Kazakhstan's unharvested grain potential

Poor technology and frequent droughts hamper the development of the country's grain economy.

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    Kazakhstan is perhaps better known for its energy reserves and metals than its agriculture. But the Central Asian economy is in the top-ten league of grain producers.

    Visitors to Kostanay in northern Kazakhstan soon learn about the importance the president attaches to the region's role in his country's wheat production.

    Just a few hundred metres along the airport road, a giant billboard features the country's septuagenarian leader Nursultan Nazarbayev standing triumphantly in a golden wheat field.

    The sign reads: "Kazakhstan must become an even greater agricultural nation. We have the potential and resources."

    The potential is real. Millions of hectares of farmland stretch from here to the Russian border.

    Land that was once steppe, violently transformed under the Soviet Virgin Lands policy into arable, now produces on average around 17 million tonnes of grain annually.

    But the grain economy is a troubled one. While last year saw a bumper harvest of 26.9m tonnes, the extreme continental climate means droughts are frequent. 2010's harvest saw wheat yields of just 12.2m tonnes. This year's is expected to be similar.

    Kazakhstan's wheat farms could be more productive with better technology, such as reduced tillage, which is the practice of regrowing on stubble to improve water retention.

    But they will always face a major geographic hurdle: Kazakhstan is the largest landlocked country in the world. Transportation costs to an ocean port make Kazakh wheat less competitive.

    A 2010 study found that together with Russia and Ukraine, Kazakhstan has the potential to boost production to meet half of the world's grain export needs.

    That will require substantial investment, and the country is already spending billions of Tenge propping up its agro-economy in the form of subsidies and price controls.

    Meanwhile, the mixed fortunes of Eastern European and Central Asian harvests continue to contribute to sharp rises in international wheat prices.

    That is hurting impoverished families across Kazakhstan's borders in countries like Afghanistan, Kyrgyzstan, Uzbekistan and Tajikistan.


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