Why seed production development plan may fail?

The other day on the website Open RLA a draft decree to approve the Comprehensive Plan for the development of crop production and seed production for 2023-2027 was published. The editorial staff of World of NAN decided to analyze it and find out what real indicators can be achieved by implementing this plan.

In brief, the objective of the plan is to increase the share of cultivated areas sown with seeds of domestic selection. In 2022, that share was 51%, and the target is 77.3% by 2027. The total cost of this plan is 116.3 billion tenge. Funding will come from the national budget.

The main beneficiary of budget flows will be NASEC (National Agrarian Scientific and Educational Center), which by our calculations will get at least 77.8 billion tenge. And it may get all 100 billion tenge, if the implementation of scientific and technical programs (STP) for the development of crop production worth 22.5 billion tenge will go through NASEC.

As for costs, out of 77.8 billion tenge, 17.8 billion will be spent on increasing the base financing of NASEC`s subsidiaries, and the rest of 60 billion tenge will go for material and technical equipping of NASEC through the increase of its charter capital.

ALong with the above, we would have liked to elaborate on NASEC's activities, but let's talk about this in much more detail next time. And yet for a general understanding of the context let us note that NASEC is a group, whose main activity is to ensure the innovative development of the agricultural sector of the economy of Kazakhstan. The group has a turnover of several tens of billions of tenge, 34 subsidiaries, including 3 universities, several research institutes and experimental stations.

In our opinion, the document published for discussion is also interesting in its recognition of some problems in the field of seed production. For example, it is noted that the share of serviceable equipment in seed farms is 36%, and more than 60% of equipment has a service life of more than 10 years and requires renewal. The document also states that the renewal of staff for selection and seed production is at a low level. The average age of breeders is as old as 61 years. To fully understand the problem, note that the average salary of a seed breeder by April 2022 was 220 thousand tenge per month. In addition, in this study the number of such specialists was only 9 people, which also speaks volumes.

In addition, for many types of crops - corn, melons, vegetables, potatoes, sugar beet, the share of seeds of domestic selection is less than 10%. In general, such a picture and simple mathematics hints that the plan to increase the share of seeds of domestic selection can be easily implemented on paper.

Recall that the targets are tied precisely to the sowing areas. That is, you can not worry about increasing the share of the above crops, as their sown areas are very small, and they will have little effect on the final result. For example, sown area of vegetables and gourds is 481 thousand hectares. If we increase the share of domestic seeds from conditional 10% to 100%, the increase of such areas will amount to 433 thousand hectares. But it will have almost no impact on the total share, because the total sown area of all crops is almost 49 times bigger and amounts to 23.4 million hectares. As a result, the target result will rise from 51% to 53%, and it is with 100% import substitution. Consequently, the implementers of the plan will have an incentive to increase the share only in grain and forage crops, but not in the rest, as this is the path of least resistance. Therefore, it is probably more correct to change the targets and link them to other parameters, such as gross output. Or it is possible to leave the linkage to the sown areas, but to make separate targets for each type of crops. Thus, our analysis showed that the target of the comprehensive plan, unfortunately, does not stimulate the full development of the industry.

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