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23 may 2020
4 min
2025
Author: Yevgeniy Fedotov

How to set up a start-up in the agricultural sector and turn it into a profitable business

How to set up a start-up in the agricultural sector and turn it into a profitable business

Today, one can hear more and more about the emergence of new technological solutions and services in Kazakhstan. As a rule, it concerns public services, consumer services in supermarkets and catering outlets, as well as other areas of social relations.

At the same time, one of the most knowledge-intensive and suitable for digitalization areas is agriculture. Today, Kazakhstan's agro-industrial complex requires new technological solutions, and the introduction of innovative developments, as a rule, has the prospect of becoming a profitable business. In the current situation, when the state provides new support measures and additional funding to agriculture, we can assume that this area will only grow. An active entrepreneur can easily think of an idea, the implementation of which will be in demand by players in this market.

Suppose, for instance, that a person has found some successful solution applicable to agriculture and wants to sell it as a commercial product. To achieve the goal, he can get support at the Astana Hub Technopark absolutely free of charge. To put it simply, the scheme looks like this: a person comes with his or her idea or already existing development to Astana Hub, and at the output gets a ready market product. But, it is necessary to understand that it happens not by itself, but only with his active participation.

The services of the Astana Hub Technopark

Astana Hub runs a number of programs, in particular, acceleration and incubation programs, which support start-ups in terms of intellectual and non-financial development. In addition, if you already have a working startup or business (suitable for a certain list), you can receive tax incentives from the technopark, becoming a member of it, as well as attract foreign workers. But for now we will focus on intellectual support.

1) Acceleration program. It is aimed at mature start-ups who have some product or prototype on their hands. In three months of the program's duration, experts, speakers and consultants work with the project. They provide extensive consulting and intellectual support to the entrepreneur. They conduct lectures on various topics, including marketing, sales, business models, and consumer problems. As part of acceleration, the startup can also receive PR support through the channels of Astana Hub and placement on the basis of the Technopark, in its co-working zone. At the end of the program, 14 or 15 of the most successful startups present themselves to invited investors.

2) Incubation program. The projects are taken in for two months in here. The main task is to come from raw development to some minimal product. So that afterwards it is possible to get into the acceleration program.

3) Online mentoring. This program is designed for projects that are at the stage of an idea or have just started to develop something. Its value lies in the fact that startup participants watch online webinars (basic lectures) and work for two months with a mentor who keeps the project in focus and monitors its development.

4) Startup School. This program is aimed at those who know nothing about startups at all but want to know what they are. It provides an intensive course on startups for two or three days. It provides a basic understanding of the field that can motivate people to start working on their own idea.

As mentioned above, all these services are completely free for startups. In addition, if projects are selected for acceleration and incubation programs, everyone can already join the startup school or online mentoring.

Residents of Astana Hub

We decided to talk to the current residents of the Technopark to find out what projects they are implementing.

Agroinsurance LLP

"We have developed an online insurance service where contracts between farmers and insurers are concluded online using EDS. Payments are also made online. In addition, the insured lands are monitored. For this purpose, we have integrated with space monitoring and also receive data from various suppliers, including in the field of weather. Thus, all participants in the insurance contract see this monitoring. If there is some weather risk, such as drought or flood, the system automatically sends a notice that an insured event has occurred. It then sends an application to the farmer for him to sign, and directs him to the insurer. The insurer automatically makes the insurance payment within 15-20 days. Within the Astana Hub, our project has received tax exemptions. We believe that this is a significant support for young companies," said the company's head Yeldos Auezbekov.

Kazakhstan has now adopted a law subsidizing 50% of the cost of insurance. The other day, the rules were adopted and the operator, the Fund for Financial Support of Agriculture, was assigned. In the near future, insurance products will be approved, said Yeldos Auezbekov.

In the near future, insurance products will be approved, after which subsidies for farmers will begin to operate. 

AgroStream" LLP

"We are the developers of a comprehensive program for agricultural enterprises. This program allows you to manage all areas of the company: plan crops, monitor the work of agricultural machinery online, monitor the work of all kinds of sensors, control the implementation of plans and costs, as well as sales planning. The program allows you to increase yields, reduce grain refraction, losses and possible theft. For this program to work, you need appropriate equipment that will collect all the information. This equipment is supplied by another partner company, called TerraPoint. It includes GPS trackers, course indicators for agricultural machinery, grain reception control systems and so on. Also one of our inventions is a mobile dispenser for plant protection products AgroMixer. This unit allows mixing components for plant protection products in the right proportions and sequence according to given recipes", - said the company's marketer Yuliya Melnikova.

Prospects for implementing technological ideas in the agro-industrial complex

The agro-industrial complex provides a wide range of opportunities for active and enterprising people, and is in urgent need of new technologies and innovations. Especially today, when the coronavirus pandemic has already had an impact on domestic agriculture by stimulating domestic production and import substitution.

According to Energyprom.kz portal, 6 out of 29 socially important groups of food products in Kazakhstan are dependent on importers, however, local production has increased in most categories. Goods that are import-dependent include: apples (62.9%), fish (60.8%), sausages (62.0%), cheese and curd (57.0%), sugar (46.6%) and poultry (58.3%).

Import substitution work will be carried out in the country to combat import dependence. This year, 25 dairy farms, 3 meat processing plants will be built, orchards will be laid, the construction of 2 sugar factories has started, and the modernization of 3 existing sugar factories is planned.

However, most of the main import-dependent food products in the country have already seen an increase in production. Thus, in January-April 2020, the companies produced 35.3 thousand tons of poultry meat - by 33.8% more than a year earlier. Sausages and similar meat products were produced 18.8 thousand tons (plus 12.3% for the year).

Fresh, chilled or frozen fish were produced 15.4 thousand tons, with significant annual growth of 2.04 times in this segment; fish cooked or preserved by other methods, caviar and its substitutes produced 3.94 thousand tons (plus 32 percent for the year). In addition, Kazakh companies produced 10.2 thousand tons of cheese and cottage cheese, while the annual production growth rate was 10.2%.

All this suggests that in the coming years, the agro-industrial complex should grow, which means that there will be more opportunities for business and introduction of technology.

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