Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
94
Smallholders’ participation in the main crop markets
WHEAT
Wheat is a major staple in Kyrgyz Republic. The crop is not profitable—it is grown purely
for food security on 28 percent of arable land (325,000 hectares), largely (96 percent) by
smallholder farmers.145 The quality of local wheat is low, because soils are unsuitable for
growing the harder wheat varieties with higher gluten content that are favored for
processing. Locally produced wheat meets 70 percent of domestic demand; the remainder
is met by wheat imported from Kazakhstan and Russia. In 2009, in response to food price
increases and wheat export bans in Russia and Kazakhstan, local wheat production
increased sharply from the annual average of 0.7 million tons to 1.1 million tons. Starting
from 2010, as wheat prices fell, wheat production returned to its pre-2009 level.
The 2008 food crisis prompted steps by the government to address food insecurity,
including price and trade interventions. The government set a price ceiling for major
staple foods such as wheat, wheat flour, potatoes, sunflower seed, and sunflower oil;
limited the profit margins of output traders; restricted fuel prices; and adopted new
regulations on food imports and exports. These interventions were on a small scale and
did not seriously affect wheat prices and production. The government is now considering
closing the agency mandated to implement the interventions.
Farm households use approximately 40 percent of wheat production for food and seed;
the remainder is marketed domestically. Due to limited storage capacity throughout the
country, wheat is sold during the harvest season to traders, who transport it to larger
markets for immediate resale or sale during the winter, when traders can command
premium prices, and to processors. The limited number of local wheat mills use outdated,
semi-mechanized equipment. High processing losses, in addition to high transportation
and processing costs, result in high prices for locally produced wheat flour.146
Low productivity and high production costs are major issues for wheat. Yields—declining
since 2007—dropped to 1.7 tons per hectare in 2012. Wheat productivity is low for
several reasons. Farmers use little fertilizer or quality seed; in the 2010 winter wheat
crop, for instance, actual seed use was only 64 percent, and the average fertilizer
application was 78 kilograms per hectare.147 High prices and costly and inefficient
distribution channels for fertilizer explain its low use.148 Agricultural equipment is in poor
condition and, because of severe shortages, frequently unavailable at the right time for
crop operations. Kyrgyz Republic has the lowest level of agricultural mechanization in
ECA; the machinery shortage in 2009 was 45 percent for combine harvesters and 30
percent for seeders. Limited access to agricultural machinery leads to suboptimal land
preparation, seeding, and harvesting, and is estimated to cause losses that are 15–25
percent higher than normal losses of 12 percent. Aside from leading to production and
145 IFDC (2003).
146 IFDC (2003).
147 FAO and WFP (2010).
148 FAO and WFP (2010).