A policy agenda for agricultural development in Kazakhstan

Martin Petrick, Andreas Gramzow, Dauren Oshakbaev and Jürgen Wandel

No 15, IAMO Policy Briefs from Leibniz Institute of Agricultural Development in Transition Economies (IAMO)

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, we offer new insights into the constraints that hamper further economic growth and provide an assessment of the Kazakhstani government's agricultural development strategy. Most managers in the farm survey doubt that agricultural investments deliver a sufficiently reliable return required for credit funding and thus do not take loans. 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. The government's modernisation strategy focuses on providing subsidised capital, but underestimates the knowledge and incentive problems inherent to such measures. The government should rather provide impartial and reliable public services to the sector, ensuring that the weakest links in food chain development are identified and private entrepreneurs are incentivised to strengthen them. Our evidence suggests that a bundle of measures designed to improve the local institutional environment of agriculture is more important than massive state funding of certain production lines.

Date: 2014
New Economics Papers: this item is included in nep-agr, nep-cwa and nep-tra
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Working Paper: A policy agenda for agricultural development in Kazakhstan (2014)
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