Kazakhstan's cotton sector reforms since independence

Die Reformen des kasachstanischen Baumwollsektors seit der Unabhängigkeit

Dauren Oshakbayev, Regina Taitukova, Martin Petrick and Nodir Djanibekov

No 172, IAMO Discussion Papers from Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

Abstract: With the goal of reducing the dependency on oil revenues, the Government of Kazakhstan has recently increased its budget allocations to prop up the domestic agricultural sector. Yet, many observers agree that it is less the amount of public spending that induces long-term growth than the quality of the regulatory environment. Against this background, the current paper analyses the nature and effects of state regulation in the cotton sector. In the early 2000s, it was considered to be the only example of private vertical coordination in Kazakhstani agriculture, which contrasted sharply with the state mandates imposed on producers in Uzbekistan and Turkmenistan. However, in 2007, regulation in Kazakhstan forced ginneries to use a complex warehouse receipt system without making sure that it was accepted by stakeholders and without appropriate institutions for implementing it in place. At the same time, it imposed financing restrictions on ginneries, which were major loan and input providers to farmers. Further measures included the establishment of a special economic zone to host a "cotton cluster". In the following years, private producers and investors turned away from cotton, and cotton area and output fell substantially. We argue that the cotton sector performance after 2007 shows how ill-designed regulation and government interference can turn a promising economic sector into decline. As an unintended side effect, the regulation promoted more diversified crop rotations based on high value crops.

Keywords: cotton; Kazakhstan; public regulation; commodity finance; Baumwolle; Kasachstan; staatliche Regulierung; Rohstofffinanzierung (search for similar items in EconPapers)
JEL-codes: O13 O25 P23 Q15 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-cis and nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/173255/1/1011202573.pdf (application/pdf)

Related works:
Working Paper: Kazakhstan's cotton sector reforms since independence (2018)
Working Paper: Kazakhstan’s cotton sector reforms since independence (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:iamodp:172

Access Statistics for this paper

More papers in IAMO Discussion Papers from Leibniz Institute of Agricultural Development in Transition Economies (IAMO) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().