kyrgyz som The average monthly expenditure of a farmer in 2012: 4,341.15 Kyrgyz som The monthly balance: 967.85 Kyrgyz som
(3) Qualification Examination Ability
While the size of the Aiyl Bank branch offices vary, the number of staff in charge of loans
and leasing is about 5 in the case of a middle sized branch. 300 customers who are interested in
loans or leasing visit the branch offices; the number depends on the season and the offices.
There are only 15 -20 customers out of 300 who intend to apply for the leasing scheme for
agricultural machinery. The bank’s human resources do not meet the required number to carry
out a proper qualification examination which is made at the applicant’s farm or house prior to
the lease approval.
The lease repayment rate is almost 100% at present. The high rate is caused by a conservative
selection of solvent farmers for the leasing. It is reasonable that Aiyl Bank pay serious attention
17 “Kyrgyzstan in Figures 2013”, the National Statistics Committee
68
to the safety of financing, and avoid troubling unreliable people regarding repayment of heavy
debt. However, it is expected that the bank conduct a more comprehensive qualification
examination by assessing not only the present assets and financial conditions, but also the
potential and possibilities of the applicant farmers, such as the farming plan and earnings after
the leasing of agricultural machinery, for accelerating the agricultural mechanization and
agricultural development. Aiyl Bank should improve the staff’s ability to conduct the
qualification examination in order to respond to expectations. Furthermore, the staff needs to
improve their knowledge about agricultural machinery and facilities for diversification of the
leased machinery.
(4) Loans for used machinery
The Aiyl Bank leasing scheme is available only for brand-new agricultural machinery. While
an agricultural loan scheme is applicable for buying used machinery, the annual interest rate is
18%. The high interest rate hinders many farmers from applying for the loan. Establishment of
an agricultural leasing scheme for used machinery is actually not realistic considering required
quality assessment and the guarantee system of the machinery. A loan scheme with a low
interest rate may contribute to the sales promotion of used machinery in Kyrgyz.
(5) Diversification of leased machinery
A properly balanced agricultural mechanization not only for tractors and combine harvesters,
but also with other agricultural machinery and facilities covering all agricultural aspects, such as
marketing and processing machinery, storage facilities, irrigation facility construction
machinery, etc. should be promoted for agricultural development. The Aiyl Bank leasing
scheme actually covers only tractors, combine harvesters and implements. It is recommended
that Aiyl Bank should diversify its leasing commodities. According to the collected information,
Aiyl Bank is planning to commence a leasing of agricultural processing machinery.
While growing crops vary with the region, Aiyl Bank prepares a list of machinery applicable
for its leasing scheme, considering the local agricultural condition. However, it is initially
difficult to purchase several types of machinery, i.e. rice combine harvesters, cotton tractors and
forage harvesting machinery, in Kyrgyz. Although any agricultural machinery, even those not
included in the list can be leased, many farmers do not have enough information and knowledge
for choosing unfamiliar machinery for the lease. Public relations activity and information
service through an exhibition, a demonstration run and a promotion meeting of agricultural
machinery may contribute to stimulate leasing.
69
4.1.7 Farmers
Figure 4-1 illustrates farmers’ problems based on the questionnaire (multiple answers from
agricultural machinery holders, users of machinery service, no machine holders and no service
users). The most common problem was “limited sales channel”. This is because a limited
number of customers understand the principle of market mechanism (competition principle).
The second largest number of farmers answered the problem as “accessibility of machinery
services”. The agricultural machinery holder also pointed out this problem because there are a
certain number of cases in which their agricultural works are not only covered by their own
machines, but also depend on external services. This answer is the most common among the
farmers who use external machinery services. There are also different cases in which farmers
are using external machinery service, although, farmers cannot implement appropriate seasonal
work because machines in the area do not cover all demands of the area. Also, even though
among the farmers who are categorized as no service users, some farmers desire to use
machinery services. But there are problems regarding accessibility of services, such as deficit
machinery service agencies around the area and the service cost is too expensive.
In Osh province, during harvesting season, deficit combines are substituted by rental
machines from Uzbekistan. However, since 2010, because of the border closure between
Kyrgyz and Uzbekistan, farmers in Osh province cannot use these machines, and the deficit
machines used during harvesting season are in a critical situation. Reflecting the situation, the
price of machinery services are increasing in some areas.
Source: The JICA Study Team (based on questionnaire)
Figure 4-1 Issues Relevant to Agricultural Producers
0 5 10 15 20 25
Storage facilitiesMaintenance
Distribution of spare partsDeficit funds
Cultivation technologiesPrice of fuel
Quality of fertilizerAccess to fertilizer
Cheap farm gate priceAccess to high quality seedes
Price of fertilizerTransportation
Accessibility to irrigationAccessibility to machinery services
Limited sales channel
Agricultural machinery holder
User of machinery service
No machine holder and no service user
70
On a related note, problems about the quality of agricultural inputs including fertilizer and
seeds, prices of inputs, supply quantity, cultivation technologies, necessary funds for
agricultural production, spare parts of machines and maintenance, and storage facilities of
agricultural products are also noted to be problematic. Additionally, the price of fuel also was
indicated as a key issue of agricultural machinery in the interview. As shown in Figure 4-2, the
fuel price tripled since the last decade. The prices of lamb and flour are not farm gate prices but
retail prices, so the inflation rate of their farm gate prices might be lower than retail prices.
Source: The JICA Study Team (based on the information of Kyrgyz Central Bank and National Statistics Committee)
Figure 4-2 Index of Retail Prices for Fuel, Flour, Lamb (in USD, 2003 as the base)
Regarding the purchase of agricultural machinery, of course among the farmers who do not
have machines, there are farmers who prefer to purchase machines. Machine preference and the
manner of purchasing varies, such as leasing for new machine purchases and loan for
second-hand machine purchases, but many farmers desire to set the lease or loan conditions as a,
“lower interest rate and longer term redemption period”. According to the results from farmers
who already have machines (Figure 4-3), the most common answer was “machinery
performance” (power output of the machine which suit their needs) as a point when they
purchase additional machines. In the second place, four issues: country of origin, price,
robustness/durability, price and accessibility of spare parts had the same number of answers.
There were a limited numbers of answers, but ease of maintenance and compatibility of
implements were also noted.
100
120
140
160
180
200
220
240
260
280
300
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Gasoline,1Liter
Flour, 1kg
Lamb, 1kg
71
Source: The JICA Study Team (based on questionnaire)
Figure 4-3 Conditions for Selection for Agricultural Machinery Purchases
Work Efficiency of Decrepit Harvester Combines
Operation capabilities of decrepit combines harvest at a low rate, and this results in
harvesting losses, which results in a 30% decrease in production at times. This harvesting loss
data is referred to in various documents. According to MA & LR, this harvesting loss data is
calculated from the demonstrated results of farmers who provide machinery harvesting services
and for combine dealers for sales promotion.
Stones on the farmland
On farmland, there were large numbers of round shaped fist-sized, or bigger, stones. During the
field research, the research team discovered that the bigger sized stones accumulated next to
farmlands. Farmers seem to carry these stones away from their farms, but it seems that they
cannot remove all the stones. There is the possibility of breaking the stones by using agricultural
machinery on farmland.
4.1.8 Agricultural Machinery Service Agencies
The machinery service agencies in Kyrgyz are quite limited, and most of them are individual
farmers and agricultural corporations who have agricultural machinery. The issues surrounding
them, which are shown in the Figure 4-2, are the same as other farmers to a varying degree.
4.2 Problems of the Agricultural Machinery Market
The agricultural market in Kyrgyz has developed rapidly in the last 5 years with the financial
support of the Government and a quick expansion of machinery distributors. It is important that
0 5 10 15 20
Design
Compatibility of implements
Easiness of maintenance
Accessibility of spare parts
Robustness, Durability
Price
Country of origin
Machinery performance
72
the market be developed from now on, so that farmers will be able to choose the machinery
themselves, in accordance with quality and the cost performance. A proper information service
about agricultural machinery should be provided by the Governments, financial institutions
offering the lease, manufacturers and dealers in order to realize the market.
A milestone approach was taken by the
Government. The Ministry of Economy hosted the
“International Agricultural Exhibition” “Aiyl-Agro
2013” in May 2013 in Bishkek city. This is an
international exhibition of agricultural and
livestock machinery, and food processing
machinery, and there are about 6,000 visitors in
total. Various kinds of machinery produced in CIS
countries, Europe, USA, Turkey, China, etc. were
displayed at the exhibition. The exhibition was very useful not only for farmers and concerned
personnel to collect interested information, but also for manufacturers and suppliers to sense
responses and requests from potential customers.
The Governments of European countries and the USA intensively provided necessary support
and information to participating manufacturers from their own countries in the exhibition. Such
support from the Government was very helpful to manufacturers who intend to start their
business in Kyrgyz. While the Government has a plan to host the exhibition again in May 2014,
it is desirable to organize the same exhibition in Osh city, targeting farmers in the southern
region.
Manufacturers and suppliers usually focus their business on popular and profitable
agricultural machinery for increasing profit. Therefore, small-powered combine harvesters
applicable to Osh province, occupied by small-scale farmers or rice combine harvesters desired
by farmers in the Uzgen district, are not available in the Kyrgyz market. The MA & LR should
collect information about actual demand of such machinery and strong demand, but from
limited farmers. Then, the MA & LR should develop a support system for machinery
procurement by implementing a pilot operation and a subsidy system for reducing the financial
burden of leases.
4.3 Problems of Maintenance of Agricultural Machinery
Regarding supply of spare parts, some tractors introduced by the donor countries, have issues
“Aiyl-Agro 2013” in Bishkek
73
regarding high price and long delivery periods, since tractors are not generally utilized in the
country. Other machinery that is made in Belarus and Russia, have supply-and-demand issues in
some regions, but basically machinery spare parts are presently available. Recently the number
of Chinese made machinery has increased, and the supply of the spare parts system is gradually
improving as well.
Farm implements, chiefly for plowing, harrowing and leveling work, repair the old model
implements and are still widely being utilized.
As mentioned in 3.3.2, farmers and private repair engineers are repairing agricultural
machinery themselves. However, they do not use the measuring tools, and they cannot properly
judge repair work conducted. This is one of issues to be improved for their proper repair. To
improve this for such works, it is recommended that technical colleges and vocational schools
be fully utilized. The following countermeasures are to be considered.
Based on the agricultural development policy, teaching materials and curriculum should be
carefully reviewed, together with the ministries concerned.
The government should gradually renew the outdated training equipment like facilities,
machines, educational materials etc.
Re-education for the farmers, short-term training courses like cultivation technology,
operation and machinery services, farm management etc. should be conducted during
off-season farming.
Personnel training, mentioned above, should be considered as a agricultural mechanization
policy.
4.4 Problems of Financing for Agricultural Mechanization
The following problems of agricultural financing are recognized by the JICA Study.
(1) Less understanding of the lease
The leasing system is not well understood by benefited farmers. They have limited
knowledge about the system. Dissemination measures should be taken with due attention to the
following matters:
Differences between a loan and a lease
Different taxation imposed on a loan and a lease
Customs duty
Advantages and disadvantages of loans and leases
Information sources of the leasing system
74
Procedures and documents necessary for the lease
The Union of Kyrgyz Banks participated in workshops to train business women organized by
ADB as a consultant, and explained the available leasing system to the participants. The Union
also has a plan to organize a forum on the leasing system in “Aiyl-Agro 2014” expected in May,
2014. It is recommended to organize a similar workshop or forum in the provinces.
(2) The increase in financial institutions providing the lease
The number of leases provided by other banks other than Aiyl Bank is increasing with reform
of the taxation system. However, banks have no choice but to provide a lease with higher
interest rates than Aiyl Bank, as they do not qualify for the Government subsidy or donor’s fund
to support their leasing schemes. The number of financial institutions providing the lease and
their staff concerned should be increased in order to secure smooth provisions for the lease. It is
necessary to increase the number of institutions that can provide leases with the same conditions
as Aiyl Bank.
(3) Taxation regarding the lease
The leasing business in Kyrgyz started in 2002 when the Law on Finance leases (leasing) of
the Kyrgyz Republic was enacted. However, the number of leases grew at a sluggish pace at the
beginning because of the heavier burden of taxes than the loan. As to taxes for the lease, 10% of
income tax, 10% of interest tax, 2-3% of transaction tax and VAT were imposed. Consequently,
the accumulated tax was 24%. In order to stimulate the lease by addressing the above taxation
issue, the Government has taken the following measures:
Reform in customs duties in 2011
Revision of tax regulations in 2012
VAT exemption of agricultural machinery for leasing
Privilege of tax exemption (income tax, interest tax and transaction tax) to the leasing
business (to be reviewed whether or not the tax exemption will be continued in 2017)
Although the taxation issue has been mostly resolved by the above measures, a problem still
arises during the customs clearance. Due to the different interpretation of the relevant
regulations, the VAT exemption measure of agricultural machinery for leasing is not well
understood by some customs officers. Smooth customs clearance of machinery is sometimes
prevented due to different interpretations. The Union of Kyrgyz Banks which was involved in
taxation reform has a plan to address the different interpretations by issuance of a handbook
concerning the tax system. According to legal staff of the Union, there may be a discrepancy
75
between the tax regulations and other relevant laws. Presently, reform of other relevant laws is
gradually under way.
(4) Multiple debts
Among farmers interviewed, there are some farmers who cannot access an agricultural loan
of Aiyl Bank after getting a lease from the bank. According to the farmers, they are applying for
microcredit to procure seeds, fuel and chemical fertilizers while they utilized the Aiyl Bank loan.
After clarification of the situation with the bank, it has become clear that they cannot apply for
the loan only because of their solvency, as the bank does not have regulations prohibiting the
duplication of loans or leases. The bank has evaluated that the farmers may not have enough
solvency to take a new agricultural loan. However, their financial burden becomes heavy, if
they apply for microcredit instead of the agricultural loan, since the interest rate of the
microcredit is higher than that of the agricultural loan. A more flexible operation of the loan
conditions should be considered by financial institutions. On the other hand, it is necessary for
debtor farmers to improve their management ability, so that they will be able to make a
reasonable financial plan and to refrain from making easy and multiple loans.
(5) Agricultural insurance
An interview survey of farmers revealed that some farmers gave up having a consultation with a
financial institution due to anxiety about the failure of repayment, although they are interested
in leasing or buying agricultural machinery. Even farmers who have already leased agricultural
machinery after an appraisal of their assets, such as houses and livestock, may have difficulty in
repaying the debt during the 7-year repayment term due to a natural disaster, like a drought and
a sharp fall in the prices of agricultural products. Agricultural insurance may ease farmers’
concerns over the default, and contribute to accelerating the purchase of agricultural machinery
by a loan or lease.
4.5 Causal Relationship of Subjects Concerning All of Agricultural Mechanization
In order to organize the subjects concerning agricultural mechanization, a problem tree
diagram is summarized (Figure 4-4 and 4-5). Although the subjects concern agricultural
mechanization, the problems concerned have achieved not only agricultural machines, but also
all the agricultural production field.
76
Figure 4-4 Schematic Analysis of the Problems on Agricultural Mechanization (1)
Agriculturalmechanization does notprogress.
The governmental policy aboutagricultural mechanization is notfixed.
There is no policy for agriculturalsector.
There is no policy foragricultural mechanization.
The funding ability of farmhousesis insufficient.
Since the production costs arehigh, profit does not occur.
Services by agriculturalmachines are expensive.
Fuel costs are high.
Service costs by agriculturalmachines are maintained at highlevel.
The number of the agriculturalmachines in the area are notsufficient.
Since the border with Uzbekistanwas closed in the southern area,combine harvesters cannot berented.
Fuel cost is high.Since the combine harvester isexpensive, there are fewfarmhouses that can purchase it.
Fertilizer costs are high.
Agricultural chemical costsare high.
Seed cost is high.
The working efficiency of oldagricultural machines is low.
Appropriate machine maintenanceand repairing are not conducted.
Farmhouses are maintaining andrepairing agricultural machineswithout appropriate knowledge.
For farmhouses, there are noopportunities to learn appropriatemaintenance and repairingtechnologies.
Genuine parts are not used.
The aged deterioration of theagricultural machine isprogressing.
Transportation costs ofagricultural products are high.
Farmhouses do not own tractorsor trailers.
During the harvest season, it isdifficult to access agriculturalmachinery services.
Fuel cost is high.
The harvest yield is low.Large percentage of rain-fedproducts are cultivated.
Irrigation facilities become olderand cannot be used.
High quality seeds cannot beobtained.
Seeds are not renewed. High quality seeds are expensive.
The necessity for renewal ofseeds is not understood.
High quality fertilizer can notbe obtained.
Since the fertilizer isexpensive, it is difficult tosuficiently provide it.
Low interest loans for agricultureare not available.
Agricultural production workcan not be done at theoptimal time.
It is difficult to access to theagricultural machinery services atthe optimal time.
Agricultural machine serviceproviders prioritize working ontheir own farmland over otherfarmhouses.
Quantity of agricultural machineservice providers is not enough.
Large harvest loss occurswhen old combine harvestersare used.
Renewal of combine harvesters isdelayed.
Combine harvesters areexpensive.
Cultivation techniques are notunderstood well.
The spread system of agriculturaltechnology is underdeveloped.
Production losses are caused,because agricultural productionwork can not be done at theoptimal time.
Quantity of agriculturalmachine service providers isnot enough.
Price of agricultural products islow.
Since there are nowarehouses, all agriculturalproducts should be sold atthe time of harvesting.
Quality of the agriculturalproducts are not uniform.
Sorting and classification ofagricultural products are not done.
Necessity of the sorting andclassification of agriculturalproducts are not understood byfarmhouses.
Lack of adequate equipment forsorting and classification.
Since the buyer of theproducts is fixed, there is nocompetition in aspects ofprice and/or quality.
77
Figure 4-5 Schematic Analysis of the Problems on Agricultural Mechanization (2)
Processing for giving added valueto agricultural products is notestablished.
There are no processingfacilities in the area.
Investment for agriculturalprocessing sector does notprogress.
Market demand for agriculturalprocessed products is notresearched.
There is no information aboutprocessing facilities (in aspects ofspecifications and prices etc.)
There are not enough financialinstruments for investment.
Banks do not have enoughknowledge about the financing ofa processing plant.
Small farmhouses (less than 1 ha)have difficulty accessingagricultural machine services.
There are no agriculturalmachine services that canaccept small farmhousesrequirements.
There is no institution to realizeagricultural machine service, atthe focused area where smallfarmhouses are centered.
There are some farmhouses thatcannot make leasing contracts,even if they pass probation.
There is not enough in the bankfor seed funds leasing.
Finencing from thegovernment is insufficient.
Government supports only byusing counter part funds of grantaids by the Government of Japanand China.
Funds from the donors arenot sufficient.
This is not a priority sector fordonors.
There is no policy for agriculturalmechanization.
The results or necessity for theleasing system are not understoodwell by the persons concerned.
Only Aiyl Bank is performing low-interest rate leasing.
Other banks do not get lowinterest state funds for agriculturalmachine leasing.
Shortage of manpower in banks.Number of bank employeesconducting expertise of leasingcontracts is not enough.
Leasing conditions of banks aresevere.
Leasing conditions for high pricedcombine harvesters and lowpriced tractors are the same.(Initial payment, interest and termsof repayment)
Since leasing condition isbased on the governmentordinance, there is noinstitutional pliability.
Even the leasing of tractor withcomparatively low price is difficultto lease for small farmhouses.
Since leasing condition isbased on the governmentordinance, there is noinstitutional pliability.
If there are arrears in thecooperative social insurancepremiums, leasing contractscannot occur.
The financial health of theassociation was bad andprofits did not occur. And,social insurance premiumswere defaulted on.
After independence, men who didnot know about farm managementwere engaged in cooperativemanagement.
There is no agricultural machinewhich suited the cultivationenvironment.
Type of agricultural machineswhich are available by the leasingsystem are limited.
Agricultural machines for cropswith small quantity production,such as rice, are not introduced.
Secondhand agricultural machinesare expensive.
There are few machines whichappear on the secondhand marketof agricultural machines.
Old agricultural machines areused continuously.
Since cheap spare parts for oldagricultural machines are widelydistributed and used, oldmachines are used continuously,although their operationalefficiency is low.
Maintenance costs can bemaintained at low level, becausereplacement of parts andrepairmen of agricultural machinesare done by farmers.
Highly motivated farmhouses thatobtained new agriculturalmachines, also using oldmachines simultaneously,widening the cultivation area.
Loan conditions for secondhandagricultural machines are severe.(Annual interest is 18% and theloan limit is a maximum 10 years)
78
Current Status of the Government and Donors Against the Issues of
Agricultural Mechanization
Investigation of the Kyrgyz Government and Donors
Kyrgyz Government
After independence, the government’s approach towards agricultural mechanization has been
limited to grant aid (including counterpart funds), low interest loans and leasing through the
state bank or funds related to loan aid. There is no direct assistance in terms of technologies and
funds to farmers, dealers and private enterprises. Besides, currently the government has not
designed any policies pertaining to agricultural mechanization, so it is ambiguous regarding
what kind of assistance the government can provide in the future.
The Ministry of Education and Science and the Ministry of Work, Migration and Youth foster
agricultural machinery operators and mechanics at vocational training schools and technical
colleges across the country.
Major Donors
Food and Agriculture Organization (FAO)
FAO is mainly assists in the field of agricultural policy making and food security information.
Regarding agricultural policy, FAO published the research report, “Kyrgyz Republic Farm
Mechanization and Agricultural Productivity” in 2009, but FAO has not provided any tangible
assistance. According to FAO, the animal husbandry sector will be a significant field of
assistance in the country, and longitudinal assistance for this sector, such as human resource
development, upgrading production equipment and facilities, disease control, and research
programs will be needed in the future.
United States Agency for International Development (USAID)
The current USAID project that is related to the agricultural sector in Kyrgyz is the Kyrgyz
Agro-Input Enterprise Development Project (KAED) and the project assists with the following
fields. USAID commissioned this project to the International Fertilizer Development Center
(IFDC), and this organization is currently working on the project.
< Assistance Strategy of the KAED >
Cooperation in the field of animal husbandry, with the help of technical and technological
79
assistance for the introduction of modern management practices and improvement of
productivity
Capacity building of the seed production sector for high quality seed production and
distribution
Assistance for the improvement of food security (production of wheat)
Assistance of PPP promotion as a strategy to attract investment to the agricultural sector
Under the project, the following are the KAED 3 programs:
Program of the Economic Development Fund (EDF)
Phase I: 2011, Distribution of high quality seeds (4.1 million USD)
Phase II: 2012, Capacity building of seed production (7.4 million DM)
Phase III: 2012, Cooperation in the field of animal husbandry (8.5 million USD)
The Economic Development Fund which is under the Ministry of Finance, leased agricultural
machinery to farmers by using USAID grants. Regarding the collected money, the Ministry of
Agriculture, the Cabinet Office and Economic Development Funds agreed to reuse the collected
money for each sectors’ assistance in order to secure sustainability. Under the program of
capacity building for seed production, American and European manufacturers’ tractors and
combines are leased to farmers. The leasing conditions are at a 2% annual interest rate, 10 year
redemption period, and ownership shifts after the leasing term. Regarding the collected money,
this project will not take part in this component. And, this project will finish in September 2014,
but the further development of the decision has not yet occurred. According to the person in
charge of USAID, since current leasing conditions (the initial payment, interest rate, payment
term) are too strict, even middle-scale farmers may not apply for the leasing program.
The program of farmland rehabilitation
In the period 2011-2012, this program was involved in the rehabilitation of irrigation
facilities totaling 2,000ha abandonment cultivation areas in 5 locations of southern parts of
Kyrgyz, and the diffusion of cultivation technology.
The program of Public Private Partnership: PPP
In this program, KAED provides grant funds to the government, not directly to private firms,
for investment in agricultural machinery and facilities. And then, through the Economic
Development Fund which is under the control of the Ministry of Finance, whose funds are used
80
in leasing transactions. KAED also assists with trainings on the use of the purchased equipment,
and cultivation technologies for farmers. The details of the PPP program are described below.
Eurasia Group, LCC
In 2009, the private company Eurasia Group (headquartered in Switzerland) was established
as an agricultural firm that started machinery services for farmers. Eurasia Group established a
local corporation in Kyrgyz with the cooperation of international agricultural firms such as John
Deere, Pioneer, DuPont and Monsanto and has begun agricultural machinery services.
Cooperative companies sell seeds (wheat, sunflower), fertilizer and pesticides to farmers
intending to promote the improvement of quality and production as a synergistic effect. Eurasia
Group is an authorized John Deere dealer in Kyrgyz.
Oasis Agro, LCC
In 2011, KAED committed to work with Oasis Agro in order to promote investments for
poultry, production of chicken eggs and high quality foodstuff and soybeans. KAED established
a partnering relationship with soybean farmers and assisted in cultivation technologies in order
to produce high quality chicken eggs and edible oils.
Kumtor Gold Company, CJSC
In 2013, Kumtor Gold donated 200,000 USD to the rehabilitation (farmlands, irrigation
facilities) project of cultivation of abandoned areas, where south Issyk-kul lakeside villages are
controlled, as a CSR: Corporate Social Responsibility program. Also, the KAED and local
farmers input 170,000 USD (including labor force) for this program. About 1250 ha of the
targeted areas were invested in (rehabilitation and maintenance of farmland and irrigation
facilities), and leased to farmers through bidding in October 2013. The KAED also assists in
cultivation technologies for the targeted farmers.
Other donors (Turkey, China, Eurasian Development Bank)
China
In 2006, 1,200 units of Chinese tractors (100 million Chinese yuan) were granted, and
Chinese assistance to Kyrgyz has started at that time. Tractors were transferred from the Kyrgyz
Government to the state leasing company “Kyrgyz Aiyl Service” on a 10 year loan at a 16%
annual interest rate. The state company used leased tractors for its own agricultural production
or partially transferred to farmers in the lease (10 year term lease, without interest). But due to
the lack of after-sales service, it was difficult to obtain spare parts of Chinese tractors at that
81
time. Although the Aiyl Service leased their machinery to farmers without an interest rate, the
company had to pay an interest rate to the government. Due to the inability to obtain spare parts
and the unbalanced situation regarding the interest rate between farmers, the company and the
Government, this scheme could not continue. 18
In 2011, China donated 267 units of Chinese tractors (YTO904) and its spare parts (30
million Chinese yuan = 4.66 million USD). These tractors were transferred from Kyrgyz
government to the Aiyl Bank, and then leased to farmers (State Leasing-1). The counterpart
funds were utilized for re-leasing as a State-Leasing phase 2. In this scheme, leasing machinery
is not limited to Chinese machines, therefore the Belarusan tractor MTZ and other attachments
are also leased. Since the State Leasing-1 is low interest rate leasing, the target machines for
leasing are limited to high price machinery, such as combines.
Moreover, Aiyl Bank has concluded an agreement with the Chinese government, and a credit
line was set at 3 million USD to purchase tractors for leasing from Chinese dealers. Loan
conditions are a six month interest Libor plus 6.5%, and the period of redemption will be June
2017. The machinery leasing conditions of this scheme are a maximum leasing term of 5 years,
annual interest rate of 15 to 17 %, dollar-denominated leasing, Chinese tractors (YTO) only.
Bills for the tractors are directly paid by the Chinese Development Bank to the manufacturer.
Turkey
In June 2012, the Turkish government committed to providing 106 million USD to Kyrgyz
for social economic development. Of this amount, 100 million USD is loan assistance (interest
rate: 0.1%, redemption period: 20 years) and 6 million USD is grant aid. Kyrgyz Government
utilized this assistance for the leasing program of Aiyl Bank. In February 2013, the government
prorated 225 units of Belarusan tractors which was determined by bidding (232,831,500 som =
approximately 5 million USD). These became the underlying assets of “state leasing” 3 of Aiyl
Bank, and the counterpart fund of these assets are utilized for re-leasing.
Eurasian Development Bank: EDB
The Eurasian Development Bank was established by Russia and Kazakhstan in 2006. This
international financial institution aims to assists member countries’ economic growth, promote
trading and economic cooperation among the members, and assist with integration in the
Eurasian area. Current member countries are Armenia, Tajikistan, Belarus, Kyrgyz, Russia and
18 FAO 2009, “Mechanization and agricultural productivity of the Kyrgyz Republic”
82
Kazakhstan. According to MA & LR, Kyrgyz Government approved EDB’s loan (20 million
USD) in December 2012. This loan will be prorated for the agricultural machinery leasing of
Aiyl Bank in 2014.
Intervention of the Japanese Government
Non-Project Type Grant Aid and Grant Assistance for Underprivileged Farmers (2KR)
From 1995-2005, the Japanese Government provided 842 tractors and 304 combine
harvesters to Kyrgyz through Non-project type grant aid and 2KR. After independence in 1992,
public farmland was segmentalized and distributed to each household surrounding Kolkhoz and
Sovkhoz. Consequently, a large number of farm households began cultivation. Agriculture
machinery and equipment was distributed to a limited number of agriculture cooperatives and
individual farmers, and renewal of agriculture machinery was stopped by a disruption of the
Soviet Union since independence. As such, farmers had to buy agriculture machinery on the
market, but there were neither dealers nor agents of manufacturers in Kyrgyz. Furthermore,
there were no financial products available at commercial banks for purchasing machinery.
Farmers who could access agriculture machinery were very limited at this time.
Agriculture machinery provided by the Japanese Government at this period, was leased
mainly to agriculture cooperatives and machinery service companies to provide machinery
services to farmers who cannot access it. Repayment of this leasing has continued to be
undertaken by the State Fund for Economic Development (the Ministry of Finance).
Manufacturing countries of procured machinery of the above grant aid project were varied, such
as Russia, Belarus, Finland, Germany, and Poland. Agents of manufacturers of the machinery
no longer run their business in Kyrgyz, and never supply spare parts and any after-sales services.
However, genuine spare parts for the Belarus tractor, which have been used during the Soviet
Union era, namely MTZ, are available at a new agent in Bishkek and at nationwide bazaars.
Especially regarding machinery, which has been used since Soviet the Union era, Chinese made
imitation spare parts are also available in bazaars. Machinery owners can buy spare parts for
other manufacturers through dealers in Bishkek, but delivery time is as long as approximately 3
weeks, and the price is 3 to 5 times higher than that of MTZ.
In the case of 2KR in Kyrgyz, as previously mentioned, procured machinery is leased to
cooperatives and service companies. Repayment of machinery is collected and reserved in the
2KR Counterpart Fund for economic development. Due to a short repayment period, the
counterpart fund has not been reserved as scheduled. Leasing conditions for the 2KR program
83
were the following:
Machinery expense is the FOB price at country of origin,
Necessary collateral is 20% of the machinery expense,
0% interest rate, and
Repayment (leasing) period varied from 3 to 6 years after signing the Exchange of Note (E/N)
Since it took at least one year to receive the requested machinery at the recipient country after
E/N signed, the repayment period was actually a maximum of 5 years. The 2KR report said that,
at this time, lessees and the Government of Kyrgyz requested that the Japanese Government
extend the repayment (leasing) period up to 10 years19. The 2KR counterpart fund was utilized
for procurement of an additional 417 tractors and 70 combine harvesters, and a seed distribution
project.
JICA Training
From 2008-2013, the Kyrgyz Government sent thirteen participants to the JICA training
course “Agricultural Mechanization for Central Asia and Caucasus” being held at Tsukuba
International Training Center in Japan. Of which, nine participants came from the University of
Agriculture, two came from the Technical Inspection Bureau of the Ministry of Agriculture, and
two came from agricultural enterprises.
A goal of the training course is that participants complete a technical proposal for their
country on research and development, extension, and operation and maintenance of agriculture
machinery through industry-academia-government collaboration, which they learned from
Japan’s experience.
One participant from the University of Agriculture, who drew up an action plan for operation
and maintenance of agriculture machinery during the training, has tried to acquire a budget to
implement the action plan. Another proposed the concept of cost reduction and timeliness of
farm work for human intensive rice production in the southern area. Some participants extended
their knowledge and experience learned in Japan to other lecturers and students, or proposed
research work on agriculture machinery services. However, it was very difficult for them to
materialize their plans due to a limited budget at the university. In general, since independence
government agencies have been facing a budget shortage, and collaboration with the private
sector has not worked enough.
19 Grant Aid for the Increase of Food Production (2KR) in Kyrgyz Republic, 2004, JICA
84
Tab
le 5
-1
Res
ult
s of
Non
-pro
ject
typ
e G
ran
t A
id a
nd
2K
R
Typ
e F
isca
l Y
ear
EN
am
ount
s G
oods
N
umbe
rsM
odel
/ Man
ufac
ture
r (C
ount
ry o
f O
rigi
n)
Spe
cifi
cati
ons
FO
BU
nit
pric
es
(yen
)
Non
-pro
ject
ty
pe G
rant
A
id
1995
1 bi
llion
yen
(0
.526
bill
ion
yen
for
agri
cult
ure
mac
hine
ry)
Tra
ctor
206
MT
Z 8
2.0
(Bel
arus
)T
30A
-80
(Hun
gary
)M
TZ
(80h
p)T
30A
-80 (
30hp
)
Com
bine
har
vest
er25
S
eed
dril
l40
S
eed
clea
ner
15
Spa
re p
arts
1
1996
1 bi
llion
yen
(0
.53
billi
on y
en
for
agri
cult
ure
mac
hine
ry)
Tra
ctor
296
Bel
arus
82.0
(Bel
arus
)
P
otat
o ha
rves
ter
Com
bine
har
vest
er46
RO
ST
SEL
MA
SH
NIV
A(R
ussi
a)
S
pray
er
3-
whe
el tr
acto
r10
C
raw
ler
trac
tor
50
1997
1 bi
llion
yen
(0.4
58 b
illio
n ye
n fo
r ag
ricu
ltur
e m
achi
ner y
)
Tra
ctor
18
Plo
w18
Com
bine
har
vest
er38
19
99
0.1
billi
on y
enN
o ag
ricu
ltur
e m
achi
nery
2002
0.3
billi
on y
en
(0.2
25 b
illio
n ye
n fo
r ag
ricu
ltur
e m
achi
nery
)
Ref
rige
rate
d tr
ack
2M
AZ
-975
850
Tra
ctor
121
Bel
arus
82.0
(Bel
arus
)80
hp
See
d dr
ill
50S
PU
-4D
C
Tra
ctor
M
AZ
-642
208
Sub
tota
l
3.4
billi
on y
en (
1.73
9 bi
llion
yen
for
agr
icul
ture
mac
hine
ry)
2KR
1996
0.
3 bi
llion
yen
T
ract
o r56
MT
Z 8
2.1
(Bel
arus
)80
hp2,
544,
950
Com
bine
har
vest
er19
RO
ST
SEL
MA
SH
NIV
A(R
ussi
a)15
5hp
6,83
2,38
0 19
97
0.3
billi
onye
nC
ombi
ne h
arve
ste r
28M
asse
y F
ergu
son2
3(F
inla
nd)
115h
p, w
idth
4.2
m7,
730,
000
1998
0.
3 bi
llion
yen
Com
bine
har
vest
e r26
CL
AS
S D
omin
ator
88V
X(G
erm
any)
159h
p9,
000,
000
1999
0.
27 b
illio
n ye
n 4W
D tr
acto
r70
ZP
C U
RSU
S SA
161
4(P
olan
d)15
5hp
2,53
2,15
8 P
low
70U
NIA
TU
R 1
20 B
40.4
+1/
U-1
38/2
/"16
inch
es, 5
row
s17
8,56
5 20
00
0.33
bill
ion
yen
Com
bine
har
vest
e r44
SA
MPO
RO
SEN
LE
W 2
065
(Fin
land
)20
0hp
20
02
0.3
billi
onye
nC
ombi
ne h
arve
ste r
43S
AM
PO R
OSE
NL
EW
206
5(F
inla
nd)
200h
p5,
831,
000
2005
0.
2 bi
llion
yen
Com
bine
har
vest
er35
RO
ST
SEL
MA
SH
NIV
A(R
ussi
a)15
5hp
4,60
0,96
0 S
ub to
tal
2
billi
on y
en
Tot
al
5.
4 bi
llion
yen
(3.
739
billi
on y
en f
or a
gric
ultu
re m
achi
nery
)
Sou
rce:
Dev
elop
ed b
y th
e JI
CA
Stu
dy T
eam
ref
erri
ng to
doc
umen
ts f
rom
the
Em
bass
y of
Jap
an in
Kyr
gyz
For
the
FO
B u
nit p
rice
, the
ann
ual a
vera
ge e
xcha
nge
rate
of
Mit
subi
shi U
FJ
Fin
anci
al a
nd C
onsu
ltin
g (h
ttp:
//m
urc-
kaw
ases
ouba
.jp/f
x/pa
st_3
mon
th.p
hp)
was
use
d.
85
Consideration of Directions and Fields for Support Programs for Agricultural Mechanization
Approach for Promotion of Agriculture Mechanization
Countermeasures for problems analyzed in sub-chapter 4.5 were considered and listed in
Table 6-1. The Implementation agency and target period (short, medium and long) for each
countermeasure is shown in the table.
The main issue to be tackled for agriculture mechanization in Kyrgyz is the improvement of
quality and quantity of agriculture machinery. In other words, to increase agriculture
productivity by promoting renewal of machines that have low working efficiency, and the
acceleration of new tractor introductions to potential tractor owners to decrease machinery
shortage. This i) stems a decrease in the number of machines, ii) increases productivity by
in-time work and reducing harvest loss, and iii) increases the production area. As a result, it can
contribute to the achievement of “improvement of production and productivity” as a sector
development goal. Furthermore, it can improve access to machinery service for small-scale
farmers by increasing the number of machinery in the area where small plots are dominant.
The key program for renewal of agriculture machinery is the leasing program, and its
important role will continue in the future. However, in order to accelerate the renewal of
machinery with the leasing program, some issues in both public and private sector still remain.
The following are urgent and important issues and countermeasures. Institutional and Administrative Capacity Development of Agriculture Mechanization
At the time of this study, there were two policies on agriculture mechanization available in
the agriculture strategy in Kyrgyz. One was agriculture mechanization through public-private
partnership, and the other was the promotion of the leasing program. Neither policy had any
detailed actions or measures. In order to promote agriculture mechanization, the government
should show clear and detailed actions to the public: when and who will do what regarding
agriculture mechanization in Kyrgyz. Therefore, the establishment of an agriculture
mechanization plan, as a basis for various actions is necessary. Furthermore, organizational and
administrative capacity development to implement the plan is necessary to improve the Ministry
of Agriculture. In particular, appropriate manpower and human resource development are urgent
issues.
Machinery and facilities are one of the inputs for agriculture production. The balanced use of
other inputs, such as seeds, fertilizers, and chemicals, and appropriate cultivation techniques,
and farm management are important. In this regard, it is recommended to collaborate with the
private sector, other departments of the ministry, and other ministries concerning human
resource development.
86
Strengthening the Leasing Program
Since the initiation of the leasing program at Aiyl Bank, the national agriculture bank, in
2011, renewal of agriculture machinery has accelerated. However, the number of tractors in the
country is still two-thirds or less than during the level of the Soviet Union era. At the time of
this study, 150 farmers finished a qualification examination in 2013, but they were waiting to
receive new tractors, because of the shortage of funds for leasing. On the other hand, the leasing
program is currently utilized mainly for tractors, but a limited number of farmers can access this
program because of strict qualification examination conditions. Expansion of beneficiaries by
maintaining the present repayment rate should be taken into consideration through a review of
qualification examination conditions and the improvement of screening practices.
In the future, demand for machinery will shift from the tractor to the combine harvester for
both renewal and newly introduced machinery, but with the same leasing conditions, as tractors
are not easy for farmers to lease who want to lease a much more expensive combine harvester20.
This case requires a review of the leasing conditions as well. Furthermore, it is necessary to pay
attention to small-scale farmers to access machinery services, especially in the southern region.
Special measures, such as a preferential tax system, could be applied to service providers in
such region or area.
The number of tractors, that past more than 20 years of installation and the shortage number
has reached about 25,000. If this tractor number could be supplied to the market within 10 years,
2,500 per year of leasing contracts should have to be completed. 650 tractors (1.3 million USD),
including the number on the waiting list were contracted by Aiyl Bank in 2013. This contract
number is the maximum performance for Aiyl Bank in its capacity of both financial and
manpower. Private commercial banks also provide leasing services for agriculture machinery,
but few farmers utilize their services, as the interest rate is 15% higher than it is for Aiyl Bank.
In order to expand the leasing program, the utilization of funds and the manpower of private
commercial banks has to be taken into consideration. For example, the government could
support interests, if private banks could provide leasing services with the same leasing
conditions as Aiyl Bank. An increase of funds for leasing programs and human resource
development for qualification examinations are necessary as well.
For qualification examinations, the financial status of farm households in the past years was
mainly examined, but cost reduction by efficient work, the decrease of opportunities lost by
machinery use, the increase in service fees from machinery service as well as the cost increase
for machinery after machinery is introduced is not considered. The number of beneficiaries of
the leasing program could be expanded by examining both the financial status and future
20 Amount of payment will be 154,000 som/year for one tractor (MTZ) and 616,000 som/year for a combine harvester (NIVA)
87
business plan. Matching service of service providers and receivers can also help for business
planning on the provider side and farm management at the receiver side. Banks and local
governments should work together on sharing and providing information.
Especially in rain fed cultivation areas, in order for farmers to easily access the leasing
program, development of a financial product like agriculture insurance which guarantees a part
of the harvest, should be considered. Capacity Development of Farmers
In order to accelerate the number of leases and promote new-tractor sales, more farmers have
to be able to afford to buy agriculture machines by improving their farming management,
cultivation techniques, and market access. In addition, most farmers maintain and repair their
machines themselves by watching other people. Overhaul of a tractor engine, without
specialized tools, is not uncommon in Kyrgyz. However, maintenance and repair without
appropriate knowledge and technique often worsens the performance of machines. In order to
maintain the original performance of machinery for a certain machine’s age, it is necessary to
train farmers on the operation and maintenance of agriculture machine and equipment with
proper maintenance tools.
Improvement of facility and equipment of human resource development organization at a
regional level
Kyrgyz has no public extension service. It is difficult for farmers to access technical
information on cultivation, and operation and maintenance of machines and equipment. On the
other hand, various vocational schools and technical colleges exist countrywide, and some
schools and colleges have agriculture and agriculture machinery courses. These schools and
colleges could be utilized for the re-education of farmers on cultivation techniques. Since most
schools were established in the Soviet Union era, teaching facilities and equipment are
old-fashioned and do not meet the needs of farmers. Improvement of teaching facilities and
equipment for capacity development of farmers should be considered.
Improvement of infrastructure for stable agriculture production
Due to the malfunction of the irrigation facility due to age, farmland that relies on rain-fed
agriculture is increased, and causes low productivity and unstable production. The improvement
of the irrigation facility and proper maintenance of the existing facility is taken into
consideration.
88
Fields and Direction of Japanese Government Support on Agriculture
Mechanization
The assistance of the Japanese Government should basically go along with the development
direction of Kyrgyz. The following are possible opportunities of assistance to Kyrgyz for
agriculture mechanization. Figure 6-1 shows the agriculture mechanization of Kyrgyz and
possible assistance by the Japanese Government.
(1) Technical Cooperation on Institutional Capacity Development of Agriculture
Mechanization (Expert dispatch, training program)
Grasping the present number of agriculture machinery in the country is important to
establish an agriculture mechanization plan. However, deletion registration of defunct
machinery started just 2 years ago, and it is still ongoing. In order to obtain accurate figures,
it is necessary to accelerate deletion registration work in cooperation with the local
government office. An expert would be able to advise on the planning of agriculture
mechanization and its process as well as the institutional development of the Ministry of
Agriculture.
(2) Increase funds for leasing and advice for the leasing program (Loan, Dispatch of expert,
Training)
The present amount of the fund could not meet the demand for leasing. The capital
increment of the fund can be considered as loan assistance. Advice on the appropriate
leasing system / program (the review of the interest rate, repayment term, and qualification
examination conditions, improvement of farmer’s financial literacy), and the capacity
building of the bank staff are considered technical assistance.
(3) Utilize agriculture machinery and equipment procured by 2KR for the leasing program
(Grant aid)
Providing agriculture machinery and equipment procured by 2KR for the leasing program
has the same effect as the increment of capital. However, conditions of reserve for the
counterpart fund have to be consistent with the existing leasing condition. The
manufacturer and model of machinery has to meet the needs of farmers in terms of
availability of spare parts and ease of operation and maintenance.
(4) Technical Assistance of Agriculture Credit and Insurance System (Dispatch of expert,
Training)
Advise on the development and improvement of financial products other than the leasing
program, such as loans for agriculture inputs, livestock, and second-hand machinery, and
insurance products.
89
(5) Capacity building of farmers on cultivation techniques and farm management (Technical
cooperation project, Grass-root grant aid)
In order to enhance the paying capacity and stability of the farmer in the leasing program,
farm management, and cultivation techniques of major crops, including the utilization of
agriculture machines and equipment should be improved.
(6) Improvement of Teaching Facilities and Equipment in Educational Institutions (Grass-root
grant aid)
The technical extension system for farmers is not well organized in Kyrgyz. By installing
or renewing teaching facilities and equipment at vocational schools, these schools can be
utilized for farmers to learn cultivation techniques, and machinery operation and
maintenance techniques. Simple and basic tools and equipment, such as hand tools, special
tools, measuring equipment, and welding equipment, can be considered for re-education
training equipment.
(7) Improvement of Maintenance Equipment for Irrigation Systems, or Improvement of
Irrigation Systems (Loan or Grant aid)
In order to increase productivity and stability of production, dredging equipment (excavator,
power shovel, bulldozer) for maintenance of irrigation canals should be installed.
Improvement of dysfunctional irrigation systems is also necessary.
90
Figure 6-1 Direction of Promotion of Agriculture Machinery and the Assistance of Japan
Possibility of Business Expansion of Japanese Agricultural Machinery Manufacturers
For any machinery manufacturer, Kyrgyz cannot be a single target market in this area,
because the scale of the farming population and the cultivation area is not big enough to recover
investment, such as the cost for the establishment of sales networks, spare parts supply networks,
and after-sales service networks, staff training, and sales promotion. Therefore, other
neighboring countries have to be considered as a target market. A simple market analysis by
machinery is shown below. The market scale here is Kyrgyz domestic market.
Small-Medium-sized Tractors
More or less, 80hp-tractors are preferred in Kyrgyz. The market scale of this capacity tractor
is relatively big, and currently used countrywide. This means that in order to sell this capacity
91
tractor, the spare parts supply and after-sales service network has to be available countrywide as
well. For newcomers, they have to invest in the establishment of a sales network, a spare parts
supply network, and after-sales service network, staff training, and sales promotion. Meanwhile,
in this capacity, the Belarus tractor has been dominant in the market and the Chinese tractor
begun to gain a foothold in Kyrgyz. As such, newcomers have to show advantages over the
Belarus and Chinese made tractors in regards to price, capacity, quality, and after-sales services.
The price of a Japanese made tractor is 4 times more expensive than Belarus and Chinese made
tractors.
Market segment setting: Selling small-medium sized tractors to small-medium scale
farmers
Market size: Relatively big
Necessity of countrywide network of spare parts supply and after-sales services
Competition with Belarus and Chinese tractors exists.
Large-sized Tractor
There is little demand for large-sized (more than 100hp) tractors in Kyrgyz. The northern
region in which the relatively large cultivation size farmer exists has a small demand. According
to interviews with dealers in Bishkek, only 13 large-sized tractors were sold in 2013. The
market size is small in Kyrgyz and it is necessary to consider the market in neighboring
countries. The spare parts supply and after-sales service can be covered in a limited area where
demand exists. Competitors of this size in Kyrgyz are manufacturers in Europe and the USA.
The price of a Japanese made tractor this size is 1.5 times more expensive than European and
American brand tractors.
Market segment setting: Selling a large sized tractor to large-scale farmers
Market size: Very small
Network of spare parts supply and after-sales services can be covered in a limited area.
Competition with Europe and USA manufacturers.
Machinery and Equipment for Rice Production
The cultivated area of the paddy is only 3,000ha in Kyrgyz, and production is concentrated
in the southern region. The market size is very small. If the spare parts supply and after-sales
service network for other machinery is available in the southern region, machinery and
equipment for rice production can be sold utilizing the present network. There is concern
regarding broken down machines due to many stones in the field during land preparation,
92
puddling, and transplanting.
Market segment setting: Selling small-sized rice production machines and equipment to
small-scale farmers in the southern region.
Market size: Very small
Network of spare parts supply and after-sales services can be covered in a limited area in
the southern region.
Chinese manufacturers once tried to sell small-sized combine harvesters, but they have not
continued. The reasons are unknown.
Many stones in the field are a concern.
Implements attached to Tractors
The market size of an implement is varied, except implements that are used for common
work, like land preparation. Demand for implements for vegetables, root crops and forage exists
in the northern region. Turkish made implements are well balanced in price and quality, and
they recently began a sales promotion in Kyrgyz. It is necessary to show the working
performance to farmers through demonstrations to convince them.
Market segment setting: Depending on the kind of work.
Market size: Depending on the producers, but not very big
Network of spare parts supply and after-sales service is necessary.
Need to compete with Turkish products which are price-and-quality balanced.
As done by manufacturers in other countries, in order to test and demonstrate the
performance of machines and implements (working accuracy, efficiency, fuel consumption,
etc.), Japanese manufacturers should bring their machines and equipment to agriculture
machinery exhibitions that are held once a year in Bishkek. The results could then be utilized
for further research and development. The Japanese Government might be able to provide
support for information distribution of the exhibition to the Japanese side, test machines and
equipment for agriculture related projects.
93
Tab
le 6
-1
Pro
ble
ms
and
Cou
nte
rmea
sure
s fo
r A
gric
ult
ura
l Mec
han
izat
ion
in K
yrgy
zsta
n
Fie
ld
Pro
blem
s C
ount
erm
easu
res
Impl
emen
tati
on
agen
cy
Tar
get
Per
iod
Typ
e of
A
ssis
tanc
e
Pol
icy
The
pol
icy
on a
gric
ultu
re
mec
hani
zati
on is
yet
to b
e av
aila
ble.
T
here
are
no
deta
iled
act
ions
oth
er
than
the
leas
ing
prog
ram
in th
e se
ctor
pol
icy,
and
sta
keho
lder
s do
no
t kno
w th
e pr
iori
ty s
ubje
ct a
nd
area
of
agri
cult
ure
mec
hani
zati
on.
To
gras
p ac
cura
te n
umbe
rs o
f ea
ch m
achi
ne.
To
esta
blis
h an
agr
icul
ture
mec
hani
zati
on p
lan,
and
sh
ow p
rior
ity
poli
cy a
nd a
rea.
T
o st
reng
then
inst
itut
iona
l cap
acit
y of
Dep
artm
ent o
f A
gric
ultu
ral M
echa
niza
tion
, whi
ch im
plem
ents
va
riou
s m
easu
res
for
mec
hani
zati
on.
Min
istr
y of
A
gric
ultu
re
Med
ium
Tec
hnic
al
coop
erat
ion
Fin
ance
F
und
amou
nt f
or le
asin
g pr
ogra
m
does
not
mee
t the
dem
and.
T
o in
crea
se c
apit
al o
f fu
nds
for
leas
ing
prog
ram
ut
iliz
ing
dono
r as
sist
ance
. T
o ut
iliz
e ca
pita
l and
hum
an r
esou
rces
of
priv
ate
com
mer
cial
ban
ks f
or e
xpan
sion
of
leas
ing
prog
ram
by
sub
sidi
zed
inte
rest
rat
es.
Con
cern
ed
gove
rnm
ent a
genc
y S
hort
L
oan
and
gran
t aid
Lea
sing
con
diti
on (
adva
nce
paym
ent,
inte
rest
rat
e, r
epay
men
t te
rm)
To
expa
nd th
e nu
mbe
r of
leas
e by
rev
iew
ing
leas
ing
cond
itio
ns, s
uch
as c
olla
tera
l, ad
vanc
e pa
ymen
t, in
tere
st r
ate,
and
rep
aym
ent p
erio
d.
Con
cern
ed
gove
rnm
ent a
genc
y F
inan
cial
inst
itut
ion
Med
ium
−
To
ease
leas
ing
cond
itio
ns o
f a
com
bine
har
vest
er,
whi
ch h
as th
e sa
me
cond
itio
ns a
s a
trac
tor.
M
ediu
m−
Qua
lifi
cati
on e
xam
inat
ion
is
conc
entr
ated
on
coll
ater
al a
nd
prof
itab
ilit
y of
pre
sent
pro
duct
ion.
To
find
pot
enti
al le
asin
g us
ers
by r
evie
win
g th
e co
nten
ts o
f qu
alif
icat
ion
exam
inat
ion
(not
onl
y re
cent
ye
ars
fina
ncia
l sta
tus,
but
als
o fu
ture
fin
anci
al s
tatu
s an
d bu
sine
ss p
lan)
Fin
anci
al in
stit
utio
n M
inis
try
of
Agr
icul
ture
Sho
rt
Tec
hnic
al
coop
erat
ion
94
Fie
ld
Pro
blem
s C
ount
erm
easu
res
Impl
emen
tati
on
agen
cy
Tar
get
Per
iod
Typ
e of
A
ssis
tanc
e
To
prom
ote
mat
chin
g of
mac
hine
ry s
ervi
ce p
rovi
ders
an
d re
ceiv
ers
by g
rasp
ing
loca
l dem
and
of m
achi
nery
se
rvic
es.
Sho
rt
−
Inte
rest
rat
e of
sec
ond
hand
m
achi
nes
is v
ery
high
. T
o re
view
and
eas
e lo
an c
ondi
tions
for
sec
ond
hand
ag
ricu
ltur
e m
achi
nery
. F
inan
cial
inst
itut
ion
Med
ium
−
Far
mer
doe
s no
t und
erst
and
wel
l m
erit
s, r
isks
, and
use
of
leas
ing
prog
ram
.
To
diss
emin
ate
info
rmat
ion
on a
gric
ultu
re f
inan
cial
pr
oduc
t thr
ough
var
ious
med
ia a
nd o
ppor
tuni
ties
. F
inan
cial
inst
itut
ion
Min
istr
y of
A
gric
ultu
re
Med
ium
−
Fle
xibi
lity
of
leas
ing
syst
em is
low
. T
o es
tabl
ish
a fl
exib
le s
yste
m f
or c
hang
e of
leas
ing
cond
itio
ns, c
usto
m c
lear
ance
of
leas
ing
equi
pmen
t, an
d ut
iliz
atio
n of
don
or f
unds
.
Con
cern
ed
gove
rnm
ent a
genc
y M
ediu
m
and
long
−
Som
e fa
rmer
s he
sita
te to
app
ly f
or
a le
asin
g pr
ogra
m, b
ecau
se o
f vo
lati
lity
of
harv
est d
ue to
wea
ther
co
ndit
ions
.
To
deve
lop
an a
gric
ultu
re d
isas
ter
insu
ranc
e pr
oduc
t. T
o es
tabl
ish
a pu
blic
agr
icul
ture
dis
aste
r co
mpe
nsat
ion
prog
ram
.
Con
cern
ed
gove
rnm
ent a
genc
y F
inan
cial
inst
itut
ion
Med
ium
an
d lo
ngT
echn
ical
co
oper
atio
n
Agr
icul
ture
prod
ucti
on
Fee
for
agr
icul
ture
mac
hine
ry
serv
ice
is h
igh.
T
o ex
pand
the
num
ber
of le
ase
by r
evie
win
g le
asin
g co
ndit
ions
, suc
h as
col
late
ral,
adva
nce
paym
ent,
inte
rest
rat
e, a
nd r
epay
men
t per
iod.
Con
cern
ed
gove
rnm
ent a
genc
y F
inan
cial
inst
itut
ion
Sho
rt
−
Tra
nspo
rtat
ion
cost
for
agr
icul
ture
pr
oduc
t is
high
, bec
ause
of
the
shor
tage
of
trac
tors
and
trai
lers
.
To
expa
nd th
e nu
mbe
r of
leas
ing
trac
tors
by
revi
ewin
g le
asin
g co
ndit
ions
, suc
h as
col
late
ral,
adva
nce
paym
ent,
inte
rest
rat
e, a
nd r
epay
men
t pe
riod
.
Con
cern
ed
gove
rnm
ent a
genc
y F
inan
cial
inst
itut
ion
Sho
rt
−
Pro
duct
ivity
is lo
w a
nd h
arve
st lo
ss
is h
igh.
T
o ea
se le
asin
g co
ndit
ions
of
a co
mbi
ne h
arve
ster
, w
hich
has
the
sam
e co
ndit
ions
as
a tr
acto
r.
Con
cern
ed
gove
rnm
ent a
genc
y F
inan
cial
inst
itut
ion
Sho
rt
−
95
Fie
ld
Pro
blem
s C
ount
erm
easu
res
Impl
emen
tati
on
agen
cy
Tar
get
Per
iod
Typ
e of
A
ssis
tanc
e
Far
m o
pera
tion
in th
e pr
oper
tim
e ca
nnot
be
cond
ucte
d, d
ue to
the
num
ber
of m
achi
nes
bein
g in
suff
icie
nt.
To
expa
nd th
e nu
mbe
r of
leas
ing
trac
tors
by
revi
ewin
g le
asin
g co
ndit
ions
, suc
h as
col
late
ral,
adva
nce
paym
ent,
inte
rest
rat
e, a
nd r
epay
men
t pe
riod
.
Con
cern
ed
gove
rnm
ent a
genc
y M
inis
try
of
Agr
icul
ture
F
inan
cial
inst
itut
ion
Sho
rt
−
To
incr
ease
leas
ing
prog
ram
use
rs b
y im
prov
ing
prod
ucti
vity
and
fin
anci
al s
tatu
s th
roug
h ca
paci
ty
buil
ding
of
farm
man
agem
ent.
Sho
rt
−
To
appl
y a
pref
eren
tial
tax
syst
em f
or m
achi
nery
se
rvic
e pr
ovid
ers.
S
hort
−
Qua
lity
and
qua
ntity
of
agri
cult
ure
inpu
ts (
seed
, fer
tili
zer,
che
mic
al)
are
insu
ffic
ient
. Pri
ces
are
high
.
To
prom
ote
grou
p bu
ying
. T
o im
plem
ent p
erio
dica
l qua
lity
che
cks
of a
gric
ultu
re
inpu
ts b
y th
e au
thor
ity.
Min
istr
y of
A
gric
ultu
re
Med
ium
an
d lo
ngT
echn
ical
co
oper
atio
n
Mar
ket
Mac
hine
s su
itab
le f
or th
e pr
esen
t cu
ltiv
atio
n en
viro
nmen
t are
not
av
aila
ble.
To
mak
e m
ore
oppo
rtun
ity to
dis
sem
inat
e m
achi
nery
in
form
atio
n, in
clud
ing
mac
hine
s fo
r sm
all p
lot a
nd
min
or c
rops
to f
arm
ers
thro
ugh
the
loca
l gov
ernm
ent.
To
hold
agr
icul
ture
exh
ibiti
ons
in r
egio
nal c
ente
rs.
Min
istr
y of
A
gric
ultu
re
Mac
hine
ry d
eale
r F
inan
cial
inst
itut
ion
Med
ium
−
The
num
ber
of a
gric
ultu
re
mac
hine
ry s
ervi
ce p
rovi
ders
is
insu
ffic
ient
.
To
appl
y a
pref
eren
tial
tax
syst
em f
or m
achi
nery
se
rvic
e pr
ovid
ers.
T
o es
tabl
ish
spec
iali
zed
agri
cult
ure
mac
hine
ry
serv
ice
prov
ider
s by
Pub
lic-P
riva
te P
artn
ersh
ip (
PP
P)
in th
e ar
ea w
here
far
mer
s ca
nnot
acc
ess
mac
hine
ry
serv
ices
. Pub
lic
sect
or p
rovi
de f
acil
ity
and
equi
pmen
t, an
d co
nsig
n m
anag
emen
t to
the
priv
ate
sect
or.
Con
cern
ed
gove
rnm
ent a
genc
y M
inis
try
of
Agr
icul
ture
Med
ium
−
96
Fie
ld
Pro
blem
s C
ount
erm
easu
res
Impl
emen
tati
on
agen
cy
Tar
get
Per
iod
Typ
e of
A
ssis
tanc
e
Hum
an
reso
urce
deve
lopm
ent
Pro
fita
bili
ty is
not
goo
d be
caus
e of
a
lack
of
know
ledg
e an
d ex
peri
ence
of
farm
man
agem
ent
and
cult
ivat
ion
tech
niqu
es.
To
deve
lop
hum
an r
esou
rces
to a
dvis
e on
cul
tiva
tion
te
chni
ques
and
far
m m
anag
emen
t. T
o es
tabl
ish
a sp
ecia
l bus
ines
s sh
ort c
ours
e at
the
Japa
n C
ente
r, lo
cal v
ocat
iona
l sch
ool a
nd c
olle
ge f
or
farm
ers,
ban
k st
aff,
and
agr
icul
ture
rel
ated
sta
ff a
t the
lo
cal g
over
nmen
t.
Min
istr
y of
A
gric
ultu
re
Min
istr
y of
Edu
cati
on M
inis
try
of L
abor
Med
ium
an
d lo
ngT
echn
ical
co
oper
atio
n
Far
mer
has
to s
ell m
ost p
rodu
ce in
ha
rves
t sea
son
wit
h lo
w p
rice
, be
caus
e th
ey d
o no
t hav
e en
ough
st
orag
e an
d pr
oces
sing
fac
ilit
y.
To
conf
irm
mar
ket n
eeds
(qu
ality
, qua
ntit
y, p
rice
) of
pr
oces
sed
prod
uct.
To
trai
n lo
cal g
over
nmen
t sta
ff, b
ank
staf
f an
d fa
rmer
on
pro
cess
ing
tech
niqu
e an
d m
anag
emen
t. T
o in
trod
uce
proc
essi
ng f
acil
ity
and
equi
pmen
t by
loan
and
leas
ing
prog
ram
.
Min
istr
y of
A
gric
ultu
re
Fin
anci
al in
stit
utio
n
Med
ium
an
d lo
ngT
echn
ical
co
oper
atio
n
Far
mer
do
mai
nten
ance
and
rep
air
wor
k by
them
selv
es, b
ut im
prop
er
wor
k m
ay w
orse
n th
e pe
rfor
man
ce
of m
achi
nes.
To
esta
blis
h a
shor
t tra
inin
g co
urse
in a
gric
ultu
re
off-
seas
on o
n m
aint
enan
ce a
nd r
epai
r of
exi
stin
g m
achi
ne.
To
trai
n us
er o
n m
aint
enan
ce a
nd r
epai
r w
hen
new
m
odel
and
rar
e m
odel
are
ent
ered
.
Min
istr
y of
A
gric
ultu
re
Min
istr
y of
Edu
cati
on M
inis
try
of L
abor
Med
ium
an
d lo
ngT
echn
ical
co
oper
atio
n
Infr
astr
uctu
re
Pro
fita
bili
ty is
low
and
uns
tabl
e in
ra
in f
ed.
Im
prov
emen
t of
defu
nct i
rrig
atio
n sy
stem
and
im
prov
emen
t of
mai
nten
ance
equ
ipm
ent f
or e
xist
ing
syst
em.
Min
istr
y of
A
gric
ultu
re
Lon
g L
oan
and
gran
t aid
Attachment
Attachment 1: List of Interviewees
Attachment 2: Number of Tractor and Combine Harvester in Each Province
Attachment 3: Brochure of Manufacturers
Attachment 4: Financial Status of Aiyl Bank
Attachment 5: Result of Questionnaire Survey
Attachment 6: Crop Calendar of Main Crop
Attachment 7: Analysis of the Farmhouses that Procured Tractors
Attachment 1: List of Interviewees
Attachment −1
A1-1
List of Interviewees
Organization Name, position
The Ministry of Agriculture and Land Reclamation of the Kyrgyz Republic
Duysheev Nurlan State Secretary
The Ministry of Agriculture and Land Reclamation of the Kyrgyz Republic Foreign Relations Division
Sydykov Taalaibek Head of Division
The Ministry of Agriculture and Land Reclamation of the Kyrgyz Republic Department of Agricultural Mechanization and Electrical Supply
Kojogulov Nurlan Jamalidinovich Director Rasulov Farruh Chief specialist on Talas Oblsat Niyazaliev Kadanbek Esenbekovich Chief specialist on Alamedin Region, Chui Oblast Halmatov Abdurashid Chief specialist on Osh Oblsat Tokoev Salijan Chief specialist on Uzgen Region, Osh Oblast Mamashev Kurmanbek Chief specialist on Nookat Region, Osh Oblast
Alamedin district Department of Agricultural Development, Chui Oblast
Isaev Aftandil Konurbaevich Head of Department
Karasuu district Department of Agricultural Development, Osh Oblast
Mamedov Kubanychbek Head of Department
Uzgen district Department of Agricultural Development, Osh Oblast
Kamchibek Moldosh Head of Department
Nookat district Department of Agricultural Development, Osh Oblast
Turduev Mukamet Head of Department
Ministry of Finance of the Kyrgyz Republic State Fund for Economic Development
Israilov Bakyt Rasulovich Head of Credit Monitoring Department
State Agency of Professional and Technical Education, Ministry of work, migration and youth
Mamadaliev Abdrahim Deputy Director Jumanbekov Alseit Head of Education Curriculum Inspection Department
Department of Vocational Education Ministry of Education and Science
Turdaliev Toolos Head of Department
Tokmok Agro-industrial college
UsubalievaAinurOmushevna Deputy Director of Academic Affairs AbdurasulovBaktybek Moldoshevich Head of Department
Union of Kyrgyz Banks Abdraev Anvar President Sarybaev Rustam Project manager Satkaeva Cholpon Lawer
Kyrgyz Investment and Credit Bank Tashpolotova Zharkynai Head of Leasing Department
Attachment −1
A1-2
Organization Name, position
Aiyl Bank, OJSC IbraevMirlan Idinkulovich Head of Lease department, Head office, Bishkek
Estebesov Amanjol Chief specialist of credit department, Alamedin Branch
Moldoshev Almazbek Manager of Talas Branch Joroev Ibraim Manager of Osh Branch Osmonov Ulan Manager of Karasuu Branch Jenmuratov Altynbek Manager of Uzgen Branch Abdykadyrov Aibek Manager of Nookat Branch
Kyrgyz National Agrarian University, Faculty of Engineering and Technology
TemirbekovJeenbekTemirbekovich Dean of Faculty of Engineering and Technology, Ph.D, docent
JusupovUrmatToktomambetovich OsmonkanovTaalaibek Orozbekovich Head of the Chair “Agriculture mechanization”
AmatovSharibidin Bazarbaevich Deputy Dean of Faculty of Engineering and Technology Melisuulu Danielan Lecturer BolotovErkinbai Almambetovich Lecturer NuralievBakyt Saparovich Senior Lecturer Djumasheva Elmira Bekkulatovna Lecturer Murzaliev Mansur Lecturer
Kyrgyz Republic National Academy of Sciences Technopark of National Academy of Sciences
Kasymbekov Ryskul Candidate of technical science, Assistant professor (the senior lecturer) Head of Department “Management, marketing and intellectual property”
Seed Association of Kyrgyzstan (SAK)
AidaralievTaalaibek President, Doctor of Agriculture Science IslamovAbduhakim Executive director Farid Faridov Engineer
Agriculture Cooperative “KOSS” BarkoAleksandr Chairman
Rural agro-company “Raimbek” Kadyrov Robert The Head
Attachment −1
A1-3
Organization Name, position
Association of joint stock companies “Machine-Station”
UrahunovKerim Chief Engineer
Agriculture cooperative Adygine Alamedin region, Chui Oblast
Bugaichenko Anatoliy Vasil’evich Farmer
KyrgyzAgroMarket, Agro-equipment supplier in Bishkek
Osmonaliev Jyldyzbek Director
Avtomash-Radiator Co.Ltd., Belarus agro-equipment supplier in Bishkek
Konin Vladimir General Director Gomayunov Andrei Head of Sales and Marketing Department
ITOCHU Corporation, Almaty Yamaguchi Kanji Head of Almaty office, Kazakhstan
Toyota Tsusho Corporation, Almaty Sakurai Masanori Representative in Almaty, Kazakhstan
Trading House MTZ ElAZ LLC, Almaty Gudko Andrei Director, Almaty city, Kazakhstan
FAO, Kyrgyz Dr. Dorji Kin Lai Representative
Kyrgyz Agro-Input Enterprise Development Project, USAID
Kasymov Alisher General Manager
IG Consult, Consulting Agency BakirovaAigula Apasovna General Director
Attachment 2: Number of Tractor and Combine Harvester in Each Province
Attachment −2
A2-1
Number of Tractor and Combine Harvester in Each Province
Source: Ministry of Agriculture and Land Reclamation
0
5,000
10,000
15,000
20,000
25,000
30,000
2004 05 06 07 08 09 10 11 12 13
CountryTractor
Combine
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2004 05 06 07 08 09 10 11 12 13
Chui
Tractor
Combine
0
1,000
2,000
3,000
4,000
5,000
2004 05 06 07 08 09 10 11 12 13
TalasTractor
Combine
0
1,000
2,000
3,000
4,000
5,000
2004 05 06 07 08 09 10 11 12 13
Issyk-KulTractor
Combine
0
1,000
2,000
3,000
4,000
5,000
2004 05 06 07 08 09 10 11 12 13
NarynTractor
Combine
0
1,000
2,000
3,000
4,000
5,000
2004 05 06 07 08 09 10 11 12 13
Jalal-AbadTractor
Combine
0
1,000
2,000
3,000
4,000
5,000
2004 05 06 07 08 09 10 11 12 13
OshTractor
Combine
0
500
1,000
1,500
2,000
2004 05 06 07 08 09 10 11 12 13
Batken Tractor
Combine
Attachment 3: Brochure of Manufacturers
Attachment-3
A3-1
Attachment-3
A3-2
Attachment-3
A3-3
Attachment-3
A3-4
Attachment-3
A3-5
Attachment-3
A3-6
Attachment-3
A3-7
Attachment-3
A3-8
Attachment-3
A3-9
Attachment-3
A3-10
Attachment-3
A3-11
Attachment-3
A3-12
Attachment-3
A3-13
Attachment-3
A3-14
Attachment 4: Financial Status of Aiyl Bank
Attachment-4
A4-1
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
1514
,700
,000
1514
,700
,000
21,
960,
000
1716
,660
,000
263
196,
440,
749
263
196,
440,
749
263
196,
440,
749
00
26,
480,
000
26,
480,
000
221
6,00
02
216,
000
221
6,00
026
319
6,44
0,74
917
14,9
16,0
0028
021
1,35
6,74
94
8,44
0,00
028
421
9,79
6,74
9
Rat
e1U
SD=5
0som
Qty
Am
ount
Qty
Am
ount
Qt y
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
7981
,307
,372
7981
,307
,372
9696
,594
,740
2323
,239
,152
198
201,
141,
264
174
6,92
320
15,0
30,3
9521
15,7
77,3
185
1,57
1,61
35
2,98
4,65
263
54,8
63,0
0094
75,1
96,5
831
9,89
9,15
01
9,89
9,15
02
6,56
9,58
52
6,56
9,58
54
17,3
36,7
353
17,0
35,5
009
40,9
41,8
2031
5,82
8,36
731
5,82
8,36
77
2,53
4,20
16
694,
089
449,
056,
657
174
6,92
313
210
8,73
5,71
913
310
9,48
2,64
211
211
8,03
7,28
938
53,8
52,5
4363
54,8
63,0
0034
633
6,23
5,47
4
Rat
e1U
SD=5
0so m
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
140
139,
368,
884
284
287,
228,
716
424
426,
597,
600
8670
,910
,250
8670
,910
,250
24,
378,
588
24,
378,
588
728
,777
,953
1033
,777
,492
1762
,555
,445
207,
125,
194
3113
,721
,673
5120
,846
,867
2940
,281
,735
181
186,
868,
049
284
287,
228,
716
00
8670
,910
,250
580
585,
288,
750
Rat
e1U
SD=5
0so m
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
Qty
Am
ount
00
9496
,007
,372
9496
,007
,372
236
235,
963,
624
284
287,
228,
716
2525
,199
,152
00
639
644,
398,
864
264
197,
187,
672
2015
,030
,395
284
212,
218,
067
51,
571,
613
00
52,
984,
652
149
125,
773,
250
443
342,
547,
582
00
24,
378,
588
24,
378,
588
00
00
19,
899,
150
00
314
,277
,738
00
935
,347
,538
935
,347
,538
1451
,114
,227
00
523
,515
,500
00
2810
9,97
7,26
50
053
13,1
69,5
6153
13,1
69,5
6138
16,2
55,8
740
06
694,
089
00
9730
,119
,524
264
197,
187,
672
178
163,
933,
454
442
361,
121,
126
293
304,
905,
338
284
287,
228,
716
4262
,292
,543
149
125,
773,
250
1,21
01,
141,
320,
973
YT
OO
ther
sC
omba
inA
ttach
men
t
WB
Lea
sing
Stat
e le
asin
g-3
Stat
e le
asin
g-2
Typ
e of
Mac
hine
ry
Stat
e le
asin
g-1
(Pha
se-2
)
Typ
e of
Mac
hine
ry
Stat
e le
asin
g-1
(Pha
se-1
)T
otal
Sta
te D
evel
opm
ent
Ban
k o
f Ch
ina
WB
Lea
sing
Oth
ers
Com
bain
Atta
chm
ent
Tot
al
Tot
al
Stat
e le
asin
g-1
(Pha
se-1
)T
ype
ofM
achi
nery
Stat
e le
asin
g-2
MT
ZY
TO
Tot
al Tot
alSt
ate
leas
ing-
3T
otal
of
Sta
te le
asin
g-1
Stat
e le
asin
g-1
(Pha
se-2
)
MT
Z
Atta
chm
ent
Tot
al 2013
Tot
alS
tate
Dev
elop
men
t B
ank
of C
hin
a
MT
ZY
TO
Oth
ers
Com
bain
Tot
al 2012
WB
Lea
sing
Stat
e le
asin
g-1
(Pha
se-2
)St
ate
leas
ing-
2T
otal
of
Sta
te le
asin
g-1
Stat
e D
evel
opm
ent B
ank
of C
hina
Tot
al
MT
ZY
TO
Oth
ers
Com
bain
Atta
chm
ent
31.1
2.20
1320
11T
otal
of
Sta
te le
asin
g-1
WB
Lea
sing
Stat
e le
asin
g-1
(Pha
se-1
)St
ate
leas
ing-
1 (P
hase
-2)
Typ
e of
Mac
hine
ry
Aiy
l Ban
k L
easi
ng R
ecor
d by
Typ
e of
Mac
hine
ry
Attachment-4
A4-2
Aiyl Bank Leasing Record by Province
03.02.20142011
Qty Amount Qty Amount Qty Amount Qty Amount Qty AmountChui 63 47,056,149 9 7,076,000 72 54,132,149 4 8,440,000 76 62,572,149Issyk-kul 37 27,636,151 37 27,636,151 37 27,636,151Osh 49 36,599,227 5 4,900,000 54 41,499,227 54 41,499,227Jalal-Abad 47 35,105,381 1 980,000 48 36,085,381 48 36,085,381Talas 29 21,660,767 2 1,960,000 31 23,620,767 31 23,620,767Naryn 18 13,444,614 18 13,444,614 18 13,444,614Batken 20 14,938,460 20 14,938,460 20 14,938,460Total 263 196,440,749 17 14,916,000 280 211,356,749 4 8,440,000 284 219,796,749
2012 Rate 1USD=50som
Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount Qty AmountChui 21 24,075,435 21 24,075,435 39 41,515,834 9 22,366,050 5 4,329,250 74 92,286,569Issyk-kul 8 7,840,000 8 7,840,000 8 7,840,000 2 2,078,150 18 17,758,150Osh 32 21,606,546 32 21,606,546 25 32,412,005 10 8,949,807 16 14,890,250 83 77,858,608Jalal-Abad 37 26,212,030 37 26,212,030 12 11,931,952 8 3,947,094 24 21,425,000 81 63,516,076Talas 15 12,635,704 15 12,635,704 11 11,143,944 6 14,997,650 3 2,637,250 35 41,414,548Naryn 1 746,923 11 10,082,743 12 10,829,666 3 2,596,006 3 2,781,250 18 16,206,922Batken 8 6,283,260 8 6,283,260 14 10,597,548 3 1,513,792 12 8,800,000 37 27,194,600Total 1 746,923 132 108,735,718 133 109,482,641 112 118,037,289 38 53,852,543 63 54,863,000 346 336,235,473
2013 Rate 1USD=50som
Qty Amount Qty Amount Qty Amount Qty Amount Qty AmountChui 16 20,518,625 32 43,894,060 68 71,898,811 4 3,468,000 120 139779496Issyk-kul 23 20,006,867 35 34,144,480 58 54,151,347Osh 4 4,196,685 22 20,121,377 55 54,225,286 27 23,482,750 108 102,026,098Jalal-Abad 2 153,872 41 40,806,250 50 50,672,331 19 16,245,250 112 107,877,703Talas 1 76,936 30 28,624,655 33 33,032,013 18 15,170,500 82 76,904,104Naryn 1 38,625 10 8,541,698 18 19,158,810 3 3,085,500 32 30,824,633Batken 5 15,296,992 23 24,873,142 25 24,096,985 15 9,458,250 68 73,725,369Total 29 40,281,735 181 186,868,049 284 287,228,716 86 70,910,250 580 585,288,750
2014 Rate 1USD=50som
Qty Amount Qty Amount Qty Amount Qty Amount Qty AmountChui 3 3,135,000 1 980,000 1 1,113,750 5 5,228,750Issyk-kul 3 2,704,930 4 3,920,000 7 6,624,930Osh 1 531,500 1 531,500Jalal-Abad 3 2,940,000 3 2,940,000Talas 2 2,155,000 6 5,880,000 6 5,203,750 14 13,238,750Naryn 1 980,000 1 1,113,750 2 2,093,750Batken 2 1,960,000 1 531,500 3 2,491,500Total 0 0 9 8,974,930 16 15,680,000 10 8,494,250 35 33,149,180
Total Rate 1USD=50som
Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount Qty Amount Qty AmountChui 63 47,056,149 46 51,670,060 109 98,726,209 74 88,544,894 69 72,878,811 13 30,806,050 10 8,911,000 275 299,866,964Issyk-kul 37 27,636,151 8 7,840,000 45 35,476,151 34 30,551,797 39 38,064,480 2 2,078,150 0 0 120 106,170,578Osh 49 36,599,227 41 30,703,231 90 67,302,458 47 52,533,382 55 54,225,286 10 8,949,807 44 38,904,500 246 221,915,433Jalal-Abad 47 35,105,381 40 27,345,902 87 62,451,283 53 52,738,202 53 53,612,331 8 3,947,094 43 37,670,250 244 210,419,160Talas 29 21,660,767 18 14,672,640 47 36,333,407 43 41,923,599 39 38,912,013 6 14,997,650 27 23,011,500 162 155,178,169Naryn 19 14,191,537 12 10,121,368 31 24,312,905 14 12,117,704 18 19,158,810 0 0 7 6,980,500 70 62,569,919Batken 20 14,938,460 13 21,580,252 33 36,518,712 37 35,470,690 27 26,056,985 3 1,513,792 28 18,789,750 128 118,349,929Total 264 197,187,672 178 163,933,453 442 361,121,125 302 313,880,268 300 302,908,716 42 62,292,543 159 134,267,500 1,245 1,174,470,152
WB Leasing State Development Bank of China Total
State leasing-2 State leasing-3 Total
Oblast State leasing-1 State leasing-1 Total of State leasing-1 State leasing-3State leasing-2
Total
State leasing-1 State leasing-1 Total of State leasing-1 State leasing-2 WB Leasing State Development Bank of China Total
Oblast
Oblast
Oblast
State Development Bank of China
State leasing-1 State leasing-2 State leasing-3
State leasing-1 State leasing-1 Total of State leasing-1 WB Leasing
State Development Bank of China Total
Oblast State leasing-1
Attachment-4
A4-3
Statement of Comprehensive Income for the year ended 31 December 2013 (in 1000SOM )
31-Dec-13 31-Dec-12
Interest income 699,987 577,157
Interest expense (204,201) (174,303)
Net interest income before establishing RFCPL for interest 495,786 402,854
Establishing RFCPL for interset (43,524) 25,674
Net interest income 452,262 428,528
Net foreign exchange income 70,733 62,783
Fee and commission income 157,721 90,842
Fee and commission expense (36,550) (26,779)
Other imcome 12,304 9,102
Net non-interset income 204,208 135,948
Operating income 656,470 564,476
Operating expense (473,456) (405,221)
Establishing RFCPL for other activities (3,098) (5,789)
Profit before income tax 179,916 153,466
Income tax (17,028) (17,686)
Profit and total comprehensive income for the year 162,888 135,780
Base profit for one stock share, in SOM 2,715 2,263
*RFCPL= Reserve Fund to Cover Potential Loss
Attachment-4
A4-4
Statement of Financial Position as of 31 December 2013 (in 1000SOM )
ASSETS 31-Dec-13 31-Dec-12
Cash and cash equivalents 540,966 546,172
Corresponding account in National Bank 197,385 137,693
Acoounts and loans in other banks and financial institutions 536,376 139,497
Loans to customers 4,824,628 3,264,316
Reserve to cover the loss of value (132,625) (88,886)
Loans to customers after the loss of value 4,692,003 3,175,430
Securities 1,102,451 7,206
Property and equipment 229,541 195,364
Intangible assets 6,870 7,212
Current tax asset - -
Other assets 75,409 121,135
Total assets 7,381,001 4,329,709
LIABILITIES and EQUITY
LIABILITIES
Accounts and deposits from banks 2,394 -
Accounts and deposits from customers 3,445,568 1,389,263
Amounts owed to Ministry of Finance 1,230,598 1,236,600
Amounts owed to National Bank 122,100 216,189
Government grant 88,567 96,619
Long term liabilities 808,191 -
Other attrackted funds 156,885 91,639
Current tax liabilities 2,723 914
Other liabilities 192,595 47,778
Total liabilities 6,058,616 3,087,017
EQUITY
Share capital 600,000 600,000
Additional paid-in capital 55,246 47,468
General banking reserve 504,251 459,444
Retained earning 162,888 135,780
Total equity 1,322,385 1,242,692
Total liabilities and equity 7,381,001 4,329,709
Attachment-4
A4-5
Statement of Changes in Equity for the year ended 31 December 2013 (in 1000SOM )
Share Capital Added CapitalReserve for future
expensesRetained Profit Total Capital
Balance as at 1 January 2012 600,000 41,210 414,612 112,079 1,167,901
Profit and total comprehensiveincome for the year
- - - 135,780 135,780
Transfer funds - - 44,832 (44,832) 0
Contribution by the Government - 6,258 - - 6,258
Dividends declared - - - (67,247) (67,247)
Balance as at 31 December 2012 600,000 47,468 459,444 135,780 1,242,692
Balance as at 1 January 2013 600,000 47,468 459,444 135,780 1,242,692
Profit and total comprehensiveincome for the year
- - - 162,888 162,888
Transfer funds - - 44,807 (44,807) 0
Contribution by the Government - 7,778 - - 7,778
Dividends declared - - - (90,973) (90,973)
Balance as at 31 December 2013 600,000 55,246 504,251 162,888 1,322,385
Attachment 5: Result of Questionnaire Survey
Attachment −5
A5-1
Results of Questionnaire Survey
Table 1. Cultivated area of interviewees by type of machinery possession (ha) Type No. of sample Mini. Max. Ave. Median
A 23 3.5 200 44.1 30.0 B 30 1 100 11.6 4.0 C 19 0.04 6 1.1 0.7
All 72 0.04 200 19.2 4.5 Type A: Machinery owner Type B: No machinery owned and machinery service receiver Type C: Cultivator without both machines and machinery service
Table 2. Cultivated area of interviewees by region (ha) Region No. of sample Mini. Max. Ave. Median
North 4 provinces 41 0.2 200 26.5 7.0 Southern 3 provinces 31 0.04 70.4 9.6 3.0
All 72 0.04 200 19.2 4.5
Figure 1 Constraints of farmers by region
Table 3. Work efficiency of machines (Plowing) Province Crop Area
(ha) Working time (hr)
Fuel consumption
(L/ha)
Machines Work efficiency
(Ha/hr) Chui Barley 12 20 17 MTZ80, 3row 0.60Chui Alfalfa 13 20 18 MTZ80, 3row 0.65Chui Beet 2 5 17 MTZ80, 3row 0.40Chui Corn 5 8 17 MTZ80, 3row 0.63Issyk-Kul Wheat 15 60 35 MTZ80, 3row 0.25Issyk-Kul Barley 8 30 35 MTZ80, 3row 0.27Issyk-Kul Potato 1.5 10 35 MTZ80, 3row 0.15Issyk-Kul Sainfoin 16 60 35 MTZ80, 3row 0.27
0 5 10 15 20 25
Sales channelAccess to machinery
Irrigation waterTransportation
Price of fertilizerQuality seed
Price of productQuantity of fertilizerQuality of Fertilizer
Fuel priceProduction technique
Lack of financeAvailability of spare part
StorageRepair
Notern 4 provinces
Southern 3 provinces
Attachment −5
A5-2
Issyk-Kul Cabbage 0.15 2 25 MTZ80, 3row 0.08Issyk-Kul Carrot 0.15 2 25 MTZ80, 3row 0.08Issyk-Kul Red Beet 0.2 2 25 MTZ80, 3row 0.10Naryn Barley 66 104 40 MTZ80, 3row 0.63Naryn Forage 85 104 40 MTZ80, 3row 0.82Jalal-Abad Wheat 12 24 50 MTZ80, 3row 0.50Jalal-Abad Rice 2 24 50 MTZ80, 3row 0.08Jalal-Abad Sunflower 3 2 50 MTZ80, 3row 1.50Osh Cotton 3 16 30 MTZ80, 3row 0.19Osh Corn 2 16 30 MTZ80, 3row 0.13Osh Wheat 2 16 30 MTZ80, 3row 0.13Osh Barley 2.6 16 30 MTZ80, 3row 0.16Osh Alfalfa 2.5 16 30 MTZ80, 3row 0.16
Table 4. Work efficiency of machines (Plowing) Province Crop Area
(ha) Working time (hr)
Fuel consumption
(L/ha)
Machines Work efficiency
(Ha/hr) Chui Barley 25 63 25 YTO904 0.40Talas Barley 30 48 30 YTO904 0.63Chui Clover 21 8 25 YTO904 2.63Jalal-Abad Clover 3 4 25 YTO, 3row 0.75Jalal-Abad Corn 10 24 25 YTO, 3row 0.42Jalal-Abad Cotton 10 42 25 YTO, 3row 0.24Jalal-Abad Sunflower 10 24 50 YTO, 3row 0.42Chui Wheat 25 63 25 YTO904 0.40Talas Wheat 100 80 30 YTO904 1.25
Table 5. Work efficiency of machines (Harvesting) Province Crop Area
(ha) Working time (hr)
Fuel consumption
(L/ha)
Machines Work efficiency
(Ha/hr) Talas Wheat 37 24 25 Finland, 2m 1.54Talas Summer
grains 30 48 10 Finland, 2m 0.63
Talas Haricot 29 16 10 Finland, 2m 1.81Talas Summer
grains 30 48 10 Finland, 2m 0.63
Naryn Wheat 12 8 20 German PPL-1.6 1.50Naryn Barley 6 4 20 German PPL-1.6 1.50Naryn Sunflower 5 2 20 German PPL-1.6 2.50Naryn Wheat 12 8 20 German PPL-1.6 1.50Naryn Barley 6 4 20 German PPL-1.6 1.50Chui Barley 12 10 25 NIVA 1.20Issyk-Kul Wheat 20 24 25 NIVA 0.83Issyk-Kul Wheat 15 24 14 NIVA 0.63Issyk-Kul Barley 8 12 14 NIVA 0.67Jalal-Abad Wheat 25 48 30 NIVA80 0.52Jalal-Abad Oats 10 16 30 NIVA80 0.63Naryn Wheat 20 20 20 Russia D260(110hp) 1.00Naryn Barley 10 20 20 Russia D260(110hp) 0.50Naryn Wheat 20 56 20 Russia(110hp) 0.36Issyk-Kul Potato 1.5 20 14 Russian, 2row 0.08Issyk-Kul Potato 0.5 3 10 T28, digger 0.17Chui Wheat 25 63 25 Ukraine, 3row 0.40Chui Barley 25 63 25 Ukraine, 3row 0.40
Attachment −5
A5-3
Table 6. Labor cost for farming work (som/ha) Crop Work Min. Max.
Wheat Harvesting 1,000 1,500 Haricot bean Weeding 2,500 3,300 Haricot bean Harvesting 2,300 2,700 Potato Planting 2,400 2,400 Potato Weeding 3,000 3,000 Potato Harvesting 4,500 4,500 Beet Weeding 15,000 20,000 Corn Weeding 1,000 5,000 Cotton Harvesting 1,800 1,800 Sainfoin Harvesting 1,600 2,000 All crops Water management 1,000 2,500
Since number of samples for each crop and work are very few 1 to 3, these figures are just for reference.
Table 7. Person of machinery operation Owner himself/family Outsourcing Employee
17 9 0
Table 8. Means of operation skill acquisition Learnt from dealer School/collage Self-study
0 6 15
Table 9. Educational qualification of machinery owner ATC STE VC
3 7 1 ATC: Agricultural Technical College (Ministry of labor, migration and youth) STE: Secondary Technical Education (Ditto) VC: Vocational School (Ditto)
Regarding to accident during machinery operation, no accident was reported from interviewees of questionnaire survey, but from interview by the study team, it was reported that 2 persons died by overturned accident of a combine harvester in Osh province in 2006.
Table 10. Frequency of maintenance during cultivation period Daily basis Other
23 0
Table 11. Person/ place for maintenance (multiple answer) Owner himself/family Outsourcing Employee
21 3 0
Attachment −5
A5-4
Table 12. Means of maintenance technique acquisition (multiple answer) Learnt from dealer School/collage Self-study
0 3 14
Table 13.Person/ place for repair (multiple answer) Operator Dealer Repair shop Others
22 0 2 1
Table 13. Person who purchase spare parts for repair (multiple answer) Owner Dealer Repair shop Other
23 0 2 0
Table 14. Purchasing place of spare parts (multiple answer) Bazar Dealer Repair shop Other
20 1 4 0
Table 15. Spare part supply Item Yes No
Acceptability of delivery time 12 10 Stock of spare parts 9 14 Stability of spare part price 3 20 Use of genuine parts 7 18
Table 16. Country of origin of spare part China Russia Belarus Italy
16 7 1 1
Table 17. Problems of available spare part Cannot find suitable
one Low quality Expensive No problem
5 4 3 1
Table 18. Spare parts to be repair, adjustment and replacement Item Number
Tire 12 Fuel system related parts 9 Oil hydraulic system related 7 Transmission related parts, engine related parts, bearing 4 Injection nozzle and piston 3
Repair cost is varied from 0 to 280,000 som/year, average cost is 86,000 som/year.
Table 19. Tools and machines for maintenance and repair Welding
equipment Drilling machine
Lathe machine
Forging machine
Jack Compressor Grinder Hand tools
18 21 4 1 1 3 1 23
Attachment 6: Crop Calendar of Main Crop
Attachment −6
A6-1
Crop Calendar of Main Crop
Attachment −6
A6-2
Attachment 7: Analysis of the Farmhouses that Procured Tractors
Attachment−7
A7-1
Analysis of the Farmhouses that Procured Tractors
The trial calculation was made in order to investigate the relation between the cultivation area and the
income (net earnings) in wheat production. The preconditions of the trial calculation are as follows.
Maximum cultivation capacity of the tractor is 50 ha/month. Other than the farmer’s production
area (including leased land), a tractor is used for cultivation services by other farmers.
Cultivation services period for each work (plowing, harrowing, sowing, fertilizing and
transportation) should be one month. I.e. maximum period for each work should be completed
within one month.
Leasing system should be utilized only for the renewal of the tractor. Implement machines (such
as plow or harrow etc.) owned previously will be used continuously and not be renewed.
The unit prices for each work by tractor were set up as follows, from the interview results and
questionnaire investigation.
(a) Own land (including rental)
Plowing 20 liters/ha only fuel cost (40 som/liter) Harrowing 20 liters/ha only fuel cost (40 som/liter) Sowing 15 liters/ha only fuel cost (40 som/liter) Purchase seeds 1,000 som/ha 20som/kg, 200kg/ha. Updates every 4 years. Fertilizer 15 liters/ha only fuel cost (40 som/liter) Purchase of fertilizers 6,000 som/ha 20som/kg, 300kg/ha Chemical treatment 15 liters/ha Chemicals are not used. Purchase chemicals 0 Chemicals are not used. Water management 2,000 som/ha Labor cost. Harvesting 2,800 som/ha Cost for harvesting machine services
(b) Net income by machine service
Net income by machine
service 4,000 som/ha Sum of plowing, harrowing and fertilizing work
(not including the cost of operation, fuel and
machine maintenance)
Attachment−7
A7-2
Based on the above mentioned conditions, the trial calculation of total net income was derived from net
income by the agricultural machine service and net income by agricultural production, and by the
difference in the cultivation area. Results of the trial calculation are shown in the above figure.
When one half of the income is appropriated for the payment of the annual leasing fee (first year
154,000som), the profits income of the annual 308,000som (154,000x2) are needed. In order to attain
this, from the above figure, when only wheat is cultivated, at least agricultural production in 25ha and
agricultural machine service in 25ha should be performed simultaneously.
It is assumed that the average cultivation area of each farmhouse’s own 25ha and one tractor, and the
required number of tractors calculated by the Ministry of Agriculture is 28,000. In this case the
quantity of farmhouses that own a tractor should be 28,000. The following table shows the breakdown
of the farmhouses that own tractors and the farmhouses that receive services without owning a tractor.
When 28,000 tractors provide a cultivation service for 25ha of farmland, a total of 470,000 ha of
farmland will receive the cultivation service, owned by farmhouses they do not have tractors.
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
0 5 10 15 20 25 30 35 40 45 50
純利
益(s
om)
借地を含む耕作面積 (ha)
農業生産からの純利益
機械サービスからの純利益Net income by machine service
Net income by agricultural production
Cultivation area including leased area (ha)
Net
inco
me
(som
)
Figure: Net income from agricultural production and machine service
Attachment−7
A7-3
Table Number of farmhouses and the cultivation area by tractor ownership form
Farmhouses that own tractors
Average cultivation area (ha)
25 According to the above trial calculation
Number of farmhouses 28,000 Required number of tractors calculated by the Ministry of Agriculture is 28,000. Number of farmhouses that own tractors should be 28,000.
Ratio of all the farmhouses (%)
7.8 (Number of farmhouses that own tractors) ÷ (Total number of farmhouses)
Cultivation area (ha) 700,000 (Average cultivation area) × (Required number of tractors)
Farmhouses that do not own tractors
Average cultivation area (ha)
1.43 (Total cultivation area of farmhouses that do not own tractors) ÷ (Number of farmhouses that do not own tractors)
Number of farmhouses 329,127 (Total number of farmhouses)−(Number of farmhouses that own tractors)
Ratio of all the farmhouses (%)
92.2 (Number of farmhouses that do not own tractors) ÷ (Total number of farmhouses)
Cultivation area (ha) 470,000 (Total cultivation area)−( Total cultivation area of farmhouses that own tractors)
Total Total number of farmhouses
357,127 Statistical data (3013)
Total cultivation area (ha)
1,170,000
Statistical data (2013)
Average cultivation area (ha)
3.3 (Total cultivation area) ÷ (Total number of farmhouses)
Source: JICA Study Team
In this trial calculation, the following articles are not considered.
Influence of the production of cash crops other than wheat.
Influence of other income such as sales of livestock or income by money transfer etc.
Influence of the number in the family at the farmhouse.
Tax and social insurance premium
For reference, the repayment plan when the Belarus tractor is leased, is shown below.
Table: Repayment plan when the Belarus tractor is leased (for reference)
Model MTZ82.1
Price 1,000,000 som
Down payment 300,000 som
Leasing price 700,000 som
Annual interest rate 8.00 %
Term of leasing 7 years
Attachment−7
A7-4
Leasing year
Quarter Leasing payment
Balanced principal
Remarks Annual repayment
1 1st quarter 14,000 700,000 Interest repayment 2nd quarter 64,000 650,000 Interest and principal repayment 3rd Quarter 13,000 650,000 Interest repayment 4th Quarter 63,000 600,000 Interest and principal repayment 154,000
2 1st quarter 12,000 600,000 Interest repayment 2nd quarter 62,000 550,000 Interest and principal repayment 3rd Quarter 11,000 550,000 Interest repayment 4th Quarter 61,000 500,000 Interest and principal repayment 146,000
3
1st quarter 10,000 500,000 Interest repayment 2nd quarter 60,000 450,000 Interest and principal repayment 3rd Quarter 9,000 450,000 Interest repayment 4th Quarter 59,000 400,000 Interest and principal repayment 138,000
4
1st quarter 8,000 400,000 Interest repayment 2nd quarter 58,000 350,000 Interest and principal repayment 3rd Quarter 7,000 350,000 Interest repayment 4th Quarter 57,000 300,000 Interest and principal repayment 130,000
5
1st quarter 6,000 300,000 Interest repayment 2nd quarter 56,000 250,000 Interest and principal repayment 3rd Quarter 5,000 250,000 Interest repayment 4th Quarter 55,000 200,000 Interest and principal repayment 122,000
6 1st quarter 4,000 200,000 Interest repayment 2nd quarter 54,000 150,000 Interest and principal repayment 3rd Quarter 3,000 150,000 Interest repayment 4th Quarter 53,000 100,000 Interest and principal repayment 114,000
7 1st quarter 2,000 100,000 Interest repayment 2nd quarter 52,000 50,000 Interest and principal repayment 3rd Quarter 1,000 50,000 Interest repayment 4th Quarter 51,000 0 Interest and principal repayment 106,000