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Kanat Tilekeyev
Research Fellow
University of Central Asia
Seed and Fertilizers
Policy Development
in Kyrgyz Republic
Outline of the Presentation
1. Introduction – Agriculture Profile
2. Recent Government Policies
3. Input Policy Assessment...
Agriculture Profile
Basic Facts & Figures:
o Population – 5.7 mil. people, 2/3 -
rural
o Area – 199 000 km2, 48% -
mountai...
Agriculture Profile (continued)
Agriculture Key
Features
o Crop structure
changed since 2000
after land reform
o 90% of ag...
Agriculture recover
pre-transition level despite
huge complex of unsolved
institutional and
infrastructural problems:
•Low...
Recent Government Policies & Implications
Kyrgyz Government since Food Crisis period starting in
2008 select intensive pol...
77
Input Policy Assessment - Seeds
Overall goal of specific seed and fertilizer policy is to
increase crop productivity to...
8
Policy Gaps and New Research Agenda
8
8
Input Policy Assessment - Fertilisers
Overall goal of specific seed and fertiliz...
999
Policy Gaps and New Research Agenda
9
9
Policy Case 1 – Seed Distribution Scheme
Seed Distribution Scheme aimed to pro...
1010
Policy Gaps and New Research Agenda
10
10
Policy Case 2 – Export Duty on Fertilizers
Kyrgyz Government in 2012 introd...
Example of Analysis of Fertilizers Use
Researchers often faced with the absence of the data for
empirical analysis to asse...
Analysis of Fertilizers Use (continued)
Main cultures:
Haricot beans (56%),
hay(24%), wheat (9%),
potatoes (7%)
Main lives...
Evidence from Talas farmers experience
(Fertilizers –Agricultural Production Relationship)
Analysis of Fertilizers Use (co...
1. Agricultural policy decisions often failed due to unclear
decision-making process, absence of the necessary
information...
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Input policy in Kyrgyzstan- Kanat Tilekeyev

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Transcript of "Input policy in Kyrgyzstan- Kanat Tilekeyev"

  1. 1. Kanat Tilekeyev Research Fellow University of Central Asia Seed and Fertilizers Policy Development in Kyrgyz Republic
  2. 2. Outline of the Presentation 1. Introduction – Agriculture Profile 2. Recent Government Policies 3. Input Policy Assessment - Seeds & Fertilisers 4. Cases of Recent Government Policies for Seeds and Fertilizers 5. Empirical evidence of fertilizers using - Example of Talas farmers
  3. 3. Agriculture Profile Basic Facts & Figures: o Population – 5.7 mil. people, 2/3 - rural o Area – 199 000 km2, 48% - mountains, 44% - pastures, 7.5% - agricultural lands (1.1 mil. Ha) o Agriculture constantly declined in GDP (34% in 2000, 28% in 2005, 18% in 2011) o Main crops (2011) by area : grain (54%), fodder crops (25%), potatoes, oil seeds, vegetables and cotton ( all -19%) Sources: (Abazov, 2008)(National Statistical Office, 2011), (2010 FAO) o Low grain crop productivity: wheat – 2.3 ton/Ha, barley – 2 ton/Ha o Labor employment in agriculture decreasing (43%- 2003, 34%-2007, 30.7%-2011)
  4. 4. Agriculture Profile (continued) Agriculture Key Features o Crop structure changed since 2000 after land reform o 90% of agricultural land – privatazed 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 Fertilizers – imported, mainly from Uzbekistan & Russia (100 thousand ton in 2004-2011)
  5. 5. Agriculture recover pre-transition level despite huge complex of unsolved institutional and infrastructural problems: •Low mechanization level, •Insufficient credit to farmers, •Weak extension services, •Deteriorating irrigation system Source: Lerman /FAO 2009 Agriculture Profile (continued)
  6. 6. Recent Government Policies & Implications Kyrgyz Government since Food Crisis period starting in 2008 select intensive policy interventions approach: Food security Law  Food Security Monitoring  Food Reserves & Distribution to Vulnerable Households  Price and Trade Interventions  Food Security Council (Ministry of Agriculture – advisory body) The Agri-Food Processing Corporation- main instrument of the Government in Food Crisis Interventions: • Import food to create reserve stocks and stabilize prices, • Purchase wheat on the domestic market to stimulate own production, • Export support for haricot beans, • Investment in agro-processing pilot models (7 factories) – creation businesses, management and marketing support, providing seed and fertilizers Result of interventions in food price stabilization was ineffective Source: World Bank 2011
  7. 7. 77 Input Policy Assessment - Seeds Overall goal of specific seed and fertilizer policy is to increase crop productivity to overpass hunger and poverty of rural households Seed Policy: Development of institutional infrastructure and seed value chain (Legislation and organizations 2000-2009) Main Result s: •Legislative base is strong , but unfinished agenda for royalty and licensing • Seed producers concentrates on grain or forage crops •Insufficient financing of agricultural budget •Ineffective state interventions in Seed Distribution Schemes (destroying private market development) •Low adaptability to new crop introduction for seed producers World Bank, Agricultural Policy Update, 2011) 77
  8. 8. 8 Policy Gaps and New Research Agenda 8 8 Input Policy Assessment - Fertilisers Overall goal of specific seed and 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)
  9. 9. 999 Policy Gaps and New Research Agenda 9 9 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. Conclusion: Scheme need to be redesigned to increase policy efficiency. State Material Reserve Fund Seed producers
  10. 10. 1010 Policy Gaps and New Research Agenda 10 10 Policy Case 2 – Export Duty on Fertilizers Kyrgyz Government in 2012 introduced seasonal export duty (0.3 USD/kg) for mineral fertilizers from mid-Feb till mid-Aug period to protect domestic market. 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. 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).
  11. 11. Example of Analysis of Fertilizers Use 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 11
  12. 12. Analysis of Fertilizers Use (continued) Main cultures: Haricot beans (56%), hay(24%), wheat (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% 12
  13. 13. Evidence from Talas farmers experience (Fertilizers –Agricultural Production Relationship) Analysis of Fertilizers Use (continued) 2,1210 iii FertilizerLandY Fertilizeri 1 is the categorical dummy variable, which shows value of 1 if i-th household use fertilizers or 0 if not, - Fertilizeri 2 is the variable, which shows amount of use of fertilizers by i-th household, in kilogram per ha. 13
  14. 14. 1. Agricultural policy decisions often failed due to unclear decision-making process, absence of the necessary information. 2. Analysis of the state program effectiveness requires deep information (currently unavailable) about productivity of seeds, impact of fertilizers and other inputs on small – scale farmers. 3. Researchers may overpass the policy gap through experimental research and survey activity on the farmers and stakeholders level. 4. Joint work of researchers and Government will improve policy decision efficiency. Policy Recommendations 14
  15. 15. Thanks for the attention!
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