Presentation from OECD-UNDP Global Conference on Biodiversity Finance, 22 April 2020

2. Reforming harmful
agricultural
subsidies towards
green / organic
agriculture
BOFIN – Kyrgyzstan
Phase II

3. Agricultural subsidies In Kyrgyzstan &
potential reforming solutions
%
• Development and implementation
of a new mechanism for determining
the tariff’s size
• Compulsory payments
• Penalties for exceeding the limits
Regulation of payment for
water supply
• Shift to drip irrigation
• Creation of demonstration sites for drip
irrigation
• Training of farmers on technology, equipment
supply
Sustainable irrigation
• Cancellation of VAT exemption for deliveries
• Development and implementation of a mechanism to stimulate
the use of environmentally friendly fertilizers and plant
protection products
Exemption from value-added tax on supply of mineral
fertilizers, chemical plant protection products
Implementation of the Concept for the
Development of Organic Agriculture for 2017-
2022.
Organic Agriculture
"Green" loans with grant
elements from the national
budget
Subsidizing interest rates
of credit funds issued by
commercial banks to rural
commodity producers

4. How subsidies were identified
5
Start reforming
2
Screening the
impact
Can subsidy affect
biodiversity?
4
Reforming / removal
/ phase-out
Whether subsidy
meet following
criteria:
3
Identification of
potential for
reforming
Spotting the
subsidy / subsidies
Search for a
“government action
that confers an
advantage on
consumers or
producers in order
to supplement their
income or reduce
their costs” in the
sector
BIOFIN Workbook-
2016
1
Is subsidy
positive?
Subsidy is
harmful
no
yes
Subsidy is neutral
no
yes
Can subsidy be
strengthened?
Can subsidy be
removed / reformed /
phased-out?
Can subsidy be
reformed to become
positive?
Social importance
Influence on the state
budget
Political relevance
Compliance with the
principles of sustainable
development
+
+
+
yes

5. Workplan of BIOFIN-Kyrgyzstan
- whether the
subsidy
reform/removal is
likely to bring
significant
environmental
benefits
Assessment of
the need for
reformIdentification of
agriculture
incentives that
have clear
potential to harm
biodiversity and
are politically more
viable for reform.
Screening the
subsidies
Action plan will
consider: required
regulations,
compensation
mechanisms,
vulnerable groups,
timelines, advocacy
plan, capacity
development
needs and the
required budget
Action plan
development
Development of
concrete policy
reform options,
based on a
multiple scenario
analysis. Priority
subsidy (-ies) will
be selected to
reduce, green or
phase out.
Analysis of
reform options
• Drafting regulatory
documents
• National debates
• Communication &
advocacy
• Capacity development
• and any other needed
assistance.
Support the
reform process

6. Partnership and Strategic Framework
Partnerships
• Partnership for Action on Green Economy (PAGE) (led by UNDP)
• United Nations Environment Programme (UNEP)
• Public Council on Transition to Green Economy under the Jogorku Kenesh (Parliament) of the KR
Inter-agency Working Group on Reforming Harmful Subsidies
• Ministry of Agriculture/Department on Organic farming
• Ministry of Economy/Department of Sustainable development
• Ministry of Finance
Strategic framework
• The Green Economy Development Concept of the Kyrgyz Republic - “Kyrgyzstan - Country of
Green Economy” (Parliament)
• The Government Programme on Green economy for 2019-2023 (Ministry of Economy)
• The Biodiversity Finance Plan (2019) (Ministry of Finance & Env.Agency)

7. THANK YOU!
Q&A
Lira Zholdubaeva, Climate Change Programme Analyst
UNDP in the Kyrgyz Republic
Lira.Zholdubaeva@undp.org
Temir Burzhubaev, BIOFIN Finance expert,
t.burzhubaev@gmail.com