EBRD investments in the development of Kazakhstan's sunflower sector are helping farmers increase yields of Kazakhstan's most consumed vegetable oil.
Sunflower oil is the major vegetable oil consumed in Kazakhstan, but growing demand in recent years has been met largely by imports rather than increased production.
Low rainfall results in poor yields – and the sunflower’s poor reputation among farmers in north-western Kazakhstan. But the picture may be changing, thanks in part to efforts by the Food and Agriculture Organization (FAO) and the European Bank for Reconstruction and Development (EBRD) to strengthen the sunflower oil sector through a series of hybrid trials, coupled with farmer training, in the Aktobe and Uralsk regions of northwestern Kazakhstan, areas not traditionally known for sunflower production.
In 2005, 2006 and 2007 the EBRD provided a total of US$ 26million loan to Turkuaz Edible Oil Industries, a subsidiary of the Saudi Arabian food company Savola Group, to develop its vegetable oils production business in Aktobe.
At the time, there were only 5,000 hectares under sunflower in the region, not enough to meet the needs of Savola’s increased processing capacity. The Savola Group initiated various programmes, including the financing of agricultural equipment and seeds, to encourage farmers to grow sunflower instead of the dominant cereal crops.
Funding from FAO, EBRD and Japan aids farmers
In 2007, FAO and the EBRD, with funding from the Government of Japan, agreed to provide technical assistance to help farmers in the region increase production and processing of sunflower seed using more efficient techniques. Within FAO, the Investment Centre Division – which has been cooperating with EBRD’s Agribusiness team for more than 12 years – was in charge of delivering the assistance.
Demonstration trials that were carried out in 2008 provided farmers with first-hand evidence of how different sunflower seed hybrids perform under different soil and climate conditions.
For the training, FAO’s Investment Centre Division brought in experts from AGROPOL/CETIOM, a French interprofessional association with over 50 years’ experience in helping French farmers improve their oilseed production. Topics covered included planting, fertilization, weed control and harvesting.
New seeds could double yields
“Average sunflower yields in the Aktobe region are quite low,” says FAO’s Dmitry Prikhodko. “But the demonstration trials showed that yields could be doubled if farmers used the new sunflower seed hybrids.”
Prikhodko expects farmers who have benefited from the training to increase the area under sunflower and improve their production efficiency.
Sunflower production in Kazakhstan increased significantly in 2008 in response to high oilseed prices. According to official statistics, total area planted with sunflower seed expanded from 365 000 hectares in 2007 to 570 000 in 2008, accounting for about 60 percent of the area under oilseeds.
As sunflower becomes a profitable alternative crop to cereals, production area is expanding outside Kazakhstan’s major producing areas. In Aktobe, sunflower area has increased from 5 000 hectares to nearly 24 000 over the past four years, and farmers in neighbouring regions are also showing interest. The competitive prices offered for locally produced sunflower seed have added to the crop’s appeal.
An integrated approach
“Projects like this show that FAO and EBRD’s farm-to-fork approach, by engaging a range of actors from both the private and public sector, strengthens local food chains and can make a huge difference to farmers,” says the EBRD’s Tomas Bravenec.
"The cooperation with FAO and the EBRD is very useful for us,” says Savola’s Adil Kurmanay. “We can buy equipment and we can buy seeds, but we cannot buy good experience and good specialists, who allow us to achieve good results."
Kazakhstan, traditionally a grain producer, is rapidly building up its oilseeds production capacity. The area cultivated under oil crops has increased from 667 000 ha in 2005 to 875 000 ha in 2008, or around 31%. Sunflower accounts for about 60% of the area under oilseeds.
The annual demand for vegetable oil in the country is around 135 000 tonnes (9 kg per habitant). Domestic production of sunflower oil supplies about 70% of the country’s needs, with the rest being met by imports, mainly from the Russian Federation.
The oilseed processing industry is rapidly developing and has already exceeded Soviet-period production levels. Currently there are 303 oil seed processing companies in Kazakhstan with a total production capacity of 190 000 tonnes of vegetable oil per year. Lack of raw materials remains an issue, however, with more than a quarter of the sunflower oil produced from imported oil seeds.