Agricultural potential of regions in ensuring food security of Kazakhstan

Purpose – the aim of this paper is to explore and provide analysis for agricultural potential of regions (oblasts) located in South part of Kazakhstan in ensuring food security of the country.

Methodology – in this research were used analysis of current situation of agriculture production, correlation model and regression analysis.

Originality/Value – the value of the research is identifying connection between government’s agricultural policies with actual agricultural potential of oblasts.

Finding – the research results demonstrate not only ability of particular oblasts agriculture production potential, also absorptive capacity of innovation in agriculture.

Introduction

This research paper is aiming to investigate thoroughly production potential of agricultural products some oblasts of the Republic in order to figure out problems, reasons, as well as perspectives for further development. As we known, there are plenty of research work devoted to explore agriculture issues. Agriculture is a key industry for any economy and society in terms of its essential place. Conventionally, it comprises two big parts such as crop and livestock productions. Also, group of organizations, which serve these two fields. Today why many scientists focus on agriculture research? We think because of complicated role of this topic. Namely, many pressures are on agriculture: growing number of population, food provision, climate change, necessity to reduce greenhouse gas emissions in agriculture, rapid development of the emerging economies and growing imbalance between land, water and energy shortages [1]. These problems are research field for scientists from agriculture economics, economics, ecologists, nutrition specialists and others. Among these mentioned problems, we are going to explore food security problems. In order to uncover food security potential of our country, we will try to investigate thoroughly ‘agriculture-oriented’ oblasts.

Nowadays scientists attempt to research necessity and opportunity of improving agriculture production as a factor ensuring regional food security [2].

In this article, we will analyze the place of three regions (we name them as oblasts in this article) of Kazakhstan, which considered as a core of agriculture. These three oblasts located in south part of the country. They are Almaty oblast, Zhambyl oblast and South Kazakhstan oblast.

The challenges of today’s situation in our country are result of transition from planned to marketoriented economies, experienced major socio-economic shocks that increased food insecurity, malnutrition and poverty [3].

Figure 1 – Evolution of socio-economic, ecological indicators of Kazakhstan 

On the one hand, it is necessary to ensure people by food; on the other hand, ecological issues also should be taken into account. Therefore, as we mentioned before, this is complicated question. According to the National report of Ministry of environment protection of the Republic of Kazakhstan, agriculture takes third place in producing emission of greenhouse gases (GHG) among other pollution sources [4]. During 1990s, GHG emission level reduced gradually because of decreasing number of livestock, arable land and diminishing volume of mineral fertilizers. The situation changed from 2000 when government started to finance, support agriculture, and reorganized agricultural sector. All these problems can be solved via applying innovation.

So, what is the food security? This is a key question. This term implies 85% of consumed food produced by native agricultural producers. 

Analysis basic elements of ensuring food security

Food security is closely related with arable land. As a result, of transition from planned economic system to market arable land of agriculture descried in entire of republic. In terms of this, situation is next.

In 1992 the total arable land of Kazakhstan was 34839,9 thousand hectares (ha); total arable land of these three oblasts was 2621,1 thousand hectares, which is 7,5% from total republic arable land. After 10 years arable land territories reduced up to 50% (it reduced from 34839.9 thousand ha in 1992 to 17756,3 thousand ha in 2002). The situation was the same in these three oblasts, however, their share increased up to 11,5% by 2015. Three oblasts produce various agriculture products. Among them, we took four types of products in order to analyze and compare.

They are grain (including rice), potatoes, vegetable, and feed (for domestic animal). We can notice that these four types of products were main products of oblasts. Let us describe similarities and consider each of them. For instance, these four types of products covered almost 97% of arable land from total arable land of Almaty oblast in 1992. After two decades, its size slightly decreased by 15%, that means the share of these products in arable land were 82% in 2015. Regarding Zhambyl oblast the situation is the almost the same. One essential feature is that both oblasts (Almaty and Zhambyl) produce sugar beet. They are leaders in producing sugar beet. Therefore, 98% of arable land sugar beet is located there.

However, we notice negative tendency in cultivating sugar beet, because of reducing arable land. Arable land of sugar beet significantly decreased last years. In 2011 it was 18,2 thousand ha (which is peak during last 10 years) then in 2013 it decreased 6,7 times till 2,7 thousand ha [2].

Figure 2 – Sugar beet arable land size during 2000-2015 years 

As a result of reduction, gross harvest reduced 88% from 200,4 thousand tons in 2011 to 23,9 thousand tons in 2014 respectively. Only one positive indicator is that in 2015 gross harvest again reached 174,1 thousand tons, which 232,5 hundredweight (cwt) from 1 ha. Today our country depends on import of sugar cane (that is sugar raw material). Almost 90% of sugar cane imported from Brazil. Due to old infrastructure, absence  of modernization of sugar production, lack of current assets make cost of final product very high. In spite of government support up to 30% subsiding of investment, up to 70% financing leasing and loans, still sugar processing enterprises are in bad condition [5].

As for arable land structure of South Kazakhstan oblast the share of above-mentioned four products were almost 87% in 1992 from total arable land of oblast, and today there portion significantly decreased up to 68%. That implies cultivating other types of products as well. The main difference of this oblast is that it is a sole producer of cotton in Kazakhstan. The arable land territory of cotton fluctuated during last twenty-five years: in 1992 form 116,5 thousand ha, in 2007 – 206,1 thousand ha (that was a peak), and in 2015 – 99,3 thousand ha, which is only 48,1% of 2007 year’s level. Interesting fact is that yield is not the same as different arable land area. It was 25 hundredweight from 1 ha in 1992 (from 116,5 thousand ha), 22,1 hundredweight from 1 ha in 2007 (from 206,1 thousand ha) and finally 27,8 hundredweight from 1 ha in 2015 (from 99,3 thousand ha).

Gross harvest (yield) is a main result in agriculture production. We collected gross harvest of all oblasts for 15 years, summed up, and compared with republic level in order to see what the share of each product is and relying on that to forecast future development. So, they are designed in next table.

Table 1 – Gross harvest of grain, potatoes and vegetables produced in Almaty, Zhambyl and South Kazakhstan oblasts, % 

This table illustrates big potential these oblasts in ensuring food security, namely, potatoes and vegetables. Nearly 69% of vegetables produced exactly by Almaty, Zhambyl and South Kazakhstan oblasts. This shows strong position of them in vegetable market. That is why the price of vegetable is low in comparison with other oblasts. However, west part of Kazakhstan are covered vegetables from Uzbekistan and Russia.

Another main indicator is harvest of agriculture products. We provided analysis taking into account various products, but we would like to present the most demandable, useful for human and the cheapest products – vegetables. 

Table 2 – Harvest of vegetables, hundredweight from 1 ha 

Gross harvest of vegetable hundredweight (cwt) from 1 hectare (ha) was 153 cwt. from 1 hectare in 2000, increasing gradually till 2015 up to 245.8 cwt., growth rate was 160,6%. Regarding each oblast, we would like to highlight Almaty oblast. It attracts attention by sharply increased harvest last year from 24,5 cwt. from 1 ha up to 291,9 cwt. (which is more 12 times), that worth to demonstrate by graphically design.

Figure 3 – Harvest of Vegetables by oblasts 

Next crucial element in providing analysis is to identify main producers of each agricultural product. It is necessary in order to define how to organize agricultural entities’ work. That means how to reorganize this sector. 

Table 3 – Gross output of agricultural product by agricultural entities 

This table illustrates general differences and similarities of agricultural entities’ of three oblasts during 15 years. We group three main producers:

• agricultural enterprises,
• farmers and
• personal subsidiary farming.

The share of agricultural enterprises in gross output of products is vary from oblast to oblast, for instance production of agricultural producers increasing gradually in Almaty oblast form 10,34% in 2000 to 15,28% in 2015. Whereas, in South Kazakhstan its share decreased two times (from 11,71% in 2000 to 8,83% in 2015) and in Zhambyl oblast agricultural enterprises share significantly decreased from 17,32 in 2000 to 5,54% in 2015, although this oblast had more agricultural enterprises than both other oblasts. As we can notice main contributor of gross output of agriculture production is personal subsidiary farming. Let us describe namely gross output by plant growing and livestock production. Providing this research we collected lot of data for 20 years, it is not possible to put all information in this article, therefore, therefore we decided to describe them only in for last period. 

Table 4 – Gross output of plant growing and livestock production by agricultural entities in 2015 

Interesting observation is seen from this table. Obviously, we can definitely say that livestock production based on personal subsidiary farming in all given oblasts.

Therefore, the conclusion of how to develop livestock production is clear.

Plant growing mostly produced by farmers in all oblasts. Regarding of agricultural enterprises the situation is not the same, Almaty region is a leader among three oblasts. This oblast has a big potential. In the frame of state program ‘Industrialization map’ during 2010-2014 years, 22 big projects were implemented. That shows growing number of big enterprises which combine both plant growing and livestock production, such as LLP ‘Baiserke-Agro’, LLP ‘Uyz May Industry’, ‘Koksu Sugar Plant’, LLP ‘Plant of Kazakh Nutrition Academy ‘Amiran’, 'Fresh Food Kazakhstan’ and others. This oblast exports also meat.

Meat is a main product for our country. The next information helps, in order to describe it. General number of cattle in the republic is 6183,9 thousand heads. Almaty, South Kazakhstan and Zhambyl oblasts possess 2063,2 thousand heads of cattle which is 33.36%. Approximately the same percentage of caw (31,69%) is from three oblasts. As for sheep and goats 9493,7 thousand (52,70%) heads are belong these south part Kazakhstani part.

After this analytical part of the research, we can compare government policy, which aimed to integrate small personal subsidiary farming into agricultural cooperatives and be able to finance them, also create certain responsibility of them.

The problem of whether to organize agricultural production along individual or collective lines continues to be policy in transition economies as well as in countries that have recently altered land reform [9]. According to this research, we noticed warning situation in creating agricultural collectives. Conducted research in seven countries, including Russia suggested that elimination of subsidies could accelerate breakup of collectives. Therefore, we should take into consideration this experience as disadvantage.

Today the number of personal subsidiary farming 1 608 754 in the republic, there are 634148 personal subsidiary farming in these oblasts (39,4%). No doubt, that getting bigger organization (we mean integration of personal subsidiary farming) could have opportunity to receive financial aids from Government, thereby, strengthen food security. This is first option in order to enlarge small agricultural entities and properly divide financial sources. Second option of developing cluster chain in agriculture, which expands opportunity to receive financial aid and attract investment. As an evidence of mentioned opinion, there is interesting facts were given in research by professors of Alma University (in Almaty) [10]. Advantages of cluster in comparison with existing separate personal subsidiary farming can be explained in next way: 

However, there is an opposite side of establishing big enterprise. Big enterprises produce more product and pollute environment more. Thus, scientists should search such kind of way ‘development, but no harm’ among continuous technological innovations [11].

Along with this analytical part, we also are aiming to predict future development of agricultural potential of three oblasts. Gross output of three oblasts are designed in next table. 

Table 5 – Indicators that identify agriculture potential of Almaty, Zhambyl and South Kazakhstan oblasts 

Table 6 – Correlation Matrix 

In order to provide analysis of correlation matrix, several factors are taken, such as Х1, Х2, Х3. Correlation matrix demonstrates that gross output depends on three indicators, however, they are multicollinear between them. Therefore, only two factors were chosen which have more impact on gross output of agriculture production. They are X1 – investment and X3 – Number of agricultural entities. 

Table 7 – Indicators that impact on gross output 

This is two-factor regression model:

 У=-148361,61+20,68*х1+2,34*х3 

Using the model we forecasted for next two years by increasing each indicators for 10%, this related with government policy, which already start investing. 

Conclusion

After conducting research, we came up with an idea that government should support some products such as sugar beet, cotton (they produced only by Almaty, Zhambyl and South Kazakhstan oblasts). They are also priority for country.

As we see from this analysis, the necessity to develop agriculture production has an ambiguous result. We need food at the same time we should take care environment. In order to solve this problems only innovation will help us. A few words were devoted innovation in agriculture as a main direction in order to make proper decision in terms of food security. According to the Food and Agriculture Organization (FAO) food security is when people have access to sufficient, nutritious food in order to meet conventional needs and keep healthy life [12]. Here questions is how to keep balance between economic, social and environmental goals with regard to ensure food security. Many countries are trying to develop innovation policy and provide innovation reform in order to achieve relevant capacity of these aims [13]. This urgent issue for developing countries such as ours, because agriculture remains as a core of economic development and innovation is a key to the sustainable agricultural growth. Only in this case we can reduce poverty, safe environment and ensure food [14, 15]. In addition, we would like highlight government policy in terms of solving food security problems. Food security issue cannot be considered along alone, it included into National Innovation Policy of Kazakhstan [16].

Therefore, we see underlying key solutions: first, necessity of government regulation of food market; second, cluster development of milk and meat production in order to export; third, improvement agrarian education and link it with production, to build a bridge between production with science respectively.

References 

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