Farm restructuring and agricultural recovery in Kazakhstan's grain region: An update
Against the rising global concern of how to achieve sustainable output expansion in food, we document the main outcomes of post-Soviet agricultural recovery and restructuring in the Kazakhstan grain region. Together with an expansion of cropland area and increasing capital input, real agricultural value added has almost doubled within the recent decade. Privatisation legislation has allowed private ownership of land. However, access to state land and capital continues to be strongly regulated, and private lenders even turn away from agriculture. There are now three dominant groups of agricultural producers in the region: large agricultural enterprises and smaller individual farms mostly engaged in grain, and tiny household economies focusing on vegetable and live-stock. While agricultural enterprises have been growing more persistently than individual farms in recent years, average land productivity of both farm types is practically identical and wheat yields are even higher in individual farms. Both vertically and horizontally integrated agroholdings have emerged among the agricultural enterprises and have brought outside investment and management to the region. With stable employment in agriculture, nominal consumption spending of rural households has tripled over the last decade and has risen much faster than the costs of living. While North Kazakhstan looks much like a success story, constrained factor markets are likely to dampen further growth. The Kazakh government should improve the legal conditions for a functioning land rental market, avoid driving commercial lenders out of the market, and make sure that future access to qualified labour in agriculture is warranted.
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