China’s Belt and Road Initiative therefore offers a revolutionary game changer to the global grain and agricultural trade and specifically to the prospects and production potential of Kazakhstan and Eastern Russia’s previously landlocked soils.


Sparking a battle of the breadbaskets, Kazakhstan’s Ministry of Agriculture has stepped forward to cement bilateral cooperation for common agricultural development seeing a much needed investment in education, technology, and resources. For years, Kazakhstan has suffered from the high logistical costs, limited access to markets and the lack of direct access to sea ports with a number of neighbouring countries charging import quotas (Iran) or transit fees (Uzbekistan). This has hampered investment in new technologies and farming practices, resulting in repeated monoculture and low yields. Additional policies that run in conjunction with the Belt and Road Initiative see specific agriculture-related policy goals that see China increasing investment in collaborative projects, strengthening science and technology knowledge share, and optimizing agricultural trade.


In the current trade war context, China in particular is keen to exploit the last policy goal, reducing their reliance upon the western world for imported resources. Striking a joint accord, China has vowed to support Kazakhstan’s agricultural sector with increased wheat imports but will also see the increasing flow of higher value agricultural products such as dairy, fruit, vegetables, and processed ingredients. Initiatives such as the China-Kazakhstan Modern Agriculture Innovation Park launched in 2015, have seen the introduction of new varieties and investment from seed companies that is expected to help grain and oilseed yields increase by 30% from 2017 to 2020. The Kazakh Ministry of Agriculture also sees greater diversification in cropping thanks to increased rotations that sees the area of oilseeds grown increase from 2.131mln ha to 3.935mln ha, increasing production by 81% to 3.95mlnt from 2.17mlnt. Despite Ministry forecasts that grain plantings will fall by 1mln ha as a result, the rotational benefit and use of new seeds and technology is forecasted to bring a 22% increase in production from 20mlnt this year to 24.5mlnt by 2020.


KAZAKHSTAN’S MINISTRY OF AGRICULTURE HAS SET NEW STANDARDS TO HARMONISE DOMESTIC GRADES WITH INTERNATIONAL STANDARDS SETTING REGULATION ON GRAIN AND FOOD SAFETY.


It is therefore thanks to the Belt and Road Initiative that Kazakhstan has found a new source of economic growth and diversification away from its oil and energy sector dependence. The government has refocused its policies to promote its agricultural sector with a series of subsidies and tax exemptions available. Kazakhstan’s Ministry of Agriculture has set new standards to harmonise domestic grades with international standards setting regulation on grain and food safety as well as reaching Eurasian agreements on seed. Investment in rail, locomotives, cargo cars and infrastructure agreements has also opened up export opportunities on China’s Pacific coast at the eastern port of Lianyungang, demonstrating that China is not their only target. A joint Chinese-Kazakh logistics centre and port side silos facilitated the first export cargo of high protein Kazakh wheat last year to Vietnam with more expected to follow.


China’s $40 billion Silk Road fund also has a number of other planned investments including an oilseeds processing facility, fruit farms, a bio-starch factory and a tomato processing facility providing Kazakhstan with its largest injection and influence since Soviet years. It is claimed that Kazakhstan’s transformation brings the potential to double its agricultural output and grow its position from a landlocked and under invested sector to a leading Eurasian producer of food and agricultural commodities.


The New Silk Road and China’s Belt and Road Initiative is driving dramatic change across Eurasia, creating a new world that revives the connections of the past. China’s evolving economy is driving global growth away from the west and in the process, providing growth and dramatic change across Eurasia that is unlocking vast areas of fertile lands. For China; better roads lead to better lives.


George Eddell E: george.eddell@admisi.com T: +44(0) 20 7716 8054


9 | ADMISI - The Ghost In The Machine | September/October 2018


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