changing land tenure and farm structure in central asia
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"Changing Land Tenure and Farm Structure in Central Asia" presented by Zvi Lerman, at Regional Research Conference “Agricultural Transformation and Food Security in Central Asia”, April 8-9, 2014, Bishkek, KyrgyzstanTRANSCRIPT
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Changing Land Tenure and Farm Structure in Central Asia
Zvi LermanThe Hebrew University of Jerusalem, Israel
Agricultural Transformation and Food Security in Central AsiaRegional Research Conference, IFPRI and University of Central Asia
Bishkek, Kyrgyzstan, 8-9 April 2014
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What are we going to discuss?
• Agriculture: from collapse to renewed growth
• Farm structure: individualization of land and production
• Agricultural productivity and drivers of growth
• And time permitting – increasing incomes as tool to attain food security (findings from several surveys)
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Four phases of agricultural development (GAO)
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50
100
150
200
250
300
3501965=100
CentAsia
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GAO for three regions
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50
100
150
200
250
300
3501965=100
CentAsia
TransCau
European
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Example of Trans-Caucasus
AzArmGru
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Kaz, Taj, Tur: 1998 turnaround
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
100
200
300
400
5001965=100
Tur
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50
100
150
200
250
3001965=100
Taj
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50
100
150
200
2501965=100
Kaz
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Kyr, Uzb: 1995-1996 turnaround
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
50
100
150
200
2501965=100
Kyr
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 20150
100
200
300
400
5001965=100
Uzb
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Dramatic individualization of land tenure: arable land
Taj Uzb
Kyr Kaz
1991 1995 1999 2003 2007 20110
1
2
3
4
5mln ha
Enterprises
Peasant farms
Households
1991 1995 1999 2003 2007 20110
10
20
30
40million ha
Enterprises
Peasant farms
Households
1991 1994 1997 2000 2003 2006 20090
200
400
600
800
1000
1200
1400
1600'000 ha
Enterprises
Peasant farms
Households
1991 1994 1997 2000 2003 2006 20090
200
400
600
800
1000
1200'000 ha
Enterprises
Peasant farms
Households
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Total concentration of livestock in rural households
1960 1970 1980 1990 2000 20100
500
1000
1500
2000
2500'000 st. head
Enterprises
Individual
1980 1985 1990 1995 2000 2005 20100
2
4
6
8
10
12
14mln st. head
Enterprises
Individual
1980 1984 1988 1992 1996 2000 2004 20080
500
1000
1500
2000
2500'000 st. head
Enterprises
Individual
1980 1984 1988 1992 1996 2000 2004 2008 20120
2
4
6
8
10
12mln head
Enterprises
Individual
Kyr Taj
Kaz Uzb
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Changing structure of agricultural production
Taj Uzb
Kyr Kaz
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 20110%
20%
40%
60%
80%
100%
Ent
PF
HH
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 20110%
20%
40%
60%
80%
100%
Ent
PF
HH
1991 1993 1995 1997 1999 2001 2003 2005 2007 20090%
20%
40%
60%
80%
100%
Ent
PF
HH
1991 1994 1997 2000 2003 2006 2009 20120%
20%
40%
60%
80%
100%
Ent
PF
HH
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The special case of TurkmenistanOfficially reported statistics show most arable land still in “peasant associations” – former collective farms (enterprises)
In fact, land in peasant associations is distributed to family leaseholds – a family farming structure: the associations do not produce as corporate farms
1991 1993 1995 1997 1999 2001 2003 2005 20070%
20%
40%
60%
80%
100%
Enterprises Peasant farms Households
1991 1993 1995 1997 1999 2001 2003 2005 20070%
20%
40%
60%
80%
100%
Corporate Leaseholders Peasant farms Households
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Change in individual land use and individual production near turnaround
arable, %
arable, %
jump GAO, % GAO, % jump
t-1 t+1 (t+1)/(t-1) t-1 t+1 (t+1)/(t-1)
Kaz (98) 16 27 1.69 53 72 1.36
Kyr (95) 26 49 1.88 69 80 1.16
Taj (98) 16 32 2.00 54 57 1.06
Uzb (96) 12 19 1.58 52 64 1.23
Tur (98) 54 84 1.56
Az (97) 6 82 13.6 67 93 1.38
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Significant land reform legislation at turnaround point
Turnaround year
Date of legislation
Name of legislation
Kaz 1998 8.19973.1998
Land sharesPeasant farms law
Taj 1998 6.19966.1998
Enterprise reorganizationRight to land use
Tur 1998 12.19961.1997
Land allocation to individualsImproving farm incentives
Kyr 1995 2.1994
8.1994
Measures for deepening land and agrarian reform Procedures for implementation of land reform; reorganization of ag enterprises; land share determination
Uzb 1996 8.1994 Measures for economic encouragement of the development of agriculture
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Changing role of individual farms 1991-2010
Share of arable, % Share of GAO, %
1991 2010 1991 2010
Kaz 1 39 32 71
Kyr 3 76 44 98
Taj 7 86 36 91
Tur 5 93
Uzb 8 98 33 98
Average 5 78 36 90
Russia 2 31 24 56
Ukraine 7 49 27 60
Azerbjn 4 84 35 95
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Fragmentation/consolidation: number and size of peasant farms
• Kyr/Taj: number of farms rapidly increases, average farm size decreases
• Uzb: inverse pattern due to “land optimization” campaign – number of farms down, ave size up (since 2007-2008)
19911993
19951997
19992001
20032005
20072009
20110
50
100
150
200
250
0102030405060708090100
ha per farm number of farms
num
ber o
f far
ms,
'000
ha p
er fa
rm
Uzb
19951997
19992001
20032005
20072009
20112013
0
10
20
30
40
50
60
70
80
0
5
10
15
20
25
30
Number cultiv/farm
'000
farm
s
culti
vabl
e ha
/far
mTajKyr
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Growth is faster in countries that have more land in individual use
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Russia: Faster growth in regions with more land in individual use
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Agricultural growth is driven by individual sector
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 20100
20
40
60
80bln som (1999 prices)
Ent
PF
HH
• Taj -- households• Kyr – peasant farms• Kaz – indiv (mainly peasant
farms): 400 bln tenge 1998-2011 vs. 100 bln tenge in enterprises
Kyr
Kaz
1998 2000 2002 2004 2006 2008 20100
200
400
600
800
1000bln tenge (2000 ag prices)
0
200
400
600
800
1000
Ent
Indiv
Taj
1998 2000 2002 2004 2006 2008 20100
500
1000
1500
2000
2500
3000
3500
4000mln somoni (2003 prices)
Ent
PF
HH
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Land and Labor Productivity in CIS 1980-2004
1980 1985 1990 1995 2000 20050
20
40
60
80
100
120
140
Land
Labor
19
Productivity of land and labor in CIS 1980-2004
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Productivity of land and labor in CIS by region 1980-2004
1980 1985 1990 1995 2000 20050
20
40
60
80
100
120
Land
Labor
1980 1985 1990 1995 2000 20050
20
40
60
80
100
120
140
160
Land
Labor*
Transcaucasia
Central Asia
European CIS
1980 1985 1990 1995 2000 20050
50
100
150
200
250
Land
Abandon
Labor
20
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Households outperform all farms by relative productivity (2006-2010)
Kaz Kyr Taj Uzb0
1
2
3
4
5
6
7
8% GAO/% arable land
Ent
PF
HH
Based on GAO per ha of arable land; Kaz scale compressed (HH=61!)
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Productivity gaps among farms of different types: households on top
Kyr
TajUzb
Kaz
1999 2001 2003 2005 2007 2009 20111
10
100
1000som/sown ha (current prices)
Enterprises
Peasant farms
Households
1995 1997 1999 2001 2003 2005 2007 2009 2011100
1000
10000soum/ha (2006 prices)
Enterprises
Peasant farms
Households
1991 1994 1997 2000 2003 2006 200910
100
1000
10000
100000somoni/ha (2003 prices)
Enterprises
Peasant farms
Households
1990 1993 1996 1999 2002 2005 200810000
100000
1000000
10000000'000 tenge/sow n ha (2008 prices)
Enterprises
Peasant farms
Households
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Kazakhstan: Productivity vs. share of enterprises in agriculture
The five points represent the five zones: North, South, East, Center, West
South
North
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Kazakhstan’s regions
WEST: Ман – Mangistau; Аты – Atyrau; ЗКО – West Kazakhstan Oblast; Акт – Aktyubinsk; NORTH: Кос – Kostanai; СКО – North Kazakhstan Oblast; Акм – Akmola; Пав – Pavlodar; EAST: ВКО – East Kazakhstan Oblast; CENTER: Кар – Karaganda; SOUTH: Кыз – Kyzylorda; ЮКО – South Kazakhstan Oblast; Жам – Zhambyl; Алм – Almaty Oblast
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Kazakhstan: Higher grain productivity in the South
Zone Sown to grain, %
Share of harvest, %
Relative productivity
Yields, kg/ha
North 72 65 0.90 710-930
South 8 19 2.34 1,800-3,200
East 4 5 1.29 1,160
Center 6 5 0.78 680
West 10 6 0.61 310-570
Kazakhstan 100 100 1.00 880
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Enterprises lose out even where they have the strongest advantage
North South
Leading commodities GrainHorticulture, technical crops
Grain yields Low High
Farming structureStrong presence of enterprises
Mainly individual farms
Farm sizes Very largeSmaller than in the North
Productivity Lowest Highest
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Agroholdings in Kazakhstan???
“[An agro-holding] typically operates as an umbrella company for numerous individual agricultural enterprises, providing operating capital and marketing channels for commodities produced on the farms.
By the mid-2000s around fifteen very large grain holdings had emerged in Kazakhstan. For example, Ivolga-Holdings controlled about a million hectares of farmland and owned eleven elevators in Kazakhstan … and accounted for 500,000-700,000 tonnes of grain exports from Kazakhstan per year (Wandel, 2009).
In Kostanai oblast, which is the most important grain-producing region of Kazakhstan, over 40 per cent of the agricultural area is held by the four largest holding companies [Unsourced].”
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Agroholdings in Kazakhstan???
• “Agro-holdings play a major role in grain and wheat production but no reliable data are available concerning their share”
The case of wheat production in KazakhstanInterim report EUR 2013, EC Joint Research Center (2014)
• In Russia, “Agroholdings control 6.6% of sown area and produce 7.7% of the grain harvest – slightly less than 6 million tons”
2006 data from V. Uzun, N. Shagaida, V. Saraikin
FAO/REU Policy Study No. 2012-2 (July 2012)
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Conclusions
• Recovery of agricultural growth is associated with individualization of farming
• Small family farms have become the backbone of post-transition structure
• A new farming structure requires a new market infrastructure for farm services (government policies!)
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Food Security
• Food insecurity = Vulnerability• Improved income is the best tool for
alleviating vulnerability and ensuring food security
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Income increases with farm size
Tajikistan (TajLSMS 2003) Uzbekistan (WB 2006)
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Income increases with farm size: dehkans and farmers in Uzbekistan
Family Income
Income per one family member
FarmersDehkans
Income of family, thousand sum
Plot, hectare
FarmersDehkans
Income per one person, thousand sum
Plot, hectare
Source: 2007 survey of dehkans and farmers, MinAg,Tahlil, and Mashav
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Wellbeing increases with farm size: Tajikistan
Level of wellbeing
HH plots (ha)
Family dehkan farms (ha)
Low 0.5 8
Medium 1.0 10
Comfortable 2.3 10
Source: May 2011 PPCR survey Source: 2008 FAO survey
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Income and wellbeing rise with commercialization
Tajikistan (2011 PPCR) Uzbekistan (2007 UNDP)
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Households sell! Milk in Uzbekistan
More produced, more sold…but sales channels are underdeveloped
Activities
Milk selling farms (“sellers”)
36%
Share of output sold by “sellers”
60% (1600 kg)
Sale channels:
Neighbors, friends 53%
Market (direct) 36%
Middlemen 33%
Source: 2007 UNDP survey Source: 2007 UNDP survey
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Factors increasing family income (Tajikistan)
Positive effect of capitalsFactors Effect
Human capital
Family sizе +
Age of HH head +
Years of schooling +
Physical capital
Plot size +
HH leases land +
HH has machinery +
Effect of land leasingWithout leasing
With leasing
Household plots, ha
0.7 20
Family dehkan farms, ha
3.2 28
Family income, somoni
159 212
Per capita, somoni
25 27
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The benefits of land reform for the rural population
More land to smallholders
Higher well-being Higher commercialization
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Household income highly diversified (Uzbekistan)
Livestock
Crops
Pension
Salary
Business Migrants
Source: 2007 survey of dehkans and farmers, MinAg,Tahlil, and Mashav
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Four approaches to raising rural incomes
• Increases in productivity (output per unit of land or per head of livestock) – intensive approach (advisory services, government supported R&D)
• Increases in endowments (land, livestock, machinery, fertilizer) – extensive approach
• Increases in commercialization: – improved access to market channels (service
cooperatives)– shift to higher value-added products (advisory
services)• Diversification into non-agricultural activities in rural
areas
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Fifth approach: Overcoming the “curse of smallness”
• Contract arrangements with processors (Nestle in Uzbekistan, Danone in Ukraine, a domestic dairy in Azerbaijan)
• Effective enlargement through creation of service cooperatives:– Collection and sale of products from scattered small
farms– Processing (value added!)– Purchase and supply of farm inputs– Feed mixing centers and feed sale stations– Machinery pools for joint servicing of arms