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Kazakhstan's wheat, beef and dairy sectors: An assessment of their development constraints and recent policy responses
[Die Erzeugung von Weizen, Rindfleisch und Milchprodukten in Kasachstan: Entwicklungshemmnisse und Agrarpolitische Förderung]

Author

Listed:
  • Petrick, Martin
  • Oshakbaev, Dauren
  • Wandel, Jürgen

Abstract

Kazakhstan is now widely regarded as a key player on world agricultural markets, with considerable export potential in the wheat, beef and dairy sectors. Based on unique farm-level data covering all production systems currently relevant, we offer new insights into the constraints that hamper further economic growth and provide an assessment of the government´s agricultural development strategy. A frequently mentioned bottleneck is agriculture´s lacking access to finance. But most farm managers in the farm survey doubt that agricultural investments deliver a sufficiently reliable return required for credit funding and thus do not take loans. Despite the vast land resources, a lack of land supply is now the most cited constraint to farm expansion in the highly regulated land market of the northern grain region. Another set of constraints in wheat production is related to the market power of elevators, the vagaries of trading over long distances in an underdeveloped rail and seaport infrastructure, and the intervention activities of state agencies. In the cattle sector, there are significant problems in year-round fodder supply. The value chains for beef and dairy are bifurcated into an import-dependent chain for industrially processed products serving urban consumers, and a local chain of raw products serving rural consumers and urban bazaars. Recent modernisation strategies of the government tend to focus on the provision of subsidised capital, while they underestimate the knowledge and incentive problems inherent to a state-guided management of sector development. The government should rather focus on providing impartial, reliable and high-quality public services to the sector, making sure that the weakest links in food chain development are identified and private entrepreneurs are provided with the necessary incentives to strengthen them. Our evidence suggests that a bundle of measures improving the local institutional environment of agriculture is more important than massive state funding of certain production lines.

Suggested Citation

  • Petrick, Martin & Oshakbaev, Dauren & Wandel, Jürgen, 2014. "Kazakhstan's wheat, beef and dairy sectors: An assessment of their development constraints and recent policy responses
    [Die Erzeugung von Weizen, Rindfleisch und Milchprodukten in Kasachstan: Entwi
    ," IAMO Discussion Papers 145, Leibniz Institute of Agricultural Development in Transition Economies (IAMO).
  • Handle: RePEc:zbw:iamodp:145
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    References listed on IDEAS

    as
    1. von Hayek, Friedrich August, 1989. "The Pretence of Knowledge," American Economic Review, American Economic Association, vol. 79(6), pages 3-7, December.
    2. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agricultural development strategy; agricultural finance; agricultural marketing; livestock feeding; Kazakhstan; landwirtschaftliche Entwicklungsstrategie; Agrarfinanzierung; landwirtschaftliche Vermarktung; Tierernährung; Kasachstan;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P32 - Economic Systems - - Socialist Institutions and Their Transitions - - - Collectives; Communes; Agricultural Institutions
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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