Drought has Some Growers Reeling, but Others OK
By Alla Dubova and Maria Korzheva
Many Western Kazakhstan grain growers are on the verge of bankruptcy fr om a drought that has affected some areas far worse than others.
The drought not only has reduced this year’s expected grain harvest, it’s also burned up the grass that cattle eat, threatening livestock losses.
Prime Minister Karim Masimov addressed both the grain and cattle situations recently by saying Kazakhs would have enough bread to eat but that the Agriculture Ministry needed to help ranchers save their cattle.
Insurers are adding to grain growers’ problems by refusing to issue crop-loss policies to them, even though the law requires them to do so.
The drought has not hit Kazakhstan as hard as Russia, wh ere it has burned up about a quarter of the grain crop.
The U.S. Department of Agriculture said Kazakhstan has had less rain during this growing season than in any summer in the past 10 years.
That has led to its grain crop being in the worst shape in a decade, said the agency, which issues monthly reports on the international grain situation.
The agency cut its forecast for Kazakhstan's grain crop recently from 16 million tons to 13 million.
The situation has improved a little in Kazakhstan’s northern grain heartland around Kostenay because of some rain this month.
But western Kazakhstan is a crop disaster area because of minuscule rain since April and temperatures that have exceeded 45 degrees Centrigrade.
Losses in the west range from 50 to 90 percent of the grain crop, depending on the farm.
Many growers there are on the verge of bankruptcy.
One reason is that insurers are refusing to issue crop-loss policies to growers in West Kazakhstan Oblast. They are also saying no to growers in Aktobe and Pavlodar Oblasts.
Kazakhstan requires insurers to offer crop-loss coverage, but the losses can be big, so insurers don’t want to write the policies.
And they’ve figured a way around it.
Instead of issuing crop-loss policies, they pay the much smaller fines the government imposes for refusing to write policies.
With no crop insurance, many growers will have to ask banks to postpone their loan repayments to keep from going under.
Although the grain crop will be well below last year’s, agricultural officials have pointed out that the 2009 harvest was a record-breaker. Kazakhstan can’t expect a bumper harvest like 2009’s every year, they said.
Agriculture Minister Akylbek Kurishbayev said the drought situation “cannot be called critical” in much of Kazakhstan
Harvesting has already started in the south and east.
The yield in the south is about average compared with most years, he said, while the yield in the east is better than average.
“And it has started to rain in the northern areas,” suggesting there will be a good yield there, he said.
Thankfully, Kazakhstan’s drought is not nearly as severe as Russia’s, he said.
He said he’s “worried about the fate of two oblasts – West Kazakhstan and Aktobe. Measures to mitigate the consequences of the drought will be taken there.”
The U.S. Department of Agriculture said Kazakhstan’s growing use of a scientific-farming method has prevented the crop loss from being worse.
The technique, low-till planting, involves planting seeds by punching holes in the ground rather than breaking up the entire topsoil.
The low-till method prevents a lot of the moisture in the soil from escaping.
"Grain producers maintain that moisture-saving technology reduces yield loss in the event of drought and reduces the need for clean fallow in the crop rotation," the U.S. agency said.
Kazakhstan growers are using the low-till approach on 10.3 million hectares this year, twice as much as in 2007.
A key consequence of drought can be a jump in bread prices, and government officials are vowing that will not happen.
“Consumers must not feel the problems, and they will not,” Massimov said. “We have enough grain to feed the people.”
The domestic grain demand is about 3.5 million tons, and Kazakhstan has 3.6 million tons in storage from last year’s bumper harvest.
And the Agriculture Ministry is predicting a slightly larger harvest than the U.S. Department of Agriculture is --13.5 million to 14.5 million tons.
"Our reserves are sufficient, and we will not only provide our country with bread, but will also have a very good export potential” after the harvest, he said.
Kazakhstan exported 8 million tons of its 21-million-ton 2009 harvest.
The drought’s threat to livestock worries officials more than the grain situation.
Growers can have a healthy grain crop a year after a drought.
When ranchers have to slaughter a lot of cattle because they lack food for them, however, it can three to four years for the herds to recover.
The grass that ranchers feed their cattle is in its worst shape in 20 years in northern and western Kazakhstan, with the yield being only about 300 kilograms per hectare,
Some varieties of grass are planted in summer, but ranchers are having to delay planting because of lack of rain.
After visiting cattle-growing areas this month, Masimov asked Kurishbayev to come up with a government program to help ranchers.
The prime minister said ranchers who are worried about how they can feed their cattle should refrain from mass slaughtering, which would not hurt the industry for the next several years but also lead to higher beef prices, the Focus business newspaper reports.