Technical Efficiency of Wheat Production in Central Asia: Empirical Evidence From Kazakhstan

Abstract

Kazakhstan is the main supplier of wheat to Central Asian countries and plays a vital role in regional food security. The war between two major global wheat-exporting countries—Russia and Ukraine—resulted in a further increase in the role of Kazakh wheat in the region. Existing literature suggests that the wheat yields in Kazakhstan are still relatively low and point to significant unrealized production potential, through higher production efficiency. In light of this, the government of Kazakhstan has been heavily supporting the agricultural sector through various government programs, with the aim of improving efficiency and boosting agricultural production. However, the effects of these government programs on farms’ production efficiency are not researched yet. Furthermore, there is a lack of empirical research that studies farm efficiency in the context of Central Asian countries, in general. The current study aims to fill this gap in the literature by analyzing the technical efficiency of wheat-producing farms in the case of Kazakhstan. The results of this study reveal a decreasing return to scale and a negative association between farm size and efficiency. A negative relation was also observed between subsidies and farm efficiency, which put current government initiatives under question. On the other hand, the use of bank loans and agricultural insurance, as well as farmers’ education, seems to enhance farm efficiency.