Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
95
harvesting losses, the machinery deficit raises land preparation and harvesting costs,
which are 55 percent higher in Kyrgyz Republic than in Kazakhstan.149
Substantial post-harvest losses result from the limited availability or absence of storage
facilities. The country’s 2,043 warehouses have a capacity of 350,400 square meters, but
71 percent of this capacity is in the capital city (Bishkek), and another 9 percent is in Osh
City.150 Worse, the facilities are outdated, making potential users reluctant to store
produce there. Rising and more competitive wheat production in Russia and Kazakhstan
will keep wheat prices low into the foreseeable future. If domestic wheat production is to
compete with imported wheat, farmers’ poor access to inputs, agricultural machinery, and
adequate storage facilities must be addressed.
POTATOES
Potatoes are the country’s second most important staple food crop and an export crop as
well. Smallholders account for 99 percent of potato production (1.4 million tons annually
on about 82,000 hectares, equivalent to 7 percent of arable land). Seventy-five percent of
production comes from the northern region. Around 500,000 tons of potatoes are
consumed domestically, and remaining volumes are exported. Kazakhstan is the largest
importer of the crop, which is also exported to Uzbekistan, Tajikistan, and Russia. Annual
export earnings from potatoes are about US$ 18.5 million (2011).
Potato yields are relatively good, although productivity would improve if more farmers
could use better seed and fertilizer, plant and harvest the crop on time, and improve post-
harvest handling. At present, as much as 15 percent of the potential yield is lost in the field
because labor and machinery are not available when needed during the growing season.
After 90–120 days of storage in outdated warehouses that lack refrigeration and suffer
from frequent power cuts, around 20 percent of the initial weight of potatoes is lost.151 For
that reason, farmers tend to sell potatoes during the harvest season.
Potatoes are sold primarily to large traders (85 percent). Direct sales to consumers and
agribusiness (3 percent) are limited. Supply chains with local supermarkets have not yet
developed, although Kazakh and Russian supermarkets have expressed increasing interest
in sourcing potatoes directly from farmers.152 The considerable time and high cost of
introducing new technology and reliably collecting, storing, and transporting a sufficient
supply of potatoes of the right types and quality make it challenging to conclude such
arrangements, however.
A major issue for potato marketing is transport, which is costly and time-consuming owing
to customs valuation issues, bureaucratic barriers at border crossings, and corruption. For
example, customs inspection regulations in the Kyrgyz Republic and neighboring
149 FAO and WFP (2010).
150 World Bank (2011b).
151 USAID (2011).
152 Authors’ personal communication with Agribusiness Competitiveness Center and AgroLead.