"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

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. 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. 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. 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. Example of Trans-Caucasus
Az
Arm
Gru

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. 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. 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. 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. 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. 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. 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. 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. 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. 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. Growth is faster in countries that
have more land in individual use

17. Russia: Faster growth in regions
with more land in individual use

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. 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. 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. 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. 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. Kazakhstan: Productivity vs. share
of enterprises in agriculture
The five points represent the five zones: North, South, East, Center, West
South
North

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. 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. 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. 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. 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. 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. Food Security
• Food insecurity = Vulnerability
• Improved income is the best tool for
alleviating vulnerability and ensuring food
security

31. Income increases with farm size
Tajikistan (TajLSMS 2003) Uzbekistan (WB 2006)

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. 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. Income and wellbeing rise with
commercialization
Tajikistan (2011 PPCR) Uzbekistan (2007 UNDP)

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. 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. The benefits of land reform for the
rural population
More land to smallholders
Higher well-being Higher
commercialization

38. Household income highly
diversified (Uzbekistan)
Livestock
Crops
Pension
Salary
Business
Migrants
Source: 2007 survey of dehkans and farmers, MinAg,Tahlil, and Mashav

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. 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