International food prices, agricultural transformation, and food security in Central Asia

Abstract

This study addresses the impact of global food prices on domestic food prices, the short-term policy responses taken by national governments, and major constraints on long-term food security in Central Asia. A surge in domestic food-price inflation in Central Asian countries was almost perfectly simultaneous with the spike in international food prices. Food-price inflation was spurred in part by adverse weather conditions in 2007, and exacerbated by the decision of the government of Kazakhstan to temporarily impose export tariffs and suspend wheat exports. The transformation of the region's agriculture since 1991 has changed the structure of agricultural production and led to reallocation of more land to food crops, improving food security in the region, and mitigating the negative consequences of rising international food prices. The article argues that the further improvement of food security in the region requires concerted efforts from governments to remove constraints on agricultural productivity.

Prix internationaux des produits alimentaires, transformation agricole et sécurité alimentaire en Asie centrale

Cette étude traite de l'impact des prix alimentaires mondiaux sur les prix alimentaires nationaux, des ripostes de politique générale à court terme adoptées par les gouvernements nationaux et des importantes contraintes sur la sécurité alimentaire à long terme en Asie centrale. Une forte hausse de l'inflation des prix alimentaires nationaux dans les pays d'Asie centrale a été presque parfaitement simultanée avec la flambée des prix internationaux des produits alimentaires. L'inflation des prix alimentaires a été en partie favorisée par des conditions météorologiques négatives en 2007 et exacerbée par la décision du gouvernement du Kazakhstan d'imposer temporairement des tarifs douaniers à l'exportation et de suspendre les exportations de blé. La transformation de l'agriculture de la région depuis 1991 a modifié la structure de la production agricole et abouti à la réassignation d'une quantité accrue de terres aux cultures alimentaires, ce qui a amélioré la sécurité alimentaire dans la région et atténué les conséquences négatives des prix internationaux croissants des prix alimentaires. L'article soutient qu'une amélioration supplémentaire de la sécurité alimentaire dans la région requerra des effets concertés de la part des gouvernements pour éliminer les contraintes s'exerçant sur la productivité agricole.

Preços dos alimentos internacionais, transformação agrícola e segurança alimentar na Ásia Central

Este estudo aborda o impacto dos preços dos alimentos globais sobre os preços dos alimentos domésticos, as respostas de políticas de curto prazo realizadas por governos nacionais e principais limitações na segurança alimentar de longo prazo na Ásia Central. O surgimento de inflação nos preços dos alimentos domésticos em países da Ásia Central foram quase simultâneos com o aumento nos preços dos alimentos internacionais. A inflação do preço dos alimentos foi estimulada em parte pelas condições climáticas adversas em 2007 e agravada pela decisão do governo de Kazakhstan de impor temporariamente tarifas de exportação e suspender as exportações de trigo. A transformação da agricultura da região desde 1991 tem alterado a estrutura da produção agrícola e levado à realocação de mais terra a cultivos de alimentos, melhorando a segurança alimentar na região e amenizando as consequências negativas dos aumentos de preços de alimentos internacionais. O artigo argumenta que avanços na melhoria da segurança alimentar na região requerem esforços coordenados de governos para remover as limitações da produtividade agrícola.

El precio mundial de los alimentos, la transformación agrícola y la seguridad alimentaria en Asia Central

Este ensayo analiza la repercusión del precio mundial de los alimentos en el precio de los alimentos nacionales, las políticas públicas de corto plazo impulsadas por los gobiernos y los principales obstáculos para la seguridad alimenticia a largo plazo en Asia Central. El repentino aumento de la inflación en el precio de los alimentos en los países de Asia Central coincidió casi simultáneamente con el brusco aumento en el precio internacional de los alimentos. El clima adverso de 2007 desencadenó en parte la inflación en el precio de los alimentos y ésta repuntó cuando el gobierno de Kazakstán decretó aranceles de exportación provisionales y suspendió la exportación de trigo. La transformación del sector agrícola impulsada en la región desde 1991 ha cambiado la estructura de la producción agrícola dado que se destinaron extensiones de tierra mayores a la siembra de alimentos comestibles, mejoró la seguridad alimenticia y disminuyeron las consecuencias adversas del alza en el precio mundial de los alimentos. El ensayo sostiene que para lograr más avances en cuanto a la seguridad alimenticia de la región, los gobiernos tendrán que impulsar acciones concertadas para eliminar las actuales limitaciones a la productividad agrícola.

Keywords:

• Globalisation
• Governance and public policy
• Central and Eastern Europe and the CIS

Notes

Source: National Statistical Committees and IMF's Primary Commodity Prices database

Source: FAOSTAT

Source: FAOSTAT

Central Asia includes five countries: Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. This article covers only four, excluding Turkmenistan due to the lack of reliable statistical data.

Some question the accuracy of official statistics in Uzbekistan. Thus, to some extent, the modest impact of the spike in global food prices on Uzbekistan's domestic inflation could be a statistical artifact.

Theoretically, the net impact of export restrictions on economic welfare will be a function of demand and supply characteristics, which is an empirical question. It is true that, to a certain extent, increased food prices may benefit agricultural producers and increase their profits in the short run. However, since export restrictions on wheat and other food items are on balance distortions, the decline in consumer welfare is more likely to be greater than the increase in producer welfare (Mitra and Josling 2009).

There are no thorough analyses of the impact of administrative price controls on food security in Uzbekistan. However, anecdotal evidences suggest that they have had mixed distributional consequences.

These are plots near houses which continued to be used privately during collectivisation. The size of these plots increased in the early 1990s.

Each year, beginning with 1997, the World Bank assessed the dynamics of agrarian reforms in the transition countries of Eastern Europe and the former Soviet Union by assigning scores in five areas of agricultural reform: prices and markets, land reform, agro-food processing and input supply, rural finance, and institutions. These scores range from 1 (a centrally planned economy) to 10 (a market economy) (Csaki et al. 2006).

Although price and market distortions to cotton and wheat producers remain, the magnitudes of the distortions have declined considerably since 2001.

Indeed, the evidence suggests that as farms become larger, the cost of monitoring and enforcing labour contracts increases, eventually offsetting the gains from economies of scale (Lerman et al. 2004). Thus, the individualisation of agriculture might have effectively solved the agency problems of collective agriculture and freed previously depressed private incentives, which, in turn, may have stimulated agricultural production.

Additional information

Notes on contributors

Kamiljon T. Akramov

Kamiljon T. Akramov is a research fellow at the International Food Policy Research Institute, where he studies the determinants of aid to agriculture, decentralisation, and efficiency of service delivery in transition and developing countries. Previously he was a consultant to the Asian Development Bank on governance and regional cooperation, and Director of the Monetary Policy Research Center at the Central Bank of Uzbekistan.