Agricultural Restructuring and Trends in Rural Inequalities in Central Asia: A Socio-Statistical Survey

The agricultural and rural sector is of fundamental importance in the former Soviet Central Asian states. It is not only a crucial sector to the states’ national economies, but is also important in providing employment, basic livelihood and social security. Deterioration of this sector and its social fabric can undermine civil society development, lead to social instability and endanger sustainable economic development. However, the sector has received little attention and is rarely seen as an indispensable part of societal transformation. In this paper, Max Spoor analyses agricultural reform and sector restructuring explicitly in relation to inequality and the role of civil society, based on statistical material and the author’s fieldwork data.

To understand the differences and similarities in (agricultural) reform paths within Central Asia, the paper first describes the initial conditions. On the eve of their independence, Central Asian countries were characterized by a low level of industrialization, high population density, a predominantly rural population and a higher degree of poverty than elsewhere in the former Soviet Union. On the positive side, important social improvements had been realized under Soviet rule. The development of a rural social infrastructure not only eradicated rural illiteracy and introduced health care, but also provided rural dwellers (especially women) with salaried jobs.

The economic policy of the Soviet regime in Central Asia, like the tsarist regime before it, concentrated on primary sector resource extraction (natural resources and agriculture). In agriculture, this meant forced monoculture cotton expansion (especially in Tajikistan, Turkmenistan and Uzbekistan) to supply the centre. The subsidies from Moscow stopped after independence. However, because national elites still depended heavily on natural resource extraction (for example, agriculture and hydrocarbons), they have been reluctant to implement drastic reform, which could weaken their control. It is no coincidence that Kyrgyzstan, the country least endowed with natural resources, has been most reform oriented.

Overall, agrarian transformation in post-Soviet Central Asia has been more gradual than in Central and Eastern Europe and indeed most of the former Soviet Union. Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan have implemented various reform strategies with regard to agriculture, mainly determined by different initial conditions and the availability of natural resources. Land tenure systems have changed during the transition: most radically in Kazakhstan and Kyrgyzstan, through privatization and the breaking up of the old state and collective farms; in Turkmenistan and Uzbekistan through leasing land, leaving the large-scale enterprises in existence; and in Tajikistan land reform only took off after the end of the civil war in 1997, but advanced more quickly than in Turkmenistan and Uzbekistan. Individualization of production has increased throughout the region, whether through peasant farms (as in Kazakhstan and Kyrgyzstan) or the expansion of household plots owned by the workers at the (former) collective farms (as in Turkmenistan and Uzbekistan).

There is no simple correlation between the speed of land reform and the performance of the agricultural sector. Land reform and private farm formation can only stimulate private initiative and output when combined with a transformation of the state order system. In Turkmenistan and Uzbekistan, private farm performance is hampered by obligatory deliveries to the state and centralized input channels. On the other hand, a rapid (and often chaotic) liberalization of (input) markets, without the emergence of competitive marketing systems and necessary institutions—as in Kazakhstan and Kyrgyzstan—initially led to collapse of the markets.

Inequality has risen dramatically in the Central Asian states, and poverty rates are high. Poverty has increased particularly in rural areas (and most of all among women, many of whom lost their jobs in the decline of rural social infrastructure). This is related to the disarticulation of the previously existing social fabric in rural areas and the virtual absence of new institutions (such as civil society organizations and microfinance systems). Kazakhstan and Kyrgyzstan, the reformist countries, although demonstrating active emergence of new civil society organizations, have the most problems in this respect. In these two countries, the break-up of collective farms resulted in the break-up of the social services they provided. The slow or non-reformist countries (Turkmenistan and Uzbekistan) have safeguarded some of this social fabric, but they see civil society development more as a threat than a necessity for rural recovery and development. Civil society in these countries is most likely to evolve from organizations that were either part of the state or connected to it.

With respect to the future transition and development agenda, the rural sector should become a priority, instead of the stepchild, of reform. Furthermore, reform should not be guided by efficiency alone, but also take equity into account. Institution building is important (for example, microcredit systems) and, whenever possible, collective structures should be transformed into service cooperatives rather than destroyed. Finally, new civil society organizations are urgently needed to build a market economy, and this requires a more open policy from governments.