Kazakhstan Agricultural Overview
Kazakhstan is an important producer and exporter of high-quality wheat. Average annual production is about 13 million tons, but output is highly dependent on weather and in recent years has fluctuated between 10 and 17 million tons. Between 2 and 8 million tons is exported annually, mainly to destinations in Europe (including Russia and Ukraine), northern Africa, and Central Asia. Kazakhstan also produces around 2 million tons of barley, and a small amount of oats, corn, and rice, but wheat is by far the country’s most important commodity. The production of oilseeds (sunflowerseed and rapeseed) is increasing but total oilseed output remains well below 1.0 million tons. The country also grows a small amount of cotton in southern Kazakhstan, with annual lint output at around 100,000 tons.
This article provides a brief overview of Kazakhstan crop production (focusing chiefly on wheat, the country’s most important commodity) and is based on information from a variety of sources, including previous FAS Commodity Intelligence Reports, reports from the U.S. agricultural attache, and interviews with farm directors and agricultural officials in Kazakhstan.
According to Kazakhstan’s first comprehensive agricultural census, conducted in 2006, 61 percent of Kazakhstan’s 76.5 million hectares of agricultural land is permanent pasture, and 32 percent is classified as arable land (systematically cultivated for the production of row crops). Of the remainder, 3 percent is used for hay production and 4 percent is “long fallow” (indicating potentially arable land that has remained uncultivated for at least several consecutive years). Of the 24 million hectares of arable land, about two-thirds, approximately 18 million hectares, is devoted to grain production.
Total sown area, including grains, forage crops (mostly perennial grasses), technical crops (chiefly oilseeds and cotton), and food crops (potatoes, vegetables, and melons) decreased sharply during the late 1990’s due to the contraction of grain and forage-crop area. (The decline in grain area actually began in the 1970’s.) Grain area began to rebound in 2000, and by 2008 had grown by 40 percent from the 1999 level, while forage area essentially stabilized in the early 2000’s after a 10-year nosedive.
The Main Wheat Production Region
Kazakhstan consists of 14 administrative territories, or oblasts. About 75 percent of the country’s wheat is produced in three oblasts in north-central Kazakhstan: Kostanai, Akmola, and North Kazakhstan. Kostanai alone plants about 4 million hectares of wheat, as much as the entire state of Kansas. Spring wheat occupies 95 percent of the total wheat area in Kazakhstan and virtually all of the wheat in the three north-central oblasts. Minor grains include spring barley and oats (which are grown in the same region as spring wheat), winter wheat (southern Kazakhstan.), and rice (southern Kazakhstan, mostly in Kzyl-Orda oblast).
Decline and Rebound in Wheat Area
After peaking at 19.6 million hectares in 1969, Kazakhstan wheat area began in the mid-1970's to decrease gradually as fields of marginal productivity were taken out of production. In the early 1990’s, following the breakup of the Soviet Union and the loss of massive government subsidies for State and collective farms and livestock enterprises, local agricultural officials began to set productivity thresholds for individual fields. Fields that consistently failed to meet the threshold -- typically 0.6 to 0.7 tons per hectare against a national average of about 0.9 tons per hectare -- were taken out of grain production and converted to permanent pasture. The decline in grain area accelerated in the mid-1990's when shrinking livestock inventories caused feed-grain demand to plummet, leading to a 75-percent drop in barley area between 1993 and 1999. During these six years, total grain area in Kazakhstan contracted at the rate of nearly 2 million hectares per year.
Wheat area started to rebound in 2000 and by 2009 had increased by nearly 70 percent, to 14.7 million hectares, coincident with a steady recovery in State subsidies for agricultural inputs. (Barley area remained fairly stable over the same time, fluctuating between 1.7 to 2.1 million hectares.)
Oilseeds and Cotton
Oilseed area has nearly doubled in the past five years but still accounts for only about 6 percent of the country’s total crop area. The planted area of sunflowerseed, Kazakhstan’s main oilseed crop, has increased from about 450,000 hectares in 2004 to over 700,000 hectares in 2009. Sunflowers are grown mostly in eastern Kazakhstan. Rapeseed area has increased as well, from only 15,000 hectares in 2004 to about 200,000 hectares in 2009. Rape is grown in north-central Kazakhstan. Yields for both crops are consistently low, typically between 0.5 and 0.7 tons per hectare.
Cotton is grown only in South Kazakhstan oblast. Yields are lower than in neighboring Uzbekistan and production is hampered by a deteriorating irrigation infrastructure. (All of the country’s cotton is irrigated.) Planted area doubled between 1997 and 2004, reaching a record level of 216,000 hectares, then contracted nearly as sharply over the following five years. Estimated production for 2009 was the lowest in over ten years.
A Zone of Risky Agriculture
The soils of north-central Kazakhstan are highly variable. Fertile chernozem and kashtan soils lie adjacent to highly salty solonchak soils, which are totally unsuitable for grain production. The flat, open land lends itself to large-scale agriculture. Individual fields frequently measure over 400 hectares (1,000 acres). Precipitation is meager – about 20 inches per year compared to roughly 30 inches in Kansas – and grain fields in this region are not irrigated. Reasonably high yields can be achieved during years of adequate rainfall, but the region is subject to frequent drought and is considered a zone of risky agriculture, similar to Russia's Volga Valley. Historically, Kazakhstan grain production suffers from serious drought two out of every five crop seasons. As a result, yield and production are marked by frequent and sharp year-to-year fluctuations.
Because of the country’s dry climate, the quality of Kazakhstan wheat is relatively high. Class 1 wheat (with protein content no less than 13.5 percent) and class 2 wheat (no less than 12.5 percent) are referred to as silnaya, or strong, and grade 3 (no less than 12.0 percent) as tsenaya, or valuable. All three are considered milling quality. Class 4 (no less than 11.5 percent) and class 5 (below 11.5 percent) are slabaya, or weak, and are used for feed grain or alcohol production. In a year of reasonably favorable weather and average yield, about 75 percent of the wheat crop will likely qualify as milling quality. In general, grain quality tends to be higher in a drought year; quality typically increases as yield decreases. In the drought year of 2004, for example, 90 percent of the wheat qualified as milling grade. Quality is highest in the more southern (and drier) production regions of the main production zone in north-central Kazakhstan. Protein content typically reaches 14 percent in Akmola and southern Kostanai oblasts. Above Petropavlovsk, in the northern tier of North Kazakhstan oblast, protein content seldom exceeds 11 percent.
Prior to the early 1990's, durum wheat comprised roughly 10 percent of total wheat production in Kazakhstan -- nearly 2 million tons in a good year. Declining demand forced a gradual reduction in area during the 1990's. Both demand and sown area for durum have since stabilized, but durum currently represents a small fraction of Kazakhstan wheat output.
Planting and Harvest Dates
Spring grain planting typically begins in mid-May. Of the spring grains, oats are sown first, followed by wheat, then barley. Planting typically is finished by early June. The crops advance through the reproductive stage during mid-July, when temperatures climb to their highest levels and grains are most vulnerable to heat stress. Although barley is planted later than wheat, it is harvested earlier. Grain harvest begins in late August and continues through October. (View crop calendar.)
The dominant crop rotations for fields under conventional tillage systems are essentially unchanged from Soviet times, except that the share of wheat relative to barley and oats has expanded as planting decisions have become increasingly market-driven. The four-crop (or four-field) rotation is the most popular, and typically includes two consecutive years of wheat followed by one year of barley, oats or sometimes an oilseed crop depending on the location. Some enterprises have eliminated barley and oats from the rotation and plant nothing but wheat.
Conventional rotations include a year of clean fallow, during which no crop is planted. The purpose of the fallow year is to preserve soil moisture. Two consecutive years of wheat almost always follow the fallow year, and the first wheat crop enjoys the benefit of increased subsoil moisture. Assuming normal weather, yield drops by 15 to 20 percent for the second wheat crop. The use of clean fallow has decreased by 20 percent over the past five years due to the increasing use of reduced tillage.
One of the most interesting developments in Kazakhstan agricultural in recent years has been the emergence and growth of reduced-tillage technology (described in Kazakhstan as moisture-saving technology). There is no strict definition of what constitutes reduced tillage or minimum tillage, but the term typically implies the elimination of moldboard plowing and an increased reliance on chemical weed control. Under a strict no-tillage system, neither plowing nor secondary tillage is used. According to the Ministry figures, reduced tillage was employed on almost 60 percent of the sown grain area in 2009, including 1.3 million hectares under no-tillage. The Ministry has set a nation-wide goal of up to 80 percent reduced tillage within five years.
Although grain producers indicate that there is no clear yield advantage to either conventional or reduced tillage in a season of normal precipitation, reduced tillage preserves soil moisture and reduces (but certainly does not eliminate) the risk of yield loss in the event of drought. Adoption of a reduced-tillage regime also enables grain producers to eliminate the fallow year from the typical four-year crop rotation and plant a crop every year, which substantially increases the productivity of the field.
Reduced-tillage technology lowers fuel costs by eliminating one or more field operations, but increases herbicide costs because cultivation is replaced with chemical weed control. According to agricultural-enterprise directors, the savings in fuel costs roughly compensate for the increased chemical costs. In order to encourage the increased use of reduced tillage, the Ministry of Agriculture offers a higher direct subsidy for no-tillage wheat than for conventional-tillage wheat, and plans to increase government subsidies for herbicides.
For enterprises with old machinery, the adoption of a reduced-tillage system typically entails the replacement of outdated seeders with newer units designed to accommodate the technology. This machinery upgrade can be prohibitively expensive, especially for small enterprises or family farms. (For more information on reduced tillage, link to trip report.)
Although weather remains the single most important determinant for grain yield in Kazakhstan, improvements in crop management practices fueled by expanding State subsidies have contributed to higher and more stable wheat yields. Beginning around 2002, government support for agriculture has increased significantly in the form of reduced prices for fuel, seed, fertilizer, and agricultural chemicals. The average wheat yield for 2005 through 2009 is 13 percent higher than the average yield of 1986 through 1990, which was the peak of the so-called intensive technology movement in the Soviet Union.
Following a post-Soviet-era plunge, application rates for mineral fertilizer increased nearly six-fold between 1999 and 2007, and continue to increase due in part to the subsidized prices. Arguably the most important technological factor contributing to the improvement in Kazakhstan grain yield is the increase in the use of certified planting seed. The government provides support to agricultural research facilities, paying 40 percent of the research and development costs for breeder and foundation seed. Most enterprises use only first-reproduction seed (similar to certified seed in the U.S.) or higher-quality elite seed. The growth in certified-seed use was rapid: in 2002, only 50 percent of planting seed was certified seed; the remaining 50 percent was "common" seed (seed reserved from the previous year's harvest). By 2004, the use of certified seed had increased to 94 percent, including an increase in the use of elite seed (top-quality certified seed) from 37 to 57 percent.
Data from the State Statistical Agency indicate that inventories of agricultural machinery have declined significantly over the past 20 years. Furthermore, a high portion of Kazakhstan’s current fleet – including 77 percent of its tractors and 59 percent of its grain combines – was over 15 years old at the time of the 2006 agricultural census. The statistics are somewhat misleading, however, because the data certainly include machines that are no longer in use. As is the case in Ukraine and Russia, the overall efficiency of Kazakhstan’s machinery fleet is improving due chiefly to the replacement of aging grain-harvesting combines with new equipment. During field travel in 2009, FAS personnel observed an impressive fleet of both domestic and foreign machinery at nearly every agricultural enterprise that the team visited. In general, enterprise directors expressed satisfaction with the quality and efficiency of domestic tractors but prefer western cultivators, seeders, and combines. The quality gap is especially striking in the case of grain-harvesting combines. For example, farm directors report that one John Deere combine can do the work of four Russian-built units, but the cost is about four times as high.
The Structure of Farm Management
Farms in Kazakhstan are divided into three categories: agricultural enterprises, private (or peasant) farms, and subsidiary household plots. Agricultural enterprises tend to be large-scale operations (similar to the State and collective farms of the Soviet era) and are involved strictly in commercial production of commodities. Agricultural enterprises account for about 65 percent of Kazakhstan grain production. The average size of the 5,000 enterprises that are involved in grain production is about 3,000 hectares, but large-scale operations dominate the grain-production sector. According to the 2006 agricultural census from the State Statistical Agency, 77 percent of the total grain output from agricultural enterprises is produced on enterprises that are larger than 5,000 hectares (about 12,500 acres).
Peasant farms are typically family farms and are substantially smaller than agricultural enterprises. Nearly 200,000 peasant farms produce grain, and they account for about 35 percent of the country's output. According to the 2006 census, 95 percent of the farms are smaller than 1,000 hectares.
Peasant farms, like agriculture enterprises, produce commodities mainly for sale rather than for private consumption. Official data indicate that grain yields on peasant farms are significantly lower than on agricultural enterprises. Agricultural officials and other observers attribute the yield gap in large part to the aging machinery fleet on peasant farms; peasant farms typically cannot afford to lease or purchase new equipment.
Household farms are small personal subsidiary plots (average size 0.15 hectares, or about one half of one acre) that are used to produce crops or livestock chiefly for personal consumption. Kazakhstan's 3 million household farms produce less than 1 percent of Kazakhstan grain but account for 50 percent of the country’s poultry inventory and 85 percent of the cattle.
Agro-holding companies play a large role in Kazakhstan agriculture. An agro-holding company typically operates as an umbrella company for numerous individual agricultural enterprises, providing operating capital and marketing channels for commodities produced on the farms. In Kostanai, the top grain-producing oblast in Kazakhstan, over 40 percent of the agricultural area is held by the four largest holding companies. (The largest holding company controls 900,000 hectares in Kostanai – 20 percent of the total sown area in the oblast – and owns 70 percent of the grain elevators.) In North Kazakhstan oblast, about 20 agro-holding companies control 80 percent of the sown area. The government owns all agricultural land, and farmland is leased to holding companies, agricultural enterprises, and peasant farmers under 49-year leases.
According to the Ministry of Agriculture, there are currently 5 million hectares of idle land in Kazakhstan, but only 2 million are suitable for crop production. Idle land is arable land that has remained unplanted for at least several years. A significant amount of arable land was essentially abandoned following the breakup of the Soviet Union in 1991, including land that was only marginally productive and which specialists agree never should have been used for crop production. (Clean fallow is not considered idle land because it remains a regular part of the crop rotation.)
Idle-land recovery efforts are most active in Kostanai. In 2008, about 250,000 hectares of idle land were recovered, and the average recovery rate is 150,000 hectares per year. Agricultural enterprises in Kostanai have recovered a total of 1.0 million hectares to date, and officials expect that an additional 0.3 to 0.4 million will eventually be recovered. Land is being recovered in Akmola oblast as well, but there is a relatively small amount of idle land in North Kazakhstan oblast.
Recovery costs are low, unlike in central Ukraine or central Russia where the recovery of idle land can be prohibitively expensive. The main direct expense is the cost of treatment with a non -selective herbicide to kill the existing vegetation. Producers indicate that most fields are able to produce an average yield within two years.
Strategy to Boost Grain Production
The Ministry of Agriculture has developed a strategy for increasing crop production in Kazakhstan. The plan focuses chiefly on boosting yield rather than expanding area.
Proposed measures include:
- A technology-driven increase in yield through continued government subsidies for fertilizer, herbicides and pesticides, and high-quality seed.
- An increase in the use of reduced tillage, which would enable grain producers in arid regions to diminish the risk of drought and reduce the amount of fallow.
- The introduction of more oilseed crops into the rotation: chiefly sunflowers in the drier areas and rape in the northern, less arid regions.
- An increase in pulse area to improve soil fertility. Since pulses are a legume crop, they have the ability to fix nitrogen which makes them a good predecessor for other crops.
- An expansion of sown area through the recovery of potentially productive but currently idle land. This would increase total sown area by as much as 10 percent.
Some measures, such as the use of reduced tillage and the recovery of idle land, offer clear economic benefits and are already being adopted by agricultural enterprises. Others, like the suggested increase in pulse production, have been less widely embraced. Profitability determines crop selection and wheat remains the overwhelming favorite.
Current USDA area and production estimates for grains and other agricultural commodities are available on IPAD’s Agricultural Production page, or at PSD Online.
The valuable contribution of Zhamal Zharmagambetova, agricultural specialist for the USDA Foreign Agricultural Service in Astana, Kazakhstan, is gratefully acknowledged.