- 1. Kanat Tilekeyev Research Fellow University of Central Asia
Seed and Fertilizers Policy Development in Kyrgyz Republic
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. 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. 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.
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. 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. 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 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. 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.
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 doesnt 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. 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. 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. 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. 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. Thanks for the
attention!
