Publication: Eurasia Daily Monitor Volume: 4 Issue: 181

The steeply rising price of bread in all regions of Kazakhstan, coming in the wake of controversial parliamentary elections, has fueled popular discontent with the ruling Nur Otan party and become an embarrassment for the government.

Recently a group of protesters picketed the Almaty office of Nur Otan, demanding urgent measures against the rising cost of living. Although the protesters dispersed peacefully, the rapidly deteriorating situation on the domestic grain market and a bread shortage in Kazakhstan’s major cities has heightened social tension. In Almaty bread manufacturers complain they have already run out of flour reserves that would normally last for months. In Qaraghandy and Pavlodar, one of the three major wheat-growing regions of Kazakhstan, the price of bread jumped by 30% in one month. In North Kazakhstan, all of the regional government’s attempts to keep prices down and ration bread have failed. Shop owners openly ignore the calls for equal distribution of the staple food. Minister of Labor and Social Protection Berdibek Saparbayev, who was dispatched to Pavlodar to calm residents, publicly blamed “entrepreneurs” for “plotting a conspiracy” on the grain market (Khabar TV, September 26).

Obviously, there is more than one reason for the widespread bread crisis in Kazakhstan, including rising food consumption across the globe and the increasing, often uncontrolled, exports of Kazakh grain. But government officials persistently hush up domestic food supply problems, such as inconsistent agricultural reform, ineffective land use, rising grain production costs, and inadequate state support for farmers. Official sources indicate that this year over 300 small farms left 40,500 hectares of land fallow due to a lack of subsidized fertilizers, diesel oil, and pesticides. The actual statistics are likely double or triple the official figures. Only a few government-favored wheat-producing farms can afford expensive but efficient U.S.-made John Deere harvesters. Every year, dozens of small farms end up in bankruptcy, unable even to cover production costs and pay back hard-won bank credits. As a consequence, hundreds of hectares of abandoned agricultural land turn into barren wilderness each year.

In order to join the World Trade Organization, Kazakhstan must implement a drastic reduction of state subsidies for agriculture. But at the same time, the Ministry of Agriculture cannot abandon the subsidies without possibly losing the country’s status as a major grain exporter. At the same time, the government is in a desperate struggle to create food reserves by making it mandatory for farmers to sell part of their harvest to Prodkorporatsia, the state-owned food and grain company. But many farmers, lured by the higher prices offered by foreign customers look for buyers outside of Kazakhstan. Last August alone, when some bakeries were standing idle due to a flour shortage, 91,000 tons of Kazakh grain were exported abroad (Turkistan, September 20).

The Ministry of Agriculture announced that this year Kazakhstan will reap the richest harvest since 1991 – 20 million tons, which tops last year’s level by two million tons. Prodkorporatsia announced that it would purchase wheat from farmers for $200 per ton, a huge jump from last year’s purchasing price of $80.

The bumper harvest offers farmers a rare opportunity to buy new machinery, repay bank credits, and improve their financial position. But it does not solve the impending food crisis, which has been triggered not only by rising bread prices and poor land management, but even more by the government’s inability to handle the situation. Akhmetzhan Yesimov, minister of agriculture, admitted that there was nothing the government could do about bread prices. Nevertheless, he urged regional governors to stockpile grain over the next four months and appealed to the patriotic sentiments of farmers.

Members of the government seem to be going out of their way to avoid the political consequences of a crisis that caught Astana unprepared. Kazakhstan is not an isolated case, as food shortages are sweeping across all of the Central Asian states. But until recently Kazakhstan has been depicted as an oasis of plenty in a region dominated by poverty, and the bread shortage will have far more serious domestic political reverberations. Even some public organizations that have traditionally been loyal to the government are running out of patience with the inactivity of the elite. Siyazbek Mukashev, the chairman of the Trade Union of Kazakhstan, declared that the Council of Veterans and other public organizations would stage street protests and demand the resignation of the government if Nur Otan fails to fulfill its pre-election promises (Turkistan, September 20).

Rising prices of bread are undermining public trust in the government and damaging the political status of the ruling Nur Otan party. The growing public discontent may lead to further government shuffles and unpredictable moves. But Kazakhstan’s otherwise solid economic foundation may be enough carry the country through this crisis without serious consequences.