"Cooperation is key to stable raw milk quality and access to financing" - Tilek Ashimov
Tilek, could you please tell us how the Raiffeisen fund started and your involvement in it?
— The fund was established in 2001 as part of a project implemented jointly with the German government. The Raiffeisen cooperative association was the partner fr om the German side, and through this collaboration, a system of commodity-service cooperatives began to form in Kyrgyzstan.
We conducted a detailed analysis of the existing cooperative law with German experts. Based on this analysis, a draft of changes was developed, which was then discussed with cooperatives and in parliament. As a result, a new framework law was adopted, and the task shifted fr om legislative to practical — to develop and popularize cooperative principles in real life.
In the practical part of the work, the fund played an important role: initially, it acted as a guarantee fund for credit unions, helping them obtain loans fr om financial institutions. Later, the fund provided credit unions with financing to acquire a stake in a specialized financial company, which then directly financed the working capital of commodity-service cooperatives. I have been involved in this fund fr om the very beginning, first as one of the initiators and later as the chairman of the board.
How is milk production organized in Kyrgyzstan?
— Approximately two million tons of milk are produced annually in Kyrgyzstan, with the majority coming from family farms. These are very small-scale farms, typically with 10-20 cows each. This structure makes it crucial to unite producers and implement cooperative models, because fragmented small-scale production hinders quality standardization and access to investments.
The issue is that the quality of raw milk varies significantly from farm to farm. If a processor receives a mix of good and bad milk, they either have to spend additional resources to improve the raw material or pay less for the product. This is why we focused on quality incentives: about five years ago, in collaboration with the "Bishkeksut" plant, we launched a program wh ere the plant set a fixed price for a year, but it depended on the milk quality. This served as a strong incentive: farmers who started supplying quality milk received significantly higher prices, and processors began to compete for them.
Under this program, we financed farmers to purchase milking machines and helped organize milk collection points, which were then set up in various parts of the country. Particularly successful practices emerged in the Chuy region: several family farms modernized their facilities, installed milking machines and coolers, and their milk gained the status of "farm milk," which was in demand by processors. Thanks to this, farmers began to earn higher profits, and the model started to scale.
However, there are still several challenges: not everyone can immediately invest in building modern cowsheds, good genetics, or equipment; access to financing and a mechanism for collective cooperation are needed.
In which regions is the main volume of milk concentrated?
— There are three main dairy regions in Kyrgyzstan: Issyk-Kul, Chuy (including the surroundings of Bishkek), and Talas regions. In the Chuy region, we managed to implement several comprehensive projects: we supported a number of farms, helped renovate their facilities, funded equipment, and set up milking systems. There was a farm that built its facility independently and then sought support; we, together with experts, refined the structure, installed a milking line and coolers, and today processors are queuing up for the milk and paying a good price for it.
Such successful farms in the Chuy region number around ten, and their milk is perceived as farm milk. It is more uniform in quality and taste, reducing the processors' costs to bring the quality up to standard. This is a clear example of how investing in quality and organizing milk collection has a positive effect on the entire chain.
You mentioned the existing problem of mixing milk of different qualities to achieve something average. How does cooperation help solve this issue?
— The key idea is to unite producers and standardize processes. If we have a network of collection points and a cooperative responsible for receiving, cooling storage, and primary laboratory control, we can avoid the situation wh ere high-quality milk is mixed with lower-quality milk. The cooperative model provides infrastructure, transparent rules, and collective responsibility. By focusing on cooperation, farmers are motivated to invest in quality, knowing they will receive a premium for their product, and access to financing becomes more organized.
We have looked at the experiences of various countries and see good examples in both Europe and the Russian Federation, wh ere cooperative principles are successfully applied. This direction is currently our priority.
Can cooperatives solve the problem of small farmers' access to financing?
— For a financial institution, it's much easier to work with a united structure wh ere rights, responsibilities, and risk management mechanisms are clearly defined. When farmers act individually, banks require complex collateral procedures, assessments, and document processing — this takes time and resources fr om the farmer himself. It's better for the farmer to focus on what he's a professional at — production.
The cooperative allows for centralized financial processes: risk assessment, collateral provision, leasing applications, etc. — all of this becomes easier and cheaper for participants.
Which international partners are currently important for Kyrgyzstan, and which projects do you focus on?
— Germany has played an important role in our projects' history: bilateral programs, technical support, supply of equipment and feeds from German companies. These connections are largely due to the diaspora — many Kyrgyz people have lived and worked in Germany, creating a channel for interaction.
Today, China's actions are also noticeable in the region, increasing its presence in the agricultural sector. The global picture is interesting. In some countries (like China), there is an overproduction of raw milk, while in Kazakhstan and Uzbekistan, there is a shortage. This leads to the dynamics of subsidizing and creating large farms in neighboring countries, wh ere authorities provide preferential loans and subsidies. We don't have such large-scale measures yet, and this affects competitiveness.
There are also international financial institutions in the region (World Bank, Asian Development Bank), but access to their resources for small farmers is difficult: requirements for the "green agenda," reporting, and transparency may be hard to implement at the level of a small farm.
How is milk processing in Kyrgyzstan?
— Processing, in general, has potential; we have the capacity. Some plants have undergone modernization and are equipped at a decent level: "Bishkeksut," "Umut & Co," "Ak-Sut" — these are examples of plants that have updated their lines and now produce products competitive in several markets, including Kazakhstan. In Almaty, our processors are well represented and have a good reputation: Kyrgyz milk and dairy products are valued for taste and quality there.
However, the key problem remains in raw materials: quality instability forces processors to spend additional resources to bring milk up to standard. Once we align quality through cooperatives, standardization, and investment in primary processing, processing can develop faster, and export opportunities can expand.
How realistic is it to introduce environmental standards and "green footprint" requirements in the Central Asia region?
— International financial institutions are tightening requirements, and many programs indeed include the condition of meeting certain environmental criteria. However, in practice, this is often too difficult for small farmers: they lack the resources and knowledge to fully comply. Moreover, in an extreme situation, a farmer is more concerned about saving the animal — he won't worry if there will be an antibiotic trace in his milk: he'll administer an injection to ensure the cow doesn't die. This creates risks for raw material quality.
Therefore, consistent work is essential: educating farmers, informing them about proper practices, developing affordable alternatives, and regulatory support from the state. Without this, transitioning to a "green" agenda will be challenging.
What recommendations do you give on genetics and productivity improvement?
— Genetics is one of the pillars of increasing yield. Today, working with genetics in Kyrgyzstan is at an early stage, and state involvement is necessary here: a selection policy, training farmers in proper handling of genetic material is needed. If all this is done, we can move from 1.7-2 tons of milk per head to progressive figures — up to 5-7 tons, which some of the best farms in the region already achieve.
What issues would you like to raise at AqAltyn and what goals do you expect from participation?
— On such platforms, key topics include understanding the global and regional situation in dairy production: forecasts, trends, consumer behavior. But practical issues are also important: implementing modern technologies, robotics, AI, developing new products (including high-protein lines), and exchanging experiences.
For us, AqAltyn is an opportunity to meet with investors, partners, and experts; discuss subsidy models and state policy; establish export channels and technology exchange. We aim to understand which support mechanisms work in neighboring countries and how they can be adapted to our specifics.
Finally, how do you see the future of agro-financing in the region in 5-10 years? What changes will occur in approaches and support tools?
— I believe the Kyrgyz model is not about mega-farms. The optimal model is farms with around 150-200 milking cows. This scale allows for a combination of efficiency and manageability: it's serious production with economies of scale but without major complexities. With this model, stable milk quality and production profitability can be ensured.
More information about AqAltyn - via the link.
General partner and key engineering partner - Borte Engineering
As a leading national manufacturer in Kazakhstan, Borte Engineering creates high-tech equipment for the food industry, confirming its quality by being included in the Register of domestic producers. The company successfully collaborates with enterprises across Central Asia, strengthening the regional economy.
Innovation partner - DeLaval
Altyn sponsors - Alpha L Service, MB-System
Qola sponsors - Tetra Pak, LLP Clever Machines
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Partners - Dairy Union of Kazakhstan, Republican Chamber of Dairy and Combined Breeds, Food Master
