Currently, quantitative and qualitative accounting of grain turnover in Kazakhstan is based on:
1) state statistics;
2) the grain receipts registrar.

The reliability of state statistics data is constantly questioned due to distortions caused by:
1) motivation of local authorities to inflate sowing, harvesting, and yield figures;
2) preferential tax regimes;
3) linkage of the VAT refund system (for exports);
4) linkage of subsidies to fieldwork.

Grain imports mainly come from Russia and are in fact not officially recorded, since importers are not interested in paying VAT on imports and also want to benefit from preferential railway tariffs for export shipments.

Grain production accounting is based on declarative reporting forms, allowing inaccuracies due to the absence of verification procedures.

Grain storage accounting is divided between the digital accounting of the grain receipts registrar at licensed elevators with 12 million tons of storage capacity and state statistics accounting at unlicensed warehouses with a total storage capacity of about 16 million tons.

The digital accounting of the registrar is more reliable compared to statistical accounting at unlicensed warehouses, as it provides format-logical control procedures during data entry and also creates and keeps “digital traces” for subsequent verification.

Grain processing accounting is also done by state statistics and is declarative in nature.

Accounting of grain exports is based on railway carrier data and the State Revenue Committee of the Ministry of Finance of Kazakhstan and is the most reliable.

Reliability issues in accounting at each stage of grain turnover ultimately accumulate into the general problem of unreliable statistical grain turnover accounting in the country.

As a result, the Government of Kazakhstan does not have the data necessary to ensure food security.

According to preliminary estimates by the Union of Grain Producers of Kazakhstan, the shadow grain market amounts to about 9 billion tenge annually.

The introduction of grain and flour export bans and quotas in spring 2020 created many disputes regarding the justification for such restrictions. In fact, the Ministry of Agriculture of Kazakhstan cannot substantiate such decisions with precise figures.

Most market participants consider the ban unjustified and excessive. As a result, many traders failed to fulfill export contracts and were forced to return advance payments.

All market participants unanimously agree on the need to create a reliable grain accounting system that would ensure the grain market operates on civilized and predictable grounds.

It should be noted that over the past 4 years, the agro-industrial complex has made significant progress in digitalization. Digital maps of all fields have been created, every field owner is accounted for, space monitoring of sowing, vegetation, and harvesting is conducted, the turnover of electronic grain receipts issued by licensed elevators has been fully digitized, integration with railway transportation data has been implemented, electronic invoicing has been introduced, etc.

This level of digitalization makes it possible to implement a highly integrated grain traceability information system based on the principle “from field to processing/export.”

The system will include accounting of:
1) objects: fields, agricultural machinery, warehouses, processing enterprises;
2) subjects: field, warehouse, and processing plant owners, traders, and exporters;
3) processes: crop sowing, harvesting, storage, sales, utilization;
4) documents: electronic phytosanitary and veterinary (feed) certificates, technical regulation inspection acts, export declarations, shipping documents, etc.

Implementation will require improvement of the regulatory framework. The analysis showed that amendments to the legislative framework are not needed, only the adoption of regulatory acts at the level of the ministries of agriculture, trade, and finance.

The creation of a grain traceability system will allow:
1) to create conditions for the development of grain trade, including exchange trading;
2) to reduce the level of the shadow economy;
3) to increase confidence in Kazakh grain in export markets;
4) to establish a foundation for further digitalization of the agro-industrial complex in terms of implementing traceability of meat, fish, and other types of products.