Islamic Organizationfor Food Security

Ministry of Agriculture of the Republic of Kazakhstan1

In 1995 Kazakhstan became a full member of the largest international Islamic organization — the Organization of Islamic Cooperation (hereinafter — OIC).

On June 28-30 in Astana the 38th session of the OIC Foreign Ministers Council (hereinafter — FMC) had been held and the Republic of Kazakhstan entered into chairmanship in this organization.

On the opening session of the OIC Foreign Ministers Conference Nursultan Nazarbayev, President of the Republic of Kazakhstan had announced the proposal on expedience of development of the food mutual aid system within the OIC with location of its headquarters of such organization in Kazakhstan as in the state that exports food resources.

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Prerequisites of establishment of the Organization

The OIC Sixth Ministerial Conference on Food Security and agricultural development (Istanbul, October 3-6, 2011) has adopted the Resolution with decision to support the proposal of the Republic of Kazakhstan.

The ideology of the developed concept of the Fund of food mutual aid had been supported by OIC member-states at the 27th meeting of the OIC COMSEC (Istanbul, October 17-20, 2011).

Drafts of the Resolution on establishment of the OIC Food Mutual Aid Fund and the Statute of the OIC Food Mutual Aid Fund have been developed and discussed with the OIC Secretariat General, with specialists of the Islamic Development Bank, the UN World Food Programme, The UN Food and Agriculture Organization.

The initiative on establishment of the Fund had been supported by states at the 35th session of the Islamic Commission on economical, cultural and social issues (June 18-20, 2012).

At the 28th meeting of the OIC COMSEC Executive Council (Ankara, May 9-10, 2012) the above mentioned drafts had been supported.

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The implementation history of the initiative

The 39th FMC has adopted the decision on establishment of the new body in Astana (capital of Kazakhstan) and on development of its Statute.

On June 11-12, 2013 the Intergovernmental Experts Meeting of OIC member-states has been held in Astana aiming at coordination of the Statute of the body on food security. At this meeting the experts of 30 member-states had coordinated the draft Statute of the new body, including its nomination – “Islamic Organisation for Food Security” and have decided to submit this document to the next session of the OIC CFM.

During the 40th session of the Foreign Ministers Council in Conakry, Guinea on December 9-10, 2013 the Statute of the Islamic Organisation for Food Security (IOFS) has been signed by 19 countries. Since this moment, according to the Article 21 of it the IOFS Statute is started to be applied provisionally and the OIC Note № OIC-ECO-047/C-04/000643 on February 11, 2014 has been issued about provisional application.

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Legal base of the Organization

Global trends

Data from the latest UN assessment (2010) under the medium fertility variant indicates that population is expected to reach 9.3 billion in 2050, and to continue growing at decreasing rates until the end of the century.

Virtually all the population increase is expected to take place in developing countries. Developed countries will start declining in the late 2040s. By 2100, the only region where population is still expected to be growing is sub-Saharan Africa, which will have reached some 2.15 billion. Projections for certain African countries show particularly fast increases, reaching up to 3.5 to 7 times their current levels at the end of the century. Population growth, ageing and urbanization affect consumption - and food consumption - habits through different channels, as well as the development of agrifood production activities.

5Source: ‘Global trends and future challenges for the work of the organization’, FAO

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Actuality of the food security

Around 900 mln. working people live in poverty ($2 per day). The majority live in countries of Sub-Saharan Africa and South Asia where the population mainly is engaged in agriculture (East Africa – up to 75%, Central Africa and South Asia – up to 50%). The reason is the low productivity of the agriculture and the low level of the rural development.

Global Hunger Index shows that regions with alarming food insecurity are Africa (Sub-Saharan), South Asia, South-East Asia.

Besides the natural cataclysms, natural disasters and human caused accidents can lead to sharp need on food reserves in various points of the world including developed countries.

Member-states of the IOFS

Region Country Global Hunger Index (IPFRI,

2013)

GNI per capita, $ (WB, 2013)

Population, mln. (FAO,

2013)

Population growth,

%/annually (FAO, 2013)

Food Import, bln. $ (FAO, 2013)

Africa Djibouti 19,5 0,810 2,23 0,593

Africa Sudan 27 1 130,00 35,482 1,78 5,941

Africa Somali n.a. n.a. 10,428 1,75 1,263

Middle East State of Palestine n.a.

Africa Comoros islands 33,6 880,00 0,767 1,87 0,208

Africa Mauritania 13,2 1 060,00 3,516 2,26 3,355

Africa Uganda 19,2 510,00 35,918 3,24 4,858

Africa Burkina-Faso 22,2 670,00 18,365 3,05 2,941

Africa Sierra Leone 22,8 680,00 5,743 2,33 1,637

Africa Gambia 14 510,00 1,926 2,23 0,360

Africa Guinea 16,9 460,00 11,474 2,63 2,384

Africa Guinea-Bissau 14,3 520,00 1,693 1,93 0,206

Africa Mali 14,8 670,00 16,455 3,00 2,895

Africa Niger 20,9 410,00 17,466 3,28 2,314

South Asia Afghanistan n.a. 700,00 31,822 2,29 6,390

Middle East Iran <5 5 780,00 80,840 1,22 64,420

Middle East Turkey <5 10 950,00 81,619 1,12 242,900

South America Suriname <9 9 260,00 0,573 1,12 1,778

Central Asia Kazakhstan <5 11 380,00 17,948 1,17 52,030

Africa Libya <5 n.a. 6,244 3,08 27,150

TOTAL: 379,089 423,623

Global Hunger Index (IPFRI): ≥ 30 – extremely alarming level, between 20.0 and 29.9 - alarming level, between 10.0 and 19.9 – serious level, between 5 and 9,9 – average level, below 5 – low level

Countries classification on GNI per capita (WB, July 1, 2013): $1,035 and less – countries with low level of GNI per capita;

between $1,036 and $4,085 – lower average; between $4,086 and $12,615 – upper average; more than $12,616 – high income level 7

1. To provide expertise and technical know-how to member-states on the various aspects of sustainable agriculture, rural development, food security and biotechnology including addressing the problems posed by desertification, deforestation, erosion and salinity as well as providing social safety nets;

2.To assess and monitor, in coordination with member states, the food security situation in member states, in order to determine and make necessary emergency and humanitarian assistance, including the creation of food security reserves;

3. To mobilize and manage financial and agricultural resources for developing agriculture and enhancing the food security in member states; and

4. To coordinate, formulate and implement common agricultural policies, including exchange and transfer of appropriate technology and public food management system.

Aims and Objectives of the Organisation

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The organizational structure of the IOFS

General Assembly

Executive Board

Secretariat

Finance Control Committee

Centers Offices Organizations

The General Assembly comprises Ministers of all member-countries responsible for matters within mandate of the Organisation . Its meeting are held once per year. During its sessions Chairman and Vice-Chairman are elected for a term of 1 year renewable once. It elects Chairman and members of the Executive Board. Also it elects Director General of its Secretariat. All main decisions will be taken during session of the General Assembly.

It is composed of members including its Chairman. The country hosting the Headquarters shall be a permanent member . One non-voting post shall be allocated for Director General. The Executive Board shall meet at least twice a year. Members of the Executive Board are elected for a period of 3 years renewable once. The Executive Board may appoint various committees of the Organisation, and the Executive Board shall appoint a Financial Control Committee made up of representatives from 5 member-states for a three-year period on a rotational basis to audit accounts and to ensure sound management of the Organisation .

The Secretariat shall comprise a Director General and official staff working in the permanent Headquarters and in such other offices as may be established. Director General shall be appointed by the General Assembly for a period of four years renewable once only.

Regional food reserves

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Wheat production in main exporting countries in the season 2013/14 MY*

Production share, % Wheat production, mln. tons

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* - according to US Agriculture Ministry

Wheat production and export in the Republic of Kazakhstan

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The Republic of Kazakhstan is in top 10 countries in the world that produce and export the wheat. The annual wheat production composes between 10-22 mln. tons and the export composes 6,5 - 8,5 mln. tons.

The Republic of Kazakhstan is in top 10 countries in the world that produce and export the wheat. The annual wheat production composes between 10-22 mln. tons and the export composes 6,5 - 8,5 mln. tons.

Supply of grains in the market of Kazakhstan significantly exceeds the domestic demand. Moreover, the agricultural policy of the Kazakhstan Government dedicated to establishment of favorable conditions for exports of grains to external markets. It is, first of all, based on high productivity of land: so the average yield of grains for last 10 years has composed 16 mln. tons while the domestic demand for this product is around 6-8 mln. tons. Even at the low harvest that composes 10 mln. tons, considering final reserves around 3-4 mln. tons, approximately 5-6 mln. tons of wheat is exported. This allows Kazakhstan to provide stable volumes of deliveries to the export, also in case of need for demands from the IOFS countries.

Supply of grains in the market of Kazakhstan significantly exceeds the domestic demand. Moreover, the agricultural policy of the Kazakhstan Government dedicated to establishment of favorable conditions for exports of grains to external markets. It is, first of all, based on high productivity of land: so the average yield of grains for last 10 years has composed 16 mln. tons while the domestic demand for this product is around 6-8 mln. tons. Even at the low harvest that composes 10 mln. tons, considering final reserves around 3-4 mln. tons, approximately 5-6 mln. tons of wheat is exported. This allows Kazakhstan to provide stable volumes of deliveries to the export, also in case of need for demands from the IOFS countries.

Dynamics of prices and production volumes of wheat in the domestic market for 2007 - 2013

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The price list formation for food wheat in the Kazakhstan market depends on its production volumes:

at high yields (2007, 2009, 2011 and 2013) the price for wheat decreases to 130-220 USD/ton;

at less plenteous years (2008, 2010, 2012) the price increases up to300-350 USD/ton.

By means of storehouses the “NC “Food Contract Corporation” JSC stabilizes prices for grains through buying wheat in high yield years and selling in low yield years.

It is proposed to implement the analogous mechanisms within the IOFS.

13The role of the “National Company “Food Contract Corporation” JSC in stabilization of grain price

Export directions for Kazakhstan wheat

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Astana

● Oral

● Aqtobe

● Atyrau

● Aktau● Ozen st.

● Kyzylorda

● Shymkent

● Taraz ● Almaty

● Taldykorgan

● Karagandy ● Oskemen

● Pavlodar

●Kokshetau

● Petropavlovsk

Caspian Sea Aral

Sea

EU, Turkey, North Africa (export through ports of Black Sea and Azov

Sea)

Russia

Russia, Mongolia

China, South-East Asia countries

Central Asia countries(Uzbekistan, Tajikistan, Kyrgyzstan) and Afghanistan

New export route to Iran by railways

Iran by sea

Azerbaijan, Georgia

Amirabad Grain Terminak Kish LLC»

“Baku Grain terminal” LLC

Gorgen grain terminal

Proposals of Kazakhstan on participation in the IOFS activities:

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Establishment of specialized Grain hubs on storage and shipment of grains on territories of IOFS state-members

Development of the storage infrastructure in the Republic (the OIC Grain storage system) will provide price stabilization by means of interventions (through buying in high yield years/selling in low yield years) and storage of food wheat that belongs to the IOFS and other grain market participants of the Republic (commercial companies), and the system will be involved both to OIC programs and operational activities of Kazakhstan grain market and it will allow to ensure the efficiency of the OIC Grain storage system.

Development of the storage infrastructure in the Republic (the OIC Grain storage system) will provide price stabilization by means of interventions (through buying in high yield years/selling in low yield years) and storage of food wheat that belongs to the IOFS and other grain market participants of the Republic (commercial companies), and the system will be involved both to OIC programs and operational activities of Kazakhstan grain market and it will allow to ensure the efficiency of the OIC Grain storage system.

The HUB 2 in direction of Persian Gulf countries: Imam Homeini port and/or the Abbas port (Iran, Persian Gulf), with the passage capacity of up to 200 th. tons of grains per month and the storage capacity up to 100 th. tons of grains ;The HUB 2 in direction of Persian Gulf countries: Imam Homeini port and/or the Abbas port (Iran, Persian Gulf), with the passage capacity of up to 200 th. tons of grains per month and the storage capacity up to 100 th. tons of grains ;

The HUB 3 in direction of Saudi Arabia and the UAE: located on the Dammam port (Saudi Arabia) and/or on the Abu-Dhabi port (UAE), with the capacity of storage of up to 200 th. tons grains;The HUB 3 in direction of Saudi Arabia and the UAE: located on the Dammam port (Saudi Arabia) and/or on the Abu-Dhabi port (UAE), with the capacity of storage of up to 200 th. tons grains;

The HUB 4 in direction of North and East Africa countries: The Republic of Djibouti (The Red Sea) with the capacity of storage of up to 200 th. tons of grains.The HUB 4 in direction of North and East Africa countries: The Republic of Djibouti (The Red Sea) with the capacity of storage of up to 200 th. tons of grains.

The HUB 1 in Afghanistan direction: in the Mazari Sharif province and /or Gerat province (Afghanistan) with the passage capacity of up to 50 th. tons of grains per month and the storage capacity 20 th. tons of grains;The HUB 1 in Afghanistan direction: in the Mazari Sharif province and /or Gerat province (Afghanistan) with the passage capacity of up to 50 th. tons of grains per month and the storage capacity 20 th. tons of grains;

Development of the port on the territory of the RoK on the Caspian Sea with the passage capacity of 600-700 th. tons per year and storage capacity of 50 th. tons, the grain terminal on the st. Inche-Burun with the passage capacity up to 1 mln. tons and the storage capacity 150 th. tons per month, on the Amirabad port with the passage capacity of up to 1,5 mln. tons per year and the storage capacity 150 th. tons per month, grain terminal on the Kazakhstan-China border with the passage capacity of up to 1 mln. tons per year and the storage capacity 50 th. tons per month and others will allow Kazakhstan companies to perform deliveries any time through the Iranian territory to countries of the Persian Gulf and Africa.

Development of the port on the territory of the RoK on the Caspian Sea with the passage capacity of 600-700 th. tons per year and storage capacity of 50 th. tons, the grain terminal on the st. Inche-Burun with the passage capacity up to 1 mln. tons and the storage capacity 150 th. tons per month, on the Amirabad port with the passage capacity of up to 1,5 mln. tons per year and the storage capacity 150 th. tons per month, grain terminal on the Kazakhstan-China border with the passage capacity of up to 1 mln. tons per year and the storage capacity 50 th. tons per month and others will allow Kazakhstan companies to perform deliveries any time through the Iranian territory to countries of the Persian Gulf and Africa.

Establishment of the OIC Grain Storage system on the territory of Kazakhstan:

Development of neighboring to the RoK export infrastructure

Proposals of Kazakhstan on participation in the IOFS activities:

As one of means of implementation of IOFS objectives the mechanism of agent services is proposed.

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The IOFSOwner of assets and resources

“NC “Food Contract Corporation” JSC

Agent on behalf of the IOFS

Procurement of food resources

Organization of shipments and implementation of

deliveriesStorage of food resources

and storehouses management

On request of the IOFS Secretariat

“NC “Food Contract Corporation” JSC is an agent on management of state grain reserves that provides procurement, formation, accounting, storage organization, refreshment, transportation, sale of state grains reserves and products

of its processing, also carries out other functions determined by the Kazakhstan Government. Besides, the “NC “Food Contract Corporation” JSC performs export deliveries since 1998 and has significant experience

in exporting.

Thank you for your attention!

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