Kyrgyzstan without Subsidies: Azizbek Kyrgyzbayev Shows How the Country Remains a Milk Exporter
"Throughout the 30-year history of Kyrgyzstan's independence, no Kyrgyz citizen has ever received subsidies," said Azizbek Kyrgyzbayev to the participants of the event. "When you talk about subsidies for investments, feed, cows – to us, it sounds like a fairy tale."
According to him, his previous presentation was dedicated to the crisis in Kyrgyzstan's dairy industry.
The critical blow came in 2023 when the Russian regulator restricted access to the Russian market for Kyrgyz dairy products. The formal complaint was harsh: about 95% of milk in Kyrgyzstan is produced in personal and small farms, making it "impossible to ensure traceability and quality control."
"We lived for 30 years with 95% of milk produced in small farms. Suddenly in 2023, it was decided that this could no longer continue," noted Azizbek Kyrgyzbayev.
The ban on supplies to Russia led to a double-digit drop in export volumes. According to the speaker, the total export reduction during the crisis period was about 10%, with certain positions falling even more. By 2024, the industry began partial recovery, but the market has not returned to its previous growth trajectories.
According to the expert's presentation, Kyrgyzstan annually produces about 1.7 million tons of milk. The majority of raw materials – up to 95% – comes fr om personal household farms and small farmer farms. Only about 20% of the milk produced goes to industrial processing.
"When a cow is on the pasture all day, returns in the evening, gives five liters of milk. Of these five liters, four are sold to neighbors or processors," described Azizbek the typical model.
There are few large farms with industrial livestock in the country. A farm with 300 cows is already considered "large" in Kyrgyz realities, and such farms become competition objects for processors: "If you have 300 cows, the plant owner will call and literally beg for the milk to go only to him. There are many factories, most of them underutilized," explained the speaker.
According to Azizbek Kyrgyzbayev, the total milk production in Kyrgyzstan is roughly double the domestic consumption. This creates a base for export: the annual volume of external supplies is estimated at about $50 million, although the speaker honestly puts "question marks" to this figure and emphasizes that an accurate assessment still needs to be clarified.
"Why, under all these conditions, do we still produce more milk than we consume and remain an exporter?" asks the expert from Kyrgyzstan. "The answer is that we have the same problems as our neighbors – technology, safety, genetics – but at the same time, production is structurally excessive."
The main export directions are Kazakhstan, Russia, and Uzbekistan. Until 2017, Russia was the key market, and after the restrictions of 2023, Kazakhstan became the leader in importance.Today, according to Azizbek Kyrgyzbayev, the main export orientation of the Kyrgyz dairy industry is the south of Kazakhstan. "Those who live in southern Kazakhstan know our products well. We are well represented in three regions," he noted.
At the same time, the speaker assesses the scale of possible expansion: given the volume of processing and the limited resource of quality raw materials, Kyrgyzstan "probably doesn't need more than three regions of southern Kazakhstan." Even in a hypothetical situation wh ere Kyrgyz producers were the sole suppliers of dairy products in these regions, the country would physically not be able to cover the entire demand.
Azizbek Kyrgyzbayev reminded that in 2022–2023, significant stocks of butter were formed in Russia, which could not be sold for a long time.
"Somewhere within one and a half to two years, these huge volumes of butter that were stuck in warehouses were eventually sold," he recalled.
Against this backdrop, in 2024, the demand for imported butter began to recover, and Kyrgyz products returned to the Russian market. According to Azizbek Kyrgyzbayev, by the end of 2025, the export volume in monetary terms may approach the pre-crisis level and reach the same approximately $50 million that the Kyrgyz industry earned in favorable years.Separately, the speaker spoke about Uzbekistan. On the one hand, the market is attractive: in recent months, some of the highest prices were recorded there, and in three months, the Kyrgyz side, according to the speaker, supplied about 1050 heads of live cattle there. On the other hand, the structure of work with this market raises questions.
"We just decided to calculate for ourselves how this market actually works. And found out that only Uzbek citizens work there. Formally, there is a Kyrgyz company that imports cattle from Russia, a company that delivers to the border, a company that supposedly exports to Uzbekistan. But all these guys only sign papers. From start to finish, everything is handled by Uzbek citizens," said Azizbek Kyrgyzbayev.
According to the expert, a similar situation is observed in dairy trade: transactions are often structured so that the actual control over product flows and risks remains with Uzbek counterparts.
The Kyrgyz milk production model relies on pasture livestock, low feed costs, and traditions. These factors, according to him, make milk competitive in price even without subsidies. However, the same model limits opportunities for rapid productivity growth: average yields remain low, and processing depth is limited.
Azizbek Kyrgyzbayev emphasized that despite specific conditions and lack of subsidies, the key challenges of the Kyrgyz dairy industry are similar to the problems of neighboring countries:
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lack of modern technologies at the farm and processing level;
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issues of food safety and veterinary control;
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shortage of high-quality genetics.
He paid special attention to the topic of importing breeding cattle from China. According to him, Kyrgyzstan allowed the transit of Chinese breeding cattle through its territory and Kazakhstan, but did not receive final approval for direct import of breeding animals due to disagreements over veterinary protocols within the EAEU.
"Our veterinary services and livestock specialists visited breeding farms in China and concluded that in terms of breeding potential, they are no worse than some farms in Europe or the US. Yes, they have their own features, but why not?" said Azizbek Kyrgyzbayev.
Regulatory barriers, in his opinion, slow down herd renewal and productivity improvement.
Kyrgyzstan can become a key milk exporter in Central Asia if it manages to solve several systemic tasks:
- increasing processing – increasing the share of milk reaching factories and loading existing capacities;
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investments in farms and genetics – transitioning from an extensive pasture model to more productive farming technologies;
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strengthening logistics and contract discipline – especially in working with the markets of Russia and Uzbekistan;
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coordination between the state and private sector – building a predictable, even if minimalist, support policy.
The 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 Manufacturers. The company successfully collaborates with enterprises throughout Central Asia, strengthening the regional economy.
Innovative partner - DeLaval
Altyn sponsors - Alpha L Service, MB-System
Qola sponsors - Tetra Pak, LLP Clever Machines
SPX FLOW APV | SEITAL SEPARATION
Partners - Dairy Union of Kazakhstan, Republican Chamber of Dairy and Combined Breeds of Cattle, Food Master
