Governmental Resolution No.554 of 1996 on concept of development of food and processing industry in the Kyrghyz Republic

THE GOVERNMENT OF THE KYRGHYZ REPUBLIC RESOLUTION Hou.e of Ocvernment, Bishkek November, 28, 1996, ## 554 On Concept of denlopment food and processing industry in the Kyrghyz Repnblie Government of the Kyrghyz Republic notes that food and processing industry is the most important branch of national economy of the republic. 30 % of the whole output industrial producnon is production of fOod and processing industry. 2~ % of export comprises production offood and processing industry. During transitional period food and processing industry. based mainly on local resources suffered from deep crisis. From 1991 to 1995 productivity recession made up about 80 %, prices has gone up. The most obvious recession had been observed in meat processing industry - 91.6 %. dairy industry - 87.8 %. fruit processing industry 69.5 %. Volume ofproduction of main agricultural goods has reduced by 20 - 25 %. industrial processing and output ofmeat products, sausages, cheese, butter and other food-stuffs had reduced and equal to the level of 1940-1950-s. Reforms in sovhoz and kokhoz started in 1992and establishment of farms and peasant farms, agricultural cooperatives and associations has influenced all branches of food and processing industry, because structure of agricultural production has changed. More than 60 % of gross output is produced by private sector, products are used mainly for their own conswupliun ur sell it in the market, as a result volume of agricultural production for processing has significantly reduced. Equipment of processing companies are not being used. coefficient of usage of this equipmenthasdecreased and compiles only 15 - 35 %. in some cases this coefficient is even lower. In order to solve this problem some compames started to work with resources which IS given by customers to be processed. They did it in order to keep personal busy and to use their equipment. Barter has become main approach for economic activities in food and processing industry. In order to use more effectively existing equipment of food and processing industry, to attract labour resources, to USe local resources, to use financial and credit resources more effectively, to replace import with local products Government of the Kyrghyz Republic decrees : 1. To approve proposed Concept of development food and processing industry in the Kyrghyz Republic. c:\fao\tetnp\govSS4.doc 2. Ministry of Agriculture aud Food of the KyrghyzRepublic, Ministry of Economics of the Kyrghyz Republic, Miuistry ofFinauce of the Kyrghyz Republic, Ministry of Industry aud Trade of the Kyrghyz Republic, State Property Fund, State JSC "Kyrghyzalko" aud "Kyrghyztamekisi", oblast state administrations, local administration of Bishkek shall develop and approve measures on implementation uf the Concept, approved by the ~von Reseluticu and munitur implcmematiou of the Concept. 3. Ministry of Finance of the Kyrghyz Republic. Ministry of Economics of the Kyrghyz Republic shall: envisage funds for implementation of the Concept of development food and processing industry ill the Kyrghyz Republic when planning budget for 1997; identify alternative sources of finance for measures on development of branches of food and processing industry beforeJanuary, 1, 1997. 4. To establish Working Group for coordination of implementation of the Concept, approved by given Resolution. List of the members of the Working Group is attached in Appendix. 5. Ministries, administrative bodies, cblast administrations, local administration of Bishkek shall inform the Working Group once in 3 months and at the end of the year on progress of the implementation of the Concept, approved by given Resolution. Prime Minister c:\fao\temp\gov554.doc A. Jomagulov Appendix to the Resolutionofthe Government ofthe Kyrghyz Republic ofNovember 28, 1996 No 554 Composition of the Working Group for coordination of implementation of the Concept of development food and processing industry in the Kyrgbyz Republic Talgarbekov B. T. Vice-primeMiuister of the Kyrgbyz Republic, Chairman ofthe Working Group Abdimomuoov K. A. Minister ofMAP ofthe Kyrgbyz Republic, Deputy Cbainnan ofthe Working Group Members of the Working Group: Nanaev K. K. Minister of Finance ofthe Kyrghyz Republic Koichumanov T. D. Minister ofEconomics of the Kyrghyz Republic Iordan A. A. Minister of Imdustry and Trade ofthe Kyrghyz Republic KasievN. K. Miuister ofHealth Care of the Kyrghyz Republic Sarygulov A 1. Chairman ofSPF ofthe Kyrgbyz Republic Rysmendiev A. A. Director ot tne State Inspection on Standards of the Kyrgbyz Republic Brmetov A. E. General Director of state Joint-Stock Corporation "Kyrghyztamekisi" Kurmanaliev D. B. General Director of state Joint-Stock Corporation "Kyrgbyzalko' Akimaliev J. A. Kalchinov D. A. TOktoSllDOV N Bekturov O. A. Ergashev V. M. c:\fao\temp\gov554.doc President of the Agrarian Academy DeputyHeadofChui oblast administration DeputyHeadofTalas oblast administration Deputy Head ofNaryn oblast administration Deputy Head ofDjaIaI-Abad oblast administration Kydyrgychev A. K. Satybaldiev A. S. Deputy Head ofIssyk-Kul oblast administration Deputy Head ofOsh oblast admiuistration Head of Government Apparatus Abdykalykov o. Approved by the Resolution of the Government of the Kyrghya Republic November, 28, 1996 N554 CONCEPT of DEVELOPMENT FOOD and PROCESSING INDUSTRY in the KYRGIIYZ REPUBLIC. Contents 1. Review of the current situation 2. Constraints 2.1 Privatisation and corporatisation 2.2 Incentives for investments and commercial legislation 2.3 Orgnnisntion structure 2.4 Education and training 2.5 Credits 2.6 Quality ofproduction 2.7 Support to marketing J. Analysis of Advantaees. Possibilities and Risk of branches Development (APRDj 4. Strategy for development of food and processing indnstry in 1996 - 1998 up to year 0."ZUU5 4.1 Priority directions of activities in processing industry 4.2 Support to export 5. Conclusion General measures for development of food and processing industry in the Kyrghyz Republic c:\fao\temp\gov554.doc Mesr and dairy industry Fruit processing industry Sugar branch Tobacco industry Mill and bread industry Alcoholbrancb of industry Butter industry Wine-making industry INTRODUCTION Agroindustrial complex (AlC) is very important for national economy of the Kyrghyz Republic. Fixed assets of A1C compriseone half of fixed assets of national economy as a whole. AlC produces 50 % of Gross output, its share in national revenue is 40 %, 70% of populationof the countryare employed here. Food and processing industry is one of the branches of national economy. Under conditions of the going on reforms new approaches are needed for production and management notivities. Goal of the Concept - to develop organisational, economic and technical measures. Concept gives the analysis of production and financial activities of food and processing industry and plans activities for each branch for nearest years. Concept had been developed with active participation of: Ministryof Agriculture and Foodof the Kyrghyz Republic Ministry of Industryand Tradeof the Kyrghyz Republic Ministry of Economics of the Kyrghyz Republic Ministry of Financeof the Kyrghyz Republic State Property Fund State JSC "Kyrghyztamekisi" State JSC "Kyrghyzalko" Association "Dan" TACISproject PABS. I. REVIEW OF THE CURRENT SITUATION Food and processing industry is one of the most important branch of national economy, it provides more than 30 % of the whole volume of industrial production c:\fao\temp\gov554.doc and 25 % of export. It bases mainly on processing of local resources for domestic consumption, In 1991 - 1995recession ofproduction was 80 %, at the same time priceshas goneup by 575 times, in flour industry relatively 69 % :mrl997 times. Peale ofreoession was in 1994(morethan 20 %), Th. highestgrowth ofpriceswas in 1992 - 1994. The most vulnerable branches, fully dependent of agricultural production development are: meat processing industry. where recession rate was 91.6 %, dairy 87.8 %, fruit processing industry - 69.5 %. Structure of industrialproduction of foodstuffs has changes. Share of farinaceous and sugaroua products increased from 35 % in 1992 to 62.8 % in 1995. Share of meat products decreased from 12.5 % to 5 %, milk. products - 12.4 %to 6.9 % and fruits 5.2 % to 1.8%. Volume of production has decreased from 20 % to 95.%. output of meat, tins, cheese and butter has reduced to the levelof 1940-1950-s. Financial position of food and processing industry is extremely serious. Debts for September, 1, 1996was 196.7mln. KS, credits allocated - 282.7 min. KS. Residue of production in stockscomprises 29.8 min KS. Difficulties ofmarketing ofthe products are based on mutual debts of the companies and break the whole process of improvement of their financial position. Mainreasonswhich lead to continuos recessionin food and processingindustry: • process of price Iiberalisation, abrupt disparity of prices for agricultural production andproduction of foodandprocessing industry; • collapse of connections with CIS countries and loss of markets and sources of resources; • absence of system of incentives for export commodity producers and state support ofentrepreunership; • weak marketing activities , • out-of-dated equipment and shortage ofinvestments for re-equipment, Structure of agricultural production has changed because share of private sector has increased, they produced 60 % of all agricultural production which goes for domestic consumption or is sold in the market. At the moment they produce 72 % of meat, 76 %ofmilk, 67 %of vegetables, 84.4 % of potatoes, 88.8 % or eggs. As a result of the above mentioned. reasons volumes of industrial processing of meat has reduced from 47.2 % in 1991 to 6 % in 1995, milk - from 41 % in 1991 to 6 % in 1995,vegetables from 35 % to " %. In. 1991-1996 production of 2T~in has TeO.UCed by 31.S %. import decreased 13.5times, industrial processing ofit bas reduced 2.8 times. c:\fao\temp\gov554.doc Equipment of processing equipment is not being used, coefficient of its usage is 15 35%. Some companies started to work with resources which is given by customers to be processed. So, production of sugar from resources given by customers in 1991-1995 increased 12 times, its proportionhas increased from 1.3 % in t991 to 98 % in 1995, production oftobacco on this basis - 75 %, oil - 82 %, flour - 44 %, vodka and alcohol beverages - 56 %. Technical level of storage and processing of ngricultuml production is vary low. About 50 % ofequipment is worn out by 75 %. Procurement of spare parts for foreign equipment has reduced. There are no facilities for packing ofproduction.. Food industry imports quite significant part of resources: cacao - 100 %, cognac spirits - 60 %, champagne materials - 80 %, labels for confectionery and cigarettes. Import mainly is based on barter. its shan, comprises 80 % and prevents improvement of relations between producers and customers. Privatisation nf fnoli and processing industry is nearly finished. 92 units of "Kyrghyz Dan-Azyk" and 114units of "Kyrghyz-Tamak-Ash" had been restructured. Privatisation of food and processing companies is one of the conditions of the World Bank and APEAC and FlNSAC programs, which are implemented by Stale Property Fund ofthe Kyrghyz Republic. About 50 JSCa still have state share of property. Some of them had been included to the list ofcompanies for which foreign investors would be found. With introduction of state monopoly for production of spirits and alcohol and state control of tobacco industry, Government reserved certain share of property not liable for privatisation. After 4 years of recession iu 1995 stabilisation and even growth of production has started. For g months of 1996 volume of production in food and processing industry in comparison with last year increased by 28.2 %. Increase of production in food industry is connected with increase of sugar output which comprises more than 50 % ofthe whole output of food industry, pace of increase made up 242.8 % in comparison with 1995. Processing industry is still in a very difficult position, recession continues in meat proceeeing 51.4 % in comparison with 1995, milk processing - 32.5 %. tobacco 37.9 %, bread industry - 23.7 %. Existing equipment for processing very often is foreign made, it is 20 years old, consumes a lot of electricity and materials. c:\fao\temp\gov554.doc Some companies practically have no possibility to switch for production of different products. Snme fruit and vegetable companies could process some certain types of products. They can not meet requirements of market because of constraints of their equipment. Recession in bread-making industry is presupposed by the fact that population make bread themselves, a lot ofmini-bakeries appeared lately. 2. CONSTRAINTS 2.1 Privatisation and corporatisation Investments should be attracted in the food and processing industry. For this we need sufficient tax system, legal framework, endurance ofeffective its observation. 2.2 Organisation structure It is necessary to review the whole structure of food and processing industry. Role and functions of ministries, administrations and bodies should be identified very clearly in order to implement restructuring. Their role should be "assisting" rather than "managing". Information systems should be improved. Effective reorganisation of the Ministry of Agriculture and Food must become key issue in development of the branch. 2.3 Education and training Agricultural education and training at the moment is the responsibility of the Ministry of Agriculture and Food of the Kyrghyz Republic, Ministry of Education and Science of the Kyrghyz Republic, Ministry of Labour and Social Protection of the Kyrghyz Republic. System of education and training should be changed in order to train students and prepare them to changes going on in agricultural sector and processing industry. 2.4 Credits Banking system and structures are being formulated at the moment in the Kyrghyz Republic. Donor organisations like ADB (pilot project. for rural Ilnaucing) and WB render their assistance in this sphere. Kyrghyz Agricultural Financial Corporation (KAFC) was established in July, 1996 to assist commercially viable private financial units and financial market in rural area. KAFC has short-term and long-term goals. Short-term goals - to implement financial support and to allocate credits to agricultural commodity producer and agro-business companies. KAFe would assist to development of commercially viable financial c:\fao\remp\govSS4.doc organisations and financial market in rural area and replacement of state financing system with commercial system. 2.5 Quality of production In the future quality of agricultural production should be improved in order to meet requirements. For this purpose system of sorting and quality control, storage, processing. transportation should be improved. Market system information should provide information for people dealing with marketing and processing of agricultural production. 2.6 Support to marketing Assistance in identification of potential exportmarkets is needed. Exportconnections shouldbe established by meansof participation in tradeblocksand organisations, e.g. WTO - World Trade Organisation. 3. ANALYSIS OF ADVANTAGES, POSSIBILITIES AND RISK OF BRANCHES DEVELOPMENT (APRD) Advantages: • relatively low labour cost; • early harvesting of fruits andvegetables (in Osh and Djalal-Abad oblasts] • good connections with former CIS countries (markets); • traditional production of goodqualityproducts (primary processing) for export; • high levelofliteracy; • economic comparative advantage in production of oil-yielding crops, sugar, some vegetables, cotton and meat. Weak points : • relatively small economy with strong dependency of international trade; • non-participation in trade bloch nfNorthem America and Europe. because ofwhat theyhave "to acceptprices" rather than "to dictate prices"; • no access to sea and remoteness from possible expensive markets, which are difficult to reachbecause ofhigh transportation costs; • no packingindustry; c:\fao\temp\gov554.doc • structural collapse of the system of material inputs followed by collapse of "command economy"; • shortage of business knowledge and deficit of information systems needed for effective management and marketing; • low technical level of equipment, insufficient methods of storage and transponation ofproduction; • out-of-dated infrastructure ofagro processing; • under estimation of consumers needs in conditions ofgrowing competition; • absence of legally based standards, which limits issuing of licences for export to Western Europe and Northern America. Possibilities: • in the prospect Russian Federation could become a suitable market for Kyrghyzstan; • to use markets ofneighbouring countries - China and countries ofFar East; • to export meat (Khalal) to Far East countries; • to trade through Central-Asian Economic Union. Risks : • growing competition on the markets of CIS countries; • purchase ofproduction ofKyrghyzstan for low prices; • badly organised food aid. 4. STRATEGY FOR DEVELOPMENT OF FOOD AND PROCESSING INDUSTRY IN 1996 -1998 UP TO YEAR OF 2005 4.1 Priority directions of activities in processing industry Main aims ofdevelopment of food and processing industry : • provision ofminimum needs ofpopulation with foodstuffs: • creation of conditions for growth of investment policy; • ensuring of structural reorganisation of food and processing industry; • re-equipment of companies; • production ofquality and competitive goods; • increase of export. c:\fao\temp\gov554.doc Privatisation process in food and processing industry lead to establishment of JSCs. Corporatisation is opened for private investments in agriculture and processing industry. Reconstruction and modernisation of production facilities of food and processing industry should be done in connection with needs of population and requirements of potential export markets. Production of goods should be in accordance with international qnalitystandards. Forecast for development of food and processing industry envisages annual growth of production in 1996 - 1998by 14.3 % , in 1999 - 2005 - 5.3 %. The highest growth is envisaged in sugar, tobacco, starch, fruit and vegetable, liqueur and vodka making branches, all ofwhich are considered to be priority for food and processing industry. Growth of production in 1996 - 1998 is based on usage of full capacity of equipment and operation of facilities which had not heen used before. It is planned to USe resources given by customers to be processed on the following companies : JSC "Bakai", JSC "Koshoi",SJSC "Kyrghyz StarchPlant". Assortment of goods should be widened in order to produce competitive goods. They should look fur- pit.rUltiCli within the republic and outside it for delivery of resources and further marketing of goods. All this relates first of all to sugar industry, which comprises 50 % of the volume of food production Production growth of vodka made up 1.3 times and is presupposed by introduction of state monopoly for production, storage and sale of spirits and alcohol products, by establishment of SJSC "Kyrghyzalko", its main goals are : to renew state policy in price formation, to observe technology and quality of production. to increase production and ensure contribution to budget ofexcises and other fees. One of the priorities in food and processing industry is development of fruit and vegetable processing. Country has capacities for production of fruit and vegetable for domestic consumption and export. For stabilisation ofproduction and development of canneries he following is needed: • complex solution of problems in agriculture, namely - stimulation of fruit and vegetable production at the expense ofcredits for sowing; • establishment nf associations foe each brunch in complex with producers. Increase of production in the future is possible after introduction of new capacities on SJSC "Aksui maize processing plant", on JSC "Kyrghyztamekisi", construction in the South of the republic of plant for production of children's rood, small and medium size plants for processing of sugar beet, fruits, vegetables. meat, milk and other products. For production offood-stuffs of high qualityresources of high quality are needed, for this purpose quality standards for resources should be developed. Agricultural producers and population should be informed about standards. Relations between agricultural producers and processing companies should be based on contracts. Contract must clearly identify : • type of required products; c:\fao\temp\gov554.doc • quality; • amounts; • schedule of delivery; • prices and terms ofpayment. 4.2 Support to export Food and processing industry has its certain place in export of the republic. In 1993 • 1994 it was 16.3 %, in 1995 • 30.6 %, in the first half of 1996 • 21 %. Goods for export - fermented tobacco (23.8 %), sugar (35 %), spirits (10.4 %), alcohol products (25.1 %), wine (4.1 %), confectionery (2.5 %). More than 85 % of goods are exported to CIS countries. Export to foreign countries consists of tobacco and sugar. For increase of export the following is needed: • state regulation of internal activities; • flexible tax and tariff system; • international scientific and technical exchange; • to change structure of import; • import oflmow-how and new technologies for production Establislunent of joint ventures with experienced foreign firms in order to produce competitive production. Forecast for export of goods of food and processing industry in the Program of development of export of the Kyrghyz Republic for 1996 and medium-term envisages annual growth of export by 30 - 40 %. Increase of export should be based on traditional goods. State support ofexport-oriented companies: • credits and loans for activities aimed at increase of quality, expansion of production, establishment of sufficient packing and advertisement, purchase of good resources, • establishment offavourable taxation for export; • flexible regulation of import by means of increase of custom fees for goods which are produced in country. Potential increase of export - output of tobacco goods, within 2 - 3 years reconstruction of JSC "Kyrghyztamekisi" with participation of foreign investors should be finished, tobacco tactory wtll be constructed in the South. Processed wild fruits for children's food and concentrated juice plus sufficient advertisement could become export goods. Drying of apricots and grapes is possible in Osh and Djalal-Abad oblasts. c:\fao\temp\gov554.doc In the future frozen fruits could be exported. This requires good transportation and storage system with usage of refrigerators on all ctages ofprocessing. Apart from this it is necessary to start training agrobusiness managers in all aspects of modem management: • methods ofbusiness control; • budgets and forecasts; • reaction for changes ofthe market; • use ofresources; • analysis ofexpense; • identification of price; • drawing up ofcontracts and negotiations. 5. CONCLUSION Draft of the Concept for development of food and processing industry is based on the analysis of work of food and processing industry and agricultural production. Given analysis covers aU aspects from agricultural production to marketing of goods. Examination of activities made it possible to identify advantages and weak: points of processing industry and possibilities of its further development. In the "Indicative Social-Economic Plan of the Kyrghyz Republic for 1996 - 1998 and year of2005" it is mentioned, that processing industry is considered to be a priority in the national ~IlUIl1Y and should be based on local resources and should not require Q lot of investments and expenses. Privatisation in agriculture and processing industry is in the final stage, so state support to private entrepreunership could formulate necessary component for industrial production of food-stuffs. Implementation of the Concept for development of food and processing industry uf the Kyrghyz Republic could allow to reach the following aims: • more effective use of resources; • increase ofproduction and economic potential; • employment ofpopulation; • creation ofconditions for attraction of foreign investments. Sustainability of increase paces of food-stuffs production will be implemented at the expenses of introduction of new export oriented goods, increased use of capacities of processing companies which do not operate because of recession ofproduction. c:\fao\temp\gov554.doc Establishment ofregional concepts for development of food and processing industries on the beeia of given program could draw up levels of development of different regions and level ofconsumption of fond-stuff. by popnlation of those regions. General measures for development of food and processing industry of the Kyrgby. RepubUc N Measures Type of Period Executors document 1 To accelerate bankrupt process, Resolution consta SPF,MAF, sanation and liquidation of loss- ofSPF ntly Min of Trade, making companies "Kyrghyzalko'' , "Kyrghyzta mekisi" 2 Annual credits and bank loans for Govern- annual MOF, NBJ(, operation capital for processing ment .ly MAF. JS companies for seasonal procurement Resolution banks ofresources 3 Restructuring of penalties and fines, Govern- 1997 MOF, lax calculated on taxes from previous menl inspections vears Resolution 4 To study needs in spare parts for re- 1996- MAF, Min of equipmcnt ufcompanlce 1997 Trade, comnanies 5 State support of industrial companies, 1997 - MOF,NBK research institutes producing spare 2000 parts for equipment 10 processing industry by means of allocation of targeted credit resources 6 To formulate lisl of export oriented Govern- 1997 MAF, Min of companies and supportof them bythe menl trade, Min of state Resolution Economics, . MOP 7 Organisation of auctions and future Resolutions annual MAF, Min of transactions for sale of agricultural of local -Iv trade, oblast c:\fao\temp\gov554.doc production and products ofprocessing administra- administration comnanies tions s 8 Establislnnent of save credit and consta MOF,MAF financing system for procurement of ntly agricultural production 9 To organise production of modern Govern- 1997 - MAF, Min of packing materials and labels ment 1998 Trade Resolution 10 T{) establish Tasting Ccnuuission and Govern- 199G MAP, "Min of Arts Council under MAF of the ment order Health Care, Kyrghyz Republic for supervision of State Standard quality of goods. produced by Inspection companies irrespective of ownership tvne, 11 To data base for inputs, resources and 1997 Nat.Stat.Com goods with issuing of information MAf, Min of bulletins and advertisement Economics 12 Training of specialists Program 1997 Min of Education, Agrarian Academv 13 Preparation of business plans for business 1996- companies of investments plans of the 1997 processing companies industries 14 To review existing and develop new stale 1997- State Standard standards tor sources and goods with standards 1998 Inspection, Re orientation for world standards search Institute of MAF, Min ofHealth Care 15 Introduction of licences for Min ofTrade, production of foodstuffs "Kyrghyzalko" , "Kyrghyztame kisi" 16 Establishment and improvement of consta Min ofTrade, marketing services in the companies ntIy "Kyrghyzalko" , "Kyrghyztame kisi''. companies Meat and dairy Industry There are 15 meat packing plants with capacity - 500 tons, 25 milk plants with proccaaing capacity 1500 tom: a day. ,""= --"o,,,f I Period 1 ExecutorsIType[K] Measures c:\fao\temp\gov554.doc document ! To organise temporary mini slaughter Bishkek, Osh, houses for saving of operation Tokmok, Talas expenses on huge meat-packing Kainda meat I plants I packing plant 2 Establishment of intestinal resource 1997 Meat-packing base forprocurement, processing and plants exnort 3 Construction of slaughter-house in 1997- Raicu Ak-Tala, Naryn with capacity 10 tons 1998 administration, a shift (500.000 $) MAF 4 Annual allocation of credits and Government annuall MAF. MOF, loans for procurement of livestock resolution y IS banks and milk 5 To develop conditions of processing Instructions 1997 MAF, Min of of sick livestock in order to prevent for recei- Health Care infection ofpeopleand animals ving of sick livestock 6 To develop Rcguletiona on Regulations 1997 MAP, State certification of milkproducts sold by Standard rural commodity producers through Inspection, trade network. Veterinary Dept, Min of Health Care 7 Advisory services and practical constant MAF assistance to farmers for 1y establishment of mini processing I nlants foe meat and milk 8 To render assistance to associations constant MAP, milk on meat and milk processing with Iy plants, meat rural commodity producers packing plants, rural commo ditv producers Fruit processing Industry N Measures Type of Period Executors document I Development of business plans for business 1996 . Companies of reconstruction of fruit processing plans 19997 food and companies in MAP of the Kyrghyz processing Reoublic industry 2 Annual allocation of credits and Govenunent annuall MOF, IS banks loans for seasonal procurement of resolution y lCWWl,.;CS and auxiliarv materials 3 Construction of glass plant for Feasibility 1998 Oblast production of glass iars for Osh studv administration c:\fao\temp\gov554.doc oblast 4 Reconstruction (l min. KS) of Feasibility 1998 Min ofTrade Bishkek glass plant for production of study I glass iars 5 Purchase and installation of line for Feasibility 1997 MOP, MAP carton packing of friable materials (2 study 1998 lines - 16min. KS) 6 Purchase and installation of line for Feasibility 1997 MOF. MAF. of fruits (3 lines - 6 min. KS) studv 1998 Min ofTrade 7 Installation of line for potato Feasibility 1997 MOF, MAP, Iorocessina (2 lines - 5 mIn. KS) study 1998 Min of Trade 8 Attraction of investments tor 1996 MOF, MAF, purchase and installation of line for 1997 SPF drying of apricots in JSC "Jany-Jer", Batken reion (l line - 1.8 mIn. KS) 9 Purchase of lines for packing Feasibility 1997 MOF, MAP, materials of Tetra-Pak type with study 1999 Min ofTrade installation of ecuipment for packing of juices and drinks in Bishkek, Djalal-Abad and ash oblasts (3 lines 80min. KS) 10 Expansion of sowing areas for some annnall MAF, rarrns varieties of vegetables, fruits and y and peasant berries farms 11 Development of export of fruit constant Companies, production by means of improvement ly rural of its quality and meeting of commodity requirements of international producers standards 12 To ensure harvesting of wild fruits annuall Farms, and berries in all regions of the y processing republic for increase uf production of companies, tins (rose hips, barberry, etc) State Forest Asencv 13 For lengthening of fruit processing annuall Farms, companies to establishproduction of y processing semi-products for further processing companies in winter (jams) 14 To organise production of constant MAl', Min ot concentrates and confectionery in Iy Trade, winter, for this porpose delivery of companies resources and auxiliary materials should be ensured Confectionery and Sugar Industry ffiJ Measures c:\fao\temp\gov554.dot I Type of IPeriod IExecutors document 1 To prepare plan for development of Program 1997 MAP, MOF, sugar beet branch for period up to "Sugar" Min of year of 2005 (distribution of sowing Economics, area, seed breeding, training of the Chui oblast staff) administration 2 Establishment of service centres for 1997 Raion agricultural machinery on the basis 1998 administ of former "Selkhoztekhnilca" rations, MAF, "Kyrghyzaiylk omok" 3 To organise annual procurement and annuall MAF, MOP, distribution of seeds, plant protection y "Kyrghyzaiylk stuff, fuel and advance for purchase omok", SJSC of sugar beet for sugar beet growing "Kaindy-Kant" farms 4 To construct units for collecting 1996 - SJSC "Kaindy sugar beet in Kemin, Issyk-Ate and 1998 Kant", raion Kara-Bura iaious administrations 5 Development and submission of business 1997 SJSC "Tun business plans for reconstruction of plans guch-Kant'' , sugar plants to the Ministry ofTrade JSC "Koshoi". SJSC "Kaindy Kant" 6 To select investors for reconstruction 1996- Min of Trade, ofsugar plants 1997 MAP' 7 Establishment ofN "Chui-Glass" 1997 Concern "Kyr ghyzkurulush materinly" "Panter Holding and ct l-- >--. . 1--. . ~ 8 Establishment of N "Bakai-Suu" 1996 - JSC "Bakai ", (packing ofmineral water) ]997 Central Asian Fund for suppon of Entreoreneurs 9 Establishment of mini-plant for 1997 JSC "Bakai" production ofpacking materials 10 Establishment ofmini-sugar plant 1997 SJSC "Tuhguch 'r Kant" ~ 11 Output of mineral water with March JSC "Salkyn" participation of French fmn 1997 "Klekner" 12 To take measures for production 1991 MAP, oblast 4.000 tons of barley for production and and raion ofmalt annuall administration c:\fao\temp\govS54.doc v 13 Completion of construction of new 1997 JSC "Tattuu" shop for production of sweets and oats goods Tobacco industry N Measures Type of Period Executors document 1 To introduce state support of tobacco Government annuall MOF,MAP producers by means of favourable resolution y financing (annual consumption - 45 mln. KS) 2 Restoration of activities of Kyrghyz 1996 - SJSC "ICyr experimental breeding seed station 1997 ghyztamekisi", for the following purposes: MAP provision of farms with elite tobacco seeds; research and improvement of agricultural technologies; development of new varieties of tobacco 3 Increase of production of fermented 1996- SJSC "Kyr tobacco : 1997 ghyztamekisi'', 1995 - 17.9 thous. tons MAP 1996 - 18.8 thous. tons 1997 - 19.0 thous. tons 1998 - 19.U thous. tons 1999 - 19.0 thous. tons 2000 - 23.0 thous. tons 2005 - 23.0 thous. tons: 4 Increase of production of tobacco 1997 - SJSC "Kyr products : 2005 ghyztamekisi", 1996 - 1335 min. pcs NHK, MOF, 1997 - 2000 mln. pcs MAP 1998 - 5000 mln. pes 1999 - 5000 min. pcs 2000 - 7000 min. Des 5 To attract foreign investments for SJSC "Kyr completion of construction of ghyztamekisi" cigarette f~~tmy ;n Bishkek with capacity -7 billion a year Investments - 35 mln, $ Mill and bread iudustry c:\fao\temp\g:ov554.doc N Measures Type of Period Executors rr documentTo take measures for grain annuall MAP,production : Y Association- food wheat - 800 thous. tons/year ; "Dan"- forage grain (wheat, barley, oats, maize) - 700 thous. tous/year ; groats wain - 60 thous. tons/year 2 To organise plUuucuon of non-grain annuall MAP, resources for production of fodder y Association !lDan" 3 To establish regional stock annuall MAF, oblast exchanges and auctions for purchase y administrations and sale of grain with obligatory manaaement of grain market 4 To establish measures for quality 1996 - Min of Health control, scientifically grounded 1998 Care, National identification of composition of Academy of bread products, Science 5 To allocate credits for formulation of annual! MOF,NBK operation capital for procurement of y I stain 6 To attract foreign and domestic constant MAF, SPF, investments: ly Association re-equipment of bread and flour "Dan" plants ; construction of plants for deeper I processing ofgrain Alcohol industry Production of alcohol beverages and spirits in 1996 - 2005 1995 2000 2005 I Liqueurs andvodka 938.5 1200 1600 2 SPirits 2242.0 2400 2500.0 3 including local production 125.2 500 1000 N Measures Type of Period Executors document I To examine companies re : issuing of ID-N SJSC "Kyr licences quarter ghyzalko", ofl996 companies 2 Establishment and development of 1997 SlSC "Kyr infrastructure ghyzalko", local c:\fao\temp\gov554.doc 3 4 5 6 7 8 9 10 Development and submission of feasibility studies to MOF, Ministry of Economics forallocation of credit resources for oocreticn cccitel Development and submission of investments projects to MOF and SPF for reconstruction and modernisation of wine-making industry, beer, liaueur and vodka Establishment of shop for production of gotret packing in Bishkek liqueur and vodka plant Identifieation of the list of export oriented companies Establishment of the Commissionfor protection of rights of local producers and customers from false alcohol products and contraband I eoods Participation in development of legislation for ensuring of state monopoly for production, storage and sale of spirits and alcohol products Feasibility studies Drafts of legislative acts administrations 1997 SJSC "Kyr ghyzalko" 2000 SJSC "Kyr ghyzalko", companies 1997 SJSC "Kyr ghyza1l<o" constant SJSC "Kyr Iv I n';~a1ko" constant SJSC "Kyr ly ghyzalko" constant SJSC "Kyr ly ghyzalko", Min of Health Care, Min of Justice, State Standard Inspection constant SJSC "Kyr Iv I zhvzalko" SJSC "Kyr ghyzalko", Min of Health Care, State Standard Inseection Butter audrat industry N Measures Type of Period Executors document 1 To check quality of goods, produced constant Kyrghyzstan by small plants ly dard, Min of Health Care 2 To start production of soup in SJSC 1997 - ash oblast "Ak-Mai", output in 2000 - 870 tons 2000 administration. SJSC "Ak Mai" 3 To install shop for desodoration in 1997 - ash oblast SJSC "Ak-Mai" 2000 administration, c:\fao\temp\gov554.doc SJSC "Ak Mai" To look for foreign investors for 1996 SPF SJSC "Ak-Sui Maize Processing Combinat" Wine-making indnstry 1996 - 2005 1 Reconstruction nf TSC "Kyrghyasten", capacity pecking of 4.0 mln. $ 1.5 mIn. Dekaliters ofwine a vear 2 Reconstruction of JSC "Kyrghyzshampagne", capacity - 4.0mln. $ Ipacking of 1.5 min. Dekaliters ofwine a~ 3 Reconstruction of JSC "Adis", capacity - packing of 1.5 min. 1.9 min. s Dekaliters ofwine a year 4 Renewal of main production facilities and equipment of wine- 8.0$ iuakina ularns TOTAL 18.9 s Wine-making N Measures Type of Period document Executors 2 3 4 5 R~.nm:trttC".tinn of JSC G(\vt>n\1'nl?'tl't "Kyrghyzshampagne", capacity - resolution packing of 1.5 min. Dekaliters of wine a year Reconstruction of JSC "Adis", Government capacity - packing of 1.5 mIn. resolution Dekaliters ofwine aveer Reconstruction of JSC "Kyrghyz- Government stan", Kara-Sui raion, capacity - resolution packing of 1.5 mln. Dekaliters of wine a vear To reach production of wine up to Resolution 0.5 mln. Dekaliters a year in Peasant of MAF Farm named after Lenin and JSC Collegium "Juzum-Sharabv" To envisage specialisation of wine- Resolution zrowina farms of Balken and of MAF 1997 1997 1997 2000 1997 1997 1SC "Kyrgbys shampagne"• SJSC "K 0" MAF, Moscow raion administration SJSC "Kyrghyzalko" MAF MAF c:\fao\temp\gov554.doc Layilayk raions for growing varieties Collegium for coenac soirita 6 Renewal and modernisation of main Government 1997- MAF production facilities and equipment resolution 2000 ofwine-making nlants 7 Export of Kyrghyz wine after Resolution 1997 - MAF improvement of their quality and of 2000 SJSC nresentation Collegium "Kvrghvzalko" Viniculture N Measures Type of Period Executors document 1 Production of grapes seedlings in Resolution 1997 MAF, oblast 1996-2000 should be 1 mln. pes a of MAP administrations year, in 2000-2005 - 2.5 mln. pes a Collegium year. To organise growing of seedlings in Sckuluk, Belovodsk and Uch-Kurgan nurseries 2 To envisage establishment of wine- Govermnent 1997 MAP, Moscow growing farms in Chui oblast, area - resolution and Sokuluk 1.4 thous. ha on the lands from Land raton Redistribution Fund (0.7 thous. Ha administration each) on new lands not suitable for other agricultural crops 3 To envisage establishment of Government 1997 MAF, Chui, experimental wine-growing farms in resolution Osh, D-Abad Chui, Osh, D-Abad oblests, one in ooleet each oblast for introduction of new administration technologies 4 To cover vineyards with reed mats Resolution 1996 MAF forwinter timein Chuioblast of MAP Collegium 5 To stop groundless destruction of Resolution constant MAP vineyards without MAP permission of MAF ly Collegium c:\fao\temp\gov554.doc