EXECUTIVE SUMMARY

Kazakhstan extends across both sides of the Ural River, considered the dividing line with the
European continent, Kazakhstan is one of only two landlocked countries in the world that
has territory in two continents (the other is Azerbaijan). India lies on the Indian Plate, the
northern portion of the Indo-Australian Plate, whose continental crust forms the Indian
subcontinent. The official language of Kazakhstan is Kazakh, a Turkic language.

Other languages spoken in Kazakhstan include Russian which is co-official with Kazakh, as
well as Uzbek, Kyrgyz, Uyghur, Kazan Tatar, German, and Ukrainian. The languages of India
belong to several language families, the major ones being the Indo-Aryan languages spoken
by 75% of Indians and the Dravidian languages spoken by 20% of Indians.

The national flag of the Republic of Kazakhstan has a gold sun with 32 rays above a soaring
golden steppe eagle, both centered on a sky blue background .The National Flag of India is a
horizontal rectangular tricolor of deep saffron, white and India green; with the Asoka Chakra,
a 24-spoke wheel.

The Kazakhstan's economy advanced 0.1 percent year-on-year in the January-June of 2016,
compared to 1.7 percent growth in the same period last year. Indias GDP advanced 7.1%
year on year in the second quarter of 2016, slowing from a 7.9% expansion in the previous
period and missing market expectation of 7.6% growth.

India has the maximum number of cows and buffalos in dairy production: about 300 million. It is also
the global leader in milk production: about 135 million tonnes a year. In India, dairying is
predominantly unorganised and the sector is dependent on rural households for supplies; over 70
million of 147 million households in India depend on dairy for their livelihood .

Presently there are around 70,000 village dairy cooperatives across the country. The co-operative
societies are federated into 170 district milk producers unions, which is turn has 22-state cooperative
dairy federation. Milk production gives employment to more than 72mn dairy farmers

DAIRY INDUSTRY

OVERVIEW OF INDUSTRIAL NICHES

Prior to contact with Russia and incorporation into the Soviet Union, the Kazaks were highly
mobile pastoralist people who kept mixed herds of sheep, goats, camels, cattle and horses.
Traditionally, horses, sheep and camels were the main sources of milk. Cattle played a minor
role in peoples livelihoods; the type of cattle kept was named after the Kalmyk people and is
thought to have originated in India

People had to develop their own strategies for keeping livestock, including by establishing
communal herding in which farmers take turns to herd the animals.

One of the major bottlenecks for the millions of usually landless livestock keepers in
KAZAKHSTAN is that no viable alternative support services have emerged.

The contribution of dairy sector in GDP of the country is 4.4% in KAZAKHSTAN

STEEPLED ANALYSIS OF DAIRY INDUSTRY IN KAZAKHASTAN

Socio-Cultural

Milk played an important role in Kazakhs everyday life and is important for most people.
Milk was usually consumed for breakfast or before sleep. Kazakhs consume a great deal of
milk with black tea. Moreover, milk is used in cooking and baking pancakes for example. A
Fermented horses milk called KUMIS in Kazakhstan is also occasional drunk at ceremonial
occasion. Cheese consumption is increasing in Kazakhstan largely because of increasing
innovation and many new products being launched. Sour milk products consumption is deep
in Kazakh tradition. Sour milk products is the most often consumed dairy products by
Kazakhs.

Technological

Dairy value chains in Kazakhstan can be categorized according to, the length of the chain in
terms of number of stakeholders; the animal species from which the milk is derived; the type
of enterprise where the milk is produced and processed.

Economic

Kazakhstan Dairy industry contribute 4.4% to the GDP of the country.

Dairy share in total employment is 28.2 percent (2.29 million).

 For more than 40 percent of the population and almost all the people in rural areas,
agriculture is the basis of their livelihood. Cattle provide many rural families with
dairy products and, through the sale of surplus milk, cash for purchasing other
necessities.

The growth in agriculture implies an annualy between 9-10 percent in agricultural

GDP.

Environment

The following environmental factors are in favors of the development of the dairy industry in
Kazakhstan

Abundant agricultural land;

Qualified labor force;

Low production cost and freight advantage; and

The growing government support to the sector.

To take advantage of this favorable potential industry should be prepared to deal with the
following negative factors:

Impact of harsh and uneven climate;

Instability of agricultural commodity prices in the world markets;

The overvaluation of the tenge (dutch disease);

Less than favorable business and investment environment;

Relatively high cost of labor; and

Limited access to know-how, technology, and finance.

Political
Stable Political Environment support the development of the dairy industry at high growth
rate in Kazakhstan. The government dairy development policy and strategies should assist
dairies and livestock farmers in addressing various issues arise. Considerable investments
have been made for the promotion and the maintenance of pedigree farms. It has had much
effect on the majority of Kazakhstans dairy farmers in the household and small- and
medium-scale dairy sectors.

Legal

Law Food prospectus law 2007:

Central government veterinary services under the Ministry of Agriculture and the Chief
Veterinary Officer, responsible for policies, regulations, guidelines, food safety and oversight
of public bodies; Provincial veterinary services under local government, responsible for
preventive animal disease control and prevention of epizootics.

Ethical

Kazakhstan is a member of the International Organization for Standardization (ISO) and the
technical policy for standardization is the responsibility of the Committee for Technical
Regulation and Metrology (KAZMEMST), which has a regular budget. Together with
national ministries and departments, KAZMEMST establishes technical committees to
develop standards. The main document for ensuring the safety of milk and dairy products at
all stages of the supply chain is the Technical Regulation on Requirements for the Safety of
Milk and Dairy Products (No. 230 of 11 March 2008). However, not all producers and
processors comply with these minimum quality standards, and an independent assessment of
compliance has been difficult to achieve. Annex 3 gives an overview of current Kazakhstan
quality standards. Local safety standards will also have to be harmonized with Codex
Alimentarius.

Demographic

In Kazakh most of rural area people dependent on dairy and other agriculture for employment
and their livelihood.