As detailed by Kazakhstan’s Deputy Prime Minister and Minister of Agriculture Zhanybek Karibzhanov on April 6, the World Bank will extend a credit line of US $15 million to Kazakhstan’s ailing agricultural sector. (Russian agencies, April 6) The aim is to assist newly privatized farms to adjust to emerging markets and to reverse the decline in yields and output. More specifically, the loan will secure advisory services and financing for farm restructuring, help alleviate rural poverty exacerbated by the restructuring and encourage farmers to adopt new technology and commercial practices.
In the Soviet era, Kazakhstan had around one-fifth of the USSR’s arable land and was the third most important republic in terms of grain output. Agriculture still accounts for approximately 25 percent of Kazakhstan’s labor force and 15 percent of GDP, and is a significant source of export earnings. Unlike the mineral and metals sectors, however, Kazakhstan’s agriculture has not attracted any major foreign investment since independence. Moreover, because of the lack of financing available from domestic banks, lending by multilateral agencies is the republic’s most likely source of assistance. Today’s principal problems are the lack of essential inputs such as fertilizers, spare parts for machinery and aviation fuel for crop-spraying aircraft and superficial or poorly implemented reforms. Yields of all major crops have fallen sharply since 1990. Another problem is the fact that imported food is often cheaper than that produced within the republic. Food imports are accordingly rising. — SC
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