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Changing Competitiveness of the Wheat Sector of Kazakhstan and Sources of Future Productivity Growth

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  • Longmire, James L.
  • Moldashev, Altynbeck

Abstract

Economic incentives in Kazakhstan have been radically reshaped since the Soviet era ended in 1991. In the first phase of transition, the economy and agricultural sectors declined by 40-50%. Overall economic growth refused in 1996, and agriculture is likely to enter a recovery phase soon. The economy of Kazakhstan is undergoing rapid structural change, and agriculture is experiencing strong inter-sectoral competition. The change to market-oriented and commercially-driven agriculture has altered fundamentally the incentives faced by Kazakhstan's wheat farmers. They have reduced use of inputs sharply because of the need to pay market prices for fertilizer, fuel, and other inputs, while severely curtailing investment in machinery and their farms generally. There is considerable potential for productivity improvements and adoption of new technologies in the wheat production and marketing sectors. Farmers are likely to resume investment only slowly and are likely to adopt only those changes that are low cost and which are based on low-input methods of production. Assessed under 1998 conditions, these wheat growing methods are about 20% more competitive than the energy and input-intensive technologies of the Soviet era. Because of the new commercial pressures brought on by the opening of the Kazakhstan economy to global markets, the production methods of the Soviet era are no longer relevant to Kazakhstan's wheat farmers. A fundamental change of thinking and approach to the situation faced by farmers is required in research, extension, training and education. The new commercial circumstances of agriculture call for strategic analysis of the future for Kazakhstan's farming and of related policies, research and education. Action is required in these areas to reinvigorate Kazakhstan's agriculture, and programs should commence as soon as possible. The future for wheat in Kazakhstan is promising, providing there is concerted and strategic change in the mindsets, culture, and approaches of those working in and supporting the wheat industry.

Suggested Citation

  • Longmire, James L. & Moldashev, Altynbeck, 1999. "Changing Competitiveness of the Wheat Sector of Kazakhstan and Sources of Future Productivity Growth," Economics Working Papers 7686, CIMMYT: International Maize and Wheat Improvement Center.
    • Handle: RePEc:ags:cimmew:7686
    DOI: 10.22004/ag.econ.7686
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    References listed on IDEAS

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    1. International Monetary Fund, 1998. "Output Decline in Transition: The Case of Kazakhstan," IMF Working Papers 1998/045, International Monetary Fund.
    2. Jarvis, Lovell S, 1974. "Cattle as Capital Goods and Ranchers as Portfolio Managers: An Application to the Argentine Cattle Sector," Journal of Political Economy, University of Chicago Press, vol. 82(3), pages 489-520, May/June.
    3. Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
    4. Mr. Peter Doyle & Mr. Peter F. Christoffersen, 1998. "From Inflation to Growth: Eight Years of Transition," IMF Working Papers 1998/100, International Monetary Fund.
    5. Peter G. Warr, 1994. "Comparative and Competitive Advantage," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 8(2), pages 1-14, November.
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    Cited by:

    1. Brosig, Stephan & Yahshilikov, Yorbol, 2005. "Interregional integration of wheat markets in Kazakhstan [Interregionale Integration von Weizenmärkten in Kasachstan]," IAMO Discussion Papers 88, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    2. Meng, Erika & Longmire, Jim & Moldashev, Altynbeck, 2000. "Kazakhstan's wheat system: priorities, constraints, and future prospects," Food Policy, Elsevier, vol. 25(6), pages 701-717, December.
    3. Petrick, Martin & Wandel, Jürgen & Karsten, Katharina, 2011. "Farm restructuring and agricultural recovery in Kazakhstan's grain region: An update," IAMO Discussion Papers 137, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
    4. Heidelbach, Olaf, 2007. "Efficiency of selected risk management instruments: An empirical analysis of risk reduction in Kazakhstani crop production," Studies on the Agricultural and Food Sector in Transition Economies, Leibniz Institute of Agricultural Development in Transition Economies (IAMO), volume 40, number 92323, February.

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