Kazak Farm Reforms “Flawed”

Tuesday, 22 February, 2005

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Eduard Poletaev

Small farms struggling to survive appear to have lost out in an ambitious government-sponsored rural development programme aimed at bolstering agriculture and curbing the migration of villagers to the cities.

The programme, which began in 2003 and is expected to be completed by the end of the decade, includes resettling workers from poor agricultural regions to more productive ones; improving rural infrastructure and farming technology; and privatising farmland.

President Nazarbaev apparently hopes that the measures will strengthen his country’s bid to join the World Trade Organisation. At present, the agricultural sector does not meet required international standards.

Nazarbaev recently said he believed his programme would make long-suffering smallholders “masters of the land”, but they say the measures have benefited them little.

“The government admits that the republic’s agriculture is in a disastrous state, but we producers have seen no real results yet [from the rural development programme],” said Serik Kerimkulov, chairman of the Farm and Peasant Association.

Small-scale farmers suggest the programme is flawed, as it has not addressed two of their main problems: the high price of land and the difficulties in getting produce to market.

Currently, many farmers simply can’t afford to buy good quality land and have to rely on loans, but the banks offer unrealistic terms.

Many of the smaller banks provide credit at very high levels of interest and demand chunks of sometimes up to three thousand hectares of prized irrigated land as a deposit.

“Those farms that have 10,000 hectares can afford a deposit if they wish – but I only have two thousand hectares and cannot afford to risk any of it,” said Aibek Narmetov, a farmer from the Sairam province of South Kazakstan.

Another smallholder in the area, Alikhan Mambetov, said he had similar problems, “I cannot present any sort of property to a bank that would have any value – they’re not interested in old sewing machines or tractors.”

Kermimkulov is urging the authorities to provide some sort of financial scheme to help his members purchase land, “Successful agricultural development requires a long-term credit system for farmers – at the moment there is no such system.”

In addition, small-scale farmers have difficulty getting their produce to customers, as more often than not they have to deal with powerful middlemen who control the markets. “The middlemen force farmers by hook or by crook to sell their produce to them,” said Narmetov.

Sometimes, farmers opt for these intermediaries, as the alternative - filling out huge amounts of paperwork and bribing officials - is barely worth consideration.

Some politicians believe that unless these problems are tackled small farms will continue to decline and rural workers will have no other option but to head for the cities.

The current crisis in agriculture emerged in the early Nineties when the Kazak leadership focused all its energies on petroleum exports, which promised quick returns.

Farming went into steep decline – grain harvest fell, livestock numbers dwindled and strong collective farms fell apart. Tens of thousands of villagers sold up and went in search of work in urban centres.

With funds generated from the oil sector, Nazarbaev is now seeking to arrest this trend. This he must do for the country to be considered for WTO membership in a few years’ time.

Militating against membership is the fact that Kazak agricultural produce is currently well below international standards.

Some agricultural experts warn that even if the country were to join the WTO before completion of its rural development programme, small-scale farmers could suffer yet more upset.

The experts say that those still using outdated, inefficient equipment will simply be unable to compete with cheap imported goods.

Eduard Poletaev is IWPR director in Kazakstan, Ainur Adilbaeva and Daur Dosybiev are independent journalists.