"Access to improved seeds and fertilizers and agricultural productivity in Kyrgyzstan“ presented by Kanat Tilekeyev, at Regional Research Conference “Agricultural Transformation and Food Security in Central Asia”, April 8-9, 2014, Bishkek, Kyrgyzstan

1. Kanat Tilekeyev
Research Fellow
Institute of Public Policy and Administration
University of Central Asia
Access to improved seeds
and fertilizers and
agricultural productivity in
Kyrgyzstan

2. Outline
1. Agriculture Profile
2. Seed Sector Overview
3. Fertilizer Sector Overview
4. Empirical evidence of fertilizers using impact -
Example of Talas farmers (2011 data)
5. Conclusions

3. Main Facts about Agriculture
o Agriculture constantly declined in GDP (34% - 2000, 28% -
2005, 18% - 2011) – low productivity problem
o Rural population is dominating, but labor employment in
agriculture decreasing (43%-2003, 34%-2007, 30.7%-2011)
o Labor migration to Russia and Kazakhstan (mainly from South regions)
o Limited land resources - 1.1 million hectares of arable land
(80% is private land)
o Main crops (2011) by area : grain crops (54%), fodder crops
(25%), potatoes, oil seeds, vegetables and cotton (all -19%)
o Grain crops mainly concentrated in the North (low labor intensive crops)
o Fruits, vegetables, cotton crops mainly grown in the South (high labor
intensive crops)
o Low grain crop productivity: wheat – 2.3 ton/Ha, barley – 2 ton/Ha

4. Agricultural Transformation - Crop Structure
Transformation
o 95% of output in agriculture – small scale farmers (83% of land
owners has < 1 ha)
Crop area dynamics in Kyrgyzstan in 1990-2011, %
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990 1995 2000 2003 2005 2007 2011
Other crops
Cotton
Vegetables
Potatoes
Forage crops
Other grain
Beans
Corn
Barley
Wheat
o Crop structure changed since 2000 after land reform

5. •Main agricultural production is a small – scale production,
•Low growth productivity is a key problem for the sector
Main directions of the productivity improvement:
o Small scale mechanization level,
o Improve of irrigation techniques,
o Rural credit,
o Extension services,
o Improved inputs – Seeds and Fertilizers
Improved Inputs and Agricultural Productivity

6. 6
Seed Sector – Current Status
Number of seed farms in
Kyrgyzstan
Arable land in
seed farms
year Total State
Farms
Private
Farms
year thousand
ha
1991 46 46 1990 229.1
1997 119 57 62 1995 56.0
2000 175 75 100 2000 102.5
2005 151 43 118 2005 77.9
2009 188 22 166 2009 40
84%
8%
1% 3% 3% 1%
Seed farms specialization by
crops
cereals cotton
forage grasses potato and vegetables
fruits tobacco

7. 7
Seed Sector Problems
Seed Policy: Reform of institutional infrastructure and seed value
chain (Legislation and organizations were reorganized in 2000-2009)
Main Problems:
•Legislative base is strong, but unfinished agenda for royalty and
licensing
•Seed production based on ‘production-oriented’ seed farms with lack
of marketing expertise.
•Insufficient support of seed producers: old machinery
• Seed producers concentrates on cereals
•State interventions in seed sector strong -Seed Distribution Schemes
Case
•Low potential of profitability of the variety use to the breeder

8. 888
Policy Gaps and New Research Agenda
8
8
Policy Case 1 – Seed Distribution Scheme
Seed Distribution Scheme aimed to provide access to the farmers by
seeds (grain crops) as subsidized credit from seed producers
State Fund of the Economy Development
(SFED) distributes grain seeds for farmers
annually – 2-3 thousand tons. Total
volume of this support varies from 0.6 to
1.2 million USD. SFED
Farmers
Policy Problems:
1. Program management problem – Aim of the program is
unclear; farmers selection process is not transparent.
2. Farmers often not returned credit in time and fully.
3. Stakeholders interests conflict: Seed prices was
overestimated (2001-2006), Government changes rule
after seeds were distributed (2008-2009 conflict).
4. Local seed producers commercialization incentives are
deteriorated due to Government intervention.
Scheme need to be
redesigned to increase
policy efficiency.
State Material
Reserve Fund
Seed
producers

9. 9
Policy Gaps and New Research Agenda
9
9
Fertilisers Sector
Overall programmatic goal of specific fertilizer policy is to
increase crop productivity to overpass hunger and poverty
of rural households
Fertilizer Policy:
1. Monitoring of import of fertilizers – regulatory activity
•Listing, registration and testing of fertilizers, pesticides, herbicides and other chemicals for
plant protection for use in agricultural production,
•Purchasing of the stock of pesticides from state budget for emergency situations (to prevent
and fight with the pests invasions),
•Assessment of the fertilizer availability and declaratory control of firms- suppliers of
fertilizers and other chemicals,
2. Access to Market Liberalizing
•Decrease tax and administrative barriers - no licensing, zero rate on VAT and custom duties
(Custom Tariff Law, 2004); since 2008 VAT exemption for domestic and imported fertilizers.
3. Attempts to protect market from re-export to neighbors
•(Seasonal export duty, Decision of Government, 2012)

10. 1010
Policy Gaps and New Research Agenda
10
10
Fertilisers Sector Status
Fertilizers import
increased
significantly after
market opening in
2004. Import
declining in 2009-
2010 related to
fertilizers price
boom in 2008 and
political instability in
Kyrgyzstan in 2010.

11. 1111
Policy Gaps and New Research Agenda
11
11
Policy Case 2 – Export Duty on Fertilizers
Kyrgyz Government in February 2012 introduced seasonal export duty (0.3
USD/kg) for mineral fertilizers from mid-Feb till mid-Aug period to protect
domestic market.
Introduction of the export
duty doesn’t support to
decrease ‘official’ re-
export of fertilizers –
export of fertilizers
increased in 2012. Main
country of re-export is
Uzbekistan – 89% in 2011
and 99% in 2012.
Conclusion: Government cannot affect on the market directly.
Strategy to protect domestic market need to be re-analyzed
Source: COMTRADE database (http://
http://comtrade.un.org/db/) (date accessed: Jul. 2013).

12. Empirical Analysis of Fertilizers Use – Regional Case
Researchers often faced with the absence of the data for
empirical analysis to assess importance of the input factors and
policy changes. Evidence from the regional case study – Talas
Oblast (Tilekeyev, 2011)
Target Area -Talas Oblast
•Located in north-west of Kyrgyzstan
•92% residents are Kyrgyz
•220 thousand inhabitants
•85% rural residents
•Rural sector dominating - 64% of
regional GDP
12

13. Empirical Analysis of Fertilizers Use (continued)
Main cultures:
Haricot beans
(56%), hay(24%), whe
at (9%), potatoes
(7%)Main livestock;
cattle (59% of
HH), sheep
(48%), horses (17%)
Sample:
297 households
Representative on
regional and district
levels
Geographical
randomization
Households Parameters:
Average size of HH – 5.4
pers.
Residents in working age
– 55.4%,
Nationality -92% Kyrgyz
Average age -27.3 years,
88% of HH has a land plot,
Average land plot - 2 ha
per HH
Crop production –
56%, Livestock production
43%, renting land – 0.4%
Agricultural income – 71%
Non-agricultural income-
29%
13

14. Evidence from Talas farmers experience
(Agricultural Production Relationship
with Land – Labor – Fertilizers )
2,13210 iii FertilizerLaborLandY
Yi is the aggregated crop output in monetary terms of the i-th household
Landi is the total land used for crop production, hectares of the i-th
household
Labori is number of working people in working age of the i-th
household, persons
Fertilizeri 1 is the categorical dummy variable, which shows value of 1 if i-th
household use fertilizers or 0 if not,
or
Fertilizeri 2 is the variable, which shows amount of use of fertilizers by i-th
household, in kilogram per ha.
14
Empirical Analysis of Fertilizers Use (continued)

15. 15
15
Empirical Analysis of Fertilizers Use (continued)

16. 1. Agricultural policy decisions often failed due to absence
of the necessary empirical evidence.
2. Analysis of the effectiveness of state programs on seed
and fertilizers markets requires deep information (often
unavailable) about impact of improved seeds on
productivity of small – scale farmers, impact of fertilizers
and other technological inputs.
3. Researchers may overpass the policy gap through
experimental and survey activity on the farmers and
market stakeholders level.
4. Joint work of researchers and Government may improve
policy decision quality and results.
Main Conclusions
16

17. Thanks for the attention!