Abstract
This study analyses the effect of Kazakhstan’s 2003–2005 agricultural land reform on land rental and credit market participation. Although the reform declared an intention to facilitate efficient land allocation, we observe a major land concentration. We analyze whether new land relations stimulated land sales and rental markets and made credit more accessible. Utilizing data from two independent surveys before and after private land ownership was introduced, we demonstrate that the reform did not affect the land sales market but reorganized the land-rental market in a top-down fashion with the state remaining the principal landlord. The reform did not achieve the goal of providing access to land for the more skilled producers and did little to facilitate the use of owned land as collateral. The reform achievements are modest and bolder steps will be necessary to improve the functioning of Kazakhstan’s agricultural land markets.
Highlights
The literature has extensively considered agricultural land markets as mechanisms creating opportunities for land transfers from less to more productive farms (de Janvry, Platteau, Gordillo, & Sadoulet, 2001; Deininger, 2003; Deininger & Feder, 2001)
This may partially reflect the ultimatum that the government set to the land share holders as some of them have converted their shares into rented land establishing individual farms and some established new LLPs pooling everyone’s shares together
We see that cultivation of owned land increased but only 1.4% of all agricultural land was owned privately as of 2019 (Ministry of Agriculture of Kazakhstan (2020))
Summary
The literature has extensively considered agricultural land markets as mechanisms creating opportunities for land transfers from less to more productive farms (de Janvry, Platteau, Gordillo, & Sadoulet, 2001; Deininger, 2003; Deininger & Feder, 2001). Aggregate productivity improvements and rural economy diversification associated with better access to land can substantially reduce poverty rates (Sadoulet, Murgai, & Janvry, 2001). These arguments played a major role when the successor countries of the Soviet Union engaged in the restructuring of agriculture a quarter of a century ago. Russia, Ukraine, and Kazakhstan all legally recognized private ownership of land but high transaction costs and legal uncertainties in land purchases along
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