Changing Land Tenure and
Farm Structure in Central Asia
Zvi Lerman
The Hebrew University of Jerusalem, Israel
Agricultural...
What are we going to discuss?
• Agriculture: from collapse to renewed
growth
• Farm structure: individualization of land
a...
Four phases of agricultural
development (GAO)
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
0
50
100
150
200
250
...
GAO for three regions
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
0
50
100
150
200
250
300
350
1965=100
CentAsi...
Example of Trans-Caucasus
Az
Arm
Gru
Kaz, Taj, Tur: 1998 turnaround
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
0
100
200
300
400
500
1965=100
Tur
1...
Kyr, Uzb: 1995-1996 turnaround
1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015
0
50
100
150
200
250
1965=100
Kyr
19...
Dramatic individualization of land
tenure: arable land
Taj Uzb
Kyr Kaz
1991 1995 1999 2003 2007 2011
0
1
2
3
4
5
mln ha
En...
Total concentration of livestock in
rural households
1960 1970 1980 1990 2000 2010
0
500
1000
1500
2000
2500
'000 st. head...
Changing structure of agricultural
production
Taj Uzb
Kyr Kaz
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
0%
20...
The special case of Turkmenistan
Officially reported statistics
show most arable land still in
“peasant associations” –
fo...
Change in individual land use and
individual production near turnaround
arable,
%
arable,
%
jump GAO, % GAO, % jump
t-1 t+...
Significant land reform legislation at
turnaround point
Turnaround
year
Date of
legislation
Name of legislation
Kaz 1998 8...
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...
Fragmentation/consolidation:
number and size of peasant farms
• Kyr/Taj: number of farms rapidly
increases, average farm s...
Growth is faster in countries that
have more land in individual use
Russia: Faster growth in regions
with more land in individual use
Agricultural growth is driven by
individual sector
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
0
20
40
60
80
bl...
Land and Labor Productivity in CIS
1980-2004
1980 1985 1990 1995 2000 2005
0
20
40
60
80
100
120
140
Land
Labor
19
Product...
Productivity of land and labor in
CIS by region 1980-2004
1980 1985 1990 1995 2000 2005
0
20
40
60
80
100
120
Land
Labor
1...
Households outperform all farms by
relative productivity (2006-2010)
Kaz Kyr Taj Uzb
0
1
2
3
4
5
6
7
8
% GAO/% arable land...
Productivity gaps among farms of
different types: households on top
Kyr
TajUzb
Kaz
1999 2001 2003 2005 2007 2009 2011
1
10...
Kazakhstan: Productivity vs. share
of enterprises in agriculture
The five points represent the five zones: North, South, E...
Kazakhstan’s regions
WEST: Ман – Mangistau; Аты – Atyrau; ЗКО – West Kazakhstan Oblast; Акт – Aktyubinsk;
NORTH: Кос – Kos...
Kazakhstan: Higher grain
productivity in the South
Zone Sown to
grain, %
Share of
harvest, %
Relative
productivity
Yields,...
Enterprises lose out even where
they have the strongest advantage
North South
Leading commodities Grain
Horticulture, tech...
Agroholdings in Kazakhstan???
“[An agro-holding] typically operates as an umbrella company for
numerous individual agricul...
Agroholdings in Kazakhstan???
• “Agro-holdings play a major role in grain and
wheat production but no reliable data are
av...
Conclusions
• Recovery of agricultural growth is
associated with individualization of farming
• Small family farms have be...
Food Security
• Food insecurity = Vulnerability
• Improved income is the best tool for
alleviating vulnerability and ensur...
Income increases with farm size
Tajikistan (TajLSMS 2003) Uzbekistan (WB 2006)
Income increases with farm size: dehkans
and farmers in Uzbekistan
Family Income
Income per one family
member
Farmers
Dehk...
Wellbeing increases with farm
size: Tajikistan
Level of
wellbeing
HH plots
(ha)
Family
dehkan
farms (ha)
Low 0.5 8
Medium ...
Income and wellbeing rise with
commercialization
Tajikistan (2011 PPCR) Uzbekistan (2007 UNDP)
Households sell! Milk in Uzbekistan
More produced, more sold
…but sales channels are
underdeveloped
Activities
Milk sellin...
Factors increasing family
income (Tajikistan)
Positive effect of capitals
Factors Effect
Human capital
Family sizе +
Age o...
The benefits of land reform for the
rural population
More land to smallholders
Higher well-being Higher
commercialization
Household income highly
diversified (Uzbekistan)
Livestock
Crops
Pension
Salary
Business
Migrants
Source: 2007 survey of d...
Four approaches to raising rural
incomes
• Increases in productivity (output per unit of land or per
head of livestock) – ...
Fifth approach: Overcoming the
“curse of smallness”
• Contract arrangements with processors (Nestle in
Uzbekistan, Danone ...
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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, Kyrgyzstan

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  • Updated to 2010
  • Updated to 2010
  • NEED TO UPDATE TO 2010
  • Updated to 2010
  • Updated to 2010
  • Probably no update beyond 2007
  • Updated to 2010
  • ADD GRAPHS WITH SOURCES OF GROWTH (FIGS 3.5-3.6)
  • Not just growth of gross output: also productivity starts increasing after the transition decline (both land and labor). Increase in labor productivity much more moderate – primarily due to the rapid population growth in Transcaucasus and Central Asia. Essentially the same results observed for TFP where calculated.
  • In Transcaucasus and Central Asia labor productivity growth lags behind land productivity growth – because of rapid population growth. In the European CIS both indicators follow the same path as neither land nor labor change dramatically
  • Kyrgyzstan (and Kazakhstan) display the theoretically expected productivity ranking: household plots, peasant farms, enterprises. In Taj and Uzb the differences between peasant farms and enterprises are less pronounced – presumably because the newly emergent peasant farms are still far from utilizing their full potential and some of them may be renamed collectives.
  • Changing Land Tenure and Farm Structure in Central Asia

    1. 1. Changing Land Tenure and Farm Structure in Central Asia Zvi Lerman The Hebrew University of Jerusalem, Israel Agricultural Transformation and Food Security in Central Asia Regional Research Conference, IFPRI and University of Central Asia Bishkek, Kyrgyzstan, 8-9 April 2014
    2. 2. 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)
    3. 3. Four phases of agricultural development (GAO) 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 250 300 350 1965=100 CentAsia
    4. 4. GAO for three regions 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 250 300 350 1965=100 CentAsia TransCau European
    5. 5. Example of Trans-Caucasus Az Arm Gru
    6. 6. Kaz, Taj, Tur: 1998 turnaround 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 100 200 300 400 500 1965=100 Tur 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 250 300 1965=100 Taj 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 250 1965=100 Kaz
    7. 7. Kyr, Uzb: 1995-1996 turnaround 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 50 100 150 200 250 1965=100 Kyr 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 0 100 200 300 400 500 1965=100 Uzb
    8. 8. Dramatic individualization of land tenure: arable land Taj Uzb Kyr Kaz 1991 1995 1999 2003 2007 2011 0 1 2 3 4 5 mln ha Enterprises Peasant farms Households 1991 1995 1999 2003 2007 2011 0 10 20 30 40 million ha Enterprises Peasant farms Households 1991 1994 1997 2000 2003 2006 2009 0 200 400 600 800 1000 1200 1400 1600 '000 ha Enterprises Peasant farms Households 1991 1994 1997 2000 2003 2006 2009 0 200 400 600 800 1000 1200 '000 ha Enterprises Peasant farms Households
    9. 9. Total concentration of livestock in rural households 1960 1970 1980 1990 2000 2010 0 500 1000 1500 2000 2500 '000 st. head Enterprises Individual 1980 1985 1990 1995 2000 2005 2010 0 2 4 6 8 10 12 14 mln st. head Enterprises Individual 1980 1984 1988 1992 1996 2000 2004 2008 0 500 1000 1500 2000 2500 '000 st. head Enterprises Individual 1980 1984 1988 1992 1996 2000 2004 2008 2012 0 2 4 6 8 10 12 mln head Enterprises Individual Kyr Taj Kaz Uzb
    10. 10. Changing structure of agricultural production Taj Uzb Kyr Kaz 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 0% 20% 40% 60% 80% 100% Ent PF HH 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 0% 20% 40% 60% 80% 100% Ent PF HH 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 0% 20% 40% 60% 80% 100% Ent PF HH 1991 1994 1997 2000 2003 2006 2009 2012 0% 20% 40% 60% 80% 100% Ent PF HH
    11. 11. The special case of Turkmenistan Officially 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 2007 0% 20% 40% 60% 80% 100% Enterprises Peasant farms Households 1991 1993 1995 1997 1999 2001 2003 2005 2007 0% 20% 40% 60% 80% 100% Corporate Leaseholders Peasant farms Households
    12. 12. 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
    13. 13. Significant land reform legislation at turnaround point Turnaround year Date of legislation Name of legislation Kaz 1998 8.1997 3.1998 Land shares Peasant farms law Taj 1998 6.1996 6.1998 Enterprise reorganization Right to land use Tur 1998 12.1996 1.1997 Land allocation to individuals Improving 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
    14. 14. 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
    15. 15. 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) 0 20 40 60 80 100 0 50 100 150 200 250 19911993199519971999200120032005200720092011 haperfarm numberoffarms,'000 ha per farm number of farms Uzb 0 5 10 15 20 25 30 0 10 20 30 40 50 60 70 80 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 cultivableha/farm '000farms Number cultiv/farm TajKyr
    16. 16. Growth is faster in countries that have more land in individual use
    17. 17. Russia: Faster growth in regions with more land in individual use
    18. 18. Agricultural growth is driven by individual sector 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 0 20 40 60 80 bln 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 2010 0 200 400 600 800 1000 bln tenge (2000 ag prices) 0 200 400 600 800 1000 Ent Indiv Taj 1998 2000 2002 2004 2006 2008 2010 0 500 1000 1500 2000 2500 3000 3500 4000 mln somoni (2003 prices) Ent PF HH
    19. 19. Land and Labor Productivity in CIS 1980-2004 1980 1985 1990 1995 2000 2005 0 20 40 60 80 100 120 140 Land Labor 19 Productivity of land and labor in CIS 1980-2004
    20. 20. Productivity of land and labor in CIS by region 1980-2004 1980 1985 1990 1995 2000 2005 0 20 40 60 80 100 120 Land Labor 1980 1985 1990 1995 2000 2005 0 20 40 60 80 100 120 140 160 Land Labor* Transcaucasia Central Asia European CIS 1980 1985 1990 1995 2000 2005 0 50 100 150 200 250 Land Abandon Labor 20
    21. 21. Households outperform all farms by relative productivity (2006-2010) Kaz Kyr Taj Uzb 0 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!)
    22. 22. Productivity gaps among farms of different types: households on top Kyr TajUzb Kaz 1999 2001 2003 2005 2007 2009 2011 1 10 100 1000 som/sown ha (current prices) Enterprises Peasant farms Households 1995 1997 1999 2001 2003 2005 2007 2009 2011 100 1000 10000 soum/ha (2006 prices) Enterprises Peasant farms Households 1991 1994 1997 2000 2003 2006 2009 10 100 1000 10000 100000 somoni/ha (2003 prices) Enterprises Peasant farms Households 1990 1993 1996 1999 2002 2005 2008 10000 100000 1000000 10000000 '000 tenge/sow n ha (2008 prices) Enterprises Peasant farms Households
    23. 23. Kazakhstan: Productivity vs. share of enterprises in agriculture The five points represent the five zones: North, South, East, Center, West South North
    24. 24. 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
    25. 25. 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
    26. 26. Enterprises lose out even where they have the strongest advantage North South Leading commodities Grain Horticulture, technical crops Grain yields Low High Farming structure Strong presence of enterprises Mainly individual farms Farm sizes Very large Smaller than in the North Productivity Lowest Highest
    27. 27. 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].”
    28. 28. 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 Kazakhstan Interim 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)
    29. 29. 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!)
    30. 30. Food Security • Food insecurity = Vulnerability • Improved income is the best tool for alleviating vulnerability and ensuring food security
    31. 31. Income increases with farm size Tajikistan (TajLSMS 2003) Uzbekistan (WB 2006)
    32. 32. Income increases with farm size: dehkans and farmers in Uzbekistan Family Income Income per one family member Farmers Dehkans Income of family, thousand sum Plot, hectare Farmers Dehkans Income per one person, thousand sum Plot, hectare Source: 2007 survey of dehkans and farmers, MinAg,Tahlil, and Mashav
    33. 33. 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
    34. 34. Income and wellbeing rise with commercialization Tajikistan (2011 PPCR) Uzbekistan (2007 UNDP)
    35. 35. 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
    36. 36. Factors increasing family income (Tajikistan) Positive effect of capitals Factors 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 leasing Without 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
    37. 37. The benefits of land reform for the rural population More land to smallholders Higher well-being Higher commercialization
    38. 38. Household income highly diversified (Uzbekistan) Livestock Crops Pension Salary Business Migrants Source: 2007 survey of dehkans and farmers, MinAg,Tahlil, and Mashav
    39. 39. 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
    40. 40. 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

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