ASIAN DEVELOPMENT BANK PPA: KGZ 28394

PROGRAM PERFORMANCE AUDIT REPORT

ON THE

AGRICULTURE SECTOR PROGRAM (Loan 1407-KGZ[SF])

IN THE

KYRGYZ REPUBLIC

October 2002

CURRENCY EQUIVALENTS

Currency Unit – Som

At Appraisal At Project Completion At Operations Evaluation (October 1995) (June 1999) (June 2002) Som1.00 = $0.096 $0.024 $0.022

$1.00 = Som10.45 Som42.00 Som46.52 $1.00 = SDR0.669 SDR0.742 SDR0.752

ABBREVIATIONS ADB – Asian Development Bank ASP – Agriculture Sector Program CLAR – Center for Land and Agrarian Reform ECFSP – European Commission Food Security Program FSU – former Soviet Union GDP – gross domestic product Gosregister – State Agency for the Registration of Rights to Immovable Property GR – Government Resolution ha – hectare MAF – Ministry of Agriculture and Food MAWR – Ministry of Agriculture and Water Resources MAWRPI – Ministry of Agriculture, Water Resources, and Processing

Industries OEM – Operations Evaluation Mission

PCR – program completion report PD – Presidential Decree PIP – public investment program RCLAR – Republican Center for Land and Agrarian Reform SDR – special drawing rights t – metric ton TA – technical assistance VAT – value-added tax WUA – water users association

NOTES (i) The fiscal year (FY) of the Government is the same as the calendar year. (ii) In this report, "$" refers to US dollars.

Operations Evaluation Department, PE-604

CONTENTS

Page BASIC DATA ii EXECUTIVE SUMMARY iii I. BACKGROUND 1 A. Rationale 1 B. Formulation 1 C. Objectives and Scope 2 D. Financing Arrangements 2 E. Progress Report and Program Completion Report 2 F. Operations Evaluation 3 II. IMPLEMENTATION PERFORMANCE 3 A. Design 3 B. Policy Reform Measures 4 C. Program Management 11 III. PROGRAM RESULTS 13 A. Performance Indicators 13 B. Impact of Policies 14 C. Social Protection 15 D. Institutional Development 15 E. Environmental Protection 16 F. Counterpart Funds 16 G. Sustainability 16 IV. KEY ISSUES FOR THE FUTURE 17 A. Farm Management 17 B. Access to Formal Credit 17 C. Marketing of Agricultural Inputs and Outputs 17 D. MAWRPI Institutional Capacity and Public Investment Management 18 V. CONCLUSIONS 19 A. Overall Assessment 19 B. Key Lessons Learned 20 C. Follow-Up Actions 21 APPENDIXES 1. Organization Chart of the Ministry of Agriculture, Water Resources, and Processing Industries

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2. Development Policy Matrix 23 3. Statistical Tables 41 4. Selected Economic and Social Indicators 65

BASIC DATA Agriculture Sector Program (Loan 1407-KGZ[SF])

PROGRAM PREPARATION/INSTITUTION BUILDING TA No. TA Name Type Person-

Months Amount1

($) Approval

Date 2274 Agriculture Sector Program PPTA 24 600,000 29 Dec 1994 2450 Reorganization and

Strengthening of the Ministry of Agriculture and Food

ADTA 65 1,324,000 23 Nov 1995

2451 Building Capacity for the Formation and Management of Water Users Associations

ADTA 64 861,000 23 Nov 1995

KEY PROGRAM DATA ($ million)

As per ADB Loan Documents

Actual

Total Program Cost 40.0 37.9 Foreign Exchange Cost 40.0 37.9 ADB Loan Amount/Utilization 40.0 37.9 KEY DATES

Expected

Actual

Reconnaissance 11–28 Mar 1995 Fact-Finding May 1995 6–26 May 1995 Appraisal Aug 1995 31 Jul–21 Aug 1995 Board Approval Dec 1995 23 Nov 1995 Loan Agreement Dec 1995 15 Dec 1995 Loan Effectiveness Mar 1996 9 Apr 1996 First Disbursement Apr 1996 9 May 1996 Program Completion Dec 1997 31 Dec 1997 Loan Closing 30 Jun 1998 30 Jun 1998 Months (effectiveness to completion) 22 21 BORROWER Kyrgyz Republic EXECUTING AGENCY Ministry of Finance MISSION DATA Type of Mission No. of Missions No. of Person-Days Reconnaissance 1 36 Fact-Finding 1 63 Appraisal 1 110 Program Administration Review 5 161 Program Completion 1 44 Operations Evaluation2 1 54 ADB = Asian Development Bank, ADTA = advisory technical assistance, PPTA = program preparatory technical assistance, TA = technical assistance. 1 Approved amount of TA. 2 Comprising N. Bestari, Senior Evaluation Specialist (Mission Leader), and J. Channon, consultant. G.J. Tentieva

and V.D. Tian of the Kyrgyz Resident Mission provided support in data and information gathering in the field. M.R. Ortega, Evaluation Analyst, supported the mission at headquarters.

EXECUTIVE SUMMARY

Following the breakup of the former Soviet Union, the transition of the agriculture sector from a command system to a market-based economy was one of the Kyrgyz Government’s top priorities. The country chose to accelerate the transition to a market-based economy to overcome its economic difficulties. The Agriculture Sector Program (ASP) was formulated in 1995 taking into account previous and concurrent reforms. The ASP loan of $40 million equivalent from the Asian Development Bank (ADB) was approved on 23 November 1995. The ASP objective was to facilitate the transition of the agriculture sector to a competitive market-based system. With 36 policy measures and a program period of 24 months, the ASP covered six areas of reforms: (i) supporting land reform and farm restructuring, (ii) improving water rights management and user contribution in irrigation water use, (iii) improving markets of input supplies, (iv) improving social protection, (v) promoting environmental protection, and (vi) enhancing institutional capacity building and restructuring of selected government agencies. The loan became effective on 9 April 1996 and was disbursed in two tranches. With the ASP, ADB provided two technical assistance grants to assist the Government.1

The ASP was completed in December 1997. The project completion report circulated 2 years later rated the ASP partly successful, because of partial accomplishment of some reform measures at that time. In hindsight, the ASP underestimated the time required to effect legislative and institutional changes, given the complexity of the reform measures. Since 1999, there has been significant advancement and strengthening of the policy reforms initiated by the ASP, and the Government remains committed to them.

Supporting Land Reform and Farm Restructuring. The ASP stipulated five measures to support land reform and farm restructuring. The development of land dispute resolution procedures was initially behind achievements in land distribution, but substantial progress has been achieved over the last 3 years on several fronts. The 1999 land code specifies the settlement of dispute through the court, the Government has taken steps to establish an arbitration mechanism as an alternative method to resolve land and property disputes, and a law for the establishment of a third party arbitration court is under preparation. Complementary to the ASP, publicity campaigns and rural legal services have increased public awareness of their rights and the rules concerning land. The distribution of shares in nonland farm assets, and the development of modes of ownership and management were hampered by several major problems: debt was an issue for farm shareholders; poor financial conditions led to liquidation and foreclosures; and nonland assets (machinery and buildings) were not easily divisible, posing problems for their distribution and management. The ASP initiative to develop a draft law for simplified land and immovable property registration was fully accomplished. The law on State Registration of Rights to Immovable Property (1998) became a cornerstone for securing immovable property rights. The preparation of guidelines and procedures for the functioning of centers for land and agrarian reform was substantially accomplished. These centers were instrumental in facilitating reform implementation.

Improving Water Rights Management and User Contribution in Irrigation Water Use. The ASP stipulated three measures: (i) develop policies and procedures governing irrigation water users rights, (ii) extend the rights and responsibilities of water users associations (WUAs), and (iii) develop clear guidelines for the transfer of ownership of irrigation infrastructure. These measures were substantially accomplished, while further work is required to improve the existing Law on Water (1994). The ASP measures have benefited from 1 TA 2450-KGZ: Reorganization and Strengthening of the Ministry of Agriculture and Food, for $1.3 million; and TA

2451-KGZ: Building Capacity for the Formation and Management of Water Users Associations, for $861,000; both approved on 23 November 1995.

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continuing efforts by the Government to refine and deepen the reforms with assistance from the World Bank. Legal deficiencies for WUA organization and development were addressed progressively. The Parliament passed a new law on WUAs (February 2002), replacing earlier regulations related to the ASP. The new law is comprehensive, allowing options for voluntary establishment, management, and operation of WUAs.

Improving Markets of Input Supplies. The ASP stipulated nine measures to transfer regulatory functions from former state-owned enterprises to the Ministry of Agriculture and Food (MAF),2 corporatize and privatize agricultural enterprises, and establish a market-based mechanism for agricultural inputs. These measures were largely accomplished with some shortcomings. Regulatory functions for agrochemicals, plant protection, and veterinary products were transferred to MAF in 1996, and to date these functions have been retained in the Ministry of Agriculture, Water Resources, and Processing Industries (MAWRPI). The Government privatized state-owned seed and cattle breeding farms, maintaining a few for research purposes. With the accession of the Kyrgyz Republic to the World Trade Organization in 1998, the Government improved regulations on plant quarantine and seeds certification. Designated state-owned agricultural enterprises were privatized, but some privatization proceeds were still outstanding as of June 2002. Monitoring and enforcement of fair trade practices were partially achieved, while legal provisions to improve competition and trade practices were established in 1999.

Improving Social Protection. The ASP stipulated six measures to monitor the social impact of the reforms, support the social safety net, and maintain essential social services. Data and analytical capability to monitor poverty were inadequate. There was no baseline against which the ASP could be specifically monitored and mechanisms were not in place for monitoring social impacts. The additional budget support for social assistance in 1996 and 1997 was met, but payments to beneficiaries were delayed, and payment arrears continued until 1999. The ASP relied on existing delivery mechanisms and did not stipulate specific actions to improve targeting. Nonetheless, complementary to the ASP, the law on social benefits was introduced in 1998, and the benefits administration system was modernized. This represented an improvement over the previous indiscriminate benefit coverage. The ASP also required the Government to ensure that the majority of the rural state-run kindergartens operational in 1995 remained operational in 1996 and 1997. This objective was achieved, but the intervention was temporary and hence insignificant. The closure of on-farm kindergartens was not offset by the emergence of new facilities. By contrast, significant progress was achieved in the assessment of food supply and requirements in remote rural areas, and in the development of a strategy to meet these needs.

Promoting Environmental Protection. The ASP stipulated four measures to promote sustainable management of forests and upland pastures as well as biological control of cotton pests. Control on grazing in the forest areas was introduced, and forestlands that had been grazed by former state and collective farms were returned to the Government. The preparation of a policy on the long-term leasing of natural pastures to promote sound grazing and sustainable land use practices has been protracted. Pastureland management remains a major issue, given that pastures of all categories occupy 46% of the country’s territory. The ASP also required the Government to introduce a mechanism for industry funding of biological control of cotton pests, but this has not been done.

2 MAF and the Ministry of Water Resources were merged into the Ministry of Agriculture and Water Resources in

1996, which in turn was reorganized in April 2001 and renamed the Ministry of Agriculture, Water Resources, and Processing Industries.

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Enhancing Institutional Capacity Building and Restructuring. The ASP aimed to build institutional capacity and restructure public sector institutions to support market-based agriculture. The ASP focused on reorganizing MAF headquarters, restructuring MAF-dependent organizations, and strengthening the capacity of the Ministry of Water Resources to organize WUAs. Since 1995, there have been at least four major reorganizations marked by frequent changes in the Government. The ASP opted for an ambitious timeframe for institutional reforms, aiming for the implementation of the stipulated measures in 24 months. The ASP design underestimated the difficulties that came with a changing institutional environment, such as frequent changes of personnel, inability to attract and retain staff, rapid changes in functions, and downsizing and retrenchment. All these changes brought uncertainties and undermined staff morale. Nonetheless, the ASP helped redefine the roles and functions of relevant institutions through the new policy measures and by curtailing government interventions in agriculture.

The ASP performance indicators were broadly specified at appraisal, identifying the ASP as an integral part of the Government’s overall reform process that would contribute to the economic recovery and growth prospects for the sector. Legal and institutional development indicators were not specified. With past and concurrent reforms, the ASP on its own merits could not justifiably claim economic recovery and sector growth targets. Numerous factors were at play, including preceding and other reforms in the sector, reforms undertaken in other sectors that had an influence on agriculture, and the overall macroeconomic situation. Exogenous factors, including external shocks, have also influenced the pace of transformation and recovery of the agriculture sector. The Russian financial crisis in 1998 and its unfolding events have dampened economic recovery, and exacerbated the incidence of poverty in the Kyrgyz Republic.

The combined effects of cumulative reforms, including those under the ASP, cannot be separated. Agriculture rebounded at annual growth rates of 15.2% in 1996 and 12.3% in 1997, and grew more modestly by 2.9% in 1998, 8.2% in 1999, 2.7% in 2000, and 6.8% in 2001. Employment in agriculture increased from 47% of total employment in 1995 to 53% in 2001, providing shelter to the underemployed and social protection of last resort in the rural areas. Crop productivity levels per hectare have also improved since 1995, regaining and (in some cases) surpassing pre-independence levels. The sector’s recovery and the improved productivity per unit land area have not been sufficient to fully absorb the additional employment; thus wages in agriculture have remained depressed. Land distribution to farmers, privatization of farms, and the significant reduction of government interventions contributed to a steady shift in cropping patterns in favor of wheat. Farmers favor wheat for subsistence, food security, and as a medium of exchange. The inefficiency of irrigation water use remains a major issue. However, efforts to improve the operation and maintenance of the irrigation systems continue, and public reinvestments have commenced with assistance from ADB and the World Bank.

Small traders, market intermediaries, and competition in input supply and output marketing have emerged. Small traders frequently operate informally, and porous international borders have enabled smugglers of fertilizers and agrochemicals to capture sizable domestic market shares and to gain an unfair advantage through tax evasion and uneven application of value-added tax. The smuggling and the uneven tax application hamper the formal trade of fertilizers and agrochemicals. Although the moratorium on the sales of agricultural land was lifted in September 2001, there has not been an upsurge of land transactions, given existing restrictions against speculative transactions and concentration of land ownership.

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The scope of the ASP reforms was relevant, pragmatic, and consistent with the priorities of the Government, establishing a strong platform for a market-based private agriculture. The ASP strengthened land reform and farm restructuring, catalyzed the development of procedures for resolving land disputes, recognized rights to immovable property, advanced the legal framework governing irrigation water users rights, and clarified the requirements for establishing WUAs. The ASP also reduced the role of the Government in the distribution and marketing of agricultural inputs. The ASP support for social protection was significant, but its effects were limited due to poor targeting inherent in the delivery systems. Achievements in strengthening environmental protection were limited, but the Government has demonstrated a commitment to developing a sound legal framework for the leasing and management of pastureland. Overall, the direction of reform has been consistently maintained, and with time, development initiatives beyond the ASP have strengthened and deepened the enabling environment for creating market institutions, increasing the competitiveness of markets, improving social and environmental protection, and rationalizing public sector support for agriculture. Although there are shortcomings, delays, and major challenges ahead, there has been no lasting reversal in the implementation of the ASP reforms. In view of only moderate achievements in institutional development, further investments in capacity building are required to support reorganized institutions and their revamped functions. The capacity of existing institutions is still largely inadequate to cope with new roles and functions.

Based on the above considerations, the ASP is rated successful.

The Operations Evaluation Mission recommends several follow-up actions. First, ADB has not conducted a comprehensive review of the Kyrgyz agriculture sector since 1995. ADB should undertake such a review for completion in 2003 as a foundation for its program and operations in agriculture. Second, ADB should conduct further dialogue with the Kyrgyz Government and governments of neighboring countries to emphasize governance and transboundary issues to promote the development of markets, investments, and enterprise development in agriculture. Underpinned by the sector review, such dialogue should commence in 2003. Third, partial achievements have been attained in natural pasture management. MAWRPI and the State Agency for the Registration of Rights to Immovable Property should develop effective interagency coordination by December 2002, harmonize existing rules, and further improve the provisions for protecting pastureland commencing from 2003.

I. BACKGROUND

A. Rationale

1. The Kyrgyz Republic declared independence on 31 August 1991 from the former Soviet Union (FSU). As a consequence of the breakup of the FSU, the Kyrgyz Republic faced serious economic and fiscal crises: large fiscal transfers (35% of total revenue) ended abruptly, centrally planned distribution systems of outputs and input supplies ceased to exist, and the trade and payment systems collapsed. From 1990 to 1994, the country’s gross domestic product (GDP) contracted by more than 45%. Hyperinflation characterized all the former constituent economies in the ruble zone after the breakup of the FSU. In the Kyrgyz economy, annual inflation jumped from an average of 3% from the period before independence to 85% in 1991 and to 1,209% in 1993. The current account deficit reached more than 12% of GDP in 1994 and 1995. The decline in aggregate income and in the standard of living translated into a sharp rise in poverty.

2. The Kyrgyz Republic responded to the crisis by initiating fundamental policy reforms to address the debilitating conditions and began the transition process to a market-based economy. As a matter of priority, the Government undertook macroeconomic stabilization and structural reforms. The International Monetary Fund supported the stabilization program first through a systemic transformation facility (1993) and second through a 3-year enhanced structural adjustment facility (1994). This arrangement aimed at stabilizing the financial situation through fiscal and monetary policies focused on reducing inflation, containing the decline in real output and living standards, and instituting systemic reforms. The World Bank supported the stabilization program through a rehabilitation loan ($60 million) approved in May 1993, and the Asian Development Bank (ADB) provided a special assistance loan1 ($40 million) in December 1994. With this stabilization program, inflation fell sharply to 278% in 1994, and below 50% in 1995.2 Apart from agriculture, the thrust of the reforms encompassed enterprise restructuring and privatization, industrial and trade policy, private sector development, financial sector, and social safety nets.

3. Prior to independence, agricultural production came from about 500 state and collective farms, and the centerpiece was the state order system under which agricultural inputs and production were centrally organized, and outputs purchased by the Government on the basis of long-term production plans. The transition of agriculture to a market-based system was at the forefront of the Government’s agenda, and initial reforms began to dismantle the system of state ownership and interventions, establishing the institutional and legal framework for private agriculture. The Kyrgyz Republic had thus initiated one of the most ambitious reform programs in the FSU.

B. Formulation

4. Reforms up to 1995 had been on track; however, liquidity squeeze, incomplete farm restructuring, and inadequate support services constrained the sector’s recovery. Farm operations were demonetized and dominated by barter and subsistence activities. In 1995, agricultural output further declined by 2%, and GDP by 5%. The Government requested ADB to provide assistance to deepen policy reforms and support institutional reforms. ADB focused its assistance on facilitating the transition of the Kyrgyz Republic to a market economy.3 Program preparatory technical assistance (TA)4 was provided by ADB in the first half of 1995 to assist in

1 Loan 1342-KGZ(SF): Special Assistance Project, for $40 million, approved on 8 December 1994. 2 The agriculture sector has been more resilient than the industrial sector. From 1990 to 1995, the decline in

agricultural output was less than the decline in industrial output, thereby increasing the relative importance of agriculture in the economy from 35% of GDP in 1990 to 41% in 1995.

3 ADB. 1993. The Bank’s Interim Country Operational Strategies in Kazakhstan and the Kyrgyz Republic. Manila. 4 TA 2274-KGZ: Agriculture Sector Program, for $600,000, approved on 29 December 1994.

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the formulation of the Agriculture Sector Program (ASP). Some earlier studies with comprehensive analyses of opportunities and major constraints were also utilized.5 The ASP formulation was coordinated with multilateral and bilateral aid agencies operating in the country. Following a reconnaissance mission in March 1995, a fact-finding mission in May 1995, and an appraisal mission in July–August 1995, the ASP was approved by ADB in November 1995.6

C. Objectives and Scope

5. The ASP objective was to facilitate the transition of the agriculture sector to a competitive market-based system by (i) encouraging the development of market institutions, (ii) increasing the competitiveness of markets, (iii) improving social and environmental protection, and (iv) enhancing public sector support. A total of 36 policy measures were agreed upon, of which 5 were complied with prior to Board approval and 31 were to be implemented during the 2-year program period. Nine of the measures7 were set as conditions for the second tranche release. The release of the second tranche was scheduled for December 1996, or 12 months after loan approval.

D. Financing Arrangements

6. On 23 November 1995, the ADB Board of Directors approved the ASP loan in the amount of SDR26,764,000 ($40 million equivalent) from ADB’s Special Funds resources. The loan became effective on 9 April 1996 and the first tranche was released 1 month later. The loan was for 40 years, including a 10-year grace period, with a service charge of 1% per annum. ADB provided two TA grants with the ASP to (i) reorganize and strengthen the Ministry of Agriculture and Food (MAF), and (ii) build capacity for the formation and management of water users associations (WUAs).8 The Ministry of Finance was the Executing Agency, and implementation of the ASP involved MAF, the Ministry of Water Resources, and other agencies. Appendix 1 shows the organization chart of the Ministry of Agriculture, Water Resources, and Processing Industries (MAWRPI), which resulted from the merger and reorganization of the agriculture and water resource ministries.9 The ADB loan was to be disbursed against a broad range of imports subject to a list of ineligible items. The financing arrangements stipulated that the counterpart funds generated from the loan proceeds would be used by the Government to support the transition of the agriculture sector to a market-based system. There was no earmarking for specific uses of loan funds.

E. Progress Report and Program Completion Report

7. Overall, the progress report was more optimistic than the subsequent program completion report (PCR), concluding that by May 1997 (i) 7 of the 9 second-tranche conditions had been complied with; (ii) substantial progress had been achieved on the remaining 2 conditions albeit with some delay; and (iii) the non-tranche conditions were accomplished, substantially accomplished, on track, or under implementation with a program of action planned

5 ADB. 1994. Economic Report on the Kyrgyz Republic. Manila; and World Bank. 1994. The Kyrgyz Republic

Agricultural Sector Review. Report 12989-KG. Washington, DC. 6 ADB. 1995. Report and Recommendation of the President to the Board of Directors on a Proposed Loan to the

Kyrgyz Republic for the Agriculture Sector Program. Manila. 7 Policy measure 4.2.1, for the Government to submit a budget provision for 1996 and 1997 for additional support to

the social fund of at least Som15 million above the 1995 planned budget level, was also one of the five conditions for the Board approval of the ASP.

8 TA 2450-KGZ: Reorganization and Strengthening of the Ministry of Agriculture and Food, for $1.3 million; and TA 2451-KGZ: Building Capacity for the Formation and Management of Water Users Associations, for $861,000; both approved on 23 November 1995.

9 MAF and the Ministry of Water Resources were merged in 1996 into the Ministry of Agriculture and Water Resources which in turn was reorganized in April 2001 into MAWRPI. Depending on the year, these names are used interchangeably in this report.

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or in place for their effective implementation.10 The PCR appropriately downgraded the assessment of the progress report, considering the difficulties faced in implementation and the timeframe required for undertaking complex reform measures. The PCR rated the ASP partly successful, concluding that the overall progress was significantly less than anticipated at appraisal.11 Two conditions for the second tranche were not fully fulfilled on schedule, causing a 5-month delay in the second tranche release. According to the PCR, of 23 conditions not linked to tranche release during the ASP period, only 4 measures had been accomplished by June 1999, 1 measure substantially accomplished, 15 measures partially accomplished, and no substantive action taken on the remaining 3 measures. Out of the 9 second tranche conditions, 3 measures had not been fully accomplished by June 1999. The PCR concluded that (i) given the pace of macroeconomic reforms, it was likely that the ASP measures would be adopted over a longer timeframe than anticipated at appraisal; (ii) there were inherent conflicts between the quick-disbursing nature of the program loan modality and the timeframe of the policy reforms; and (iii) structural reform was commonly accompanied by fiscal austerity that ran against the requirements for developing analytical, administrative, and management capability in the public sector. The PCR pointed out that supply responses in the agriculture sector could not be expected to emerge within the timeframe of the ASP, given the sequencing of reforms and lags of impacts; and there was an inherent danger in linking privatization to tranche conditions, in that fiscal pressure might compromise the quality of the privatization process.

F. Operations Evaluation

8. An Operations Evaluation Mission (OEM) visited the Kyrgyz Republic in May–June 2002 and held discussions with staff of government agencies, research institutes, private farms and agribusinesses, nongovernment organizations, and other stakeholders. Copies of the draft program performance audit report were provided to the Ministry of Finance, MAWRPI, and concerned ADB staff for review. Their comments were considered in the preparation of this report.

II. IMPLEMENTATION PERFORMANCE

A. Design

9. The ASP design was formulated under the difficult conditions the country faced during its initial 4 years of reforms. With no obvious alternatives, the Government chose to accelerate the transition to a market-based economy. The ASP took into account prior and other reforms.12 Land reform, including the establishment of the Republican Center for Land and Agrarian Reform (RCLAR) in 1994, was well under way. Prior achievements fulfilled the five conditions of the first tranche of the ASP: (i) Government Resolution (GR) 226 of 5 June 1995 provided a basic legal framework for the establishment of private WUAs and the transfer of ownership of irrigation facilities from former state and collective farms to WUAs; (ii) the Government commenced to corporatize and privatize state-owned enterprises in agriculture, including agro-processing conglomerates; (iii) the Government allocated additional resources for the continuation of social assistance in 1996 and 1997; (iv) the Government proposed an organizational plan for MAF; and (v) local centers for land and agrarian reforms (CLARs) were placed under RCLAR management.

10 ADB. 1997. Progress Report on the Agriculture Sector Program in the Kyrgyz Republic: Release of Second

Tranche. Manila. 11 ADB. 1999. Program Completion Report on the Agriculture Sector Program in the Kyrgyz Republic. Manila. The

rating system was then based on three categories: (i) generally successful, (ii) partly successful, or (iii) unsuccessful.

12 The ASP complemented the World Bank-financed Agriculture Privatization and Enterprise Adjustment Credit, for $45 million, approved on 28 June 1995.

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10. Reflecting the reformist stance of the Government and the broad consensus at the time, the ASP stipulated actions to bring the sector closer to a market-based and privatized system. Separately, the World Bank and ADB addressed issues related to the development of rural financial services. The ASP included an ex-ante poverty impact assessment. The reform adjustment costs were estimated at $95 million in 1995 present value terms.13 Several major risks were highlighted: (i) limited government capacity to implement reforms, (ii) potential resistance to land reform and farm restructuring, (iii) slow pace of reform, and (iv) unfavorable economic conditions. There was no experience that paralleled the magnitude of the disruptions caused by the FSU breakup. In hindsight, the ASP design was ambitious, underestimating the complexity of the reforms, the time required to effect legislative and institutional changes, and the constraints on institutional development imposed by downsizing and budget austerity.

B. Policy Reform Measures

11. The ASP covered six areas of policy reforms to (i) support the continuing land reform and farm-restructuring process; (ii) improve water rights management and user contribution in the use of irrigation water; (iii) increase the competitiveness of the input supply markets, focusing on the supply of veterinary products, fertilizers, agrochemicals and seeds, mainly through corporatization and privatization; (iv) improve social protection; (v) promote environmental protection by focusing on managed grazing of natural pastures and forested areas, and by reintroducing biological measures for pest control; and (vi) enhance the capacity of MAF and its dependent agencies to implement the reform and support a change toward market-based agriculture. This section summarizes the OEM’s assessment of the ASP measures (for details, see Appendix 2). Since 1999, there has been notable strengthening and deepening of the policy reforms started by the ASP. The OEM confirmed that, out of the 9 second tranche conditions, only 2 measures had remained partially accomplished, with 2 measures substantially accomplished, and 5 measures fully accomplished. The OEM also confirmed that substantial advancement had occurred among the 23 non-tranche policy measures: (i) 8 measures, fully accomplished; (ii) 8 measures, substantially accomplished; and (iii) 7 measures, partially accomplished. The Government has strengthened the policy measures over an extended period, and the country has remained committed to the reform path without signs of lasting retreat or reversal.14

1. Supporting Land Reform and Farm Restructuring

12. The ASP stipulated five policy measures to support land reform and farm restructuring. It promoted the development of permanent land dispute resolution procedures to complement and safeguard the continuing land reform initiatives that led to the (i) establishment of more than 84,000 private farms by 2001 (Appendix 3, Table A3.1); (ii) completion of the distribution of land shares for about 1.1 million hectares (ha) by 2001 (Appendix 3, Table A3.2); (iii) establishment of private ownership of agricultural land (Appendix 3, Table A3.3), following the approval on 30 April 1999 by Parliament of the new land code; and (iv) emergence of different farm ownership structures and farm sizes (Appendix 3, Table A3.4). Initially lagging behind the progress in land distribution and privatization, the development of the dispute resolution procedures has been substantially accomplished over the last 3 years: (i) the 1999 land code specifies the settlement of disputes through the court; (ii) the Presidential Decree (PD) 265 of 30 August 2001 promotes the creation of an arbitration mechanism as an alternative method to resolve land and property disputes; (iii) pilot arbitration procedures and training programs for 13 The present value of the reform adjustment costs over 5 years was estimated with an annual discount rate of 20%.

The undiscounted costs over 5 years comprised $40 million for the development of WUAs, land dispute procedures, and the distribution of nonland assets; $15 million for the establishment of regulatory functions, corporatization, and privatization efforts; $30 million for social protection; $2 million per year for environmental protection; and $2 million per year for institutional capacity building and restructuring.

14 On 20 December 1998, the Kyrgyz Republic was the first, and is the only country to date, among the Central Asian republics to join the World Trade Organization.

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arbiters have been put in place; and (iv) a law for the establishment of a third party arbitration court is under preparation. The number of land disputes settled through the court has been limited, and land conflicts have also been handled through the councils of village elders and CLARs. Subsequent to the ASP, publicity campaigns and legal services have increased awareness of the public of their rights and the rules and regulations concerning land.

13. The ASP called for the completion of the distribution of shares in nonland farm assets as well as the development of modes of ownership and management. These measures were partially accomplished because (i) debt was a major issue for farm shareholders who purchased their nonland assets from state farms; (ii) poor financial conditions led to liquidation, foreclosures, and the emergence of new entities; (iii) nonland assets (machinery and buildings) were not easily divisible, posing problems for their subdivision, distribution, reorganization, and management; and (iv) nonland assets were largely obsolete and unsuited for small private farms.

14. The ASP required the submission to the Parliament of a draft law for simplified land and immovable property registration. This measure was accomplished. The law on State Registration of Rights to Immovable Property (1998) is the cornerstone for securing immovable property rights. The Government took further actions to implement this law by subsequently issuing GR 213 of 12 April 1999 to establish the State Agency for the Registration of Rights to Immovable Property (known as Gosregister) along with land and real estate registration systems. The registration system of immovable property rights increases the security of tenure and property transactions, and improves the information base for land administration and taxation. Unified taxes for agriculture were introduced in 1997 and tax rates were periodically adjusted to simplify taxation on agriculture that previously faced multiple taxes (Appendix 3, Table A3.5).

15. The ASP required the preparation of guidelines and procedures for the CLARs. This measure has been substantially accomplished over an extended period. The republican and local CLAR offices were instrumental in the implementation of land and agrarian reforms, and their mandate on privatization and denationalization has been largely completed. Consequently, RCLAR shifted its attention to the facilitation of farmer group formation and cooperative development, and to the monitoring of farm bankruptcies.

2. Improving Water Rights Management and User Contribution in Irrigation Water Use

16. The ASP stipulated three measures to (i) develop policies and procedures governing irrigation water users’ rights; (ii) extend the rights and responsibilities of WUAs to set and collect water charges, retain revenues, and decide on operation, maintenance, and capital investments within their areas; and (iii) develop and publish clear guidelines governing the transfer of ownership of irrigation infrastructure within particular service areas. These measures have been largely accomplished over an extended period. Further work is under way to improve the Law on Water (January 1994) in areas concerning water rights, water resources policy, planning and management, tariff setting, information system and dissemination, and inspection authorities.15

17. Accomplishments on these three measures took longer than expected at appraisal, and have benefited from continuing efforts by the Government to deepen the reforms with assistance from the World Bank. Since 1995, substantial progress has been attained in the development of WUAs, their rights, obligations, and organizational development. These accomplishments are now the most advanced among the Central Asian republics. The

15 Subsequent to the ASP, with assistance from the Land Reform Project funded by the United States Agency for

International Development, a new draft water code is under preparation to replace the existing Law on Water (1994).

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Parliament passed a new law on WUAs in February 2002 that specified their purpose, tasks, establishment procedures, membership requirements, management, dispute resolution procedures, and financing arrangements. By improving and replacing earlier regulations (GR of 13 August 1997), this new law allows options for voluntary establishment, management, and operation of the WUAs. It governs the rights and responsibilities of WUAs, including rights to establish and collect water charges, retain revenues, and make decisions on operation and maintenance, distribution of water, and improvement of on-farm irrigation systems within their jurisdiction. These achievements comprise key steps for establishing a system for sustaining operation and maintenance as well as cost recovery. Irrigation represents by far the largest water use (Appendix 3, Table A3.6), and the current water charge of Som0.03 per cubic meter is insufficient to cover the operation and maintenance costs of delivery systems. Fee collections were below targets from 1996 to 2000, but improved in 2001 (Appendix 3, Table A3.7). The functioning of the WUAs will facilitate the collection of water delivery charges and service fees, and enhance the efficiency of water use.

3. Improving Markets of Input Supplies

18. The ASP stipulated nine policy measures to (i) transfer regulatory functions from former state-owned enterprises to MAF, (ii) corporatize and privatize agricultural enterprises, and (iii) establish a market-based mechanism for the distribution of government-supplied agricultural inputs. These measures have been largely accomplished and strengthened by subsequent events, with partial achievements in some cases.

19. Regulatory functions for agrochemicals, plant protection, and veterinary products and services were transferred from KyrgyzSelkozkhimia and KyrgyzZoovetsnab to MAF in 1996. These functions have since been retained in MAWRPI. Further improvements went beyond the ASP requirements. MAWRPI promotes the safe use of fertilizers and agrochemicals, including registration and certification, although the operational capacity for crop protection has been under-resourced. Additionally, the Kyrgyz Republic became a member of the World Trade Organization (footnote 14), and also joined the European and Mediterranean Plant Protection Organization. The country subsequently improved regulations on plant quarantine by taking international standards into account. Seed regulatory functions were transferred to the Ministry of Agriculture and Water Resources (MAWR) and these functions have remained in MAWRPI. Beyond the ASP, after 1998, the Kyrgyz Republic began to introduce the international system for seeds certification and the Republican State Seed Inspectorate sought accreditation for its central seed testing laboratory from the International Seed Testing Association (Switzerland). The adoption of new standards will be gradual by initially focusing on international trade and continuing with national standards for domestic requirements.

20. All former units of KyrgyzZoovetsnab were privatized, although privatization proceeds of several subsidiary units have not been fully recovered by the Government. The State Veterinary Department of MAWRPI performs regulatory functions on the basis of the Law on Veterinary Measures (amended, June 1998), which is being revised to shift the responsibility for curative livestock disease control to private livestock services and private livestock owners. Although the responsibility for disease control remains with the State Veterinary Department, the development of privatized agriculture has increased the responsibility of farmers for control of livestock diseases. Private farms/households owned more than 95% of the livestock population and the production of animal products in 2001 (Appendix 3, Tables A3.8 and A3.9).

21. Corporatization and privatization of designated state-owned agricultural enterprises were completed. There are now no remaining commercial entities in MAWRPI of the bodies formerly responsible for regulating agricultural and veterinary products and services. However, the performance of the privatized entities is largely unknown, as there is no state requirement for monitoring privatized enterprises when the Government no longer has any share in them. The

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Government privatized and liquidated state-owned seed and cattle-breeding farms, maintaining only a few for research purposes. Further development took place in October 2001 when the Kyrgyz Agrarian Academy was restructured, leading to the establishment of the Kyrgyz Agrarian University. All remaining seed and livestock breeding farms of the former academy were then privatized, and minor portions retained for research were transferred to the newly established Center of Agrarian Sciences and Consulting Services under MAWRPI (para. 33).

22. The Government decided in 1997 to conduct state procurement through a central procurement agency rather than through individual line ministries. Consequently, the State Commission on Procurement and Material Reserves (previously the State Agency for Procurement) oversees the implementation of the rules for state procurement as stipulated by the Law on State Procurement of Goods, Works, and Services (April 1997, amended in November 1998). These rules include procedures for competitive bidding, direct purchase, and requests for quotations. The ASP also called for fair trade practices. However, the monitoring and enforcement of fair trade practices have been only partially accomplished. Legal provisions to improve competition and trade practices were established in the Law on Natural and Permitted Monopolies (October 1999), and the State Commission on Antimonopoly Policy (previously the National Commission on Competitiveness Protection and Development) expanded its functions that now include consumer protection, monitoring of advertising, and supervision of government licenses and fees for services. Further, the State Commission on Antimonopoly Policy has taken steps to review the appropriateness of various licenses and permits, in an effort to curb the proliferation of such requirements. The requirements for permits and inspections have reached an alarming level, and they have impeded new agribusiness entries and existing business operations. The concerned state agencies have used these administrative requirements to generate income.

4. Improving Social Protection

23. The ASP noted that the transition to a market-based economy in agriculture brought an increase in poverty in rural areas. When the ASP was prepared, about 48% of rural households were poor.16 In 1995, the social support system was at an early stage of development, with a wide eligibility for benefits that were allocated without targeting assistance at vulnerable groups. The ASP stipulated six measures to monitor the social impact of the reforms, support the social safety net, and maintain essential social services. Most of the ASP’s achievements on social protection were considered partial at program completion, but these measures were later improved. The ASP required the Government to monitor and evaluate the impact of the reform measures, but in 1995, data and analytical capability to monitor poverty were inadequate, there was no baseline against which the ASP could be specifically monitored, and mechanisms were not in place for monitoring social impacts. Consequently, there was no specific reporting by the Government to ADB on the socioeconomic impacts of the ASP during the program period. As a separate exercise, but complementary to the ASP, the National Statistics Committee began to undertake household surveys in 1996 and improved its capacity to undertake surveys on poverty and unemployment.

24. The ASP called for the Government to provide additional financial support to maintain social assistance expenditures in 1996 and 1997 at least at the 1995 level, and to monitor the social fund and social assistance expenditures to ensure payments were in accordance with beneficiary entitlements. The additional budgetary support to social assistance was met, but payments to beneficiaries according to entitlements were delayed by 6–10 months in 1995, and

16 Agricultural wages plummeted, unemployment was widespread, and the earlier system of social service provision

under the FSU disintegrated. While the social fund and social allowances schemes provided some cash support to more vulnerable groups, both schemes were seriously in arrears and with long delays in paying benefits, particularly to those in rural areas, and in remote and mountainous regions. It was emphasized in the ASP that payments should be made on the basis of entitlements and that the rural population should not be disadvantaged.

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significant payment arrears continued until 1999. The ASP relied on the existing delivery mechanisms and did not stipulate specific initiatives to improve targeting. In hindsight, the social impacts of policy reforms could have been handled separately with delivery instruments specifically designed for better targeting, instead of lumping such initiatives together with the ASP. Concurrent and complementary to the ASP, the law on social benefits was introduced in 1998, and a number of changes occurred: (i) a means-tested benefit system was introduced, (ii) the Ministry of Labor and Social Protection was reorganized, and (iii) the benefits administration system was modernized. This represented a notable improvement over the previous indiscriminate benefit coverage. By 2000, resources allocated to the nonpoor were reduced, and the means-tested benefit system improved.

25. The ASP required the Government to ensure that the majority of the rural public sector kindergartens operational in 1995 remained operational in 1996 and 1997. The dissolution of former state and collective farms led to the disappearance of free social services including kindergartens. The ASP considered that it was important to support rural kindergartens. These facilities provide childcare and education, and improve employment opportunities for women. The ASP objective to keep the same number of kindergartens operational from 1995 to 1997 was achieved. However, by 2001 there were only 145 publicly funded rural kindergartens under the Ministry of Education, reportedly covering no more than 8% of eligible rural children. The closure of on-farm schools had not been offset by the emergence of new schools. Existing kindergartens are in poor conditions, lacking basic equipment and furniture. Recent initiatives included encouraging private sector involvement and emphasizing flexibility, choices, variable costs for different services, and increased parental participation.

26. The ASP required the Government to assess food supply and needs in remote rural areas, and to develop a strategy to meet these needs. Significant progress has been achieved, but it took much longer than anticipated at appraisal and major progress did not take place until after the end of the program period. GR 189 of 10 May 1999 established the State Food Security Commission. The Government later approved a national food security policy (GR 585 of 26 October 1999) to meet a second tranche release condition of the European Commission Food Security Program (ECFSP) for implementation in 1999. The Government’s strategy for food security now includes meeting food needs for those living in remote rural areas. In August 2000, the Government established in the National Statistics Committee a national food security information system to provide timely and reliable information on food stocks, food production and consumption, and access to food for different categories of the population. The committee now publishes a quarterly food security information bulletin, providing analyses of food security conditions and characterizing food consumption and food balances at national and regional levels.

5. Promoting Environmental Protection

27. The ASP stipulated four measures to promote sustainable management of forests and upland pastures and to enhance biological control of cotton pests. With the exception of improving control on grazing in the forest areas, the ASP measures on environmental protection have only been partially accomplished. Forestlands that had been grazed by former state and collective farms were returned to the Government (GR 226 of 15 April 1997). The newly established State Forestry Service (PD of 25 November 2001) was empowered to manage forest areas formerly under the control and management of the agricultural enterprises and to address the management of grazing in forest areas.

28. The ASP required the Government to prepare a policy on the long-term leasing of natural pastures to promote sound grazing and sustainable land use practices. In May 1997, the progress report considered this policy measure substantially accomplished, as ADB accepted the preparation of a draft law on pastures to fulfill the related second-tranche condition.

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However, the issue of grazing and leasing of natural pastures was not translated into a defined policy or management strategy, and the draft law on pastures (that was approved by GR 179 of 3 April 1997) was withdrawn on 2 July 1998 following consideration by the Committee for Agrarian and Industrial Complex of the Parliament. Historically, pastures were free for all to use and regulating pastureland did not gain popular support since independence; and the pressure on pastureland was commonly perceived to be decreasing as the population of major livestock shrank from 1990 to 1997 by 62% for sheep and goats, and by 27% for cattle (Appendix 3, Table A3.7). This decline was consistent with the large decrease in the planted areas of perennial fodder crops from 386,000 ha in 1990 to 224,000 ha in 1997 (Appendix 3, Table A3.10).

29. Pastureland management remains a major issue, given that pastures of all categories occupy 9.2 million ha, representing 46% of the country’s territory (Appendix 3, Table A3.11). The land code (1999) contained minimal reference to natural pastures (article 4, para. 2), while the subsequent GR 649 of 29 November 1999 regulated the lease and use of pastures. Recently, GR 360 of 4 June 2002 replaced GR 649, introducing new provisions for leasing and use of natural pastures, and encouraging competition for leasing. Pastureland can no longer be leased for less than 5 years. MAWRPI is preparing a new draft law on pastures to harmonize existing rules and to clarify the leasing process, revenue generation, and protection for pastureland, but the drafting has been undertaken without much interagency consultation, including with Gosregister, which prepared GR 360 of 4 June 2002.

30. The ASP required the Government to introduce a mechanism for industry funding of biological control of cotton pests, but this was not done. Instead, steps were taken to privatize three laboratories (Osh, Jalal-Abad, and Issyk-kul) and the biocontrol factory producing pesticides. These facilities were separated from the Department of Chemical Use and Plant Protection, and placed under a new Republican Center for Production of Biological Methods of Pest Control under MAWRPI. This center now receives funding from ECFSP.

6. Enhancing Institutional Capacity Building and Restructuring

31. The ASP stipulated nine measures to build institutional capacity and restructure public sector institutions to support market-based agriculture. These measures focused on (i) completing the reorganization plan for and the reorganization of MAF headquarters; (ii) strengthening the capacity of the then Directorate of Economics, the Directorate of Investment, and RCLAR; (iii) restructuring MAF-dependent organizations, including research institutes, agricultural education, and training agencies; and (iv) strengthening the capacity of the Ministry of Water Resources to organize WUAs. Since 1995, there have been at least four major organizational changes in a political environment marked by frequent changes in the Government and a cabinet minister rarely served more than 2 years.17 The PCR appropriately pointed out that the ASP design should have recognized the weak institutional capacity for implementation, and that it was unrealistic to build institutional capability within the timeframe attached to the program loan, as the institutional capacity was inadequate to start with, and was further eroded by fiscal constraints and disrupted by frequent personnel changes. It also pointed out that a monitoring framework should have been developed to link potential risks in implementation with the specifics of the policy agenda. There have been limited direct achievements under the ASP in institutional capacity building.

17 Several reorganizations took place since 1995: (i) functions, responsibilities, and work arrangements for MAF were

redefined in August 1996; (ii) MAF and the Ministry of Water Resources were merged in December 1996; (iii) functions and responsibilities of MAWR were redefined in February 1997, and amended in February 1999 and August 1999; and (iv) MAWRPI was established in April 2001 following PD of 28 December 2000 that guided the overall reorganization of public administration central bodies, and the responsibilities for agroprocessing industries (such as breweries and tobacco) were transferred to MAWRPI from the Ministry of Industry and Trade, hence the formation of the new MAWRPI.

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32. Following the ASP, further initiatives were targeted at MAWR with assistance from ADB18 and bilateral and multilateral sources. Recently, with assistance from the Swiss-funded Policy Support Project, the Directorate of Investment (now the Department for Agrarian Policy, Investment and External Relations) took over the functions of the former Agriculture Project Coordination and Management Unit, including tasks related to identification and preparation of investment programs. Other achievements include the establishment of a budget office in the Department of Economics with support from ECFSP and the transfer of credit-recovery tasks to the Ministry of Finance. The roles and functions of the republican and local CLAR offices were redefined and reconciled with those of Gosregister (established in 1999), as the latter started to play its prominent role in the registration of rights to immovable properties. Notably, organizational behavior, work procedures, and management practices were difficult to change. In May 2002, ECFSP conducted a functional analysis of MAWRPI, provided recommendations, and proposed that further work be undertaken to analyze the resources for sustaining the revamped functions.

33. Research institutes and educational agencies were reorganized, although the restructuring did not fully recognize the implications of the new functions of these agencies on the resources required to perform such functions. Under the ASP, PD 117 of April 1996 established the Kyrgyz Agrarian Academy with the responsibility for agricultural education and research. However, the actual restructuring of agricultural research did not receive external assistance apart from TA 2450-KGZ (footnote 8) that initially provided a background assessment for the Government to conduct a study on agricultural research. Following the formation of the academy, the TA’s scope was changed and it did not support further activities on agricultural research. After the ASP, based on GR 7 of 5 January 2002, the academy was reorganized (i) transferring all affiliated research institutes and research stations to the newly established Center of Agrarian Sciences and Consulting Services under MAWRPI, and privatizing the remaining seed and livestock breeding farms except farms that were retained for noncommercial and research purposes; and (ii) establishing the Kyrgyz Agrarian University in October 2001 and dedicating it as an institution of higher learning. The university’s fledgling role is under-resourced. Operating arrangements for the Center of Agrarian Sciences and Consulting Services have not been detailed, although steps were taken to allow it to receive funds from the republican budget and grants from domestic and external sources, and generate revenues by providing consulting services.

34. The ASP called for the Ministry of Water Resources to strengthen its capacity to organize WUAs. Moderate progress was achieved under the ASP with pilot initiatives conducted under TA 2451-KGZ (footnote 8). The WUA concept was new, and awareness building was required at the beginning to familiarize ministry staff with the task of facilitating the transfer of the organization and management of on-farm irrigation systems to WUAs (which at that time were still to be established). Assistance for WUA development was not limited to the ASP. By 2001, more than 200 WUAs had been registered, although the majority of them were still at an early development stage. Support for the organizational and management development of the WUAs continued beyond the ASP. The capacity of the Department of Water Resources under MAWRPI to organize WUAs has been strengthened with assistance from the World Bank, especially with the establishment in May 2001 of a central WUA support unit in the department,

18 TA 3035-KGZ: Capacity Building in the Ministry of Agriculture and Water Resources, for $470,000, approved on

29 June 1998. Aimed to help the then MAWR to design, implement, and monitor a public investment program for the agriculture sector, TA 3035-KGZ followed TA 2450-KGZ (footnote 8), strengthened the Agriculture Project Coordination and Management Unit, facilitated the development of an information and documentation center, and established mechanisms for the development of an agriculture sector investment program. TA 3035-KGZ was rated partly successful (ADB. 2000. Technical Assistance Completion Report on the Capacity Building in the Ministry of Agriculture and Water Resources. Manila.) as it provided more operational support than direct capacity building for MAWR.

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along with seven WUA support units in the provinces.19 These support units promote the formation, development, and functioning of WUAs. The establishment of support units at the district level is under way in areas where irrigated farming predominates.

C. Program Management

1. Disbursement and Procurement

35. The first tranche of the loan, amounting to $19.4 million equivalent, was released in three batches (9 May 1996, 20 June 1996, and 27 June 1996) as per disbursement applications. The second tranche of $18.5 million equivalent was disbursed on 30 May 1997. At appraisal, the second tranche was expected for release by December 1996. Facing difficult budgetary conditions, in March 1997 the Government strongly urged ADB to release the second tranche, claiming that seven of the nine second-tranche conditions had been complied with, and substantial progress had been achieved on the remaining two conditions.20 The progress report recommended the release of the second tranche with amendments to the two second-tranche conditions that had not been fully accomplished by April 1997: (i) the publication and distribution of the policies and procedures governing water users’ rights (measure 2.1.2), and (ii) the issuance of a decree to promote the management and sustainable use of natural pastures (measure 5.1.2). The progress report was overoptimistic (para. 7). The loan proceeds were disbursed with statement of expenditure procedures, covering six claims. No audit report was required because no imprest account was used. Disbursement was based on reimbursements for goods already imported while complying with the list of ineligible items. There were no procurement packages or any single item that cost more than $5 million. Reimbursements of eligible imports were allowed to cover expenditures incurred for up to 180 days before the loan effectiveness, allowing disbursement of the first tranche, with 90% of the loan proceeds based on imports incurred before the date of loan effectiveness. The loan proceeds were fully liquidated by 30 May 1997 and the loan account was closed as scheduled on 30 June 1998.

2. ADB and the Executing Agency

36. ADB provided considerable staff time and program preparatory TA to the Government in designing the ASP. From program loan approval (November 1995) to September 1998, ADB fielded five loan and TA review missions. ADB relied heavily on consultants engaged under the two attached TAs (footnote 8) for reviewing and supervising the ASP as ADB staff resources were constrained. Based on available records, the ADB review missions for the ASP were tasked with fact-finding, appraisal, and review of other projects, thereby seriously limiting staff resources that were actually made available for the supervision of the ASP implementation.21 The OEM confirmed the PCR findings that (i) the program coordination committee was not established, and coordination between the Ministry of Finance (the Executing Agency) and MAWR was weak; (ii) MAWR staff did not perceive there were direct benefits from the ASP because of the absence of direct financial support to the agriculture sector; and (iii) the Ministry of Finance did not effectively respond to its role, except when the second-tranche release was delayed. The PCR emphasized that specific earmarking of a portion of the counterpart funds to support the agriculture sector would have developed greater ownership in MAWR. Changes in personnel, repeated reorganizations, and limited institutional experience in the management of reforms affected the implementation of the ASP during the 2-year program period. 19 The World Bank-financed On-Farm Irrigation Project provides significant support for the development and

functioning of the WUA support units, with an aim to mainstream these units into the functional responsibilities of the Directorate of Exploitation and Construction of the Department of Water Resources under MAWRPI.

20 Letter 1-224, dated 17 March 1997, from the Prime Minister of the Kyrgyz Republic to the Executive Director representing the Kyrgyz Republic in the Board of Directors of ADB.

21 Key documents that were cited in the progress report and the PCR were not available in the ADB archived files for the OEM to review and validate. Subsequently, the OEM obtained these documents from MAWRPI and from bilaterally-funded projects, particularly the Swiss-funded Policy Support Project.

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Nevertheless, the Government’s reformist stance consistently supported the ASP objectives and allowed progressive achievements to be attained beyond the ASP period.

3. Effectiveness of Technical Assistance

37. ADB provided two TA grants to assist the Government in implementing the ASP.

a. TA 2450-KGZ: Reorganization and Strengthening of the Ministry of Agriculture and Food

38. The specific objective of the TA was to strengthen the then MAF’s capability to formulate strategy and policies, and to design, finance, and implement a program to complete the process of reform in the agriculture sector.22 The TA aimed to support the reorganization of MAF, help RCLAR in the privatization of various enterprises, and strengthen three directorates within MAF, namely, the Directorate of Economics, the Directorate of Investment and Agroprocessing, and RCLAR. The TA objectives and scope were ambitious, and outcome expectations unrealistic. The TA could not effectively deliver what was expected due to unforeseen impacts of rapid and continued organizational changes affecting MAF and later MAWR (footnote 17), including staff reduction. Frequent personnel changes at the minister, deputy minister, and departmental head levels compounded the problem of developing institutional memory and capacity. Fiscal austerity and budgetary constraints ran counter to developing significant analytical, administrative, and management capability. Consequently, the TA consultants’ work plan was curtailed and revised to focus on training of domestic counterparts, aid coordination, and preparation of an agriculture sector public investment program (PIP). Specific achievements against the original TA objectives were limited, and the PIP initiatives were unsuccessful. Efforts were then redirected to focus on skill improvement, helping ministry staff understand the ministry’s evolving role in a market economy. Working groups were established to address issues related to land and agrarian reforms, rural advisory services, market information, rural finance, and other subject areas. Attitudes of ministry staff toward repeated reorganization were increasingly unfavorable. The TA design assumed that reorganization and capacity building would be accompanied by increased budgetary allocations, and thus the TA focused on initiatives to secure incremental financing to restructure and strengthen key public services through major investment projects. But this focus failed to succeed, as downsizing and reduction of available resources predominated during the transition. The OEM rates the TA partly successful given its limited influence in strengthening the capacity of the target ministry.

b. TA 2451-KGZ: Building Capacity for the Formation and Management of Water Users Associations

39. The TA aimed to strengthen the Ministry of Water Resources' capacity to facilitate the formation and management of WUAs. The TA included (i) reviewing pertinent legislation; (ii) advising on organizational structure and staffing to support local irrigation departments; (iii) advising on policies and processes for organizing WUAs, irrigation fee collection, and farm-level system management; (iv) training ministry staff to facilitate formation and monitoring of WUAs; and (v) field testing and refining approaches for organizing WUAs in selected irrigation systems.23 The TA was instrumental in developing the legal framework, and demonstrating the modalities to form and strengthen WUAs. The TA initiatives had led to the acceptance of the necessity of WUA development, and increased the awareness and capacity of the ministry’s staff and domestic consultants on WUA formation through training and pilot WUA development, including a study tour in November 1996 to review WUA operation in Spain. The initiatives to

22 TA 2450-KGZ commenced in June 1996, providing 48 person-months of international consultants and 34 person-

months of domestic consultants. International training of 18 person-months was completed in April 1999. 23 The TA commenced in July 1996 and was completed in March 1998, utilizing 21 person-months of international

consultants and 12 person-months of domestic consultants.

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strengthen the ministry’s capacity to facilitate the development of WUAs continued beyond the ASP with further assistance from the World Bank. The Government’s commitment to WUA development reached a new impetus with the new WUA law that now provides options for the voluntary establishment, management, and operation of the WUA (paras. 16–17, 34). Recognizing the contribution of the TA efforts to WUA development, the OEM rates the TA successful.

III. PROGRAM RESULTS

A. Performance Indicators

40. The ASP performance indicators were broadly specified at appraisal, identifying the ASP as an integral part of the Government’s overall reform process that would contribute to the economic recovery and medium-term growth prospects for the sector. The ASP did not set specific targets, but it appropriately indicated anticipated trends. The precise outcomes of the transition were impossible to predict, considering the dynamics of reforms in all sectors of the economy. Nonquantified indicators included efficiency of water use, land market development, and input supply competition. Legal and institutional development indicators were not specified. The ASP was an integral part of a continuum of reforms during the transition. With the presence of concurrent reforms, the ASP on its own merits could not justifiably claim economic recovery and sector growth targets. Numerous factors were at play, including preceding and other reforms in the sector, reforms undertaken in other sectors that had an influence on the agriculture sector, and the overall macroeconomic situation.

41. Exogenous factors influenced the pace of transformation and recovery of the agriculture sector, including external shocks that affected the entire economy. The emigration of Germans, Russians, Ukrainians, and other ethnic minorities after independence reduced the pool of skilled workers. The Russian financial crisis24 in 1998 and its unfolding events dampened the Kyrgyz economic recovery, for example (i) exports to Russia and the other Commonwealth of Independent States members declined; (ii) GDP in US dollar terms shrank with the ensuing currency devaluation; and (iii) external debt to GDP ratio rose sharply with increased borrowing costs in foreign currency, external public debt stock reaching 105% of GDP in 1999. The total external debt (public and private) stood at 110% of GDP in 2001, and the high indebtedness of the Kyrgyz Republic led to an agreement on 7 March 2002 between Paris Club creditors and the Government to restructure the country’s external debt. The PIP has been heavily dependent on external financing. Since the external debt and the prospect of a large debt repayment burden have necessitated a major reduction in the size of the PIP, investments and rehabilitation in agriculture will have to be rationalized and limited.

42. The Kyrgyz economy is small and open and, hence, sensitive to trade restrictions. For example, Kazakhstan and Uzbekistan intensified restrictions between late 1998 and 1999, curbing international market opportunities for Kyrgyz products.25 The Kyrgyz Republic imposed a 100% tax on exports of wheat and flour in 1999 to depress domestic prices of wheat in order to help the Government replenish its grain reserves at low cost at the expense of farmers. However, this erratic policy to obstruct exports was soon removed and has not been repeated. The orientation of the Kyrgyz agriculture is predominantly domestic, and export opportunities have been constrained by prohibitive marketing costs, cross-border levies, transit charges, and transportation costs. Security threats caused by armed incursions of extremists in 1999, ethnic 24 International Monetary Fund. 2001. The Russian Financial Crisis and its Consequences for Central Asia. Working

Paper WP/01/169. 25 In October 2000, protective measures were introduced by Kazakhstan for specific products, among them eggs and

vegetable fats, by raising import tariffs to 30% for 6 months; (ii) in 1999, tariffs as high as 200% were imposed by Kazakhstan on specific goods such as rice, margarine, and fruit juices from Uzbekistan, and dairy fats and margarine from the Kyrgyz Republic; and (iii) neighboring countries imposed high transit fees for trucks and penalized exports of Kyrgyz goods.

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tension, and international drug trafficking have also affected the country and contributed to interruptions of cross-border access.

B. Impact of Policies

43. Appendix 4 provides selected economic and social indicators from 1995 to 2001. Agriculture has practically been privatized. The agriculture sector has continued on a recovery path since 1996, with annual growth rates at 15.2% in 1996 and 12.3% in 1997. Mainly because of the exogenous shocks, the growth slowed down to 2.9% in 1998, 8.2% in 1999, 2.7% in 2000, and 6.8% in 2001. Employment in agriculture increased from 47.0% of total employment in 1995 to 53.2% in 2001, providing shelter to the underemployed and social protection of last resort in the rural areas. As the sector’s recovery and the improved productivity per unit land area have not been sufficient to fully absorb the additional employment, wages in agriculture have remained depressed at not more than 50% of national wage averages since 1998.

44. With land reforms, distribution of land to farmers, and significant reduction of state interventions, there has been a steady shift in cropping patterns in favor of wheat, as farmers and households make their own decisions and favor wheat for subsistence, food security, and as an acceptable medium of exchange. This shift has reflected the evolving supply and demand of the emerging privatized agriculture, as the Government divested its interests in direct production. Out of about 480,000 ha of wheat in 2001, private farmers owned 62%, households 11%, and collective farms the remaining 27% (Appendix 3, Table A3.12). As the guaranteed distribution channels for livestock and animal products disappeared, massive culling occurred and the livestock population declined to adjust to the post-Soviet Union realities. This, in turn, caused the domestic demand for livestock feeds to decrease and crop areas of barley declined by more than 70% from 255,000 ha in 1990 to 67,000 ha in 2001. Wheat took over in part as a replacement of barley and wheat production almost tripled since independence. By 1997, wheat production had reached almost 1.3 million metric tons (t), and since then stabilized in the range of 1.0–1.2 million t (Appendix 3, Table A3.13). The ownership of agriculture shifted from state and collective farms to private farms and households, with emphasis on subsistence and mainly for grains and potatoes. Grain production, including wheat, reached 1.8 million t in 2001, making the country nearly self-sufficient, while potatoes reached 1.2 million t. Raw cotton production increased from 62,400 t in 1997 to 98,200 t in 2001. Other major crops include vegetables, tobacco, and sugarbeet.

45. Based on National Statistics Committee data, crop productivity levels have improved since 1995, regaining and, in some cases, surpassing pre-independence levels, with average yields in 2001 for all grains reaching 2.8 t/ha, 2.5 t/ha for wheat, 2.6 t/ha for cotton, and 15.7 t/ha for potatoes (Appendix 3, Table A3.14). Since most arable lands are irrigated, further productivity gains may not be achieved as the conditions of the irrigation systems have deteriorated due to lack of maintenance. Efficiency of irrigation water use remains a major issue, as was the case when the ASP started. Efforts to improve the operation and maintenance of the irrigation systems continue, and reinvestments for rehabilitation have commenced with assistance from ADB and the World Bank.26

46. Agricultural exports fluctuated from $45.2 million in 1997 to $56.8 million in 1999 to $46.9 million in 2000, rising to $59.3 million in 2001 (Appendix 3, Table A3.15). Agricultural imports rose from $17.0 million in 1995 to $31.4 million in 1999 and $40.9 million in 2000, and declined sharply to $15.9 million in 2001. In that year, agricultural exports made up 12.3% of total exports while agricultural imports accounted for only 3.4% of total imports. The composition of the agricultural exports and imports (including food aid) is presented in Appendix 3, Table 26 Loan 1726-KGZ(SF): Agriculture Area Development Project, for $36 million, approved on 20 December 1999;

World Bank-financed On-Farm Irrigation Project, for $20 million, approved on 6 June 2000; and World Bank-financed Irrigation Rehabilitation Project, for $35 million, approved on 7 May 1998.

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A3.16. Agricultural exports consistently exceeded imports, with exports mainly to the Commonwealth of Independent States. But exports of processed foodstuffs declined severely from $127.0 million in 1996 to just $11.8 million in 2000 and foodstuff imports exceeded corresponding exports since 1999. Domestic food-processing industries have not seen major reinvestments and obsolete processing facilities are unable to meet market demands, or have ceased to operate. Emergence of new food-processing industries has been limited.

47. Although the moratorium on the sales of agricultural land was lifted on 1 September 2001, there has not been a sharp rise in land transactions. Land sales have been limited, as major restrictions still apply due to existing political conditions that have emphasized safeguards against speculative transactions and concentration of land assets. However, there is growing domestic pressure for the Government to ease restrictions on land transactions to recognize the individual rights of landowners, facilitate farm consolidation, promote enterprise development in agriculture, and allow efficient producers to use their land assets more effectively as collateral. The current restrictions have made land an unattractive choice for collateral to creditors.

48. Small traders, market intermediaries, and competition in input supply and output marketing have emerged, although there are no reliable data on the number of traders. Farmers as primary producers are exempted from value-added tax (VAT), while market intermediaries are not VAT exempt. Small traders often operate informally, and porous international borders have enabled smugglers of fertilizers and agrochemicals to capture sizable domestic market shares, and gain an unfair advantage through tax evasion and uneven application of VAT. The Kyrgyz Republic does not produce its own fertilizers and agrochemicals, and relies on imports. The pervasive smuggling and the uneven tax application dampen the development of formal trade and contribute to tax evasion, although farmers benefit from the low-priced agrochemicals.

C. Social Protection

49. The ASP supported the social safety net by maintaining budget levels in 1996 and 1997 for social assistance, but these measures were limited by the ineffectiveness of the delivery mechanism that was then available. Major improvements were achieved after the ASP and the social protection services underwent significant changes to improve targeting. The loss of kindergartens through the dissolution of state and collective farms had not been compensated with the emergence of new school facilities. The effective coverage of the kindergartens dropped substantially to less than 8% of eligible rural children by 2001. Nonetheless, the ASP initiatives were appropriate under the prevailing conditions. The Government recognized the limitations of the social protection benefits and coverage, and opted for a progressive overhaul of the social protection system. Monitoring capacity has substantially increased through the improvement of data collection, analyses, and dissemination of information at the National Statistics Committee. Rural poverty increased from 49.6% in 1996 to 55.3% in 1997 to a peak of 62.4% in 1998, but it declined again to 60.0% in 1999 and 56.4% in 2000.27 The biggest contributor to social protection in rural areas is the agriculture sector by absorbing excess labor and providing food security through distribution of lands to individual farmers, and the ensuing recovery in crop productivity.

D. Institutional Development

50. There were serious challenges facing institutional reforms. The program preparatory TA 2274-KGZ (footnote 4) emphasized several key issues: (i) there was inadequate understanding within MAF of what was required to establish an agriculture sector based on private farms in a market economy; (ii) MAF lacked capacity to develop policies, strategies, priorities, and an implementation program; (iii) MAF resources were seriously constrained; and (iv) there was 27 Comprehensive Development Framework of the Kyrgyz Republic, 2001.

16

limited ownership of development strategies and plans already prepared with external assistance over the previous 18 months. The findings of TA 2274-KGZ indicated that (i) major reorganization of agricultural services could take up to 5 years, and (ii) unrealistic targets for completion of certain reforms had in the past hastened the process to meet such targets but achievements had been more cosmetic than real. Nevertheless, the ASP opted for an ambitious timeframe for institutional reforms, aiming for their completion in 2 years. Although this was an overoptimistic view of what could be achieved over such a short period, fundamental changes during the last decade divested MAWRPI of most of its former attached organizations. MAWRPI is now in a better position to support private agriculture, as it has given up its key production functions.

E. Environmental Protection

51. The ASP promoted environmental protection by focusing on managed grazing of natural pastures and forested areas, and reintroducing biological measures for pest control. In respect of pasture management, it was expected at appraisal that a law would be forthcoming. In hindsight, the Government did not view the adoption of such a law as a priority. The obstacles to a smooth transition of the law through the legislative process were underestimated. The existing land code (1999) contains minimal reference to natural pasture. Inadequate understanding of the roles and responsibilities of different agencies and local authorities over state-owned natural pastures made effective implementation of pasture management difficult. While Gosregister established its role on pastures through GR 360 of 4 June 2002, MAWRPI has proceeded to draft a new law on pastures without much consultation with other agencies (paras. 28–29). There are reasonable prospects for reaching a solution, provided interagency cooperation improves to harmonize existing rules and provisions for protecting pastureland.

F. Counterpart Funds

52. According to the report and recommendation of the President (footnote 6), counterpart funds generated from the ADB loan were to be used to support the transition of the agriculture sector to a market-based system. There was no earmarking for specific uses of such funds. This financing arrangement allowed much flexibility, and in effect, the funds became part of general government revenues. Tracking of the specific use of counterpart funds was deemed unnecessary due to the fungibility of budgetary resources. There was no specific action undertaken to monitor the uses of the counterpart funds, apart from the initiatives taken by ADB to monitor budget allocations to maintain certain expenditure levels for safeguarding the social safety net. The OEM confirmed the PCR findings that MAWRPI staff commonly perceived that the financing arrangement for the ASP did not provide direct financial support to the agriculture sector.

G. Sustainability

53. The ASP has remained highly relevant, and the policy reforms it initiated have been strengthened and sustained over the last 3 years. Although accomplishments in some areas have been partial, the ASP has advanced the country’s reform agenda to establish a firm platform for a market-based agriculture. The Government has remained committed to the reform measures, showing this commitment by attaining key milestones, albeit over an extended period, and seeking further TA from multilateral and bilateral agencies. External assistance has continued to play a critical role in advancing and deepening the reform process. For example, specialist knowledge in some areas was needed in establishing and operating the registration system for rights to immovable property. Current efforts continue to show improvements in the (i) legislative framework for privatized agriculture, (ii) reorientation of the role and functions of the Government in support of agriculture, (iii) market information and advisory services, (iv) enabling environment for secured lending and transactions, and (v) legal prerequisites to

17

support the emergence of land market for agriculture and rural finance. There is no evidence of reversal of the reform path, while new issues have emerged for the sector to function more efficiently in the future.

IV. KEY ISSUES FOR THE FUTURE

A. Farm Management

54. The restructuring of farms to a market-based system must take into account the multifaceted aspects of farm operation and management. The emergence of private farms has brought serious challenges, placing them in an uncharted territory where the systems of centrally assured delivery of inputs and distribution of outputs, and guaranteed employment have disappeared. Many collective farms have retained their management styles, as inherited from the FSU, despite privatization and the change in ownership structure. Nonetheless, individual private farmers have realized that they have to make decisions as producers and entrepreneurs on all aspects of production, management, and marketing. Their previous experiences are often limited and specialized, lacking in all-rounded farming operation. Thus, farm management, skill acquisition, and restructuring will remain dominant issues, as private farmers and collective farms continue to learn to operate in an increasingly competitive market.

B. Access to Formal Credit

55. Planted areas of major crops amounted to about 1 million ha in 2001, requiring at least $50 million annually in working capital. The outstanding commercial bank lending to agriculture and agribusinesses amounted to only Som38.9 million or $0.8 million as of 31 December 2001 (Appendix 3, Table A3.17). The commercial banks’ ability and willingness to service agriculture are limited. Alternative financing modalities have emerged, including the establishment of the Kyrgyz Agricultural Finance Corporation in 1997 with assistance from the World Bank.28 The corporation’s lending to the sector grew recently and reached Som450 million in 2001 ($9.4 million), more than 10 times the total lending of commercial banks to agriculture. Other sources of rural finance have progressively emerged, including microcredit schemes promoted by nongovernment organizations. However, the financing gap in agriculture remains large and there is room for alternative credit schemes to meet various niches. ADB has provided assistance to widen access to credit through the establishment of credit unions.29 The development of sustainable rural financial services continues to need attention.

C. Marketing of Agricultural Inputs and Outputs

56. Subsidized agricultural inputs in neighboring Uzbekistan have caused Uzbek farmers to benefit from the sales of state-supplied fertilizers, instead of using them. The porous borders have encouraged the smuggling of low-cost fertilizers and fuel into the Kyrgyz Republic from neighboring countries. This has led informal trade in fertilizers and other inputs to flourish, offering competitive prices to Kyrgyz farmers. Benefits to Kyrgyz farmers from these low-cost agrochemicals cannot be sustained, for they depend on foreign subsidies, and the Uzbek Government may change its pricing policies in pursuit of market reforms. This underground trade poses a serious challenge to formal and legitimate private traders in the Kyrgyz Republic by undercutting sales prices of imported agrochemicals. The uneven tax enforcement has also discouraged entrepreneurs from establishing formal businesses. Although there is no reliable estimate of the share of smuggled fertilizers and fuel in the domestic market, interviews with farmers and traders indicate that the domestic consumption of fertilizers from informal sources

28 Further assistance came from the World Bank in the form of Rural Finance Project II, for $15 million, approved on

24 June 1999. 29 Loan 1529-KGZ(SF): Rural Financial Institutions Project, for $12.5 million, approved on 21 August 1997.

18

is significant, and may exceed 50% of the total fertilizers actually used by farms.30 The Kyrgyz Republic is landlocked, mountainous, and notably remote from major markets. Export markets for agricultural products are limited and heavily constrained by cross-border clearances, roadblocks and inspections, and various administrative inspections.31 Costs of intermediaries, transit, and transportation to reach export destinations are prohibitive. Cross-border access has also been periodically interrupted by closures. Inadequate regional cooperation has affected the potential for agricultural trade.

57. The Kyrgyz Republic can benefit from streamlined customs services, harmonized transit procedures, lower transit costs, unfettered cross-border passage, and reduced arbitrary charges. The overall business environment, including agribusiness and agriculture, is exposed to predatory hindrances and rent-seeking practices that have increased the costs of conducting business. The business climate and other barriers have also impeded new entries. The geophysical and demographic features of the country contribute to the fundamental constraints facing agriculture: (i) domestic demand constraints due to low income and small population; (ii) access constraints due to mountainous terrain and relative isolation; and (iii) prohibitive transport and transit costs along with uncertain cross-border access.

D. MAWRPI Institutional Capacity and Public Investment Management

58. ADB assistance to strengthen the capacity of MAF, MAWR, and later MAWRPI to prepare, implement, and monitor the PIP for the agriculture sector has not succeeded, despite considerable efforts that commenced with the ASP through TA 2450-KGZ, and continued with TA 3035-KGZ (footnote 18), and TA 3439-KGZ.32 As its predecessors, the ongoing TA 3439-KGZ has deviated from its objective to assist MAWRPI in developing and managing its PIP, and instead focused on training of its staff without a systematic needs assessment for specific PIP functions. The inability to focus on the PIP has been attributable to (i) poor interface with other efforts to strengthen budgetary and expenditure management; (ii) unclear PIP responsibilities within MAWRPI; (iii) inadequate incentives for MAWRPI to focus on the PIP when funding decisions are beyond MAWRPI’s domain and considered to be the prerogative of the Ministry of Finance; and (iv) heavy dependence of its operations on external financing that has made MAWRPI more responsive to external financing conditionalities rather than focused on budget and expenditure management functions. Budget management functions require greater attention to determine priority use of scarce fiscal resources. The large debt burden has obliged the country to rationalize its public expenditures. Public investments in agriculture (such as for irrigation) will be inevitably limited (para. 41), requiring astute planning and prioritization. However, the capacity of MAWRPI to manage its PIP for agriculture remains a major issue. Overall, the capacity of MAWRPI to perform its mandated functions will continue to require institutional strengthening, as these functions have not been matched with resources and staff skills.

30 National Statistics Committee. 2001. Environment of the Kyrgyz Republic: Statistical Compendium. Bishkek.

Imports of coal, gasoline, and related products excluded undeclared trading volumes by physical persons. 31 Under TA 3458-KGZ: Support to the National Strategy for Poverty Reduction, for $600,000, approved on 14 June

2000, a trade and export promotion study was carried out that surveyed trade impediments, including customs, transportation, transit costs, and permits. The OEM interviewed farmers and traders who confirmed the study's finding that customs charges, transit fees, facilitation charges, and other levies at road blocks and checkpoints for trucks to pass through Kazakhstan to reach destinations in Russia were prohibitive.

32 TA 3439-KGZ: Capacity Building in the Ministry of Agriculture and Water Resources (Phase II), for $585,000, approved on 11 May 2000. Commencing in May 2001, TA 3439-KGZ follows earlier TA 2450-KGZ and TA 3035-KGZ and is scheduled for completion in November 2002.

19

V. CONCLUSIONS

A. Overall Assessment

59. Relevance. The goal of the ASP was to facilitate the transition of the agriculture sector to a competitive market-based system. The scope of the reforms was relevant, pragmatic, and consistent with the priorities of the Government and ADB, establishing a strong platform for market-based private agriculture. Strengthening of the ASP measures continued progressively beyond the designated program period, with consistent support from the Government and other externally-funded assistance programs. The ASP measures filled gaps of reform opportunities, serving as catalysts for further legislative and regulatory refinement and deepening the core policy measures. The ASP is assessed as highly relevant.

60. Efficacy. The ASP (i) strengthened the requisites for land reform and farm restructuring, (ii) catalyzed the development of procedures for resolving land disputes, (iii) recognized rights to immovable property, (iv) advanced the legal framework governing irrigation water users’ rights, and (v) clarified the requirements for establishing WUAs. With TA 2451-KGZ, the ASP was instrumental in clarifying irrigation water rights and promoting the concepts of irrigation management transfer to WUAs. The ASP also reduced the role of the Government in distribution and marketing of agrochemicals, and in providing veterinary supplies and services. The ASP support for social protection was significant, but its effects were limited, primarily due to poor targeting inherent in the delivery systems. Later, the Government took appropriate steps to improve its social protection program and monitoring. Achievements on environmental protection were limited, but the Government demonstrated a commitment to developing a legal framework for the leasing and management of pastureland. Recognizing its achievements at the time of evaluation, the ASP is assessed as efficacious.

61. Efficiency. The ASP reinforced major reforms that had taken place, and complemented concurrent reforms in agriculture and other sectors. In hindsight, the ASP design was ambitious, and the timeframe underestimated (i) the enduring efforts required to effect and implement difficult policy changes; (ii) risks to capacity building that came with rapid downsizing and repeated reorganizations of government functions, and inadequate resources to support revamped functions; (iii) effects of retrenchment and frequent changes in personnel; and (iv) resistance to change, the change process, and the requisites of change management. Although some events could not be foreseen, considering the actual time taken for the achievements to occur, the ASP is assessed as less efficient.

62. Sustainability. The direction of reform has been consistently maintained, and with time, associated development initiatives have strengthened and deepened the enabling environment for creating market institutions, increasing the competitiveness of markets, improving social and environmental protection, and rationalizing public sector support for agriculture. Although there are shortcomings, delays, and challenges ahead, there is no lasting reversal or retreat in the implementation of the ASP reforms. Efforts continue to augment the foundation for market-based private agriculture. Consequently, the sustainability of the ASP is assessed as likely.

63. Institutional Development and Other Impacts. A large number of decrees, government resolutions, and laws have been issued, and their implementation requires significant institutional and legal capacity. The ASP design underestimated the difficulties that came with changing institutional environment, as later characterized by (i) frequent changes of personnel and management; (ii) inability to attract and retain staff with appropriate skills due to poor remuneration; (iii) rapid changes in functions and responsibilities as organizational structures were frequently revised; and (iv) the downsizing and retrenchment in MAF (later MAWR) that brought uncertainties for capacity building, and undermined the team spirit and staff morale. However, the ASP initiatives redefined the roles and functions of institutions

20

through the effects of the policy measures, thus obviating the need for so much state intervention in privatized agriculture. The capacity of existing institutions is still largely inadequate to cope with their new roles and functions, particularly in implementing new directives and enforcing laws. Further investments in capacity building are required to support the reorganized institutions and revamped functions (para. 58). The ASP contributed to arresting the increases in rural poverty, as the agriculture sector has absorbed excess labor and provided food security through land reforms. On balance, the institutional development and other impacts of the ASP are assessed as moderate.

64. Based on the above considerations, the ASP is rated successful.

65. ADB and Borrower Performance. The ASP design was ambitious, and ADB did not allocate adequate staff resources to supervise the ASP implementation (para. 36), to match the complexity of the reforms and the time to effect institutional changes. ADB performance in supervising the ASP was partly satisfactory. For the Ministry of Finance, the ASP loan was to support the balance of payment, instead of agriculture. Leaving the ASP implementation to MAF and its successor, the performance of the Ministry of Finance as the Executing Agency was partly satisfactory.

B. Key Lessons Learned

66. Capacity building, in the midst of downsizing across all sectors, coupled with frequent changes in the Government, was difficult to achieve. Difficulties were compounded by lack of experience given the scale of the transition, and an unforeseen political context and processes to effect and manage changes. Institutional development could not be effectively achieved when reorganization, downsizing, and staff changes occurred frequently, and when the Government was forced to stipulate fiscal austerity instead of budgetary support for redefined roles and functions. Institutional reforms require an in-depth institutional assessment that specifies the requisites of capacity-building initiatives and the conditions for the initiatives to succeed.

67. The ASP timeframe of 24 months was unrealistic and did not specify the phases of institutional changes that would have allowed capacity building over the designated period. The timeframe was dictated by the urgency to provide budgetary support to the country. The policy content of a program loan should be realistically appraised against the time required for implementing the specific policy measures and their requisite components, taking into account ex-ante risk assessments and the absorptive capacity of the Government to implement such initiatives. Although predicting the outcomes of reforms was difficult, a logical framework and a monitoring and evaluation system for the program should have been developed.

68. ADB staff resources for the supervision of the ASP and the associated TAs were limited, and review missions were heavily burdened with other tasks. This resource constraint shortened the time available for staff to review and supervise the ASP implementation, leaving little time for reviewing the assessments of the TA consultants and government statements claiming notable achievements. Resources for supervision should be allocated to match the demand imposed by the complexity of the program.

69. Corporatization and privatization of state organizations were not followed up, as there was no requirement for the Government to monitor the status of the emerging enterprises once it no longer held any shares in the entities. In some cases, privatization proceeds could not be recovered easily, and were reported still outstanding and not fully paid to the Government. Further, the commercial and financial viability of privatization efforts should have been emphasized, without which privatization could effectively mean dismantling and liquidation of state assets, and subsequent insolvency and bankruptcy of emerging entities. The second-tranche release conditions included corporatization and privatization measures, and this could compromise the quality of the privatization process as the specific steps for corporatization and

21

privatization were not indicated. Privatization initiatives should have clear objectives to distinguish them from other acts of dismantling state interests such as liquidation of state assets and divestments. Steps for pursuing privatization should be spelled out, emphasizing transparency, and indicating the milestones for monitoring progressive achievements based on the desired objectives of privatization. Further, ex-ante analysis of privatization’s fiscal impact should be conducted during the design of future programs.

70. The dynamics of policy reforms makes it difficult to design and implement reforms with a one-time blueprint approach as a yardstick. Refinement and deepening of reform measures were evident, and adjustments were needed to respond to unforeseen dimensions of the reforms, and incorporate ways to overcome resistance to change. Sticking to fixed conditionalities is not the best option when such measures are overtaken by events and affected by changed circumstances. Delays in implementation of certain measures do not necessarily reflect waning support for reforms, for delays may mean unrealistic timeframe, or the change processes may require repeated attempts to overcome resistance to change. The impacts and likely consequences of reforms may extend over a considerable length of time, even beyond the postevaluation period. Long-term engagement is required, with options to devise other measures along the path of the desired reform direction.

C. Follow-Up Actions

71. ADB has not conducted a comprehensive review of the Kyrgyz agriculture sector since 1995, although there have been partial updates through subsequent consultants’ reports of the various TAs. The Government and ADB should place emphasis on conducting agriculture sector analysis with scheduled updates to identify opportunities and constraints facing the sector. ADB should undertake an agriculture sector review for completion in 2003, in time for the country strategy formulation. The sector review should also analyze the operating and institutional environment of MAWRPI and recommend steps to safeguard the use of TA resources.

72. The sector’s recovery requires sustained efforts to improve implementation of adopted policies and rules, ensure law enforcement, complete structural adjustments, and strengthen regional cooperation to facilitate trade. The ASP did not foresee the cross-border problems and governance issues that have constrained the business climate, trade and markets, enterprise development, and new business entries. ADB should conduct further dialogue with the Kyrgyz Government and governments of neighboring countries to emphasize governance and trans-boundary issues to promote the development of markets, investments, and private enterprise development in the agriculture sector. Such dialogue should start in 2003 to complement the proposed agriculture sector review.

73. Achievements in the promotion of environmental protection under the ASP were partial, particularly with respect to natural pasture management. MAWRPI and Gosregister should develop effective interagency coordination by December 2002, harmonize existing rules, and improve the provisions for protecting pastureland commencing from 2003.

GEN. DIR. WATER RESOURCES

Dir. Exploitation

Organization & Maintenance

Dir. Investment,

Legislation, & Institutional

Development

Dir.

Water Resources

Dir. Economics

& Finance

Dir.

Administration

Dir.

Technical Policy

Reservoirs (3)

Oblast & Raion

Branches (7 + 40)

Dir. Inter-Raion

Canal Facilities

Republican Centre for

Land & Agrarian Reform

Oblast & Raion

Branches (7 + 40)

Dpt. Processing Marketing ofAg. Products

Bread

Inspectorate

Dpt. Economics (Production Indicative

Plans)

Budget

Unit

Dpt. Ag. Policy

Investment &External

Links

Veterinary Services Network

Dpt. Rural Water Supply

Dpt. Livestock

& Breeding

ManagementOffice

2 Motor Vehicles Depots

Rural Drinking Water

Facilities (Ail-Suu)

Raion Branches

(31)

Production Amalgamation

Pastures & Fodder

Joint Stock Company

Elita

Dpt. Veterinary

Dpt. Crop

Production Marketing

Dpt. Chemicals

& Plant Protection

State Veterinary

Inspectorate

Republican Veterinary Laboratory

Dpt. Plant

Quarantine

Commissionfor Variety

Testing

State Seed Inspectorate

(Quality Control

Certification)

Veterinary Laboratories

(24)

Veterinary

Militia (with MoIA)

Veterinary Border Control (with

Customs)

Control & Toxicology

Laboratories(2)

Plant Protection Stations

(6)

Republican Centre for Biological

Plant Protection

FIRST DEPUTY MINISTER DEPUTY MINISTER

Raion Agricultural

Dpts.

MINISTER OF AGRICULTURE, WATER RESOURCES, & PROCESSING INDUSTRIES

TECHNICAL INSPECTORATE

Ag. = agricultural, Dir. = director, Dpt. = department, Gen. Dir. = general director, MoIA = Ministry of Internal Affairs.

Seed CertificationLaboratories

(33)

ORGANIZATION CHART OF THE MINISTRY OF AGRICULTURE, WATER RESOURCES, AND PROCESSING INDUSTRIES

DEVELOPMENT POLICY MATRIX

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 A. Encourage the Development of Market Institutionsc 1. Land Reform and Farm Restructuringd 1.1.1 Government to develop

permanent land dispute resolution procedures to handle land allocation conflicts, boundary disputes, and similar problems

Dec 1996 Partially Accomplished. The Land Code of the Kyrgyz Republic was passed by Parliament on 30 Apr 1999 and replaced the 1991 Land Code. Although the 1991 Code included provisions for dispute settlement, the new version includes minimal reference to dispute resolution procedures. While dispute resolution procedures are well established, they are not documented or formalized. The Republican Center for Land and Agrarian Reform (RCLAR), State Property Fund, and State Agency for the Registration of Rights to Immovable Property (Gosregister) are preparing a Government Resolution (GR) on dispute resolution that will be issued in 1999. The law on State Registration of Rights to Immovable Property was passed by Parliament on 26 Nov 1998, and

Substantially Accomplished. The new land code, ratified on 2 Jun 1999 by the President of the Kyrgyz Republic, allows private ownership of agricultural land and specifies that land disputes shall be resolved through judicial procedures and court settlement (Article 119). GR 649 of 29 Nov 1999 concerning Regulations on Lease and Use of Pastures stipulates that disputes concerning pasture lease agreements shall be settled through the court or arbitration court. However, the Law on Administration of Land for Agricultural Purposes (passed by Parliament on 18 Dec 2000) does not have any reference to dispute resolution. Subsequently, the Presidential Decree (PD) 265 of 30 Aug 2001 promotes the creation of an arbitration mechanism, as an alternative method, to

a ADB. 1999. Program Completion Report on the Agriculture Sector Program in the Kyrgyz Republic. Manila. b As updated by the Operations Evaluation Mission (May–June 2002). c The Kyrgyz economy was among the poorest republics of the former Soviet Union (FSU), and existed as part of the Soviet production system, with agriculture and

industry, including mining, energy, and construction, dominating the economy. The country’s terrain is predominantly mountainous with about 90% of its land exceeding an elevation of 1,500 meters. During the Soviet period, the sector was under a highly centralized system of extensive resource use. Intensively irrigated farms in the lowlands and extensive grazing in the mountains enabled the country to supply other FSU states with woolen products, tobacco, cotton, fruits, vegetables, meat, and processed meat products. Production targets were determined and output prices were set administratively using cost-plus pricing, which covered costs of production, processing, and distribution. The system was oriented to fulfill production targets with little regard to costs, providing no incentives to change cropping patterns and improve efficiency.

d Land reform and farm restructuring commenced with the Law on Peasant Farms (2 February 1991) that allowed the establishment of small, single family, and private peasant farms. Subsequently, the Land Code (19 April 1991) introduced new forms of land tenure depending on the intended use of the land parcel, although the land was still owned by the State. Article 4 of the Constitution prohibited private ownership of land. However, with the lack of clarity in asset distribution and land leasehold rights, little progress was made in land reform and farm restructuring by 1993. The reform program gained momentum in 1994 with the issuance of the PD on Land Reform (February 1994) that granted eligible rural residents land shares of arable land for use for agricultural purposes with land use rights of 49 years. These land shares were not physically demarcated, and families were encouraged to pool their land shares, apply for a physical parcel, and establish a farm enterprise. The 1994 decree also provided shares of nonland assets and reduced the holding of the state-owned National Land Fund to 25% of arable land. The land shares could be traded, leased, rented, bought, sold, mortgaged, and bequeathed. The land use rights were later extended to 99 years (PD 297 of 3 November 1995). The registration of land and property shares was undertaken by local centers of land and agrarian reform based on procedures established by Kyrgyzmamjerresurstary (the State Institute on Land Resources and Engineering of the Ministry of Agriculture and Food), the tax inspectorate, the National Statistics Committee, and the notary office. Continuing reforms subsequently led to private ownership of agricultural land. By 1994, farm privatization had reduced the number of state and collective farms from about 500 farms to 270 farms, and more than 20,000 individual and cooperative farms had emerged. State quota and purchase orders were eliminated in 1994, and replaced with a state needs system for a range of commodities. Price controls and trade margins on farm products and consumer goods were removed by early 1994. By 1995, quantitative restrictions on agricultural foreign trade were removed, agricultural import tariffs reduced, and export taxes on agricultural products eliminated.

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 includes provisions for settlement of disputes

(Chapter 9). resolve land and property disputes. Established on 15 Mar 2001, a public foundation, Kalys Consult, provides arbitration services. With support from the Department for International Development (DFID) of the United Kingdom, four offices of third-party arbitration services have been established in three oblasts (Chui, Osh, and Jalal-Abad), with a planned expansion to 12 offices by 2003. With DFID assistance, a draft law on the establishment of third party arbitration for the agrarian sector is under preparation. On a pilot basis, arbitration services currently cover cases between private individuals and entities, excluding cases involving the State. According to Kalys Consult, 18% of the reported disputes were on property shares, 33% on land shares, 10% on land boundaries, 8% on water use, and 8% on rental disputes.

1.1.2 Government to complete the

distribution of shares in nonland farm assets of former state and collective farms, except for specific cases affecting individual farms where legal or public use issues remain

Second Tranche Condition, Dec 1996

Partially Accomplished. By 1997, property shares remained to be distributed on 131 state and collective farms (out of a total of 464 where land distribution had been completed), and property distribution is still in arrears of land distribution. Outstanding debt is complicating share distribution. This process is to be completed under the World Bank-funded Agriculture Support Services Project (ASSP).e

Partially Accomplished. Debt has been a major issue for farm shareholders who purchased their nonland assets from state farms. Issues of inherited debts have also complicated property share distribution. Increased awareness of the public of their rights had led to complaints and disputes concerning alleged unfair practices. The offices of the Center for Land and Agrarian Reform (CLAR) have been dealing with complaints concerning distribution and redistribution of property and land. CLAR offices have also acted as state debt collectors, for debts from the sales of assets from former state farms. The Swiss Agency for Development and Cooperation, through Helvetas, has financed the Legal Assistance to Rural Citizens (LARC) Project aimed at addressing legal issues concerning distribution and redistribution of property, debts, leases, taxes, registration, and other transactions. LARC has established 14 legal assistance centers.

1.1.3 Government to develop

modes of ownership, organization, and manage-

ment for the efficient

Program Period 1996–1997

Not Accomplished. The management of redistributed property has developed as a major issue, with a lack of clear, equitable, and efficient management practices. Plant and equipment are

Partially Accomplished. Poor financial conditions have led to liquidation of assets, bankruptcy of farm enterprises, and emergence of new entities. Nonland assets, such as machinery and buildings, were not

e Project cofinanciers of the ASSP include the International Fund for Agricultural Development, World Bank, Swiss Development Cooperation, and DFID. The objectives of

the Agriculture Privatization and Enterprise Adjustment Credit included development of land markets, demonopolization and privatization of large state-owned conglomerates in agricultural marketing and processing, elimination of remaining price and trade distortions in agriculture, and removal of local governments’ interference in commercial decisions.

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 operation of nonland assets to meet the needs of emerging farms

deteriorating, its replacement is minimal, and equitable access is a problem. This issue of distribution of nonland assets is to be addressed further under the World Bank-funded ASSP and Rural Advisory and Development Service Foundation and through nongovernment organizations. The law on State Registration of Rights to Immovable Property, passed on 26 Nov 1998, creates a unified registration system for immovable property.

easily divisible, posing problems for subdivision, reorganization, and management. Nonland assets were largely obsolete and unsuited for the emerging market economy and the individual small-sized peasant farms. The ASSP and Helvetas support the functioning of countrywide rural advisory services (RASs), including group formation and organizational development of private farm enterprises. RAS now operates 35 district (raion) offices, 7 provincial (oblast) offices, and 1 national office.

1.1.4 Government to submit to

Parliament a draft law for simplified land and immovable property registration system

Second Tranche Condition, Dec 1996

Accomplished. The law on State Registration of Rights to Immovable Property was passed on 26 Nov 1998 and Gosregister was established under PD 49 of 22 Feb 1999. This will facilitate State protection for registered rights to immovable property, and the development of a real estate market. The World Bank-funded Land and Real Estate Registration Project is due to commence in 2000.

Accomplished. The law on State Registration of Rights to Immovable Property (1998) remains in place. GR 213 of 12 Apr 1999 provides the basis for Gosregister’s main mandate, roles, and functions. The legal framework for secured transactions has been strengthened since the Law of Collateral (4 Apr 1997) and the Law on Bankruptcy (22 Sep 1997). The Law on Mortgage was passed by Parliament on 30 Apr 1999. A draft law is under preparation to combine and harmonize the Law on Collateral and the Law on Mortgage to simplify foreclosure procedures, increase protection for pledge holders, and take into account relevant provisions of the 1999 Land Code and regulations on agricultural land.f Further initiatives include (i) PD of 13 Apr 2000 on measures for further development of immovable property market, and (ii) formation in each oblast of a zonal center on immovable property and land resources of the Gosregister (GR 605 of 4 Oct 2001). The moratorium on sales of agricultural land was removed effective 1 Sep 2001, although there are restrictions that can seriously dampen transactions of agricultural land. The World Bank-financed Land and Real Estate Registration Project provides significant

f The 1999 Land Code allows private ownership of agricultural land that can be traded, leased, rented, bought, sold, mortgaged, and bequeathed, albeit with restrictions

which were introduced on 18 December 2000 by Parliament through the Law on the Administration of Land for Agricultural Purposes. The moratorium on sales of privately owned agricultural land was removed as of 1 September 2001. Those who are not permitted to own agricultural land include (i) persons who have not resided in the rural areas for at least 2 years; (ii) legal entities; and (iii) foreign legal entities, foreigners, and persons married to foreigners. Further, land shares can only be exchanged with other land shares within the same village (ail okmutu), and a land plot cannot be subdivided. Safeguards against land speculation currently include a maximum ownership of 50 hectares within a village, and resale is penalized by state fees equivalent to 40% of the land price if the resale is within the first year, 20% in the second year, and 10% in the third year. Banks cannot own land, and in the event of a foreclosure, collateralized land must be sold within 3 months at an open auction to eligible buyers. Administrative price floors or normative prices of land apply, and land cannot be sold at prices below the normative prices. By May 2002, only 118 land plots had been sold/purchased. These restrictions reflect popular concerns that private ownership should not lead to permanent ownership of farmlands by a small number of people. These limitations allow more time to the public to understand the implications of private ownership of agricultural land before making irrevocable decisions. With increased awareness of individual rights, there is pressure to ease these restrictions in the future.

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June 2002 assistance to Gosregister to establish, equip, and

maintain a national system of about 50 local registration offices. This system is intended to increase tenure security and transactions, improve the functioning of sales and leases of land and real estate, and improve information base for fiscal and land administration cadastres. The United States Agency for International Development (USAID)-funded Land Reform Project has financed mass media and public awareness campaigns on the land code, including mortgaging, pledging, buying, selling, and leasing land.

1.1.5 Government to prepare and

implement guidelines and procedures for CLARs and rural committee activities

Jun 1996 Partially Accomplished. Decree 490 of 23 Oct 1996 provides regulations for RCLAR to implement land and agrarian reform, denationalization, and privatization in the agriculture sector. A Ministry of Agriculture and Water Resources (MAWR) regulation dated 28 Feb 1997 includes the tasks and functions of the CLARs at oblast and raion levels. However, the implementation capacity of RCLAR and the CLARs is weak, with confused agency functions, weak institutional coordination, and inadequate resourcing. The World Bank-funded ASSP is addressing these shortfalls.

Substantially Accomplished. The ASSP has provided support to strengthen the capacity of RCLAR and local CLAR offices. As the original mandate on privatization and denationalization initiatives has been largely completed, RCLAR has recently shifted its attention to facilitating farmer group formation, the development of cooperatives, and monitoring of farm bankruptcies. With limited resources, local CLAR offices are fully occupied with debt collection of past sales of assets of former state farms, conflict resolution, and handling of various complaints related to land and property issues. An agreement was reached between Gosregister and the Ministry of Agriculture, Water Resources, and Processing Industries (MAWRPI) including RCLAR and CLAR offices to clarify their respective responsibilities. However, the continuing mandate of CLAR offices to act as debt collectors may undermine its role as facilitator for cooperatives development and mediator for conflict resolution.

2. Water Rights Management and User Contributions 2.1 Clarifying Irrigation Water Rights 2.1.1 Government to review,

make consistent, and publish the policies and procedures governing irrigation water user rights

Second Tranche Condition, Dec 1996

Substantially Accomplished. Under technical assistance (TA) 2451-KGZ,g both a handbook on the organization of water users associations (WUAs) and a legal compendium in Nov 1997 were prepared but have not been widely distributed. Current policies for water rights are not consistent and are thought to be unenforceable. Effective water use rights currently last only 1 year. Amendments to the water law will be

Substantially Accomplished. The current Law on Water (enacted on 14 Jan 1994) has inadequate provisions for water rights, water resources policy and planning, tariff setting, information gathering and dissemination, inspection authorities, and water resources management. The USAID-funded Land Reform Project currently assists in drafting a new water code to replace the 1994 Law on Water. On

g TA 2451-KGZ: Building Capacity for the Formation and Management of Water Users Associations, for $861,000, approved on 23 November 1995.

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June 2002 introduced in Parliament in 1999 to address this

issue. 8 Feb 2002, the Parliament passed a Law on Associations of Water Users specifying the purposes and tasks of WUAs, establishment procedure, registration, membership, rights and duties of WUA members, reception of new members, termination of membership, WUA management including dispute resolution, and the finances of the WUAs. This new law on WUA is comprehensive, facilitating the development of a model charter that provides options for the voluntary establishment, management, and operations of the WUA.

2.2 Establishing Collection of Irrigation Water Use Contributionsh 2.2.1 Government to issue a

decree extending the rights and responsibilities of WUAs to set and collect water charges, retain revenues, and make decisions regarding operational and capital costs within their area of jurisdiction

Board Consideration

Accomplished. GR 226 of 5 Jun 1995 on Approval of WUAs in Rural Areas has now been replaced by a GR on Water Users Associations in Rural Areas of 13 Aug 1997. This provides for WUAs and contains substantive water law. One shortcoming is that such resolutions do not have the surety that would be attached to a law on WUAs. This issue is being addressed, and it is anticipated that a law will be introduced in Parliament later in 1999.

Accomplished. The new Law on Associations of Water Users (2002) provides adequate provisions for the rights and responsibilities of WUAs to establish and collect water charges, retain revenues, and make decisions regarding operation and maintenance, distribution of water, and rehabilitation and improvement of irrigation systems within their jurisdiction (see 2.1.1). All existing WUAs will have to be reregistered, although the current timetable of 6 months is ambitious, as WUAs may take more time in reorganizing and refining the provisions for their new charter with the approval of their members in a general assembly. The new law has removed various uncertainties concerning the legal status of the WUAs, their rights and obligations, and organizational parameters.

2.2.2 Government to establish

and publish clear guidelines governing the transfer of ownership of irrigation infrastructure within particular service areas to their respective WUAs

Apr 1997 Partially Accomplished. While the GR on Water Users Associations in Rural Areas provides for the transfer of on-farm irrigation infrastructure to WUAs cost-free, legal opinion is that the ownership structure of such infrastructure is still vague and has not been satisfactorily resolved. No clear procedures have been published. Ownership rights need to be clarified, as does the process of transfer.

Accomplished. Article 25 of the Law on Associations of Water Users (2002) clarifies that the WUA is the owner of the property transferred to it, including any irrigation systems within its service area. Although procedures for transferring on-farm irrigation infrastructure to the WUAs exist, as already practiced in the past, clarifying regulations are under preparation including the transfer of assets. However, there is a need to clarify how the WUA ownership of the irrigation infrastructure will be registered at Gosregister, in the context of the rights to immovable property and current registration procedures and

h Deficiencies were recognized in the financing of the operation and maintenance of irrigation systems. Government fiscal resources were inadequate and limited and more

than 80% of the required maintenance could not be financed. User-based cost recovery arrangements had not materialized, although existing laws and decrees provided for individual water use rights and obligations, and required users to pay.

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June 2002 requirements. Commencing in 2001, Gosregister

intensifies its efforts to register farm and nonfarm properties in the rural areas. The management of Gosregister confirmed that the ownership and registration of the irrigation facilities of the WUAs should be clarified.

B. Increase the Competitiveness of Marketsi 3. Input Marketing 3.1 Transferring Regulatory Functions from the Former State-Owned Enterprises to the Ministry of Agriculture and Food (MAF) 3.1.1 Government to transfer

regulatory functions for veterinary products and agrochemicals from KyrgyzZoovetsnab (KZVS) and KyrgyzSelkhozKhimia (KSKK) to MAFj

Second Tranche Condition, Dec 1996

Accomplished. GR 372 of 9 Aug 1996 transferred regulatory responsibility for veterinary control, plant protection and quarantine, produce quality, seed production, and plant varieties to MAF (now MAWR). The State Veterinary Department, State Veterinary Inspectorate, and Department of Chemical Supply and Plant Protectionk now carry out regulatory activities. However, the capacity of MAWR to properly implement these regulatory responsibilities is weak.

Accomplished. Regulatory functions remain with the restructured MAWRPI (previously MAF and MAWR). Operating on the basis of the Law on Chemical Use and Plant Protection (25 Jan 1999), the Department of Chemical Use and Plant Protection performs regulatory functions and promotes the safe use of fertilizers and agrochemicals, including registration and certification. However, operational capacity for crop protection has been weak and under-resourced, and the ASSP provides support to modernize laboratory facilities, introduce integrated pest management, and develop a manual for safe use, storage, transportation, and warehousing of pesticides. Following the membership of the Kyrgyz Republic in the World Trade Organization (WTO) and European and Mediterranean Plant Protection Organization, the Law on Plant Quarantine has been significantly improved, taking international standards into account. The State Veterinary Department performs regulatory functions. The Law on Veterinary (6 Mar 1992, as amended on 2 Jun 1998) is currently being revised, and a draft is under preparation with provisions to increase and shift the responsibility for

i In 1996, the Government initiated financial sector reform with World Bank assistance (Credit 2890-KG: Financial Sector Adjustment) aimed to address the lack of

confidence in the sector, insolvency of commercial banks, and bad debt problems. World Bank Credit 29590-KG: Rural Finance Project I, for $16 million, approved on 5 June 1997, established a nonbank financial institution, the Kyrgyz Agricultural Finance Corporation to serve the newly emerging private farmers and rural enterprises. Loan 1529-KGZ(SF): Rural Financial Institutions Project, for $12.5 million, approved on 21 August 1997, was designed to establish a network of about 280 individual credit unions and develop an apex union for the support and development of the credit unions to mobilize rural savings and provide small-sized and short- to medium-term lending services. By 30 March 2002, a total of 320 credit unions had been established with more than 21,000 members.

j In the FSU and the following years before reforms took place, all agricultural input supplies and services were provided by state-owned monopoly enterprises, including KSKK for agrochemicals and fertilizers, KZVS for veterinary drugs and supplies, Kyrgyzailkomok for farm machinery and spares, Agromunaizat for fuel, and Kyrgyzdanazyk for grain, flour, bread, and cereal seeds.

k This Department is now referred to as the Department of Chemical Use and Plant Protection as its former supply function had been removed.

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June 2002 curative livestock disease control to private livestock

services and private livestock owners. There are more than 1,100 veterinarians in the country and about 375 have so far been licensed for private services. However, the demand for such services has been weak due to the much reduced livestock population, inadequate attention to preventive animal health measures by private farmers, and affordability for such services and medical supplies.

3.1.2 Government to establish

seed regulatory functions and inspection capability in MAF

Dec 1995 Partially Accomplished. While seed regulatory functions have been transferred to MAWR, in the State Commission on Variety Selection, Republican State Seed Inspectorate, and the State Inspectorate for Plant Quarantine, implementation capacity is weak, and the activities are underfunded and understaffed. The World Bank-funded ASSP is strengthening capability in these areas.

Substantially Accomplished. Seed regulatory functions remain in MAWRPI. Following the WTO accession (1998) of the Kyrgyz Republic, the international system for seeds certification is currently being introduced. The Republican State Seed Inspectorate currently seeks accreditation of its central laboratory for seed testing from the International Seed Testing Association (Switzerland). Other accreditation and memberships with relevant international associations are being pursued. GR 6 of 5 Jan 2002 governs the certification of cereal seeds in the republic. The ASSP and its associated European Union-Technical Assistance for the Confederation of Independent States Support to Seed Industry Development promote capacity building, rehabilitation, and investments to strengthen regulatory and seed inspection capability of the Republican State Seed Inspectorate, and seed variety testing functions of the State Commission for Seed Variety Testing. In practice, the applications of the newly-adopted standards will be gradual, initially focusing on international trade while continuing to apply existing national standards on domestic requirements.

3.1.3 Government to determine

whether government procurement should be absorbed in MAF or in some other independent central procurement agency

Jun 1996 Accomplished. Procurement is now handled through the State Agency for Procurement created under PD 31 of 29 Jan 1997 on the Establishment of the State Agency on Procurement. Minor procurements are still handled directly by MAWR departments.

Accomplished. The State Agency for Procurement was renamed as the State Commission on Procurement and Material Reserves (27 Dec 2000) with expanded functions that include the administra-tion and management of state material reserves, including grain, food supply, medicine, and fuel. State procurement rules under the Law on State Procure-ment of Goods, Works, and Services (15 Apr 1997), and as amended on 28 Nov 1998, are applicable to all state agencies and ministries including MAWRPI. Procedures and guidelines for procurement, including competitive bidding, direct purchase, and requests for quotations have been developed.

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June 2002 3.2 Corporatizing and Privatizing Agricultural Enterprises 3.2.1 Government to prepare a

plan for the transfer of responsibility for disease control services to MAF and the corporatization and subsequent privatization of the KZVS distribution network

Program Period 1996–1997

Accomplished. Responsibility for disease control was transferred to MAF in 1996–1997 and is now with the State Veterinary Department. Decree 433 dated 27 Dec 1996 of the RCLAR Management Board reorganized KZVS into a limited liability company as a prelude to privatization. However, all the units of KZVS are not yet fully privatized with drug stores yet to be sold.

Accomplished. Responsibility for disease control remains with the State Veterinary Department. However, with the development of privatized agriculture, there have been initiatives to shift more responsibility for curative disease control to private livestock services and private farmers. About 375 private veterinarians have been licensed. All units of KZVS have been privatized. However, redemption prices for a number of former subsidiary units have not been fully paid to the State.

3.2.2 Government to corporatize

the KSKK headquarters and 50% of all local units

Board Consideration

Accomplished. KSKK was corporatized in Dec 1993 into a joint-stock company. Prior to Mar 1994, the State Property Fund had privatized 45 regional branches (of 72 entities within KSKK), and RCLAR has now privatized the remainder. Regulatory functions were transferred to the Department of Chemical Supply and Plant Protection, although the biocontrol factory is still under the Department.

Accomplished. Corporatization and privatization initiatives have been completed, although the current operations of the privatized entities have not been monitored. There is no requirement for such monitoring, and the State Property Fund confirmed that once privatized and when the State is no longer a shareholder, no monitoring of the privatized enterprises is required. According to the State Property Fund, among the privatized entities, there are still state shares in four joint-stock companies, one of which has been declared bankrupt.

3.2.3 Government to corporatize

the remaining local units Second Tranche Condition, Dec 1996

Accomplished. KSKK was unbundled into 72 separate entities, of which 52 were privatized, 5 liquidated, and 15 retained (12 with the Department of Chemical Supply and Plant Protection, and 3 with the Land Management Agency). The entities transferred to the Department of Chemical Supply and Plant Protection and the Land Management Agency have noncommercial functions.

Accomplished. The remaining entities under the Department of Chemical Use and Plant Protection were transferred to the oblast governments and later privatized (see 3.2.2). There are no remaining commercial entities of the former KSKK in MAWRPI.

3.2.4 Government to determine

the minimum number of seed and cattle breeding farms to be retained for strategic purposes and to privatize or liquidate at least 12 of the remaining farms

Second Tranche Condition, Dec 1996

Accomplished. One cereal seed-breeding farm, the NPOZ-Djal farm, has been retained under the Crop Research Institute of the Kyrgyz Agrarian Academy (KAA) to multiply breeder's seed. Seed multiplication is on three pilot seed production farms (Mis, Aikol, and Tameki) that have been privatized. Fodder seed breeding is undertaken at the Forage and Pastures Institute of KAA. KAA has a total of nine experimental stations/farms for seed breeding. In addition, KAA has 13 livestock breeding farms.These 21 seed and livestock breeding farms are being privatized, with 25% of the area of each being retained for research purposes. This should be completed this year. A national seed policy and a national cattle-breeding

Accomplished. Pursuant to the 1999 Land Code, and Article 6 of PD 46 of 2 Jun 1999 on the Implementation of the Land Code, 75% of the lands of all seed and cattle breeding farms were privatized, with a quarter of the remaining land areas earmarked for research purposes, and the rest to be used for rural settlements, or leased out by auctions. In Oct 2001, KAA was reorganized, and the Kyrgyz Agrarian University was later established. All 21 experimental seed and livestock breeding farms/stations have been privatized, and the portions retained for research purposes transferred to the newly-established Center of Agrarian Sciences and Consulting Services under MAWRPI. The Agriculture

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June 2002 policy are in draft form. Sector Program recognized that there was a need to

retain a number of well-managed seed and nucleus livestock breeding farms in state hands to safeguard genetic materials, undertake multiplication and distribution, pending the development and functioning of private operations to ensure adequate supplies of seed and breeding stock. Currently, there are 175 private seed breeding farms, 105 of which are members of an independent Seed Association of Kyrgystan.

3.3 Government-Supplied Commodities 3.3.1 Government to establish a

market-based mechanism for the distribution of agricultural inputs that are provided under external assistance (as permitted under external agreements) or financed from its own budgetary resources

Program Period 1996–1997

Partially Accomplished. Agricultural machinery and agricultural inputs received under grants are being delivered to oblast agricultural departments and Kyrgyzpotrebsoyuz, with their cost price to be repaid over 5 years without interest.

Partially Accomplished. Although reform measures have emphasized privatization of farm machinery services, the Government channeled machinery and equipment received under grants to Ailtechservice, a parastatal corporation. Operating as a leasing company, Ailtechservice channeled equipment to mini-machinery stations controlled by local governments, serving farmers based on requests from the village authorities. Ailtechservice has ceased its operations.

3.3.2 Antimonopoly Department

to continue to monitor operations of successor organizations to KSKK to ensure fair trade practices prevail

Program Period 1996–1997

Partially Accomplished. The Antimonopoly Department has been replaced by the National Commission on Competitiveness Protection and Development under PD 290 of 1 Oct 1998. Its capacity to effectively monitor fair trade practices is understood to be minimal.

Partially Accomplished. The Law on Natural and Permitted Monopolies was passed on 8 Oct 1999. The National Commission on Competitiveness Protection and Development has been replaced by the State Commission on Antimonopoly Policy (GR 109 of 19 Mar 2001), with expanded functions that include consumer protection, monitoring of advertising, and supervision of government licenses and fees for services. With seven branch offices, the Commission monitors trade practices, and deals with complaints on business practices and transactions. The Commission did not conduct specific monitoring of successor KSKK organizations.

C. Improve Social and Environmental Protection 4. Social Protection 4.1 Monitoring the Social Impact of the Reforms 4.1.1 Government to monitor and

evaluate, through the information and analysis system established within

Program Period 1996–1997

Partially Accomplished. The Social Safety Net Project within the National Statistics Committee (NSC) has undertaken household surveys under the Poverty Monitoring Program supported by the World

Substantially Accomplished. NSC published in 1999 the results of the surveys on poverty monitoring conducted during the fall seasons of 1996 and 1997, and further published in 2000 the results of the

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June 2002 Goskomstat, and report to the Asian Development Bank (ADB) on the socioeconomic impacts of the reform measures, with particular emphasis on vulnerable groups in rural areas

Bank. These surveys were made in Mar–Apr 1996, Nov–Dec 1996, Nov–Dec 1997, and Oct–Nov 1998. The results of the first two 1996 surveys have been analyzed. Analysis of the 1997 and 1998 surveys will be completed in 1999. Copies of the reports on the two 1996 surveys were provided to ADB on 30 Jun 1999. No specific reports on the socioeconomic impacts of the reform measures have been received.

surveys conducted during the fall seasons of 1996–1998. Household surveys have continued with the survey of 3,000 households in 2000 for report completion in Jun 2002. NSC currently plans to continue these household surveys, with the support of the World Bank. In 2002, NSC has produced monitoring indicators for the Kyrgyz Republic, including poverty, for the 1990–2001 period. NSC has also published “Socioeconomic Conditions of the Kyrgyz Republic 2001 (Jan–Nov), Bishkek, 2002” which includes data on poverty groups. (A monthly version is also available). While the development of social sector monitoringl has continued to evolve from 1997 to date, the most important measure concerns the introduction of social passports, enabling better identification of vulnerable groups, and the majority of these are located in rural areas. For the vulnerable, the passport is a means of receiving benefits, while the passport creates a poverty card that enables the Ministry of Labor and Social Protection (MLSP) to identify the conditions correlated with poverty.

4.2 Supporting the Social Safety Net 4.2.1 Government to submit a

budget provision for 1996 and 1997 for additional financial support to the social fund of at least Som15 million above the 1995 planned budget level and for the maintenance of total social assistance expenditures in 1996 and 1997 at least at the 1995 planned budget level

Board Consideration and Second Tranche Condition

Accomplished. The 1995 planned budget level was Som181 million for the social fund and Som660.6 million in total social assistance. The budget provisions for these two areas for 1996 were Som314 million and Som880 million, respectively; for 1997, they were Som314 million and Som806 million, respectively.

Accomplished. MLSP confirmed that budget provisions for total social assistance were Som531 million (actual Som410 million) in 1998, Som728 million (actual Som554 million) in 1999, Som812 million (actual Som615 million) in 2000, Som1,114 million (actual Som977 million) in 2001, and Som1,237 million in 2002. The targeting of social assistance has substantially improved since 1995, and the current system allows better identification of vulnerable groups which are eligible to receive beneficiary entitlements from social assistance. Many of the extremely poor were still excluded from the system, and payments in kind comprised about 50% of total benefits. Subsequently, the European Commission Food Security Program (ECFSP) provided targeted support to MLSP to deliver assistance aimed at social groups deemed most

l According to the Comprehensive Development Framework of the Kyrgyz Republic 2001, rural poverty increased from 49.6% in 1996 to 55.3% in 1997, and peaked at

62.4% in 1998. Rural poverty later declined to 60.0% in 1999 and 56.4% in 2000, poorer families countrywide tend to have more children, and children under 14 years of age comprise over 30% of the total population. Of these, more than 61% live in poor families. Poverty among children with single parents reaches 73%. Unemployment among men is high, with the highest unemployment rate among the 16–25 age group. Families with pensioners are prone to poverty, with 61% of such families are poor and 30% of these families are extremely poor.

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June 2002 vulnerable, including children, disabled, non-working

mothers, and low-income persons in remote mountainous areas.

4.2.2 Government to monitor that

social fund and social assistance payments are in accordance with beneficiary entitlements

Program Period 1996–1997

Partially Accomplished. Payment arrears reached 10 months in 1995. Decree 333 of 16 Dec 1996 provided for the timely payment of pensions and benefits to the rural population, and while the Government confirmed to ADB in early 1997 that payments of pensions and benefits were being implemented according to this decree, it is understood that these payments again became delayed in 1998, reaching 5–6 months arrears. All these arrears had been paid by May 1999.

Partially Accomplished. While the Government confirmed to ADB that payments and benefits are still being implemented in accordance with the legislation, and specific entitlements remain for rural population in remote areas, payment arrears became serious in 1998–1999. Payments have continued to improve since then, once arrears were paid off.

4.3 Maintaining Essential Social Services 4.3.1 Government to ensure that

the majority of rural public sector kindergartens operational in 1995 will be kept operational in 1996 and 1997

Program Period 1996–1997

Substantially Accomplished. There were an estimated 158 rural kindergartens operating in 1995, 163 in 1996, and 158 in 1997 according to the Ministry of Finance (MOF) data. The NSC data set suggests 190 in 1995, 199 in 1996, and 167 in 1997. These numbers compare with just under 1,000 rural kindergartens operating in 1991.

Accomplished. There are three categories of kindergartens: (i) those supported through the republican and local budgets; (ii) those attached to institutes, enterprises, or other such bodies; and (iii) those that are privately funded. This explains the two different sets of figures (MOF and NSC). The MOF data relate only to budget-funded kindergartens, while the numbers provided by NSC relate to all rural kindergartens. For comparison, in 2001 there were 145 rural kindergartens covering no more than 8% of rural children. Most of these kindergartens are in poor condition, with inadequate basic furniture and equipment. The Ministry of Education does not have sufficient funds to undertake regular monitoring trips. The target for 2010 is to cover 30% of all rural children in pre-school education. A PD in 1996 promoted a reassessment of kindergartens to develop private pre-school education, and emphasize more flexibility, choice, variable cost (depending on use), provision of different services, and parental participation.

4.3.2 Government to assess food

supply and needs in remote areas

Dec 1995 Partially Accomplished. Government Decree on Measures on Implementation of Decree 1420 of 14 Jan 1994 on Government Support of Social and Economic Development of the Areas with Difficult and Unfavorable Climatic Conditions provides for the implementation of measures to improve the supply of food and commodities to remote areas. This is complemented by Government Decree 46 of 30 Jan 1996 on Measures to Reorganize the Consumer

Accomplished. The systems developed in NSC and MLSP have refined procedures and methodology for identifying vulnerable groups, and rural population in remote areas are considered an extremely vulnerable group. Assessing food supply and the production of food balances has been further supported through GR 585 of 26 Oct 1999 on establishing a policy on national food security. A food security information system, established in NSC with the support of

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June 2002 Cooperation System. The law on State Guarantees

and Compensations and Compensations for People Living in the Mountains provides additional support measures. Despite this framework, there is no overall supply or needs assessment, no single agency has responsibility, and responses are ad hoc.

ECFSP, assesses food supply and demand (including local production, imports, humanitarian aid) and provides a breakdown by region, identifying regions and groups most at risk in the context of food security. Since 1999, the social fund designated a specific budget line for pensions to inhabitants of remote rural areas. MLSP has specific budget lines targeted on providing social benefits to those living in remote (mountainous) regions.

4.3.3 Government to develop a

strategy for meeting identified food needs in remote areas

Jun 1996 Not Accomplished. The European Union is currently working with the Government to develop a food security policy and associated strategies. Government Decree 189 of 10 May 1990 established a State Food Security Commission, and a food security conference is planned for Bishkek on 27 Jul 1997. Approval of a food security strategy by the Government is a second tranche condition of ECFSP for 1999.

Accomplished. GR 585 of 26 Oct 1999 approved the national food security policy, which was implemented in accordance with the Program to Stabilize the Socioeconomic Situation in the Kyrgyz Republic (No. 77 of 9 Feb 1999). An earlier GR 189 of 10 May 1999 established a State Food Security Commission, and on 27 Jul 1999 in Bishkek, ECFSP organized a seminar on food security in the country. Implementation activities are coordinated through MAWRPI. Approval of the food security policy was a second-tranche release condition of the 1998 ECFSP operating in the 1999 fiscal year. Two further pieces of legislation followed: (i) GR 497 of 16 Aug 2000 on further implementation of the national food security policy, established a food security information system within NSC with support from the ECFSP; and (ii) GR 193 of 25 Apr 2001 on measures for the subsequent realization of the national policy on food security. The basis of the national food security policy is to ensure everyone in the country has adequate access to food at all times: (i) food must be available (from local production, imports, or reserve stocks); (ii) food supply must be stable (avoiding sharp fluctuations); (iii) food must be of an acceptable quality, safe to consume, and appropriately balanced in nutritional terms; and (iv) food must be accessible, both in physical terms as well as in relation to household acquisition power.

5. Environmental Protection 5.1 Sustainable Management of Forests and Upland Pastures 5.1.1 Government to prepare

policy on the long-term leasing of natural pastures to promote sound grazing and other sustainable land

Jun 1996 Partially Accomplished. A draft law on pastures was prepared and approved under GR 179 on 3 Apr 1997. The draft law was submitted to the legislative assembly, considered by the Agrarian and Industrial Complex Committee, and then withdrawn on 2 Jul

Partially Accomplished. At the time that the draft law on pastures was submitted to Parliament in 1997, it was anticipated that Parliament would include provisions on pasture use in the new Land Code. Management of pasture leasing was expected to be

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June 2002 use practices 1998. The prior 1997 GR 179 is now invalid. A

working group has been set up to draft new proposals for pasture use and a pasture law, but there is little progress.

included in the Land Code. However, the 1999 Land Code contains minimal reference to pastures, merely confirming that all pastures remained state land (Article 4, para. 2). GR 775 of 30 Nov 1998 on Measures for the Use of Remote Pastures and GR 649 of 29 Nov 1999 on Approval of the Regulations on the Lease and Use of Pastures were put in place as legal instruments for the lease and use of pastures. Recently, GR 360 of 4 Jun 2002 replaced GR 649, introduced new provisions for leasing and use of natural pastures, and encouraged competition for leasing.

5.1.2 Government to issue a

decree to promote the management and sustainable use of natural pastures

Second Tranche Condition

Partially Accomplished. Although GR 179 was issued on 3 Apr 1997, it later became invalid in July the following year (see 5.1.1).

Partially Accomplished. A new draft law on pastures is being prepared principally by MAWRPI, but with participation of the Livestock, Veterinary and Pasture Institute under the new Center of Agrarian Sciences and Consulting Services. The draft law is expected for submission to Parliament in Jul 2002. Owing to the controversial nature of this subject, with hindsight, it was overoptimistic to expect that the draft law on pastures would have received a straightforward passage through Parliament in 1997.

5.1.3 Government to issue a

decree controlling grazing in the forest areas

Jun 1996 Accomplished. GR 226 on the Return of Lands from the State Forest Fund that were Given Earlier for Long-Term Use to Agricultural Enterprises, and Transfer of Forests from Collectives and State Farms, was passed on 15 Apr 1997. This transfer effectively returns control of these lands to the State Agency on Forests.

Accomplished. Control of grazing in forest areas has now been transferred to a new, independent State Forestry Service under the Presidential administration, which was established by PD of 25 Nov 2001, and regulated by GR 3 of 4 Jan 2002 concerning the State Forestry Service of the Kyrgyz Republic. The State Forestry Service is effectively independent of the budget, with the exception of salaries and social fund payments, and is responsible for the administration and regulation of forests through local administration, namely the 42 forest farms. A department of the State Forestry Service, the Department for State Control service for the Protection of Flora and Fauna, including biodiversity of forests, has been specifically given the responsibility for managing grazing in forest areas.

5.2 Biological Control of Cotton Pests 5.2.1 Government to introduce a

mechanism for industry funding of biological control of cotton pests

Program Period 1996–1997

Partially Accomplished. Cotton areas treated with biological control agents totaled 26,100 hectares (ha) in 1996, 10,340 ha in 1997, and 25,145 ha in 1998. While farmers now pay for biological control agents

Partially Accomplished. According to MAWRPI and ECFSP, the biocontrol factory produces bio-agents and insecticides for tobacco, sugarbeet, and cotton. The production is small, and there is little demand for

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 (commonly in kind), the Government's biocontrol

factory effectively operates at a loss. There is no industry plan for the sustainable funding of biological control.

it. This factory is no longer under the Department of Chemical Use and Plant Protection, and this state department is now charged with inspection and supervisory functions in accordance with the Law on Chemical Use and Plant Protection (25 Jan 1999). A mechanism for industry funding has not been established. However, steps have been taken to privatize three laboratories (Osh, Jalal-Abad, and Issyk-kul) and the biocontrol factory by reorganizing them under a new Republican Center for Production of Biological Methods of Pest Control under MAWRPI. This center is based on the biocontrol factory, which is currently supported by ECFSP funding, although a plan for long-term sustainability has not been developed. Reportedly, the area treated with bio-methods of pest control reached 68,700 ha in 1996, 104,000 ha in 1997, and 105,870 ha in 1998, and declined to 92,360 ha in 1999 and 55,950 ha by 2001. The cotton areas covered by such methods followed a similar trend, increasing from 41,100 ha in 1996 to 76,800 in 1997, 91,300 ha in 1998, and declined to 80,250 ha in 1999 and 50,440 ha by 2001. These data cover cumulative areas treated each year, while the appraisal referred to areas treated once in each year.

D. Enhance Public Sector Support 6. Institutional Capacity Building and Restructuring 6.1 Strengthening MAF Headquarters and RCLAR 6.1.1 Government to complete the

reorganization plan for MAF headquarters

Board Consideration

Accomplished. By MAF Collegium Decision 11 of 6 Jul 1995 on the Reorganization of the Central Apparatus of MAF, MAF headquarters was to be reorganized in line with proposals submitted by the World Bank and developed by an MAF Committee convened in Jun 1995.

Accomplished. A series of reorganization initiatives have taken place. The ECFSP Support to Institutional Strengthening recently conducted a functional analysis of MAWRPI and provided recommendations (May 2002) for the organizational development of MAWRPI. These recommendations are under an intensive review by the MAWRPI management and staff. In the meantime, GR 144 of 2 Apr 2001 on the establishment of MAWRPI currently rules the functioning of the ministry.

6.1.2 Government to complete the

reorganization of MAF headquarters

Dec 1997 Accomplished. Reorganization of the MAF has been ongoing over the program period. This has involved the establishment of KAA in Apr 1996 to assume responsibility for agricultural education and research;

Accomplished. There have been several reorganizations since 1995 including (i) GR 372 of 9 Aug 1996, specifying the functions, responsibilities, and work arrangements for MAF; (ii) PD 357 of 2 Dec

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 staff reductions of 15% (Government Decree 372 of

9 Aug 1996), reducing staff to 111 in mid-1996; amalgamation of MAF and the Ministry of Water Resources to MAWR in Dec 1996; and further staff reductions in MAWR personnel to 85 in Feb 1997. GR 451 of 8 Jul 1998 approved the current organization of MAWR and associated regulations.

1996 instructing the merger of MAF with the Ministry of Water Resources to become MAWR; (iii) GR 51 of 3 Feb 1997 specifying the functions and responsibilities of MAWR; (iv) GR 451 of 8 Jul 1998 approving the statute of MAWR, as amended by GR 98 of 24 Feb 1999, and GR of 23 Aug 1999; and (v) GR 144 of 2 Apr 2001 establishing MAWRPI based on PD of 28 Dec 2000 that instructed the reorganization of public administration central bodies. Responsibilities for processing industries (such as breweries and tobacco) were transferred to MAWR from the Ministry of Industry and Trade, hence the formation of the new MAWRPI. A commission was established on 11 May 2001 (Order 105) to assess whether the Department of Water Resources should be separated from MAWRPI. Staffing reduction has continued and GR 181 of 30 Mar 2002 limited the number of MAWRPI headquarters staff to 71 persons. KAA was restructured, establishing the Kyrgyz Agrarian University and transferring the existing research institutes to the newly-established Center of Agrarian Sciences and Consulting Services under MAWRPI (see 3.2.4 and 6.1.1).

6.1.3 Government, with technical

assistance, to strengthen the capacity of the Directorate of Economics, Directorate of Investment, and Directorate General of RCLAR

Dec 1997 Partially Accomplished. TA 2450-KGZ,m which supported institutional capacity building within MAF (now MAWR) from Jun 1996 to Aug 1998 resulted in some institutional strengthening within the Directorate of Economics and the Directorate of Investment, but both remain weak. Support was also provided to RCLAR and this has been extended under the World Bank-funded ASSP.

Substantially Accomplished. TA 3035-KGZ,n supported the strengthening of the Agriculture Project Coordination and Management Unit (APCMU) and the establishment of the Information and Documentation Center. The Directorate of Investment was restructured to become the Department for Agrarian Policy, Investment and External Relations (Order 189 of Oct 2000), absorbing former functions of the former APCMU related to identification and preparation of investment programs, and the coordination of external assistance. The Swiss-funded Policy Support Project currently supports this department of 12 staff. In 2000, a new budget office of five staff was established in the Department of Economics with support from ECFSP to develop capacity in budgeting and public expenditure

m TA 2450-KGZ: Reorganization and Strengthening of the Ministry of Agriculture and Food, for $1.3 million, approved on 23 November 1995. n TA 3035-KGZ: Capacity Building in the Ministry of Agriculture and Water Resources, for $470,000, approved on 29 June 1998. This TA followed TA 2450-KGZ, and was

designed to build capacity in MAWR to design, implement, and monitor a public investment program for the agriculture sector. According to the TA completion report of 30 June 2000, the TA was rated partly successful, as in effect the TA provided more direct operational support for MAWR than direct capacity-building achievements.

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 management. TA 3439-KGZo currently provides

further support to MAWRPI aimed at consolidating and expanding a mechanism for preparing, implementing, and monitoring a public investment program for the agriculture sector. However, TA 3439-KGZ currently emphasizes staff training and skill development rather than system development. The World Bank-financed ASSP has strengthened the capacity of RCLAR and local CLAR offices (see 1.1.5).

6.1.4 Government to issue a

decree placing CLARs under the direct supervision and management control of MAF

Board Consideration

Accomplished. GR on Transferring Responsibility for Local CLAR to RCLAR of Jul 1995.

Accomplished. These arrangements have remained in place, with RCLAR overseeing the functioning of the local CLAR offices.

6.2 Restructuring MAF's Dependent Entities 6.2.1 Government to privatize or

liquidate at least 10 of MAF's attached organizations

Second Tranche Condition

Substantially Accomplished. Progress on implementation was slow. By the end of Mar 1997, the 12 enterprises targeted for privatization had been unbundled into 200 units, of which 177 had been either formally privatized or liquidated. Of the remaining 23 units, 7 were transferred to the State Agency for Land Management and Land Resources, of which 5 were liquidated and the remainder subject to privatization. The State Poultry Farm (Kanatullar), State Coop Corporation (Agropromenergo), and enterprises of KZVS and KSKK remained to be privatized. As of Jun 1999, residual units of Kanattular and KZVS remain to be privatized. In a number of privatization transactions, the redemption price has yet to be fully paid.

Substantially Accomplished. MAWRPI confirmed that all remaining and residual units have been offered for privatization. However, investors found these enterprises unattractive and unsuited for commercial operations in the emerging market economy because of their oversized capacity, poor conditions of the physical assets, and inappropriate product lines (see 3.2.1).

6.2.2 Government to prepare a

time-bound program for restructuring research institutes

Dec 1997 Partially Accomplished. PD 117 of Apr 1996 established KAA with responsibility for agricultural education and research. Support provided to KAA under TA 2450-KGZ (footnote m) assisted with preparing the background necessary to commission a study on the restructuring of agricultural research, but no external assistance to fund such a program has been found.

Substantially Accomplished. Based on GR 7 of 5 Jan 2002, KAA was reorganized into a Center of Agrarian Sciences and Consulting Services under MAWRPI, transferring all of the research institutes and research stations to the Center, and the rump of the KAA became the Kyrgyz Agrarian University. There are three new research institutes based on mergers of previous institutes, namely the Crop Cultivation Institute; the Livestock, Veterinary, and Pasture Institute; and Irrigation Institute, while

o TA 3439-KGZ: Capacity Building in the Ministry of Agriculture and Water Resources (Phase II), for $585,000, approved on 11 May 2000.

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 another institute was recently established for

agricultural economics and processing industries (see 3.2.4).

6.2.3 Government to prepare a

time-bound program for restructuring agricultural education and training agencies

Program Period 1996–1997

Not Accomplished. PD 117 of Apr 1996 established KAA with responsibility for agricultural education and research. Support provided to KAA under TA 2450-KGZ (footnote m) assisted with preparing some of the background necessary to commission a study on the restructuring of agricultural education, but no external assistance to fund such a program has been found. KAA has yet to prepare a comprehensive program for restructuring agricultural education and training.

Partially Accomplished. KAA was restructured, leading to the establishment of the Kyrgyz Agrarian University on 31 Oct 2001. With support from ASSP and Swiss-funded Helvetas, RAS offices have been established in all oblasts and raions, emphasizing practical aspects of skill improvement and human resources development for the agriculture sector (see 1.1.3). However, there is no comprehensive program for restructuring agricultural education and training.

6.3 Strengthening the Ministry of Water Resources to Organize WUAs 6.3.1 Government to establish

within the Ministry of Water Resources (i) an internal unit responsible for providing support for the promotion, formation, and operation of WUAs; and (ii) a unit to provide technical advice on water management and system administration

Jun 1996 Partially Accomplished. While a separate two-person unit, Sector for Establishment of Water Users Associations, was established within the Department of Operations and Maintenance on 1 Feb 1997, no separate technical unit was established with technical advice being sourced from existing units within the Department.

Substantially Accomplished. A central WUA support unit was established in May 2001 in the Department of Water Resources under MAWRPI, along with seven WUA support units in the oblasts. Each oblast unit has three staff, comprising a WUA support specialist, an engineer, and a water management specialist. These support units promote the formation, development, and operation of WUAs throughout the country. Establishment of support units at the raion level in 2002 is under way, especially in areas where irrigated farming predominates. The World Bank-financed On-Farm Irrigation Project provides significant support for the development and functioning of the WUA support units, with an aim to mainstream these units into the functional responsibilities of the Directorate of Exploitation and Construction of the Department of Water Resources. Emphasis has also been placed on recruitment, staffing, and training of staff of local support units.

6.3.2 Government, with technical

assistance, to strengthen the capacity of the Ministry of Water Resources to facilitate the formation and sound management of WUAs

Program Period 1996–1997

Partially Accomplished. TA 2451-KGZ (footnote g) provided support to building capacity for the formation and management of WUAs within MAWR during Jul 1996–Dec 1997. This greatly assisted in developing the legal basis for WUAs and demons-trating the process of WUA organization through support to three pilot WUAs. Institutional capacity was developed in domestic consultants and in Government. However, residual institutional capacity within the Department of Water Resources is weak.

Substantially Accomplished. Initiatives undertaken under TA 2451-KGZ have led to acceptance of the necessity and importance of WUA development. Domestic consultants’ awareness and capacity in WUA development have significantly originated from this TA. Significant capacity building initiatives have been provided further and sustained through the water legislation component of the USAID-funded Land Reform Project, and the World Bank-financed On-Farm Irrigation Project. While on-farm

Policy Measures Under the Reform Target Date Status as Reported in the Program Completion

Report of June 1999a Status at Evaluationb

June 2002 irrigation/drainage facilities were previously under the management and operational responsibilities of the state and collective farms during the Soviet era, the transfer of these responsibilities to emerging voluntary WUAs following the breakup and privatization of these farms has been progressive and with steep learning curves. More than 200 WUAs have been registered, and continued support for the organizational, management, and operational development of WUAs is required. The majority of these WUAs are still at an early stage of development. The new Law on Associations of Water Users (2002) facilitates the formation and management of the WUAs (see 2.1.1, 2.2.1, and 2.2.2).

Item 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Collective Farms (kolkhozes ) 195 179 212 119 37 16 8 4 3State Enterprises 323 258 193 128 49 38 35 35 58 61 59

Subtotal (State and Collective Farms) 518 437 405 247 86 54 43 39 58 61 59

Agricultural Cooperatives 125 160 152 608 631 318 336 282 292 463Agricultural Associations 45 79 116 227 125 154 261 282 236 212Joint-Stock Companies 72 74 61 41 45 45 45 44

Total (Private, Individual, and Group Farms) 4,567 8,695 18,269 21,264 23,180 31,078 38,724 49,277 60,111 71,163 84,692

Sources:

Committee on Environmental Policy, Economic and Social Council of the United Nations. 2000. Soil Conservation and Environmental Concerns inAgriculture—Environmental Performance Review of Kyrgystan ; and Republican Center for Land and Agrarian Reform, Kyrgyz Republic.

Appendix 3 41

STATISTICAL TABLES

(1991–2001, as at end of year)Table A3.1: Number of Farms by Type

Item 1995 1996 1997 1998 1999 2000 2001

A. Talas OblastTotal Agricultural Land Area 123.7 123.6 96.7 86.4 88.4 92.5 112.0Land Redistribution Fund 26.8 23.6 28.6 28.7 31.1 30.8 30.8Land for Distribution by Shares 96.9 100.0 68.1 57.6 57.3 61.7 81.2Total Land Distributed by Shares 25.1 30.0 78.1 81.4 85.7 93.2Non-Distributed Land 74.9 38.1Percentage of Land Not Distributed 60.6 39.4

B. Chui OblastTotal Agricultural Land Area 476.2 476.0 458.0 460.5 447.1 448.3 448.3Land Redistribution Fund 106.5 99.6 111.9 106.2 106.6 101.8 96.4Land for Distribution by Shares 369.7 376.4 346.1 354.3 340.5 346.5 351.9Total Land Distributed by Shares 70.0 240.0 246.4 362.5 362.5Non-Distributed Land 376.4 276.1 114.3 94.2Percentage of Land Not Distributed 79.1 60.3 24.8 21.1

C. Issyk-kul OblastTotal Agricultural Land Area 203.7 191.1 158.9 199.1 173.4 178.2 198.6Land Redistribution Fund 48.5 47.3 38.2 41.2 40.2 39.8 38.3Land for Distribution by Shares 155.2 143.8 120.7 157.9 133.2 138.4 160.3Total Land Distributed by Shares 50.9 60.0 125.5 142.0 142.0 142.0Non-Distributed Land 92.9 60.7 32.4 18.3Percentage of Land Not Distributed 48.6 38.2 16.3 9.2

D. Naryn OblastTotal Agricultural Land Area 151.1 119.4 127.1 119.8 127.4 127.3 142.4Land Redistribution Fund 26.2 26.9 37.8 37.6 35.7 34.3 34.2Land for Distribution by Shares 124.9 92.5 89.3 82.2 91.7 93.0 108.2Total Land Distributed by Shares 27.0 180.0 82.1 88.5 98.5Non-Distributed Land 92.5 62.3 2.2 9.6 4.5 19.7Percentage of Land Not Distributed 77.5 49.0 1.8 7.5 3.5 13.8

E. Osh OblastTotal Agricultural Land Area 357.0 323.4 330.0 307.1 313.9 229.1 252.8Land Redistribution Fund 87.7 84.4 90.6 90.1 90.1 66.7 63.0Land for Distribution by Shares 269.3 239.0 239.4 217.0 223.8 162.4 189.8Total Land Distributed by Shares 57.5 247.0 160.9 199.1 184.0 184.4Non-Distributed Land 181.5 56.1 24.7 5.4Percentage of Land Not Distributed 56.1 18.3 7.9 2.1

F. Jalal-Abad OblastTotal Agricultural Land Area 203.0 155.1 157.0 180.0 183.6 183.6 196.3Land Redistribution Fund 46.7 53.0 48.0 49.5 48.3 44.4 44.5Land for Distribution by Shares 156.3 102.1 109.0 130.5 135.2 139.2 151.8Total Land Distributed by Shares 21.7 30.0 130.0 131.7 144.3 144.3Non-Distributed Land 80.4 79.0 0.5 3.5 7.5Percentage of Land Not Distributed 51.8 50.3 0.3 1.9 3.8

42 Appendix 3

Table A3.2: Area of Land Share Distribution (excluding pasture)(status as of 1 January of the year, '000 hectares)

Continued on next page

Item 1995 1996 1997 1998 1999 2000 2001

G. Batken OblastTotal Agricultural Land Area 83.5 89.3Land Redistribution Fund 22.9 23.1Land for Distribution by Shares 60.6 66.2Total Land Distributed by Shares 61.0 61.8Non-Distributed Land 4.4Percentage of Land Not Distributed 4.9

H. Kyrgyz Republic-NationwideTotal Agricultural Land Area 1,514.7 1,388.6 1,327.7 1,352.7 1,333.7 1,342.5 1,439.6Land Redistribution Fund 342.4 334.8 355.1 353.3 352.0 340.7 330.3Land for Distribution by Shares 1,172.3 1,053.8 972.6 999.5 981.5 1,001.8 1,109.2Total Land Distributed by Shares 155.7 464.0 814.5 885.4 1,068.0 1,076.7Non-Distributed Land 898.1 508.6 185.2 96.3 32.5Percentage of Land Not Distributed 64.7 38.3 13.7 7.2

Source: Republican Center for Land and Agrarian Reform, Kyrgyz Republic.

Table A3.2—Continued

Appendix 3 43

Item

A. All Agricultural LandsPrivate Ownership 1,071.6 1,046.4State Ownership 11,647.1 10,411.5 7,677.3 7,139.0 5,995.7 4,716.6 4,483.9

B. Arable LandPrivate Ownership 917.5 920.5State Ownership 1,201.8 1,151.5 1,189.3 1,163.1 1,172.0 324.6 305.7

C. Perrenial CropsPrivate Ownership 22.0 21.7State Ownership 37.5 35.8 37.7 35.9 35.6 14.1 13.7

D. Hay FieldsPrivate Ownership 83.0 82.2State Ownership 135.5 128.4 114.5 121.5 125.4 63.6 64.4

E. Fallow LandPrivate Ownership 0.5 0.5State Ownership 14.8 12.6 10.1 13.1 9.4 14.3 14.2

F. Pasture LandPrivate Ownership 33.6 10.8State Ownership 6,115.1 5,325.8 3,644.4 3,267.1 3,013.6 2,877.5 2,784.2

Source: State Agency for the Registration of Rights to Immovable Property, Kyrgyz Republic.

44 Appendix 3

Table A3.3: Agricultural Land Use by Ownership(1995–2001, '000 hectares)

1995 1996 1997 1998 1999 2000 2001

Item 1995 1996 1997 1998 1999 2000 2001

A. Talas OblastPeasant Farms 27.3 18.5 14.5 14.7 14.6 7.6 6.1Association of Peasant Farms 403.0Cooperatives 795.0 1,760.0 246.0 139.4 578.0 517.0 302.0Collective Farms 2,840.0State Farms (sovkhoz) 3,822.0 3,030.0Joint-Stock Companies 1,600.0 3,100.0 3,048.0 1,551.0 2,674.0 1,001.0State Farms (goskhoz) 1,378.0 259.0 618.0 408.0 517.0 292.0 28.0Others 860.0 228.0 24.0 17.0 19.0 25.0 23.0

B. Chui OblastPeasant Farms 12.8 11.7 7.6 17.0 14.2 7.3 6.6Association of Peasant Farms 2,581.0Cooperatives 588.0 830.0 930.0 658.0 938.0 906.0 981.0Collective Farms 3,229.0State Farms (sovkhoz) 2,467.0 1,500.0Joint-Stock Companies 2,437.0 1,603.0 1,194.0 1,190.0 1,083.0 993.0State Farms (goskhoz) 1,498.0 277.0 1,055.0 1,250.0 1,325.0 868.0 58.0Others 598.0 205.0 63.0 410.0 104.0 158.0 35.0

C. Issyk-kul OblastPeasant Farms 36.7 18.2 21.5 22.7 24.5 36.7 25.1Association of Peasant Farms 1,744.0Cooperatives 2,440.0 6,954.0 755.0 2,283.0 11,197.0 2,246.0 2,128.0Collective Farms 3,978.0State Farms (sovkhoz) 2,676.0 1,100.0Joint-Stock Companies 600.0 325.0 558.0 523.0 541.0 382.0State Farms (goskhoz) 983.0 172.0 246.0 461.0 388.0 670.0 69.0Others 466.0 21.0 53.0 330.0 122.0 78.0 16.0

D. Naryn OblastPeasant Farms 46.0 44.9 14.4 14.2 15.5 1.0 7.2Association of Peasant Farms 216.0Cooperatives 525.0 582.0 230.0 278.0Collective Farms 2,340.0State Farms (sovkhoz) 2,033.0Joint-Stock Companies 200.0 325.0 572.0 68.0 102.0 4.0State Farms (goskhoz) 1,200.0 321.0 311.0 525.0 332.0 281.0 255.0Others 180.0 5.0 212.0 340.0 443.0 433.0 243.0

E. Osh OblastPeasant Farms 33.8 6.5 6.1 21.0 15.3 6.5 2.7Association of Peasant Farms 1,357.0Cooperatives 612.0 295.0 212.0 155.0 150.0 78.8 81.8Collective Farms 2,132.0State Farms (sovkhoz) 2,886.0 666.0Joint-Stock Companies 1,200.0 320.0 708.0 855.0 937.0 278.0State Farms (goskhoz) 1,088.0 76.0 439.0 420.0 353.0 538.0 93.0Others 412.0 128.0 88.0 44.0 96.0 242.0 34.0

Appendix 3 45

Table A3.4: Average Farm Size(status as of 1 January 1995–2001, hectare)

Continued on next page

Item 1995 1996 1997 1998 1999 2000 2001

F. Jalal-Abad OblastPeasant Farms 58.0 11.9 8.1 28.7 30.9 3.0 2.7Association of Peasant FarmsCooperatives 495.0 112.3 125.3 509.0 527.4 407.0 77.0Collective Farms 2,377.0State Farms (sovkhoz) 1,700.0 2,400.0Joint-Stock Companies 79.7 525.0 37.8 52.0 14.7 147.0State Farms (goskhoz) 381.0 120.0 450.0 437.0 307.0 339.0 15.0Others 2,112.0 338.0 96.0 320.0 301.0 439.0 26.0

G. Batken OblastPeasant Farms 6.9 1.9Association of Peasant FarmsCooperatives 421.0 53.6Collective FarmsState Farms (sovkhoz)Joint-Stock CompaniesState Farms (goskhoz) 74.0 14.0Others 194.0 7.0

H. Kyrgyz Republic-NationwidePeasant Farms 27.0 10.5 8.1 19.3 17.1 6.6 4.0Association of Peasant Farms 1,445.0Cooperatives 785.0 367.0 337.0 306.0 500.0 454.0 312.0Collective Farms 2,727.0State Farms (sovkhoz) 2,583.0 1,710.0Joint-Stock Companies 430.0 1,032.0 983.0 460.0 888.0 751.0State Farms (goskhoz) 1,094.0 174.0 498.0 540.0 464.0 426.0 37.4Others 735.0 184.0 67.0 102.0 137.0 194.0 29.0

Note: Sovkhoz (state farms) includes goskhoz farms before 1997. Since then, goskhoz covers all types of state-owned farms.

46 Appendix 3

Table A3.4—Continued

Item 1998 1999 2000 2001

A. Talas OblastArable Irrigated 343.9 229.7 229.7 322.0Arable Non-Irrigated 165.0 46.4 46.4 46.4Perennial Crops 157.3 109.7 109.7 165.0Hay Fields 17.6 11.0 11.0 11.0Pasture Land 7.6 5.2 5.2 5.2

B. Chui OblastArable Irrigated 424.2 264.4 264.4 370.0Arable Non-Irrigated 155.2 61.4 61.4 61.4Perennial Crops 202.0 132.6 132.6 199.0Hay Fields 44.1 25.3 25.3 26.3Pasture Land 13.4 9.3 9.3 9.3

C. Issyk-kul OblastArable Irrigated 341.8 227.0 227.0 318.0Arable Non-Irrigated 207.1 83.0 83.0 83.0Perennial Crops 160.7 115.4 115.4 173.0Hay Fields 70.4 23.0 23.0 23.0Pasture Land 13.2 8.1 8.1 8.1

D. Naryn OblastArable Irrigated 97.9 140.3 140.3 196.0Arable Non-Irrigated 36.4 50.3 50.3 50.3Perennial CropsHay Fields 19.0 23.6 23.6 23.6Pasture Land 3.4 4.8 4.8 4.8

E. Osh OblastArable Irrigated 361.6 245.1 245.1 343.0Arable Non-Irrigated 116.0 44.0 44.0 44.0Perennial Crops 151.8 103.7 103.7 156.0Hay Fields 46.9 27.6 27.6 27.6Pasture Land 13.1 8.2 8.2 8.2

F. Jalal-Abad OblastArable Irrigated 395.0 255.6 255.6 358.0Arable Non-Irrigated 114.1 40.9 40.9 40.9Perennial Crops 190.9 137.8 137.8 207.0Hay Fields 49.3 21.8 21.8 21.8Pasture Land 16.8 9.1 9.1 9.1

G. Batken OblastArable Irrigated 270.0Arable Non-Irrigated 41.3Perennial Crops 149.0Hay Fields 24.4Pasture Land 9.2

H. Kyrgyz Republic-NationwideArable Irrigated 345.7 225.0 225.0 315.0Arable Non-Irrigated 136.2 54.5 54.5 54.5Perennial Crops 170.4 114.6 114.6 172.0Hay Fields 46.4 23.9 23.9 23.9Pasture Land 11.1 6.6 6.6 6.6

Source:

Table A3.5: Average Land Tax Rates 1998–2001(as of 1 January of the year, Som per hectare)

Appendix 3 47

Ministry of Agriculture, Water Resources, and Processing Industries (KyrgyzRepublic).

Item

A. Total Abstraction 8,610.0 7,880.0 7,880.0 8,320.0 9,180.0 8,020.0Surface Water 7,920.0 7,290.0 7,290.0 7,790.0 8,750.0 7,720.0Underground Water 690.0 590.0 590.0 530.0 430.0 300.0

B. Total Water Use 6,990.0 6,820.0 6,580.0 6,420.0 5,240.0 5,020.0Domestic Uses 270.0 250.0 320.0 310.0 210.0 180.0Industry 250.0 240.0 140.0 140.0 60.0 50.0Irrigation 6,250.0 6,200.0 6,000.0 5,860.0 4,900.0 4,700.0Agriculture (excluding irrigation) 160.0 110.0 110.0 100.0 60.0 50.0Other 60.0 20.0 10.0 10.0 10.0 40.0

Source: Ministry of Agriculture, Water Resources, and Processing Industries (Kyrgyz Republic).

48 Appendix 3

Table A3.6: Water Abstraction and Uses, 1995–2000(million cubic meters)

1995 1996 1997 1998 1999 2000

Item Unit

Water Usage for Irrigation million m3 4,247.5 3,931.0 3,762.8 3,498.3 3,242.5 3,209.0 3,229.7(as recorded by water users contracts)

Irrigation Water Charges Som per m3 0.015 0.015 0.015 0.030 0.030 0.030 0.030Planned Collections of Irrigation Water Charges Som million 63.7 63.7 66.3 127.1 84.9 80.0Total Collections of Water Charges Som million 17.4 30.8 55.9 49.0 70.8 76.1 81.1Collection as % of Planned Collection % 48.4 87.8 73.9 55.7 89.6 101.4

m3 = cubic meter.Sources:

Appendix 3 49

(1995–2001)

Ministry of Agriculture, Water Resources, and Processing Industries (Kyrgyz Republic); and various yearbooks of the National StatisticsCommittee, Kyrgyz Republic.

Table A3.7: Irrigation Water Charges and Recovery

1995 1996 1997 1998 1999 2000 2001

Item

A. Total (All Farms)Cattle 1,206 1,190 1,122 1,062 920 869 848 885 910 933 947 970Sheep 9,545 9,107 8,362 6,973 4,783 3,899 3,313 3,333 3,309 3,264 3,198 3,104Goats 428 419 379 349 293 376 403 472 502 543 601 640

Subtotal (sheep and goats ) 9,973 9,525 8,741 7,322 5,076 4,275 3,716 3,805 3,811 3,807 3,799 3,744Pigs 393 358 247 169 118 114 88 93 106 105 101 87Horses 313 320 313 322 299 308 314 325 335 350 354 354Poultry 13,915 13,571 10,420 6,917 2,208 2,031 2,123 2,329 2,728 2,980 3,064 3,254

B. State and Collective FarmsCattle 718 645 531 426 272 160 96 84 66 55 47 43Sheep 7,571 6,137 4,582 3,297 1,539 676 250 174 126 78 62 56Goats 137 119 76 54 21 19 8 7 7 8 8 9

Subtotal (sheep and goats ) 7,708 6,256 4,658 3,351 1,560 695 258 181 133 86 70 65Pigs 318 276 182 112 64 50 30 25 21 15 12 7Horses 212 185 148 132 90 55 32 25 19 15 12 10Poultry 5,919 6,246 3,639 1,761 306 77 46 93 194 179 126 278

C. Private FarmsCattle 17 52 41 65 176 204 246 327 361 392 449Sheep 7 658 1,315 806 680 973 836 904 1,168 1,302 1,355 1,570Goats 7 19 7 9 113 147 173 261 269 314 349

Subtotal (sheep and goats ) 7 665 1,334 813 689 1,086 983 1,077 1,429 1,571 1,669 1,919Pigs 1 0 1 1 2 2 5 10 13 14 13Horses 1 12 41 34 58 87 97 108 136 155 164 190Poultry 3 56 152 51 27 223 299 386 644 778 890 1,026

D. Household PlotsCattle 488 528 539 595 583 533 548 555 517 517 508 478Sheep 1,967 2,312 2,465 2,870 2,564 2,250 2,227 2,255 2,015 1,884 1,781 1,478Goats 291 293 284 288 263 244 248 292 234 266 279 282

Subtotal (sheep and goats ) 2,258 2,604 2,749 3,158 2,827 2,494 2,475 2,547 2,249 2,150 2,060 1,760Pigs 75 81 65 56 53 62 56 63 75 77 75 67Horses 100 123 124 156 151 166 185 192 180 180 178 154Poultry 7,993 7,269 6,629 5,105 1,875 1,731 1,778 1,850 1,890 2,023 2,048 1,950

Source: National Statistics Committee, Kyrgyz Republic.

19951991 1992 1993 1994

50 Appendix 3

2000 2001

Table A3.8: Livestock Inventory, 1990–2001(end of year, '000 heads)

1996 1997 1998 19991990

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

A. State and Collective Farms1. Slaughtered Weight 140.1 110.5 77.6 57.3 45.4 26.1 14.6 6.6 6.5 5.4 3.9 3.1

Beef 50.7 41.8 31.5 25.0 22.1 14.8 8.5 4.0 4.4 3.4 2.7 2.5Pork 23.1 13.8 9.8 5.4 3.1 1.7 1.2 0.5 0.5 0.5 0.3 0.2Sheep 43.6 36.4 24.3 20.7 16.1 7.4 3.4 1.2 0.8 0.6 0.4 0.2Chicken 18.3 14.5 9.0 3.6 1.2 0.2 0.1 0.1 0.2 0.3 0.1Horse 4.4 4.0 3.0 2.6 2.9 2.0 1.4 0.8 0.6 0.6 0.4 0.2Rabbits

2. Milk 574.8 501.8 363.8 284.9 194.9 110.4 63.1 61.5 55.5 47.4 42.8 36.63. Eggs (millions) 465.6 408.2 313.5 155.3 41.8 6.9 1.3 2.1 4.0 6.1 6.4 20.64. Wool 27.0 23.6 17.0 12.7 7.5 2.8 1.2 0.6 0.4 0.3 0.2 0.2

B. Private Farms1. Slaughtered Weight 0.2 15.7 34.4 24.8 21.9 38.0 38.3 47.5 58.3 68.2 76.8

Beef 0.1 2.6 8.9 8.5 8.4 18.3 18.7 24.5 31.4 37.3 39.8Pork 0.1 1.5 0.2 0.5 0.5 0.7 1.2 1.9 1.6Sheep 11.4 23.3 11.6 9.4 13.1 12.6 13.2 16.2 16.8 20.2Chicken 0.2 0.0 0.6 0.1 0.2 0.2 0.4 0.5 0.9 0.8Horse 1.5 2.2 2.6 3.8 5.9 6.3 8.7 9.0 11.3 14.4Rabbits

2. Milk 0.3 21.7 53.9 39.4 101.4 170.2 199.3 249.9 349.9 397.0 451.73. Eggs (millions) 0.1 1.7 4.5 2.4 6.9 17.4 22.0 30.1 44.2 55.7 63.04. Wool 5.3 5.1 2.6 2.5 3.5 3.0 3.2 4.3 4.8 5.1

C. Households1. Slaughtered Weight 114.0 119.0 134.7 122.6 127.0 131.9 132.9 141.0 137.1 131.8 124.0 120.0

Beef 40.5 45.6 53.7 53.9 51.7 61.5 59.5 72.4 65.7 60.3 60.6 56.2Pork 17.4 18.9 25.8 19.4 13.4 26.0 27.0 24.6 29.2 27.0 21.6 22.4Sheep 33.6 34.4 34.6 37.6 48.7 37.3 37.7 29.9 30.0 29.8 25.9 23.6Chicken 15.0 14.3 13.0 5.7 5.4 2.4 2.7 2.8 3.4 3.7 3.6 3.6Horse 5.0 4.3 6.5 5.5 7.2 4.4 5.8 11.1 8.6 10.7 12.0 13.9Rabbits 2.5 1.5 1.1 0.5 0.6 0.3 0.2 0.2 0.2 0.3 0.3 0.3

2. Milk 610.2 629.3 575.4 607.2 637.3 652.4 652.0 650.7 667.3 667.1 665.4 653.73. Eggs (millions) 248.2 241.6 275.8 229.1 157.4 132.9 140.9 139.8 141.7 142.7 145.3 144.24. Wool 12.0 12.9 11.4 13.4 11.1 9.5 7.5 7.8 7.9 7.1 6.7 6.4

Table A3.9: Production of Animal Products and Livestock Inventory, 1990–2001('000 tons, unless otherwise stated)

Appendix 3 51Continued on next page

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

D. Total Production1. Slaughtered Weight 254.1 229.7 228.0 214.3 197.2 179.9 185.5 185.9 191.1 195.5 196.1 199.9

Beef 91.2 87.5 87.8 87.8 82.3 84.7 86.3 95.1 94.6 95.1 100.6 98.5Pork 40.5 32.8 35.6 24.8 18.0 27.9 28.7 25.6 30.4 28.7 23.8 24.2Sheep 77.2 70.8 70.3 81.6 76.4 54.1 54.2 43.7 44.0 46.6 43.1 44.0Chicken 33.3 28.8 22.2 9.3 7.2 2.7 3.0 3.1 4.0 4.5 4.6 4.4Horse 9.4 8.3 11.0 10.3 12.7 10.2 13.1 18.2 17.9 20.3 23.7 28.5Rabbits 2.5 1.5 1.1 0.5 0.6 0.3 0.2 0.2 0.2 0.3 0.3 0.3

2. Milk 1,185.0 1,131.4 960.9 946.0 871.6 864.2 885.3 911.5 972.7 1,064.4 1,105.2 1,142.03. Eggs (millions) 713.8 649.9 591.0 388.9 201.6 146.7 159.6 163.9 175.8 193.0 207.4 227.84. Wool 39.0 36.5 33.7 31.2 21.2 14.8 12.2 11.4 11.5 11.7 11.7 11.7

Sources:

Table A3.9—Continued 52 Appendix 3

Food and Agriculture Organization. 2002. Live Animals . Available: http://www.fao.org; and National Statistics Committee, Kyrgyz Republic.

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Lucerne (Medicago sativa ) 34.8 23.6 11.7 4.3 2.2 2.8 2.5 2.2 2.1 2.8 2.2 1.5Sainfoin (Onobrychis viciifolia) 10.8 9.3 8.8 5.8 5.2 3.1 1.3 1.3 1.8 2.7 0.7 1.1Other Fodder 0.6 0.5 0.3 0.4 0.0 0.1 0.0 0.1 0.0 0.0 0.0 0.2 Subtotal (seed) 46.2 33.4 20.8 10.5 7.4 6.0 3.8 3.6 3.9 5.5 2.9 2.8

Perennial for Hay 207.0 206.0 202.2 195.5 208.1 218.8 215.1 185.5 179.2 199.7 180.2 186.2Perennial for Green Fodder/Silage 171.6 171.4 159.2 143.7 122.1 74.7 51.6 36.6 29.7 23.4 18.8 14.9Perennial for Sown Pasture 7.6 9.0 5.0 5.7 9.3 10.7 2.5 2.4 2.0 3.7 5.9 4.8 Subtotal (perennial) 386.2 386.4 366.4 344.9 339.5 304.2 269.2 224.5 210.9 226.8 204.9 205.9

Total 432.4 419.8 387.2 355.4 346.9 310.2 273.0 228.1 214.8 232.3 207.8 208.7

Source: National Statistics Committee, Kyrgyz Republic.

Table A3.10: Areas Planted Under Perennial Fodder Crops, 1990–2001('000 hectares)

Appendix 3 53

Item 1995 1996 1997 1998 1999 2000 2001

A. Total Land Area-Countrywide 19,994.5 19,994.5 19,994.5 19,995.1 19,995.1 19,995.1 19,995.1Agricultural Land 10,806.8 10,774.7 10,777.7 10,810.8 10,798.2 10,798.3 10,798.1

Arable Land 1,299.1 1,299.7 1,300.8 1,259.3 1,261.7 1,260.2 1,237.1Perennial Crops 44.4 42.6 42.0 41.6 40.1 40.0 39.5Hay Fields 164.4 163.6 164.8 169.1 169.1 169.3 169.6Fallow Land 20.1 19.2 17.8 21.9 20.9 21.5 21.5Pasture Land 9,111.1 9,108.5 9,108.2 9,178.8 9,166.4 9,165.2 9,188.1

B. Total Land Area-Agriculture 11,647.1 10,411.5 7,677.3 7,139.0 5,995.7 5,788.2 5,530.3Agricultural Land 7,585.5 6,711.8 5,054.3 4,638.2 4,376.0 4,354.7 4,221.2

Arable Land 1,201.8 1,151.5 1,189.3 1,163.1 1,172.0 1,242.1 1,226.3Perennial Crops 37.5 35.8 37.7 35.9 35.6 36.1 35.3Hay Fields 134.5 128.4 114.5 121.5 125.4 146.6 146.6Fallow Land 14.8 12.6 10.1 13.1 9.4 14.8 14.7Pasture Land 6,115.1 5,325.8 3,644.4 3,267.1 3,013.6 2,911.1 2,794.9

C. Total Land Area-Collective Farms 2,958.9 2,849.1 1,546.8 594.2 484.0 146.2 113.9Agricultural Land 1,732.0 1,650.2 816.6 468.2 392.8 143.7 113.1

Arable Land 298.2 340.7 310.6 204.0 191.7 128.9 101.9Perennial Crops 11.6 6.8 6.5 4.5 4.5 2.9 2.3Hay Fields 32.4 14.1 11.0 8.8 13.2 9.6 7.8Fallow Land 4.3 1.0 0.2 0.1 0.0 0.0 0.0Pasture Land 1,361.5 1,274.9 485.5 248.9 183.0 2.1 0.8

D. Total Land Area-State Farms 396.7Agricultural Land 246.9

Arable Land 59.9Perennial Crops 1.7Hay Fields 5.0Fallow Land 0.1Pasture Land 177.6

E. Total Land Area-Peasant Farms 3,423.0 661.9 664.9 484.3 765.4 762.6 799.0Agricultural Land 2,064.2 632.2 661.0 218.1 760.8 758.3 796.2

Arable Land 290.7 476.1 516.3 410.6 630.7 647.2 703.3Perennial Crops 5.8 13.4 11.8 10.0 13.5 14.1 14.9Hay Fields 13.0 64.5 55.7 29.1 66.1 68.9 70.2Fallow Land 1.3 0.3 0.1 0.6 0.4 0.5 0.5Pasture Land 1,737.5 77.0 76.8 30.8 50.1 27.0 7.1

F. Total Land Area-Joint-Stock Companies 419.2 211.8 140.1 89.7 69.2 37.8 29.3Agricultural Land 317.5 145.6 103.5 68.5 52.3 32.1 23.4

Arable Land 80.5 47.0 40.0 32.7 28.7 26.1 18.6Perennial Crops 5.9 5.0 4.1 3.9 2.7 2.5 2.1Hay Fields 4.1 0.8 0.7 0.7 0.6 0.7 0.4Fallow Land 1.2 0.9 0.4 0.0 0.0 0.0 0.0Pasture Land 220.7 91.2 57.9 30.9 2.6 2.1

54 Appendix 3

Table A3.11: Land Use, 1995–2001(as of 1 January of the year, '000 hectares)

Continued on next page

Item 1995 1996 1997 1998 1999 2000 2001

G. Total Land Area-Agricultural Cooperatives 344.9 1,223.7 443.5 376.0 267.0 125.0 104.2Agricultural Land 329.4 753.4 305.2 347.7 220.6 123.8 103.5

Arable Land 31.8 144.2 97.3 139.4 117.0 115.3 96.6Perennial Crops 0.5 5.8 2.9 3.4 2.7 2.5 2.3Hay Fields 0.8 14.4 8.6 6.6 5.0 3.8 3.7Fallow Land 0.1 2.6 1.1 0.3 0.2 0.0 0.0Pasture Land 295.3 580.1 194.7 197.6 95.4 1.9 0.7

H. Total Land Area-Settlement Areas 137.4 152.7 153.1 179.4 200.6 231.7 233.8Agricultural Land 91.3 91.4 43.5 110.7 128.1 147.8 148.4

Arable Land 3.3 2.3 1.8 1.7 1.6 1.7 1.9Perennial Crops 0.9 0.9 0.9 0.9 0.8 0.8 0.8Hay Fields 0.3 0.3 0.3 0.3 0.2 0.3 0.3Fallow Land 0.0 0.0 0.0 0.0 0.0 0.0 0.0Pasture Land 11.3 11.5 11.5 11.4 11.4 12.7 11.7

I. Total Land Area-Industry and Transport 888.8 849.0 236.8 187.9 234.7 227.5 228.6Agricultural Land 86.2 74.8 74.2 74.6 74.1 71.4 72.1

Arable Land 1.9 1.5 1.5 1.5 1.3 1.2 1.3Perennial Crops 0.7 0.5 0.5 0.5 0.5 0.5 0.5Hay Fields 0.2 0.2 0.2 0.2 0.2 0.2 0.1Fallow Land 0.1 0.2 0.2 0.2 0.2 0.2 0.2Pasture Land 77.4 67.7 67.3 67.5 67.2 64.8 66.2

J. Total Land Area-National Parks and Reserves 145.4 159.1 314.7 350.0 350.0 349.3 382.8Agricultural Land 57.9 62.1 120.0 129.4 129.3 129.1 152.6

Arable Land 0.2 0.2 0.4 0.5 0.5 0.5 0.5Perennial Crops 0.2 0.2 0.2 0.3 0.3 0.3 0.3Hay Fields 0.3 0.3 0.8 0.8 0.8 0.8 0.8Fallow Land 0.0 0.0 0.0 0.0 0.0 0.0 0.0Pasture Land 57.1 61.3 118.4 127.7 127.6 127.4 150.9

K. Total Land Area-Forest Lands 1,107.1 1,433.8 2,383.0 2,600.9 2,617.4 2,634.3 2,652.6Agricultural Land 291.9 435.9 911.2 1,058.8 1,069.1 1,082.2 1,093.0

Arable Land 2.6 3.0 3.8 4.1 5.2 5.4 5.3Perennial Crops 1.5 1.6 1.7 1.9 2.0 2.0 2.0Hay Fields 4.4 4.9 6.9 7.0 7.3 7.3 7.3Fallow Land 0.1 0.1 0.2 0.2 0.3 0.3 0.3Pasture Land 282.2 425.3 897.6 1,044.7 1,053.3 1,066.4 1,077.4

L. Total Land Area-Water Resources 93.7 93.3 93.6 93.4 93.4 767.0 767.0Agricultural Land 2.6 2.7 2.6 2.6 2.6 2.7 2.7

Arable Land 0.2 0.2 0.2 0.2 0.2 0.2 0.2Perennial Crops 0.1 0.1 0.0 0.1 0.0 0.1 0.1Hay Fields 0.1 0.1 0.0 0.1 0.1 0.1 0.1Fallow Land 0.0 0.0 0.0 0.1 0.0 0.0 0.0Pasture Land 2.3 2.3 2.3 2.3 2.3 2.3 2.3

M. Total Land Area-Land Reserves 5,719.8 6,076.5 8,160.7 9,240.9 10,324.3 9,996.9 10,199.7Agricultural Land 2,673.0 2,961.2 4,219.6 4,593.9 4,872.6 5,010.2 5,107.6

Arable Land 98.8 135.7 0.0 0.0 8.3 9.0 1.4Perennial Crops 5.1 3.6 0.0 0.1 0.1 0.1 0.1Hay Fields 21.6 24.5 0.0 20.2 16.3 14.0 14.6Fallow Land 3.5 4.7 0.0 7.4 8.5 6.2 6.3Pasture Land 2,543.9 2,792.2 4,218.8 4,565.7 4,839.3 4,980.5 5,084.9

Source: State Agency for the Registration of Rights to Immovable Property, Kyrgyz Republic.

Table A3.11—Continued

Appendix 3 55

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

A. State and Collective FarmsGrains 510.5 527.2 524.6 533.2 464.7 338.7 305.0 315.6 259.2 230.2 172.0 159.0

Wheat 189.1 188.1 233.6 299.8 273.7 232.0 233.8 257.1 204.8 174.2 138.8 130.1Barley 254.8 276.6 239.1 198.0 162.0 90.4 56.3 48.9 42.1 43.4 22.1 14.3Corn 55.8 52.6 43.0 28.3 21.0 10.1 10.7 6.1 8.5 8.9 6.8 10Rice 1.0 1.6 1.6 1.9 2.6 2.3 1.4 1.3 1.3 1.2 1.3 1.2

Sugarbeet 0.1 0.8 5.7 9.6 7.3 6.2 8.8 6.9 9.8 8.2 4.6 4.4Cotton 29.7 25.8 20.6 18.5 25.1 23.0 17.2 12.9 12.4 8.5 8.7 7.3Tobacco 18.6 19.7 20.0 19.5 17.9 4.4 3.5 3.9 3.5 2.4 2.4 1.5Vegetable Oil Crop 7.4 4.2 7.1 13.4 24.5 27.3 32.4 20.1 18.6 18.6 12.0 10.3Potatoes 14.5 11.4 14.8 13.3 6.5 4.3 3.7 6.8 6.4 8.0 4.8 5.2Vegetables 13.9 12.6 14.1 7.7 9.2 7.2 6.5 4.9 4.8 6.6 3.8 4.7Melons 4.1 3.4 2.3 1.1 1.4 1.6 2.1 1.2 1.5 1.4 1.0 1.8Fruits and Berries 18.2 14.2 13.7 12.9 20.8 13.7 12.2 12.7 11.8 11.2 9.8 9.0Grapes 6.4 6.1 5.7 4.7 5.5 4.9 4.4 4.2 3.9 3.7 3.1 3.0

B. Private FarmsGrains 2.1 37.4 67.5 63.1 129.2 231.4 298.1 305.5 325.6 338.4 398.1

Wheat 0.3 12.7 32.8 34.3 90.4 175.0 250.9 251.6 246.1 255.8 297.7Barley 1.8 22.6 31.9 26.3 28.6 36.7 27.4 28.7 43.6 41.3 44.3Corn 0.1 1.9 1.8 2.3 8.1 15.5 13.2 18.7 27.4 30.7 39.7Rice 0.2 0.1 1.4 2.9 3.8 2.5 3.8 3.8 3.3

Sugarbeet 0.4 0.9 1.0 2.5 3.7 4.2 10.9 16.8 17.5 12.1Cotton 0.8 1.4 1.1 10.2 14.4 12.0 19.2 26.1 25.0 30.6Tobacco 0.5 1.4 0.8 4.0 4.6 6.7 7.4 7.8 9.7 6.3Vegetable Oil Crop 0.2 1.1 2.2 14.8 25.6 26.9 29.4 38.1 35.0 36.8Potatoes 1.1 1.2 1.4 2.8 6.1 10.1 12.9 14.2 24.8 28.3Vegetables 0.6 0.6 1.4 4.1 6.3 8.9 10.8 16.1 17.6 18.6Melons 0.1 0.1 0.5 1.7 2.3 1.5 1.9 2.2 2.4 2.7Fruits and Berries 0.6 0.6 0.9 2.1 4.1 5.6 5.6 6.5 9.2 9.7Grapes 0.5 0.8 0.9 0.9 1.1 2.3 2.5

56 Appendix 3Table A3.12: Cropping Area by Farm Type, 1990–2001

('000 hectares)

Continued on next page

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

C. HouseholdsGrains 10.6 10.7 10.7 12.0 30.5 36.0 49.4 53.9 58.3 65.0 79.4 84.8

Wheat 0.4 0.4 0.4 1.1 12.5 18.2 25.2 29.0 32.3 36.3 49.0 50.7Barley 0.4 0.4 0.4 0.9 4.7 3.6 6.5 4.5 4.0 4.2 6.9 8.7Corn 9.2 9.2 9.3 9.3 12.7 12.8 15.9 17.9 19.1 21.8 21.3 22.9Rice 0.1 0.1 0.1 0.1 0.1 0.6 0.9 0.8 0.9 0.9 1.1 1

Sugarbeet 0.2 0.8 1.4 1.4 1CottonTobacco 0.1 0.1 0.1 0.1 0.4 1.5 1.7 2.0 2.3 1.8Vegetable Oil Crop 0.3 0.3 0.4 0.3 0.7 2.1 7.8 8.1 7.8 9.7 10.2 12.2Potatoes 10.4 11.0 11.1 11.9 26.2 36.6 39.3 39.2 39.7 41.8 39.4 40.3Vegetables 6.0 6.1 6.8 6.1 11.3 19.3 19.3 22.3 22.9 24.2 25.5 25.3Melons 0.2 0.2 0.2 0.2 0.5 0.3 0.4 0.4 0.4 0.6 0.5 0.7Fruits and Berries 15.6 9.5 9.4 9.3 17.4 16.3 17.9 22.6 23.0 24.5 23.7 24.3Grapes 0.5 0.4 0.4 0.4 1.3 1.2 1.2 2.1 2.7 2.7 1.8 1.9

D. Total Harvested AreasGrains 521.1 540.0 572.7 612.7 558.3 503.9 585.8 667.6 623.0 620.8 589.8 641.9

Wheat 189.5 188.8 246.7 333.7 320.5 340.6 434.0 537.0 488.7 456.6 443.6 478.5Barley 255.2 278.8 262.1 230.8 193.0 122.6 99.5 80.8 74.8 91.2 70.3 67.3Corn 65.0 61.9 54.2 39.4 36.0 31.0 42.1 37.2 46.3 58.1 58.8 72.6Rice 1.1 1.7 1.7 2.2 2.8 4.3 5.2 5.9 4.7 5.9 6.2 5.5

Sugarbeet 0.1 0.8 6.1 10.5 8.3 8.7 12.5 11.3 21.5 26.4 23.5 17.5Cotton 29.7 25.8 21.4 19.9 26.2 33.2 31.6 24.9 31.6 34.6 33.7 37.9Tobacco 18.7 19.9 20.6 20.9 18.7 8.5 8.5 12.1 12.6 12.2 14.4 9.6Vegetable Oil Crop 7.7 4.5 7.7 14.8 27.4 44.2 65.8 55.1 55.8 66.4 57.2 59.3Potatoes 24.9 22.4 27.0 26.4 34.1 43.7 49.1 56.1 59.0 64.0 69.0 73.8Vegetables 19.9 18.8 21.5 14.4 21.9 30.6 32.1 36.1 38.5 46.9 46.9 48.6Melons 4.3 3.6 2.6 1.4 2.4 3.6 4.8 3.1 3.8 4.2 3.9 5.2Fruits and Berries 33.8 23.7 23.7 22.8 39.1 32.1 34.2 40.9 40.4 42.2 42.7 43Grapes 6.9 6.5 6.1 5.7 6.8 6.6 6.4 7.2 7.5 7.5 7.2 7.4

Source: National Statistics Committee, Kyrgyz Republic.

Appendix 3 57Table A3.12—Continued

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

A. State and Collective FarmsGrains 1,435.6 1,299.9 1,368.0 1,298.4 815.1 569.9 654.5 673.9 576.5 516.5 373.0 401.0

Wheat 481.5 432.7 605.7 752.9 498.1 426.4 526.7 560.6 454.6 395.1 294.3 309.6Barley 590.7 552.8 534.4 407.3 238.8 107.0 89.0 84.3 83.9 73.0 39.7 30.1Corn 341.2 296.6 209.2 125.5 65.8 28.4 32.6 22.6 30.5 40.5 30.1 51.1Rice 1.8 2.2 2.6 1.9 3.8 3.0 2.2 2.5 3.2 3.0 3.0 3.3

Sugarbeet 1.7 12.7 125.0 200.8 98.7 77.6 136.6 124.2 182.1 141.0 82.9 73.6Cotton 80.9 62.4 50.2 45.9 52.0 54.2 38.4 31.3 28.5 19.8 22.1 17.9Tobacco 53.8 49.0 42.2 45.8 35.0 9.0 7.1 8.3 7.7 5.5 5.5 3.5Vegetable Oil Crop 9.6 4.3 5.5 6.4 12.6 10.1 11.9 9.0 10.1 12.6 8.8 8.8Potatoes 176.0 130.9 109.2 82.4 55.5 39.7 40.3 84.7 84.3 123.8 72.3 84.9Vegetables 289.1 225.0 214.3 107.6 91.9 62.5 67.4 61.6 65.8 98.7 56.4 74.8Melons 56.6 37.5 18.9 7.2 10.3 9.0 13.9 12.2 15.4 17.8 14.5 27.2Fruits and Berries 50.7 20.2 42.0 7.7 18.6 13.2 19.1 20.9 13.9 15.0 20.3 16.2Grapes 36.6 21.8 24.5 8.6 13.8 13.1 6.5 10.4 2.2 3.0 9.2 8.2

B. Private FarmsGrains 3.6 83.0 151.0 103.8 243.6 530.8 778.3 856.3 908.5 939.8 1,139.7

Wheat 0.7 27.9 75.4 52.3 164.0 386.2 647.4 675.5 640.0 637.3 760.6Barley 2.8 46.8 67.9 45.2 46.6 69.6 60.4 71.6 100.2 93.1 91.2Corn 0.1 8.1 5.0 6.1 29.9 68.2 58.6 95.8 148.8 182.2 252.7Rice 0.1 0.3 0.1 2.2 4.9 6.9 5.4 9.6 12.9 10.5

Sugarbeet 9.4 19.3 15.1 29.2 53.2 73.7 227.1 362.2 333.2 194.3Cotton 2.2 3.3 1.5 20.3 34.7 31.1 49.4 67.0 65.8 80.2Tobacco 0.2 0.8 2.7 1.3 8.4 9.8 14.3 16.8 19.2 23.5 15.9Vegetable Oil Crop 0.0 0.2 0.4 1.2 8.5 16.4 21.2 26.3 35.8 33.7 37.6Potatoes 0.3 13.2 10.4 14.0 27.5 71.5 127.7 173.1 212.7 380.6 457.1Vegetables 0.1 8.1 5.6 11.6 42.0 72.4 119.9 165.5 271.1 302.4 326.4Melons 0.0 0.5 1.1 4.3 11.1 21.6 20.4 25.2 35.9 41.2 44.3Fruits and Berries 0.0 0.6 0.1 0.2 1.7 8.0 13.9 10.9 13.0 29.8 31.8Grapes 0.9 1.4 1.8 0.8 2.4 7.3 7.7

58 Appendix 3

('000 tons)Table A3.13: Nationwide Agricultural Production by Farm Type, 1990–2001

Continued on next page

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

C. HouseholdsGrains 67.5 70.4 65.5 58.4 77.4 99.8 143.9 166.7 186.3 204.9 255.9 283.5

Wheat 0.8 0.8 0.8 2.7 15.3 34.6 51.3 65.7 73.5 74.0 107.5 120.3Barley 0.9 0.9 0.8 1.8 4.2 5.3 7.8 6.9 6.2 6.6 17.4 18.6Corn 64.8 67.7 63.4 53.2 57.4 57.7 81.4 89.4 101.5 119.1 125.9 139.0Rice 0.3 0.3 0.1 0.1 0.1 1.5 2.2 2.3 2.5 2.5 3.1 2.8

Sugarbeet 0.2 0.1 0.4 0.6 7.6 20.1 32.9 33.7 18.7Cotton 0.1 0.0 0.1Tobacco 0.1 0.1 0.1 0.1 0.1 0.2 1.0 3.2 3.6 5.1 5.5 4.6Vegetable Oil Crop 0.7 0.5 0.6 0.3 0.4 1.6 6.6 7.7 7.4 9.6 10.8 12.4Potatoes 189.1 195.1 239.7 215.5 241.5 364.4 450.6 465.6 516.2 620.7 592.7 626.4Vegetables 198.2 173.9 181.6 146.1 162.1 213.9 228.7 297.2 324.6 349.5 388.0 414.1Melons 14.8 16.8 15.1 10.3 4.3 3.1 5.0 5.7 6.0 9.1 9.6 12.0Fruits and Berries 90.2 65.1 74.9 37.3 60.3 52.4 55.7 75.9 77.8 72.8 111.0 110.9Grapes 6.7 7.5 6.5 0.6 3.8 5.7 6.4 10.5 14.2 12.7 10.0 11.5

D. Total ProductionGrains 1,503.1 1,373.9 1,516.5 1,507.8 996.3 913.3 1,329.2 1,618.9 1,619.1 1,629.9 1,568.7 1,824.2

Wheat 482.3 434.2 634.4 831.0 565.7 625.0 964.2 1,273.7 1,203.6 1,109.1 1,039.1 1,190.5Barley 591.6 556.5 582.0 477.0 288.2 158.9 166.4 151.6 161.7 179.8 150.2 139.9Corn 406.0 364.4 280.7 183.7 129.3 116.0 182.2 170.6 227.8 308.4 338.2 442.8Rice 2.1 2.5 2.8 2.3 4.0 6.7 9.3 11.7 11.1 15.1 19.0 16.6

Sugarbeet 1.7 12.7 134.6 220.2 114.2 107.4 189.8 205.5 429.3 536.1 449.8 286.6Cotton 80.9 62.4 52.4 49.2 53.5 74.5 73.1 62.4 77.9 86.9 87.9 98.2Tobacco 53.9 49.3 43.1 48.6 36.4 17.6 17.9 25.7 28.1 29.8 34.5 24.0Vegetable Oil Crop 10.3 4.8 6.3 7.1 14.2 20.2 34.9 37.9 43.8 58.0 53.3 58.8Potatoes 365.1 326.3 362.1 308.3 311.0 431.6 562.4 678.0 773.6 957.2 1,045.6 1,168.4Vegetables 487.3 399.0 404.0 259.3 265.6 318.4 368.5 478.7 555.9 719.3 746.8 815.3Melons 71.4 54.3 34.5 18.6 18.9 23.2 40.5 38.3 46.6 62.8 65.3 83.5Fruits and Berries 140.9 85.3 117.5 45.1 79.1 67.3 82.8 110.7 102.6 100.8 161.1 158.9Grapes 43.3 29.3 31.0 9.2 17.6 19.7 14.3 22.8 17.2 18.1 26.5 27.4

Source: National Statistics Committee, Kyrgyz Republic.

Appendix 3 59Table A3.13—Continued

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

A. State and Collective FarmsGrains 28.0 25.2 27.5 23.9 16.8 16.8 23.0 23.0 22.2 24.7 23.6 25.2

Wheat 24.0 22.5 27.8 24.8 17.7 18.4 24.2 23.6 22.2 25.2 23.4 23.8Barley 22.2 20.0 23.8 21.9 13.7 11.8 17.3 18.8 19.9 18.6 19.7 21.2Corn 62.0 56.0 48.4 42.9 30.8 28.1 30.5 37.2 33.9 45.2 44.5 51.0Rice 17.5 14.7 18.7 9.4 13.2 13.1 17.9 20.4 17.8 25.8 24.9 26.3

Sugarbeet 158.9 155.7 213.9 176.3 102.0 113.4 155.3 180.6 169.5 171.0 179.4 167.8Cotton 27.3 24.5 24.3 24.4 20.5 23.6 22.3 24.3 23.0 25.3 26.4 24.5Tobacco 21.6 21.2 21.1 22.0 19.3 20.8 20.4 21.3 22.2 24.0 23.9 23.4Vegetable Oil Crop 13.2 10.2 7.8 4.8 1.0 0.8 3.7 4.6 5.4 7.0 7.6 8.6Potatoes 132.0 114.9 98.0 90.8 81.8 92.0 109.3 125.8 131.0 153.8 150.3 162.6Vegetables 186.0 163.8 142.3 128.8 95.1 84.0 104.2 126.5 131.0 150.8 146.3 159.7Melons 130.0 102.3 72.8 60.1 59.0 56.0 66.2 103.1 105.0 128.9 153.8 154.1Fruits and Berries 40.2 11.7 28.5 4.6 8.7 9.6 15.6 16.5 11.9 13.4 20.7 18.1Grapes 63.2 36.1 43.2 16.2 24.6 27.1 14.7 24.7 5.8 8.2 27.3 27.3

B. Private FarmsGrains 18.0 22.8 21.8 14.8 18.9 22.9 26.1 28.0 27.9 27.4 28.4

Wheat 23.9 22.7 23.9 13.4 18.1 22.1 25.8 26.9 26.0 24.9 25.5Barley 17.3 21.8 22.0 16.0 16.3 19.0 22.0 25.0 23.0 22.6 20.6Corn 15.3 41.9 25.6 23.2 36.9 43.7 44.4 51.3 54.3 56.2 61.7Rice 10.5 8.4 16.0 16.5 17.9 21.5 24.0 26.7 27.2

Sugarbeet 206.1 197.3 122.3 20.8 144.4 173.7 208.8 216.5 190.4 159.7Cotton 27.6 22.0 13.0 19.9 24.1 26.0 25.7 25.7 26.3 26.2Tobacco 14.9 19.8 16.6 21.0 21.4 21.2 22.5 24.7 24.0 25.0Vegetable Oil Crop 6.2 3.9 2.8 2.7 6.2 7.9 9.0 9.4 9.4 9.9Potatoes 123.8 90.4 99.6 99.0 118.0 125.0 134.0 150.0 154.0 160.8Vegetables 137.4 97.2 81.3 103.0 114.0 135.0 153.0 167.0 169.0 171.6Melons 76.6 76.3 81.3 67.0 93.0 134.0 133.0 164.0 169.0 165.3Fruits and Berries 5.9 14.0 1.9 8.1 19.5 24.8 19.5 20.0 32.4 32.7Grapes 14.9 18.3 19.4 8.7 22.1 31.6 30.6

Table A3.14: Crop Yield by Farm Type, 1990–2001(100-kilogram weight measure per hectare)

60 Appendix 3

Continued on next page

Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

C. HouseholdsGrains 63.8 65.9 60.1 48.4 25.6 27.7 29.1 30.9 31.9 31.5 32.2 33.4

Wheat 20.2 22.5 22.6 23.4 12.3 19.0 20.4 22.6 22.7 20.4 21.9 23.7Barley 23.4 22.6 19.8 20.4 9.0 14.7 12.0 15.5 15.6 15.8 25.0 21.4Corn 70.8 73.2 67.0 56.7 44.9 44.7 51.3 49.9 53.1 54.5 59.0 60.5Rice 27.5 28.2 10.0 10.0 9.6 23.4 23.3 24.6 25.9 27.3 29.0 29.1

Sugarbeet 304.6 235.7 236.0 243.5 204.5CottonTobacco 23.4 24.1 23.8 23.5 23.2 13.8 23.3 21.4 21.7 24.9 23.4 25.6Vegetable Oil Crop 19.7 15.4 16.0 9.2 5.3 5.6 8.2 9.4 9.4 9.9 10.3 10.1Potatoes 160.9 159.1 144.5 122.1 91.4 99.0 114.0 119.0 130.0 149.0 149.0 153.6Vegetables 213.3 191.2 180.0 159.0 133.9 111.0 117.0 132.0 141.0 143.0 152.0 162.1Melons 170.1 131.9 106.8 98.9 90.9 106.0 115.0 122.0 143.0 147.0 160.0 168.6Fruits and Berries 58.3 50.3 60.7 31.0 34.7 32.1 31.0 33.6 33.7 29.8 46.9 45.6Grapes 151.6 169.0 145.3 12.9 29.7 46.6 53.4 50.3 52.7 46.4 56.2 60.7

D. Total Average YieldsGrains 28.0 26.0 27.8 24.2 17.0 18.1 22.7 24.2 26.0 26.2 26.4 28.3

Wheat 24.9 23.0 27.5 24.6 17.0 18.3 22.2 23.7 24.6 24.3 23.4 24.9Barley 22.2 20.0 23.6 20.3 13.9 13.0 16.7 18.8 21.6 19.7 21.4 20.8Corn 17.1 58.5 51.3 45.2 35.1 37.4 43.2 45.9 49.2 53.0 55.8 59.9Rice 14.2 14.4 18.7 9.6 13.0 15.5 17.5 19.3 22.0 24.5 26.3 27.3

Sugarbeet 158.9 155.7 213.3 178.0 104.4 110.5 152.1 180.7 199.7 203.3 191.4 164.1Cotton 27.3 24.5 24.4 24.2 20.2 22.4 23.1 25.1 24.6 25.1 26.0 25.9Tobacco 21.6 21.2 20.8 22.1 19.2 20.8 21.1 21.3 22.4 24.5 23.8 24.9Vegetable Oil Crop 13.2 10.2 8.2 7.8 1.2 1.7 5.3 6.9 7.9 8.7 9.2 9.7Potatoes 136.0 136.6 123.8 107.6 89.7 99.0 114.0 121.0 131.0 150.0 151.0 157.0Vegetables 196.0 179.7 154.3 139.7 115.2 103.0 113.0 132.0 143.0 152.0 157.0 165.0Melons 131.0 103.0 75.5 66.1 72.4 65.0 83.0 121.0 123.0 150.0 164.0 161.9Fruits and Berries 41.2 27.2 40.7 15.3 20.1 20.9 24.1 27.1 25.4 23.9 37.8 37.0Grapes 63.2 45.3 50.6 15.9 25.6 29.6 22.4 31.3 23.0 24.1 36.5 37.0

Source: National Statistics Committee, Kyrgyz Republic.

Appendix 3 61Table A3.14—Continued

Item 1995 1996 1997 1998 1999 2000

A. ExportsAgriculture 42.9 63.2 45.2 52.5 56.8 46.9

Agricultural Exports to CIS Countries 38.2 47.7 33.5 42.9 47.5 35.7Agricultural Exports to CIS Countries 89.0 75.5 74.1 81.7 83.6 76.1(as % of total agricultural exports)

Food Industry 79.1 127.0 93.1 65.3 23.5 16.8Food Exports to CIS Countries 74.2 117.7 86.6 56.0 19.7 11.8Food Exports to CIS Countries 93.8 92.7 93.0 85.8 83.8 70.2(as % of total food exports)

Subtotal (Agriculture and Food Exports) 122.0 190.2 138.3 117.8 80.3 63.7Electric Energy 41.0 73.6 83.2 25.6 52.0 79.8Oil and Gas Industry 1.5 2.7 2.3 2.9 1.4 2.5Coal Industry 3.1 2.0 1.8 0.5 0.2 0.3Ferrous Metallurgy 10.4 6.9 3.0 2.9 1.6 5.4Nonferrous Metallurgy 62.7 81.9 216.2 221.0 217.2 233.9Chemical and Petrochemical 20.3 13.8 14.8 8.6 6.9 12.4Machine Building 44.5 56.2 61.6 70.1 46.8 50.7Lumber and Paper 1.8 2.4 3.6 4.6 0.7 1.0Industrial Construction Materials 11.6 21.8 26.9 24.0 8.2 8.4Light Industry 82.5 74.4 74.2 51.5 36.7 47.1Other Industry 7.6 5.2 5.0 5.6 10.4 5.7Other Items 0.0 0.1 0.0 0.0 0.2 0.1

Total Exports 408.9 531.2 630.8 535.1 462.6 510.9

B. ImportsAgriculture 17.0 27.7 34.6 18.6 31.4 40.9

Agricultural Imports from CIS Countries 3.7 13.2 12.8 12.0 10.5 15.2Agricultural Imports from CIS Countries 21.8 47.7 37.0 64.5 33.4 37.2(as % of total agricultural imports)

Food Industry 84.3 162.0 83.3 106.6 54.2 46.9Food Imports from CIS Countries 22.2 57.3 41.9 21.2 25.6 30.0Food Imports from CIS Countries 26.3 35.4 50.3 19.9 47.2 64.0(as % of total food imports)

Subtotal (Agriculture and Food Imports) 101.3 189.7 117.9 125.2 85.6 87.8Electric Energy 8.6 26.7 23.8 7.9 2.8 7.6Oil and Gas Industry 162.6 187.6 175.9 181.5 99.1 110.8Coal Industry 17.0 25.1 7.0 17.5 19.6 10.8Ferrous Metallurgy 17.8 15.0 9.9 21.6 9.5 11.0Nonferrous Metallurgy 11.2 8.7 22.4 30.6 22.9 12.5Chemical and Petrochemical 30.1 51.0 59.8 75.5 38.8 48.1Machine Building 103.6 230.5 154.0 219.3 202.4 144.9Lumber and Paper 19.8 26.2 29.2 35.3 19.1 26.8Industrial Construction Materials 10.1 15.8 13.3 16.0 11.0 8.7Light Industry 23.2 16.6 48.4 60.3 38.6 38.8Other Industry 17.3 44.6 47.7 50.7 50.2 46.7Other Items 0.0 0.2 0.0 0.0 0.0 0.0

Total Imports 522.3 837.7 709.3 841.5 599.7 554.6

C. Selected Exports Minus ImportsAgriculture 25.9 35.5 10.6 33.9 25.4 6.0Food Industry (5.2) (35.0) 9.8 (41.3) (30.7) (30.1)

Agriculture and Food Industry 20.7 0.5 20.4 (7.4) (5.3) (24.1)Oil and Gas Industry (161.1) (184.9) (173.6) (178.6) (97.7) (108.3)Non-Food Industries (134.3) (306.9) (98.8) (298.9) (131.9) (19.5)

CIS = Commonwealth of Independent States.Note: Figures in columns may not add up due to rounding.Source: International Monetary Fund. 2001. Kyrgyz Republic: Country Report 01/224. Statistical Appendix.

62 Appendix 3

($ million, unless otherwise specified)Table A3.15: Exports and Imports of Goods, 1995–2000

Major Agricultural Commodities Unit 1995 1996 1997 1998 1999 2000 2001

A. ExportsMilk tons 2,129 1,076 2,273 1,628 1,944 4,784 6,344Wheat tons 52 6,152 4,651 13,461 1,687 1,340 4,857Flour tons 3,357 11,053 26,716 20,666 20,381 18,781 1,883Flour Products (including pasta) tons 753 1,214 1,513 956 402 183 5Fruits and Vegetables tons 138,878 161,570 148,325 122,105 143,702 113,755 91,491Sugar tons 26,346 96,763 38,455 17,235 10,727 3,027 5,718Molasses tons 5,598 9,208 10,760 7,096 6,538 9,073 3,425Tea (re-export) tons 97 304 953 1,088 221 290 261Tobacco (processed and not processed) tons 36,518 19,037 21,080 36,342 36,710 26,574 29,419Hides of Cattle tons 465,674 a 1,764,846 a 1,217,643 a 8,302 5,745 12,308 17,484Hides of Sheep '000 pieces 1,514 2,122 1,115 1,209 781 1,959 1,964Cotton Fiber tons 19,286 22,805 20,624 18,980 24,891 33,190 26,904Wool tons 14,355 4,160 3,390 1,396 1,416 2,425 1,079

B. ImportsMeat and Meat Products tons 423 1,137 1,760 7,747 1,382 2,442 2,015Fish tons 183 661 2,110 3,797 2,991 3,256 2,664Wheat (including food aid) tons 84,116 109,377 126,083 95,980 127,960 223,163 74,342Wheat Flour tons 56,324 30,115 6,881 9,234 10,659 3,230 2,160Bread and Confectionery tons 1,397 1,742 5,761 5,641 2,371 2,298 2,511Fruits and Vegetables tons 2,843 6,013 5,751 11,458 28,101 14,966 9,896Raw Sugar tons 72,316 197,558 55,818 82,720 33,146 0 4,713Sugar tons 8,304 4,760 4,707 2,224 14,944 10,081 17,385Sugar Confectionery tons 252 331 1,158 4,243 1,912 1,932 1,638Cocoa and Cocoa-Containing Products tons 1,715 1,250 2,448 3,630 2,198 2,054 2,176Tea tons 912 1,224 3,945 5,615 3,440 3,620 3,503Tobacco (processed and not processed) tons 99 6 138 599 1,007 1,571 1,041Hides of Cattle tons 4,756 a 200 a 35,912 a 124 97 3,832 9,468Soybean (including food aid) tons 10 29,948 10 6Vegetable Oil and Fat tons 9,420 5,979 12,429 16,008 6,348 4,603 5,344

a From 1995 to 1997, quantities are expressed in pieces rather than tons.Source: National Statistics Committee, Kyrgyz Republic.

Appendix 3 63Table A3.16: Exports and Imports of Selected Agricultural Goods, 1995–2001

(quantities in metric ton, unless otherwise stated)

Sector 1996 1997 1998 1999 2000 2001

Agriculture 6.7 8.4 11.1 16.0 22.7 38.9Agriculture as % of Total Commercial Loans 2.7 1.9 2.3 3.6 4.9 6.0

Industry 10.2 24.0 25.5 48.4 65.9 134.1Construction and Purchasing of Real Estate a 16.0 3.6 63.2 28.1 30.5 25.5Transport and Communications 2.0 3.4 3.9 5.4 12.9 10.0Trade 63.1 81.3 120.9 114.9 51.7 142.4Other Private Sector Activities 66.7 95.0 106.7 123.1 125.5 135.1Miscellaneous 85.4 237.2 148.1 112.0 149.8 168.1

Total 250.1 453.0 479.5 447.9 459.0 654.2

a Including mortgage loans.Source: National Bank of the Kyrgyz Republic.

64 Appendix 3

Table A3.17: Outstanding Commercial Bank Loans by Sector, 1995–2001(as at end of year, Som million)

Item Unit 1995 1996 1997 1998 1999 2000 2001

A. Income and Growth1. GDP (nominal, in $) $ million 1,494.9 1,828.1 1,777.9 1,640.4 1,251.1 1,369.9 1,525.42. GDP (nominal, at factor cost) Som million 14,960.8 21,786.5 28,329.9 31,174.4 45,125.3 60,802.5 68,814.53. GDP (nominal) Som million 16,145.1 23,399.3 30,685.7 34,181.4 48,744.0 65,357.9 73,889.7

a. Agriculture (at factor cost) Som million 6,551.5 10,820.2 12,615.1 12,286.2 16,965.5 22,336.0 26,012.6b Forestry (at factor cost) Som million 16.6 18.1 23.6 38.0 37.2 37.0 43.0c. Manufacturing (at factor cost) Som million 1,931.3 2,587.9 5,077.4 5,559.2 10,573.5 15,261.0 15,768.1d. Construction (at factor cost) Som million 992.5 1,396.6 1,384.8 1,537.3 1,484.7 2,492.8 3,048.5e. Services (at factor cost) Som million 5,468.9 6,963.7 9,229.0 11,753.7 16,064.4 20,675.7 23,942.3f. Net Taxes on Products Som million 1,184.3 1,612.8 2,355.8 3,007.0 3,618.7 4,555.4 5,075.2

4. GDP (nominal, at average exchange rate) $ million5. Real GDP Growth Rate % (5.4) 7.1 9.9 2.1 3.7 5.4 5.3

a. Agriculture % (2.0) 15.2 12.3 2.9 8.2 2.7 6.86. Share of GDP (agriculture) % 40.6 46.2 41.1 35.9 34.8 34.2 35.27. Share of GDP (manufacturing and construction) % 18.1 17.0 21.1 20.8 24.7 27.2 25.48. Share of GDP (services) % 33.9 29.8 30.1 34.4 33.0 31.6 32.5

B. Balance of Payments and External Trade1. Current Account Balance $ million (234.7) (424.7) (138.4) (363.9) (179.8) (76.5) (11.0)

a. Current Account Balance as % of GDP % (15.7) (23.2) (7.8) (22.2) (14.4) (5.6) (0.7)2. Trade Balance (on FOB basis) $ million (122.0) (251.7) (15.2) (220.6) (84.3) 8.8 50.5

a. Trade Balance as % of GDP % (8.2) (13.8) (0.9) (13.4) (6.7) 0.6 3.33. Total Exports (including shuttle trade) $ million 408.9 531.2 630.8 535.1 462.6 510.9 480.2

a. Agriculture Exports $ million 42.9 63.2 45.2 52.5 56.8 46.9 59.3b. Agriculture Exports (% of total exports) % 10.5 11.9 7.2 9.8 12.3 9.2 12.3c. Exports to CIS Countries $ million 269.2 393.9 346.3 252.0 191.5 207.4 172.2d. Total Exports as % of GDP % 27.4 29.1 35.5 32.6 37.0 37.3 31.5

4. Total Imports (on FOB basis) $ million 530.9 782.9 646.0 755.7 546.9 502.1 471.5a. Agriculture Imports $ million 17.0 27.7 34.6 18.6 31.4 40.9 15.9b. Agriculture Imports (% of total imports) % 3.2 3.5 5.4 2.5 5.7 8.1 3.4c. Imports from CIS Countries $ million 353.6 486.9 435.8 440.7 259.3 299.0 260.5d. Total Imports as % of GDP % 35.5 42.8 36.3 46.1 43.7 36.7 30.9

5. Total Exports and Imports as % of GDP % 62.9 71.9 71.8 78.7 80.7 73.9 62.46. Direction of Exports

a. Exports to CIS Countries % 65.8 74.2 54.9 47.1 41.4 40.6 35.9b. Exports to Other Countries % 34.2 25.8 45.1 52.9 58.6 59.4 64.1

CIS = Commonwealth of Independent States, FOB = free on board, GDP = gross domestic product.

SELECTED ECONOMIC AND SOCIAL INDICATORS

Continued on next page

Appendix 4 65

Table A4.1: Selected Economic Indicators

Table A4.1—Continued

Item Unit 1995 1996 1997 1998 1999 2000 2001

7. Imports by Origina. Imports from CIS Countries % 66.6 62.2 67.5 58.3 47.4 59.5 55.2b. Imports from Other Countries % 33.4 37.8 32.5 41.7 52.6 40.5 44.8

C. Money and Inflation1. Inflation Rate, Consumer Prices, and Annual Average % 43.5 32.0 23.4 10.5 35.9 18.7 6.92. Broad Money Supply (M2, end period) Som million 2,718.5 3,340.8 4,188.2 4,910.0 6,574.5 7,367.5 8,201.83. Broad Money Supply (M2, annual growth rate) % 76.7 22.9 25.4 17.2 33.9 12.1 11.34. National Bank Refinancing Rate (end year) % 45.9 23.5 32.9 55.1 38.3 8.05. Treasury Bill Rate (3-month, weighted average) % 52.3 23.1 32.5 55.1 44.8 12.46. Commercial Annual Interest Rates % 65.0 50.0 73.4 60.9 50.7 39.8

(Som, up to 3 months, end year)7. Commercial Annual Interest Rates % 40.9 27.5 43.6 37.0 29.6 28.0

($, up to 3 months, end year)8. Exchange Rate (annual average, $1.00) Som 10.8 12.8 17.4 20.8 39.0 47.7 48.49. Exchange Rate (end of year, $1.00) Som 11.2 16.7 17.4 29.4 45.4 48.3 47.7

D. Government Finance1. Total Revenue (including grants) Som million 2,703.0 3,728.0 4,973.0 6,149.0 8,608.0 9,896.0 12,543.6

a. Total Revenue as % of GDP % 16.7 15.9 16.2 18.0 17.7 15.1 17.02. Total Expenditure Som million 5,358.0 5,905.0 7,778.0 9,843.0 14,802.0 16,262.0 15,496.0

a. Total Expenditure as % of GDP % 33.2 25.2 25.3 28.8 30.4 24.9 21.03. Total Financing, of which Som million 2,788.0 2,232.0 2,812.0 3,242.0 5,817.0 6,032.0 2,954.8

a. External Financing Som million 1,467.0 1,620.0 2,451.0 3,046.0 7,084.0 5,784.0 4,035.0b. Domestic Financing Som million 1,321.0 497.0 339.0 113.0 (1,385.0) 78.0 (888.0)c. Others (mainly privatization proceeds) Som million 0.0 116.0 22.0 84.0 118.0 170.0 299.3

4. Cash Surplus/Deficit Som million (2,788.0) (2,232.0) (2,812.0) (3,242.0) (5,817.0) (6,032.0) (2,954.8)5. Gross International Reserves $ million 114.6 128.5 198.3 188.6 248.8 261.1 285.26. External Public Debt (including publicly guaranteed, end year) $ million 504.7 780.8 951.5 1,093.3 1,314.4 1,399.2 1,411.3

a. External Public Debt as % of GDP % 33.8 42.7 53.5 66.6 105.1 102.1 92.5b. Multilateral $ million 308.2 435.9 594.1 715.9 837.3 893.9 925.5c. Bilateral $ million 177.7 325.6 333.6 353.7 430.3 465.2 485.7

Note: Figures in columns may not add up due to rounding.Sources:

66 Appendix 4

Asian Development Bank. 2001. Key Indicators 2001 of Developing Asian and Pacific Countries . Manila; International Monetary Fund. 2001. Kyrgyz Republic: Country Report 01/224 . Statistical Appendix; National Bank of the Kyrgyz Republic; and National Statistics Committee, Kyrgyz Republic.

Item Unit 1995 1996 1997 1998 1999 2000

A. ExpendituresGeneral Public Services Som million 362.0 555.4 834.5 983.9 1,267.1 2,002.9Defense Som million 237.1 291.0 461.3 473.8 807.8 1,173.3Public Order and Safety Affairs Som million 334.1 403.8 471.7 411.8 459.3 726.6Education Som million 1,051.3 1,228.4 1,475.3 1,631.9 1,892.3 2,302.5Health Som million 590.5 738.4 885.8 989.8 1,121.7 1,303.9Social Insurance Som million 795.7 799.1 876.4 757.8 772.2 371.6Social Security Som million 103.7 85.9 182.3 224.9 425.8 743.1Housing and Community Services Som million 182.8 296.1 275.1 375.4 468.7 665.7Recreational and Cultural Activities Som million 127.3 125.8 144.0 187.5 292.9 339.1Agriculture, Water Resources, and Forestry Som million 171.2 195.3 235.8 349.8 360.7 476.7Mining and Mineral Resources Som million 60.9 58.7 69.7 66.6 98.1 85.3Transportation and Communication Som million 69.8 102.5 176.1 231.8 523.6 464.5Other Som million 661.6 285.6 741.0 2,807.0 1,733.8 1,194.8

Som million 4,748.0 5,166.0 6,829.0 9,492.0 10,224.0 11,850.0

B. Expenditures As Percentage of TotalGeneral Public Services % 7.6 10.8 12.2 10.4 12.4 16.9Defense % 5.0 5.6 6.8 5.0 7.9 9.9Public Order and Safety Affairs % 7.0 7.8 6.9 4.3 4.5 6.1Education % 22.1 23.8 21.6 17.2 18.5 19.4Health % 12.4 14.3 13.0 10.4 11.0 11.0Social Insurance % 16.8 15.5 12.8 8.0 7.6 3.1Social Security % 2.2 1.7 2.7 2.4 4.2 6.3Housing and Community Services % 3.9 5.7 4.0 4.0 4.6 5.6Recreational and Cultural Activities % 2.7 2.4 2.1 2.0 2.9 2.9Agriculture, Water Resources, and Forestry % 3.6 3.8 3.5 3.7 3.5 4.0Mining and Mineral Resources % 1.3 1.1 1.0 0.7 1.0 0.7Transportation and Communication % 1.5 2.0 2.6 2.4 5.1 3.9Other % 13.9 5.5 10.9 29.6 17.0 10.1

% 100.0 100.0 100.0 100.0 100.0 100.0

Note: Figures in columns may not add up due to rounding.Source: International Monetary Fund. 2001. Kyrgyz Republic: Country Report 01/224 . Statistical Appendix.

Appendix 4 67

Total expenditures (excluding public investment program)

(1995–2001)Table A4.2: Government Expenditures

Total Expenditures (excluding public investment program)

Item Unit 1995 1996 1997 1998 1999 2000 2001

Resident Population (at year end) million 4.6 4.7 4.7 4.8 4.9 4.9 4.9Male % 49.0 49.0 49.0 49.0 49.0 49.4 49.0Female % 51.0 51.0 51.0 51.0 51.0 50.6 51.0

Ethnic CompostionKyrgyz % 60.3 60.8 61.2 64.9 65.2 65.7 66.3Russian % 15.7 15.3 14.9 12.5 12.2 11.7 11.2Uzbeks % 14.2 14.3 14.4 13.8 13.8 13.9 14.0Other Ethnic Groups % 9.8 9.6 9.5 8.8 8.8 8.7 8.5

Total % 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Rural Population % 64.3 64.4 64.6 64.6 64.8 64.7 64.6Urban Population % 35.7 35.6 35.4 35.4 35.2 35.3 35.4Children and Teenagers % 38.0 38.0 38.0 38.0 37.4 36.7 36.0People of Retirement Age % 9.2 9.2 9.2 9.2 9.1 8.9 8.8Migration Outflow '000 people 18.9 11.7 6.7 5.5 9.9 22.5 26.6Life Expectancy at Birth years 66.0 66.6 66.9 67.1 68.7 68.5 68.7Infant Mortality (deaths per 1,000 births) persons 28.1 25.9 28.2 26.2 22.7 22.6 21.7Child Mortality (deaths under age 5 per 1,000 births) persons 41.3 36.4 42.1 40.7 35.5 33.2 29.5Maternal Mortality Rate (per 100,000 live births) persons 44.3 31.5 62.7 33.6 42.3 45.5 43.8Adult Literacy % 97.3 97.3 97.3 97.3 98.7 98.7 98.7Enrollment Ratio for All Educational Levels % 60.0 64.0 66.0 69.0 69.0 71.0 71.0

(% of population age 7–24)Human Development Index (United Nations Development Programme) index 0.676 0.688 0.696 0.701 0.706 0.719Labor Force '000 people 1,741.0 1,791.0 1,792.0 1,811.0 1,901.0 1,913.0 1,924.0Total Employment '000 workers 1,641.0 1,651.0 1,689.0 1,705.0 1,764.0 1,768.0 1,774.0

Public Sector Employment '000 workers 517.0 455.0 437.0 405.0 393.0 385.0 374.0As % of Total Employment % 31.5 27.6 25.9 23.8 22.3 21.8 21.1

Private Sector Employment '000 workers 1,125.0 1,197.0 1,253.0 1,300.0 1,371.0 1,383.0 1,400.0As % of Total Employment % 68.6 72.5 74.2 76.2 77.7 78.2 78.9

Employed in Agriculture '000 workers 771.0 778.0 816.0 837.0 924.0 938.0 944.0As % of Total Employment % 47.0 47.1 48.3 49.1 52.4 53.1 53.2

Unemployment Rate (including unregistered unemployed) % 5.7 7.8 5.7 5.9 7.2 7.5 7.8

Average Monthly Wages Som 368.2 490.9 680.2 840.6 1,049.9 1,227.0 1,392.7Average Wages in Agriculture (as % of average wages) % 41.3 51.6 54.2 48.8 44.2 48.2 50.3Average Wages in Industry (as % of average wages) % 155.2 150.3 173.8 168.8 193.5 167.1 157.4

Sources:

Table A4.3: Selected Social and Employment Indicators

Asian Development Bank. 2001. Key Indicators 2001 of Developing Asian and Pacific Countries . Manila; National Statistics Committee, Kyrgyz Republic;and United Nations Development Programme. 2000 . Kyrgyzstan: National Human Development Report for 2000.

68 Appendix 4