The status and challenges of food security in Central Asia by United Nations Development Programme

THE STATUS AND CHALLENGES OF FOOD SECURITY IN CENTRAL ASIA Food and Agriculture Organization Regional Office for Europe and Central Asia

This paper provides an overview of the current food security situation in the Central Asia in the context of the overall trend towards higher food prices. It was prepared by David Sedik, Guljahan Kurbanova and Gabor Szentpali, as background material for the third Central Asia Regional Risk Assessment (CARRA) Meeting in Astana, Kazakhstan, 14-15 April 2011. The views presented in this paper are those of the Authors and do not necessarily reflect the views and position of the FAO Regional Office for Europe and Central Asia.

Budapest, April 2011

Table of contents THE STATUS AND CHALLENGES OF FOOD SECURITY IN CENTRAL ASIA..........................................................................1 Table of contents ................................................................................................................................................1 Acronyms ............................................................................................................................................................3 Abstract ..............................................................................................................................................................4 Introduction........................................................................................................................................................4 Overall macroeconomic situation in CA countries .............................................................................................5 Kazakhstan......................................................................................................................................................6 Kyrgyzstan ......................................................................................................................................................6 Tajikistan ........................................................................................................................................................6 Turkmenistan..................................................................................................................................................6 Uzbekistan ......................................................................................................................................................6 The Status of Food Security in Central Asia .......................................................................................................7 Transitory Food Security ................................................................................................................................ 7 Chronic Food Insecurity in Central Asia .......................................................................................................78 Food Accessibility and Poverty .......................................................................................................................9 Food price volatility ........................................................................................................................................9 Food Availability based on cereal production ..................................................................................................10 Cereal Production in the Central Asian Importing Countries .......................................................................10 Food Consumption .......................................................................................................................................13 Import Requirements ...............................................................................................................................1415 Wheat production and export opportunities in the CIS -3 ..............................................................................15 Export opportunities for the main players in the Region.................................................................................16 Policy responses in CA and neighbouring countries ........................................................................................17 Main food security risks in CA countries ..........................................................................................................19 Recommendations and follow up actions ........................................................................................................21 Follow up actions on further cooperation ...................................................................................................2122 References ........................................................................................................................................................24 Annexes ............................................................................................................................................................25

Acronyms ADB

Asian Development Bank

Central Asia

CIMMYT Centro Internacional de Mejoramiento de MaĂz y Trigo (Spanish: International Maize and Wheat Improvement Center; Mexico CIS

Commonwealth of Independent States

EDB

East Asian Development Bank

ECA

Eastern and Central Europe

EBRD

European Bank of

EFSA

Emergency Food Security Assessment

EURASIANET

EurasiaNet Information Agency

FDI

Foreign Direct Investment

FSU

Former Soviet Union

GDP

Gross Domestic Product

GIEWS

Global Information and Early Warning System

GNI

Gross National Income

ICAC

International Cotton Advisory Committee

ICARDA

International Center for Agricultural Research in the Dry Areas

IDPs

Internally Displaced People

IMF

International Monetary Found

JICA

Japan International Cooperation Agency

LIFDCs

Low income food deficit countries

NCHS

National Center for Health Statistics

MDG

Millennium Development Goals

NTBs

Non-tariff barriers to trade

UNDP

United Nations Development Programme

UNEP

United Nations Environment Program

UNICEF

United Nations Children's Fund

USAID

United States Agency for International Development

USDA

United States Department of Agriculture

OPEC

Organization of the Petroleum Exporting Countries

TICA

Turkish International Cooperation Agency

WHO

World Health Organization

WFP

World Food Programme

WTO

World Trade Organization 3

Abstract Since 2007 several shocks have made food security in Central Asia (CA) more fragile. First, there was a food price crisis, which was followed by the global economic crisis; there have also been natural disasters and social conflicts. These things together mean we need to pay more attention to reviewing the current food security trends in the sub region. There are also growing concerns surrounding increasing market volatility, which has been reinforced since July 2010 when cereal prices – particularly wheat and maize – increased due to drought and wild fires in Russia, extremely high temperatures in Ukraine and Kazakhstan, and excess rain in Canada and the United States. The global situation has been complicated by floods in Australia and low levels of precipitation in China and CA since autumn 2010. These events, along with weather fluctuations, climate change and “human-induced” threats to food supply and access emphasise that food security is not always certain. The consequences of the food crisis, macroeconomic instability, climate conditions and uncoordinated policy responses, as well as continuing fears over national, regional and global food market turmoil require urgent cooperation and coordination between UN agencies and other international organizations. This should help to mitigate risks and assist the countries of CA. This paper reviews food security issues in CA countries in the context of production, trade, and consumption of food and agricultural products that impact food prices and that are reflected in global trends. We view these factors against the backdrop of the persistent impact of environmental aspects, weather conditions and country specifics.

Introduction In July-August 2010 speculation about a possible food crisis in Central Asia began to appear in the press. These fears escalated due to an expected global decline in cereal production in the main countries that export to Central Asian countries and UNDP and Euraisanet (Ben Slay, David Trilling)1 also expressed warnings on this issue. The Economic Research Service of the United States Department of Agriculture (USDA), the Food and Agriculture Organization (FAO) and the International Grains Council have argued that the situation is not so complicated.2 These conjectures were partly a reaction to the expected decline in grain harvests in Russia (-38 percent), Kazakhstan (-40 percent), and Ukraine (-14.4 percent). The FAO food price index increased from 185 in August 2010 to 236 in February 20113, partly as a result of these lower harvest figures in the CIS countries. The main concern surrounding food security in Central Asian countries is based on the understanding that Kyrgyzstan, Tajikistan, and Uzbekistan face relatively high levels of poverty, and all five of the countries are vulnerable to earthquakes, floods, land degradation, scarcity of water, and as a consequence of these, low agricultural productivity. FAO blames the current increased volatility of world commodity prices primarily on volatility among suppliers’ prices. This volatility is caused firstly, by extreme weather events and a dependence on new exporting zones. Secondly, over the past 30 years there has been a decreased reliance on national stockholding and more emphasis has been put on international trade. Trends since August 2010 show that ad hoc barriers to trade may cause such uncertainty in the market that traders bid up prices. The implication of these trends requires that we focus on more efficient monitoring, mitigation and 1

Slay, B. 2010. Tajikistan, Kyrgyzstan face food crises. Central Asia; Trilling, D. 2010. Food Crisis Next Challenge for Kyrgyzstan? 2 International Food Policy Research Institute. September 2010, www.ifpri.org 3 FAO. Global Information and Early Warning System (GIEWS). Price Bulletin. December 2010.

prevention of disasters and shocks. In view of these factors, this paper seeks to assess how food insecurity manifests itself in Central Asian countries in two senses; namely, transitory food insecurity and chronic food insecurity. Considering both types of food insecurity requires a comprehensive approach which takes into account overall macroeconomic conditions.

Overall macroeconomic situation in CA countries The overall macroeconomic situation in CA countries has significantly improved since 2000. Even the global financial crises have not greatly affected these countries. However, economic growth and improved economic stability have not contributed to a great extent to improving people’s quality of life, food security and nutrition. Four countries in the region still qualify as low income and food deficit countries (LIFDCs) due to the structure of their economies and income distribution. This emphasizes once more that poverty remains a major cause of food insecurity in Central Asia. TABLE 1: GDP GROWTH IN CA COUNTRIES, 2006-2011

2006 Kazakhstan Kyrgyz Republic Tajikistan Turkmenistan Uzbekistan

10.7 3.1 7 11.4 7.5

2007

2008

8.9 8.5 7.8 11.6 9.5

3.2 8.4 7.9 10.5 9

2009 1.2 2.3 3.4 6.1 8.1

Estimation 2010 5.4 -3.5 5.5 9.4 8

Projection 2011 5.1 7.1 5 11.5 7

Source: IMF, World Economic Outlook, October 2010

Food security and nutrition depend on the agricultural sector’s ability to supply products, as well as on employment and income levels. The agricultural output in this group of countries has steadily increased since 2000. Poor development, monocultural production and the misuse of land and water during the Soviet years have resulted in low productivity in the sector, as well as in weak infrastructure, logistics and marketing systems. The five Central Asian countries occupy an enormous area of which 15 percent represents arable land and 70 percent of is cultivated. Almost one quarter of the arable land is irrigated. The total area of grazing land is about 200 million hectares.4 Physical features and climatic conditions include varying average annual temperatures, scarce and unstable precipitation and significant evaporation (continental climate). Summers are typically hot and dry, and winters are mild with little snow, although some years see heavy snowfall over a short space of time. Hot and dry winds and sand storms are typical in valleys. The landscape is of a mix of mountains, deserts and steppes. The following types of agro zone are present in Central Asia: •

Irrigated lowlands

•

Lowland semi-arid natural pastures

•

Dry lowlands

•

Highlands (including pasture and valley croplands)

•

Deserts

The agricultural sector and food trade is characterized in each country as follows: 4

Asymbekov, E. Cooperation in the Central Asian agriculture: current state and outlooks. Kyrgyz Research Institute

Kazakhstan Agriculture contributed 4.99 percent of GDP in 2009 and agriculture provided 14.2 percent of employment in the same year. The value of food exports increased to USD 2.76 million in 2008. The value of food imports increased to USD 2.24 million in 2008. Between 2005 and 2008, imports increased by 32.6%. The main agricultural imports are: centrifugal raw sugar, barley, chicken meat, sunflower oil, pastry, barley, refined sugar, non-alcoholic beverages and apples. The main agricultural exports are: wheat, wheat flour, barley, wheat bran, watermelons, sunflower cake, cotton lint, dry onions, rapeseed and malt.

Kyrgyzstan Agriculture contributed 29 percent of GDP in 2009 and 22 percent of the labour force was employed in agriculture in the same year. The value of food exports increased to USD 158 million in 2008. The value of food imports increased to USD 435 million in 2008. Imports of food decreased to 10.69 percent of total imports in 2008. The main agricultural imports are: wheat, wheat flour, refined sugar, non-alcoholic beverages and chicken meat. The main agricultural exports are: grapes, beans, animal hides, beef products, cotton lint and apricots.

Tajikistan Agriculture contributed 24 percent to GDP in 2009 and 30 percent of the labour force was employed in agriculture in the same year. The value of food exports increased to USD 101 million in 2008. The average growth rate of exports was 18.7 percent between 2005 and 2008. Imports of food increased to 7.15 percent of all imports in 2008. At the same time the value of food imports increased to USD 341 million in 2008. On average growth rates increased to 9.4 percent for 20052008. Imports of food decreased to 10.43 percent of all imports in 2008. The main agricultural imports are: wheat flour, wheat, refined sugar and potatoes. The main agricultural exports are: cotton lint, tomatoes, onions, dried fruit and fruit juice.

Turkmenistan Agriculture contributed 20 percent to GDP in 2009, which was a decrease. In 2009, 33 percent of the labour force worked in agriculture. The value of food exports increased to USD 8 million in 2008. In the period 2005-2008 exports grew an average of 4.2 percent. The value of food imports increased to USD 288 million in 2008. In the period 2005-2008 imports grew by an average of 38.4 percent. The main agricultural imports are: wheat, wheat flour, chocolate, margarine, centrifugal raw sugar, confectionery sugar, chicken meat, barley and pastry. The main agricultural exports are: cotton lint, cotton seed, cotton linter, cotton waste, cottonseed oil, degreased wool, sheep skins with wool, apples, cucumbers and gherkins, and distilled alcoholic beverages.

Uzbekistan Agriculture contributed approximately 28 percent to GDP in 2009 and 31 percent of the labour force is estimated to work in agriculture. The value of food exports increased to USD 239 million in 2008. The share of food exports in total merchandise exports decreased by 2.06 percent in 2008. The value of food imports increased to USD 703 million in 2008. Imports grew an average of 28 percent between 2005 and 2008. Imports of food decreased to 9.36 percent of all imports in 2008. The main agricultural imports are: wheat flour, wheat, refined sugar, bran of wheat and malt. The main agricultural exports are: cotton lint, grapes, cake of cottonseed, fresh fruit and cotton linter. In CA the share of dietary energy supplied by cereals appears to have remained relatively stable at 50 percent and so food security is dependent largely on cereal production, mainly wheat. 6

The Status of Food Security in Central Asia FAO defines two types of food insecurity; classified according to duration and causes; these are: •

Chronic insecurity

•

Transitory insecurity

Transitory food insecurity can be seasonal (cyclical) and temporary. Temporary transitory food insecurity results from short-term shocks and sharp fluctuations in food supply or access to food. It continues for a short time because the shortage of food is only temporary. Both types of transitory food insecurity require preparedness and risk mitigation. Both types of food insecurity are measured by dietary energy intake from staple food. Cereals make up about 50 percent of staple foods, although this differs from country to country and among populations within the countries. Food is mostly easily available even in Tajikistan. Rather, the main problem is more the quality of people’s diets, their purchasing power distribution, and access to food for all the groups within the populations.

Transitory Food Security Transitory food insecurity appears from time to time in CA countries as a result of natural events, economic shocks and market fluctuation. In 2007, a harsh winter and insignificant stocks in Tajikistan and Kyrgyzstan led to the deterioration of the food security situation in the countries. The global financial crisis affected Tajikistan, Kyrgyzstan, and Uzbekistan in 2009 due to declining remittances and rising unemployment in Russia and Kazakhstan. In January 2010 localized earthquakes and floods in Tajikistan affected remote populations who used up all their seeds as food. Finally, in Kyrgyzstan, social unrest in April 2010 and ethnic conflicts in the southern part of the country hurt vulnerable groups, IDPs and damaged the overall macroeconomic situation by slowing down economic growth and increasing unemployment. BOX1: UNDERNOURISHMENT AND FOOD SECURITY SITUATION IN CA COUNTRIES

Kazakhstan. In the period 1990-1992 less than five percent of the population was undernourished (less than a million). The corresponding figures for 2005-2007 were the same. Kyrgyzstan. In the period 1990-1992 about 17 percent of the population was undernourished (800,000 people). The corresponding figures for 2005-2007 were 10 percent or 600,000 people. Tajikistan. In the period 1990-1992 around 34 percent of people were undernourished (1.8 million people). The corresponding figures for 2005-2007 were 30 percent or 2 million people. Turkmenistan. In the period 1990-1992 nine percent of the population was undernourished (300,000 people). The corresponding figures for 2005-2007 were six percent or 300,000 people. Uzbekistan. In the period 1990-1992 five percent of the population was undernourished (1.1 million people). The corresponding figures for 2005-2007 were 11 percent or 3 million people. SOURCE: FAO, WWW.COUNTRIBRIEFS.FAO.ORG, 2010

Chronic Food Insecurity in Central Asia Chronic food insecurity appears mainly through another dimension of food security which is food utilization, which includes nutrition. Nutrition is the provision of the active elements of foods that are necessary to support the body’s function. They comprise proteins, fats, carbohydrates, vitamins, minerals and trace elements.. Developments, which have resulted in more extensive availability of dietary calories, are reflected in the quantity of food consumed. Food consumption – expressed in 7

kilocalories (kcal) per capita per day – is a key variable used for measuring and evaluating the evolution of both the global and regional food situations. A more appropriate term for this variable would be “national average apparent food consumption” since the data comes from national Food Balance Sheets rather than from food consumption surveys. Analysis of FAOSTAT data shows that dietary energy measured in kilocalories per capita per day has been steadily increasing on a worldwide basis. Between the mid 1960s and the late 1990s the calories per capita increased globally by approximately 450 kcal and by over 600 kcal in developing countries This change has not, however, been equal across all regions. Nutrition in CA countries is lower than the 2007 average for other parts of ECA Region. It is 35 percent lower than the ten year average for the transition countries of ECA in Tajikistan, 25 percent lower in Kyrgyzstan and 20 percent lower in Uzbekistan. Based on these figures nutrition levels create a concern about whether or not the MDG 1 target for 2015 can be achieved. (see annex) Households achieve food security when they have year-round access to the amount and variety of safe foods their members need to lead active and healthy lives. At the household level, food security refers to the ability of the household to secure, either from its own production or through purchases, adequate amounts and varieties of food. Low quality of life and poverty (which are closely related) cause the scenario in which food insecurity can occur. This can seriously limit accessibility to nutritious food, including food with high quality protein, an adequate micronutrient content and bioavailability, macro-minerals, trace elements and essential fatty acids. Adequate nutrition is essential for growth, good health and physical and cognitive development, and will only result from a diverse diet that includes staple starchy foods, vegetables, fruits and animal-source foods. Nutrition is affected not only by food availability and access but also by disease, sanitation – including access to safe drinking water – and the availability of preventive health services. TABLE 2: NUTRITION STATUS IN THE CENTRAL ASIAN COUNTRIES, 2008

rate of population

Country

Under under five (2003-2008) infants households five with consuming GNI/ mortality low iodized capita undersuffering suffering rate birthweight salt weighted from from 2008 stunting wasting %

USD

Kazakhstan

92 6,140

Kyrgyzstan

740

600

Turkmenistan

87 2,840

Uzbekistan

Tajikistan

910

Source: UNICEF, Statistics, Nutrition; www.unicef.org

By FAO observations the share of population with chronic energy deficiency is 6.9 among adult woman on overage in the sub region with the highest one in Turkmenistan. The share of children under nourishment is 8.6 percent and 7.8 percent among male and female groups accordingly (Annex 4). The highest shares of underweight children are found in Tajikistan and Turkmenistan. Thus, the nutrition status in CA countries is a subject of concern with possible deterioration because of increasing of food prices. 8

Food Accessibility and Poverty Achieving food and nutrition security is at the forefront of the development objectives of the Central Asian countries. Since independence, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan have undergone a series of transitions from centrally planned economies to marketoriented systems. Despite great efforts by these countries, and the advice of international and bilateral development agencies, policy reform has been frustratingly slow, agricultural productivity and performance have been declining, and food insecurity and malnutrition remain high. Poverty also has an uneven spatial distribution in Central Asia. Income levels vary considerably in the CA countries. Since 2000 one can see the tremendous increase of income per capita in Kazakhstan and very low improvement in the other countries, in particular in Tajikistan and Kyrgyzstan. Another indicator of food security is the share of household expenditure used on food.. According to World Bank information, in Uzbekistan and Tajikistan this share is almost 80 percent, in Kyrgyzstan it is 58 percent, and in Kazakhstan it is 42 percent, whereas in developed countries it is between 15 and 30 percent. Poverty remains a largely rural phenomenon. In Tajikistan around 70 percent of poor people live in rural areas and about 60 percent of the total population lives in rural areas across the CA region. This situation is largely the result of slow growth in the agricultural and non farming rural sectors. Therefore, improvements in agricultural productivity aimed at small-scale farmers will benefit the rural poor first in CA countries, where agriculture employs about 30 percent of population. The economic growth that has been observed since 2000 has not translated into higher agricultural yields and improved productivity. Increased agricultural productivity enables farmers to grow more food, which translates into better diets and, under market conditions that offer a level playing field, into higher farm incomes. With more money, farmers are more likely to diversify production and grow higher-value crops, benefiting not only themselves but the economy as a whole.

Food price volatility Prices declined at the end of 2009 but started to rise in the second half of 2010. One of the reasons for the price increase was volatility and speculation. Another reason is under-investment in agriculture, which has lead to a decrease in productivity, a lack of price transmission from producers and sudden government interventions in export markets. Price signals can play a very important role by drawing attention to market distortions, imbalances and volatility. Unfortunately, sometimes these signals lead to panic and speculation. Weather conditions and climate change impacts also need to be taken into account. Increases in international prices have made the LIFDCs import bills more expensive and made their populations more vulnerable (particularly poor households). In Kyrgyzstan the average price of wheat flour, which was stable in 2009, increased by 35% in September 2010 compared to its June level, due to a fluctuation in the wheat price on the international markets. Prices of bread, which are not regulated by the Government, have followed the same trend. Food prices have also been impacted by higher fuel prices and lower domestic wheat production. In January 2011 prices for wheat and wheat flour remained at high levels, as did the prices for meat, milk and eggs. In the main ethnic conflict zone, Osh, the wheat flour price increased by 20 percent. The country faces difficulties due to slowing economic growth, higher unemployment and reduced remittances that have resulted in lower household incomes. (Annex 8) In Tajikistan, prices of wheat flour, in October 2010, were 37 percent higher than they were in June. Prices continue to increase, although the 2010 wheat harvest was above average. The country depends heavily on wheat imports from Kazakhstan,5 where wheat flour and bread prices have also 5

FAO. Global Information and Early Warning System (GIEWS). Price Bulletin. December 2010.

increased. (Appendix 9, page 31) The increases are also related torising costs of exports of inputs from Russia, which in the end contribute to increase of food prices (see annex). The use of agricultural inputs has continuously declined since independence. Fertilizers, agro-chemicals, machinery and fuel are mostly imported at international prices. Most farm machinery and irrigation equipment, such as pumps and pipes are in a dilapidated condition and most machinery has passed its usual life expectancy, being at least 18 years old. The tractors that are used are mostly those inherited at the break-up of the Soviet regime. Larger farm businesses maintain them by cannibalising units or obtaining spare parts from Russia. The consequence of this is that the Sovietstyle cultivation practices of multi-pass land preparation are still followed, although they are poorly executed, and high sowing rates are intended to compensate for sub-standard practices. Bank credits are unavailable to the small farmers due to high interest rates and bad debts prevent the uptake of seasonal agricultural loans. Corruption within the lending bodies is allegedly a significant feature and risks are involved, as insurance policies do not cover the cost of the borrower, while substantial guarantees are required by the lender. In Turkmenistan and Uzbekistan wheat flour and bread prices are regulated and controlled by state authorities. However, information from these two countries is very limited, and price information is not available.

Food Availability based on cereal production Cereal Production in the Central Asian Importing Countries Out of the five countries in CA only Kazakhstan is able to meet its own cereal needs (mainly wheat). The other four countries depend heavily on imported cereals. The proportion of imported cereal made up by wheat varies from 34 percent (in Kazakhstan) to 97 percent (in Tajikistan). The figure is 80, 82, and 95 percent respectively in Kyrgyzstan, Uzbekistan, and Turkmenistan. Although in 2010 weather conditions in Central Asian countries (except Kazakhstan) were favourable for crop production, Kyrgyzstan and Tajikistan experienced declines in production (each country to a different extent, in comparison with the five years average). This is mainly due to weakness in the agricultural input supply systems and the reduced purchasing power of farmers. In Uzbekistan, there has been a slight increase in cereal production, which is seven percent above the average level of the five-year average. Turkmenistan experienced significantly increased cereal production: 30 percent above the average for the two previous years and 24.8 percent above the previous yearâ&#x20AC;&#x2122;s production. Table 3: Cereals Production in CA Countries (2001-2010, thousand tones)

Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan Total

2001 100 100 100 100 100 100

2002 100 98.7 138 117 152 110

2003 92.6 91 171 132 171 109

2004 77.2 95.2 184 137 166 99

2005 86.6 90.3 185 139 183 116

2006 104 83.8 195 96 186 124

2007 126 79.5 200 104 194 141

2008 120/2 84.6 179 60 187 132

2009 130 104 240 64 203 144

2010 99.3 87 193 79 206 114

Figures from the table above show that in total the production of cereals fluctuated between 23.3 million and 33.9 million tonnes during the period 2001-2009 (45 percent) due to weather conditions and stability in the region. The trend in crop production levels varies, with Uzbekistan and Tajikistan experiencing a with significant improvement.. Kazakhstan is a main exporter and 10

supplier of wheat and has increased the planted area by almost 42 percent in total. However, the wheat yield has declined by 30 percent over the last ten years. Although the total 2010 cereal production in CA countries has been estimated to be about equal to the average for the decade, a tendency to fluctuate could be observed during the last years of the decade (2001-2010), in particular since 2007. Kazakhstan’s share of the total cereal production of the sub region averages 60 percent, although it accounts for only 15 percent of the total population of the sub region. This allows Kazakhstan to act as a wheat basket for the neighbouring countries. Kyrgyzstan’s total cereal production for 2010 was affected by a delay in sowing caused by a long and cold winter and social unrest, particularly in the southern part of the country. It is estimated that production was 1.5 million tonnes, which is the average level for the last five years. The country has accumulated a high level of stocks, which guarantees an adequate food supply for the population. However, due to the low quality of this wheat, imports may increase slightly. Kyrgyzstan imports a major part of the wheat it uses for food consumption from Kazakhstan, despite the fact that the latter’s own wheat production has been declining. Over the last decade cereal production in Tajikistan steadily increased and reached its peak in 2009. In 2010 cereal output dropped from the previous year’s record level by around 20 percent as a result of floods in early spring, and a rainy summer. Production is currently 880,000 tonnes, which is slightly lower (four percent), than the average annual level in the 2005-2009 period. Tajikistan is highly dependent on imported cereals, especially wheat. Wheat imports in 2009/10 were about 850,000 tonnes. This is expected to increase (by eight percent) in 2010/11, reflecting declining domestic output. Over the last decade the situation in cereals production has been much improved in Turkmenistan and Uzbekistan. They have both been able to produce larger cereal yields (mainly wheat in 2010); both countries increased the area planted with wheat despite irrigation problems. Uzbekistan produced its largest harvest of cereals in general and wheat in particular in 2010 (7.1 million and 6.8 million tonnes accordingly). Uzbekistan achieved the highest wheat yield in the region, largely due the fact that input supply was subsidised by the government. However, both of these countries also need to import wheat, mainly for food consumption. Kyrgyzstan and Tajikistan are the countries which cause most concern. They are the poorest countries of the FSU republics and have relatively high levels of poverty compared to other states in the region. Even cereal production has declined since last year’s bumper harvest, although both countries have been able to accumulate a sufficient stockpile. However, the overall trends of production, import and carryover stocks in the four importing countries point to tensions for 2010 and 2011 (see Figure 1): decreasing production and stocks are combined with increasing imports and import bills. The availability of cereals may be limited due to lower production, depleted stocks and increasing import bills.

FIGURE 1: DYNAMICS OF WHEAT PRODUCTION, IMPORT AND CARRY-OVER STOCKS IN LIFDC OF CA, 2001-2010, 2001=100 %

250

200

150

Production Import Stocks

100

0 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Dynamics of Wheat Producton, Import and Carry- Over Stocks in LIFDC of CA, 2001-2010, 2001=100 %

SOURCE: AUTHOR’S ESTIMATIONS BASED ON NATIONAL STATISTICS BULLETINS, USDA, FAO/ GIEWS, 2010

This year’s decline in cereal production in the main exporting countries in the region has impacted the two poorest countries of FSU (Kyrgyzstan and Tajikistan) which rely on Kazakhstan to import between 95 and 96 percent of wheat. During the last decade Kazakhstan produced between 60 percent (the lowest level in 2006) and 80 percent (the highest level in 2009) of all the cereals produced in CA. In 2010 this figure was 75 percent. Therefore, Kazakhstan’s role as a supplier is extremely important to its neighbours. At the same time the dynamics of cereal production in Kazakhstan is very volatile and was characterized by sharp ups and downs during the decade, mainly due to weather conditions and sensitive agricultural productivity heavily based on natural factors rather than agro-technology. Figure 2: Dynamics of Cereal Stocks in Central Asian Countries, 2001-2010, thousand tonnes 12000

10000

8000 Kazakhstan Uzbekistan 6000

Turkmenistan Tajikistan Kyrgyzstan

4000

2000

0 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Kazakhstan mainly focuses on high quality wheat as the natural conditions in the country are more favourable for growing wheat varieties that are high in protein and gluten. These are in high demand in neighbouring countries, where quality is a real problem because the quality of seeds is poor and climatic conditions are not ideal. 12

Food Consumption Production trends cannot provide the whole picture, and should be complemented with data on how much countries need for food consumption and other domestic needs. It should be noted that the overall volume of production does not mean that all the wheat (or any other grain) that is produced is sufficient for food as quality can vary greatly. In Central Asia, except in Kazakhstan, the quality of wheat is low so they need to import good quality wheat for consumption. Other domestic uses, such as for livestock feed, are also important because livestock production depends on the availability of cereals. For example, in Kyrgyzstan about 50 percent of the wheat crop is used as feed (this varies by territory). Since the CA countries produce low quality wheat (around 82-83 percent) the majority of it is used as feed. The figure below shows how much the local production in Central Asia satisfies domestic needs. FIGURE 3: CA: COMPARISON OF PRODUCTION, FOOD CONSUMPTION, AND DOMESTIC NEEDS IN CEREALS, 2010/11 (MY)

The chart clearly shows that in four out from five countries cereal production is less than domestic needs and it is much less than required for consumption as food. The other four countriesâ&#x20AC;&#x2122; dependence on imports is a result of insufficient production and the low quality of domestically produced wheat. Import dependence varies from country to country and is between 43 percent and 69 percent. Moreover, imports are derived from three CIS countries: Kazakhstan, Russia, and Ukraine (KRU or CIS-3). Table 4: Comparison of Food Consumption, Domestic Use6 and Import of Cereals in CA Countries, 2010, %

Country

Kyrgyzstan Tajikistan 6

Food Consumption, to Domestic Use, % 67 71

Import dependency: import to food consumption, % 43 69

Import received from KRU/ CIS-3 (Kazakhstan, Russia, Ukraine), % 95.6 98.5

Import received from Kazakhstan, % 93.6 94.5

Domestic use includes food needs, feed, seed and others.

Turkmenistan Uzbekistan

48.7 48.5

50 45

100 98.2

48.4 97.9

The countries listed in the table are LIDFCs that depend heavily on imports from neighbouring CIS countries (CIS-3: Kazakhstan, the Russian Federation, and Ukraine, Annex 3). The share of wheat imported from non-CIS countries is very small and comes mostly from Iran and Turkey. Figures show that three countries cover more than 90 percent of their wheat needs (for food) by importing it from Kazakhstan. Therefore, the CA wheat market is not diversified in terms of exporting countries which puts import opportunities at risk. In actual fact, this scenario makes regional trade in wheat and other cereals very sensitive and quite risky as it depends on only a few players. For the last decade China’s trade role with CA has increased although it is still limited, and imports from China do not include wheat or wheat flour (the main staple food in CA). Although China tries to use Kyrgyzstan, a member of WTO, as a transit route for re-export, there are risks related to the import of low quality foodstuffs, including rice, because no CA countries have an efficient food safety control system. In general the overall production of wheat is sufficient to cover domestic needs in the sub region. However, the picture differs from country to country: Tajikistan is able to cover only 31 percent of its food consumption needs, while the other three countries cover around 50 percent (Kyrgyzstan 57 percent, Turkmenistan 50 percent and Uzbekistan 55 percent). All the countries try to maintain their own stocks as a security against possible shocks. Available data suggest that the stocks increased by almost 69 percent between 2001 and 2009. However, next year they are expected to decline by around 16-17 percent due to increasing wheat prices. FIGURE 4: DYNAMICS OF CARRY – OVER STOCKS IN LIFDCS OF CENTRAL ASIA, 2001-2010

Sources: Author’s estimation based on information from National Statistics Agencies of the countries, 2001-2010

Import Requirements As outlined above, four Central Asian countries rely on imported cereals, and mainly wheat, to supplement their own production in order to satisfy food demand. Traditionally and geographically these countries import mainly from Kazakhstan, Russia and Ukraine. Table 5: CA: Import of grains to CIS-4 countries in 2009/10 MY, thousand tonnes

Countries

Grains

Wheat

Rice

Kyrgyzstan

361

354

6.2

Tajikistan

884

872

5.3

Turkmenistan

12.4

Uzbekistan

1,703

1,673

4.6

Total

3,029

2,980

28.5

Wheat is the most imported grain commodity used to satisfy food needs. Therefore, increasing international wheat prices push up domestic prices of both wheat flour and bread. The largest portion (about 60 percent) of imported wheat goes to Uzbekistan, the second largest importer is Tajikistan with 29 percent and the third is Kyrgyzstan with almost 12 percent. In 2009/10 marketing year (MY) the imported wheat came from Kazakhstan (96.5 percent), Russia (3 percent) and other countries (0.82 percent). Our forecast shows that almost the same composition is expected for 2010/11 MY: namely- 94.7 percent, 0.73 percent, and 4.4 percent accordingly. FIGURE 5: THE STRUCTURE OF WHEAT IMPORT FROM KAZAKHSTAN BY CA COUNTRIES IN 2010, PERCENT

SOURCE: BARRIERS TO TRADE IN CIS GRAIN MARKETS AND THEIR IMPLICATIONS FOR LIFDCS OF THE REGION, FAO/ UKRAGROCONSULT, JAN 2010, DRAFT

Wheat production and export opportunities in the CIS -3 Over the last ten years wheat production has increased in the main exporting countries in the region; namely, Kazakhstan, Russia, and Ukraine. However extreme weather conditions in 2010 have significantly affected crop production in all three of these countries. A winter cereal growing season is on the way, and it is still difficult to give a preliminary estimation, although officially all three countries are planning to increase cereal production in 2011. However, last year’s droughts have already affected winter crops by causing low soil moisture during the planting season. A cold winter and frosts have also raised concerns. In a best case scenario we can expect an increase of about 20 percent. The overall picture of dynamics in three main exporters in CIS is characterized by fluctuations. These are due to the fact that CIS countries are highly dependent on weather conditions and natural resources rather than agro-technological factors. Their capacity to produce different cereals including wheat – which is the main export product – is still limited and mainly based on expansion of the planted area and low yields. 15

Table 6: Dynamics of Cereal Production in Kazakhstan, Russia, and Ukraine, 2005-2010

2005 Kazakhstan Russia Ukraine Total

13,674 76,330 37,444 127,448

2006 16,383 36,623 34,143 87,149

2007

2008

2009

2010

19,941 80,362 27,858 128,161

18,975 106,290 47,336 172,601

20,579 96,069 45,080 161,728

15,638 63,711 39,855 119,204

Average 20052009 17,910 87,135 38,372 143,417

Sources: Agreemarket, UkrConsult, issues for 2010

These figures show that 2010 production is 15.5 percent lower than the five-year average. There has also been volatility and fluctuation in cereal production during the last five years. The 95 percent variation in the range gives an idea of the instability which characterizes cereal production in the main exporting countries of the Region. TABLE 7 WHEAT EXPORT FROM CIS-3 (KZ, RU, UA) 2010/11MY (JULY 2010- JUNE 2011, PROJECTION)

Country

2010/11 tsnd tonnes

Share of export in 2010/11% in CIS-3 export

Kazakhstan

6,500

Russia

3,500

Ukraine

5,500

Total

15,500

100

SOURCES: NATIONAL STATISTICS AGENCIES OF KAZAKHSTAN, RUSSIAN FEDERATION, AND UKRAINE, SOVECON, AGROMARKETING ISSUES FOR NOVEMBER- DECEMBER 2010.

Export opportunities for the main players in the Region Kazakhstan, Russia and Ukraine remain the main suppliers of cereals for their neighbouring importing countries because they have the capacity to produce the volume that is needed and because transportation and other related costs are much lower when compared to imports from the EU or any other region. It is extremely important to take energy prices into account as they contribute significantly to costs. USDA predicts that wheat exports from Russia, Ukraine, and Kazakhstan will increase by 50 percent by 2019, and the region could lead the world in wheat exports by the end of the decade. The growing importance of Russia, Ukraine, and Kazakhstan as world wheat suppliers raises concerns about the reliability of their supply and policy responses to weather-related shortfalls, especially if they react to such shortfalls with policies that restrict exports. For example, when world wheat prices spiked during 2006-08, Russia, Ukraine, and Kazakhstan tried to contain the growth in domestic wheat prices by restricting, or even banning, exports. There is uncertainty surrounding the degree to which these three former Soviet countries will increase their wheat exports. Export growth requires costly improvements in the infrastructure needed to store, transport, and export grain. Policies that favour expansion in domestic livestock sectors could increase internal demand for feed wheat, reducing the surplus available for trade. Variable weather and possible export restrictions in low-production years could diminish the regionâ&#x20AC;&#x2122;s export reliability. However, uncertainties are likely to mitigate, though not reverse, the growing importance of Russia, Ukraine, and Kazakhstan as global providers of wheat. 16

Policy responses in CA and neighbouring countries It should be mentioned that any signals of decreasing agricultural output, particularly relating to cereals, results in policy responses both in exporting and importing countries. In its 2010 Food Outlook Report, FAO issued a warning to the international community to prepare for harder times unless production of major food crops increases significantly in 2011. (Food Outlook, FAO, November 2010, http://www.fao.org/giews/english/fo/index.htm). Food import bills for the worldâ&#x20AC;&#x2122;s poorest countries were predicted to rise by 11 percent in 2010 and by 20 percent for low-income food-deficit countries. Prices for most agricultural commodities increased during the second half of 2010, due to a number of factors, including unexpected shortfalls in supply caused by unfavourable weather events, policy responses by some exporting countries, and fluctuations in currency markets. International prices may rise even more if production in 2011 does not increase significantly, especially for maize, soybeans and wheat. As a result of extreme weather conditions which to a decline of crop production, especially cereals, Russia, Kazakhstan, and Ukraine have started to introduce some measures to protect their populations, with little concern for the food security of their trading partners (Table 8). While such measures can be effective in controlling prices in the short run, they are expensive in terms of scarce budgetary resources and can distort food markets. Price controls can lead to rationing and reduced incentives for producers. Income transfers lead to less distortions in food prices than subsidies, and they can be targeted on the poor and vulnerable, whereas non-selective blanket subsidies and price controls benefit the rich and poor equally. Table 8: Policy measures in Exporting Countries, 2007-2010

Countries

Export restrictions

Taxation

State Support (subsidies) Price regulation

n/a

Subsidies on transportation; Subsidies Through on transportation to interventions. grain and flour exporters

Limits on buckwheat and oilseeds Kazakhstan

Bans on export to Uzbekistan since October 5, 2010

Special Subsidies to regions regulation on faced drought, basic products if subsidies to farmers prices increase through soft loans above 20 percent

Russia

Export bans on wheat, barley, maize, n/a buckwheat

Ukraine

Export quotas on VAT refund on Subsidies on fertilize wheat, barley, maize; grain supply though not fully n/a Foreign contract export implemented registration stopped

Customs Union: Belarus/ Kazakhstan/ Russia

Import restrictions on cereals stopped until June 30, 2011 n/a

n/a

Joint agricultural policy between Russia 17

and Belarus Sources: Intefax issues for 2010, Agri News weekly issues of July- December 2010.

The composition of subsidies and other trade measures in the exporting countries is heavily weighted toward direct production rather than investments which could contribute to increasing agricultural yields. In response to increasing prices, importing countries have taken some policy measures, such as eliminating import duties (Kyrgyzstan), using food stocks (Tajikistan), and controlling prices using administrative measures (Turkmenistan and Uzbekistan) or market interventions (Kazakhstan). The latter is used only by Kazakhstan, which has accumulated a high level of carry-over stocks. In many cases, governments have relied on existing policy measures. The policy responses made can be grouped into four broad categories; namely, targeting consumption, trade, production, and price regulation respectively (see Table 9). These measures appear to have had no any long term effect. Unfortunately, in Kyrgyzstan and Tajikistan any measures face financing problems and require external funding, which could result in having to serve external debt in the future. This also applies to other safety nets such as food and nutrition programmes. These two countries still do not have strong institutionalized “safety net” measures. TABLE 9: POLICY MEASURES IN IMPORTING CA COUNTRIES

Countries

State Support (subsidies) Subsidies on soft loans to farmers but very limited Subsidies to regions faced by floods

Export restrictions

Taxation

Kyrgyzstan

n/a

Tajikistan

Export quotas

n/a

Export quotas, licensing and state orders

soft taxation to small farmers

Subsidies on agricultural inputs

on staple food

Export quotas

n/a

Subsidies on agricultural inputs

on selected staple food

Turkmenistan Uzbekistan

Price regulation n/a through interventions

In importing countries, trade measures and subsidies are not supplemented by measures aimed at expanding investments and creating enabling business environments. Moreover, subsidies and food price controls do not always help the most vulnerable or poor populations, because they are not targeted on those who are most in need of help. The non-WTO members in the region (Russia, Kazakhstan, and Uzbekistan) have tried to use export and import restrictions and taxes, whereas WTO member countries (Kyrgyzstan) mainly used NTBs or price controls in trying to protect their population. Under the WTO’s classification for agriculture support, several measures are allowed which are included in the so-called “green box”. This refers to supporting non-distorting measures in trade and markets which cannot involve price support. Green box mechanisms can include support to research, education and training; extension services, marketing activities and other similar initiatives. In the Central Asian countries such mechanisms are rarely discussed or implemented. While high food prices can negatively impact the food security of vulnerable households, they can also create incentives and opportunities for small holders and farmers to develop agricultural production and non-agricultural activities in rural areas. The current situation calls for continued 18

responses from governments and the international community: policies need to be adjusted and programmes need to be put in place to address negative impacts and tap into new opportunities. This situation creates challenges in terms of achieving the Millennium Development Goals, particularly MDG1 of reducing poverty and hunger. However, higher food prices affect countries differently depending on whether they are net exporters or net importers of food. Net exporters of food will benefit and experience higher terms of trade and more income. Net importers of food will face lower terms of trade and will have to pay a larger food import bill, which will affect their trade balances and the strength of their currencies. In the long run, high food prices are not only expected to increase agricultural incomes, but also to lead to increased investments in the agricultural sector. This will lead to productivity increases and will also have some indirect effects on non-agricultural rural income (e.g. trade and services). The size of this multiplier effect will of course depend on the share of the the increased agricultural profits which are ultimately invested and spent in rural areas.

Main food security risks in CA countries Overall, food security in the countries of Central Asia is improving. However, there are still threats related to fragile economies and other internal and external factors. The level of poverty has significantly decreased in these countries. However, three countries (Kyrgyzstan, Tajikistan, and Uzbekistan) remain the poorest countries in the ECA and CIS regions. For those countries in the sub region that depend heavily on imported staple foods, any sharp fluctuations of internal or external conditions increase the risk of food insecurity. Although the agricultural sector has been characterized by stable upward trends over the last ten years, it is still very fragile and only Kazakhstan is able to meet its own food requirements. Productivity of crop production is still low and highly dependent on scarce resources of water and fertilizers.

Type of Risk

Factor

Kazakhstan

Kyrgyzstan

Tajikistan

Turkmenistan

Uzbekistan

Table 10: Matrix on Food Security Potential Risks in CA Countries

Access

Poverty

Food prices volatility

Market volatility and fluctuation

Malnourishment

PPP/ Income

Import Dependency

Limited local production

Climate Change & Weather Conditions & natural resources

Frequent weather fluctuation, water scarcity

Weak social food safety net

Fiscal situation and shortage of emergency reserves

Financial constrains & macroeconomic conditions

High interest rate, limited access to financial resources

The volatility of international markets and local agricultural production increases risks relating to food supply. In addition, the sector is vulnerable to any fluctuations in climate change and weather conditions. Dependency on imports means that the countries are very much linked to global market fluctuations, which can put food prices under pressure. The countries do not cooperate on trade issues which may create problems for food supply. The observations in this paper and related analyses show that CA countries face seven main risks (see table above; not each of these risks is applicable to every country). However, overall three main risks can be identified namely, market volatility, climate and natural conditions, and food import dependency. There is an immediate need to examine the possibility of the countries in the region cooperating on trade arrangements in order to enhance the free flow of food and agricultural commodities. Cooperating on building joint monitoring systems on weather and climate change that will predict any sharp declines in crop production may also contribute to improving preparedness for climate disasters. Information- sharing on agricultural and food production, including prices, throughout the region will help farmers and trading companies deal with local or countrywide food shortages. Cross-sectoral cooperation on all these matters will help to identify the impact of food availability and accessibility on the nutrition and health of the population. In the current environment, it is very important that the international community assist and advise governments not to implement inappropriate â&#x20AC;&#x153;panicâ&#x20AC;? policies that may have welfare consequences far larger than the welfare losses resulting directly from the shocks themselves. In 2007-08, some countries imposed trade restrictions and price controls in response to rising food prices. Such policies redistributed income away from rural food producers to urban consumers (who tend to be richer). The net social impact may be even larger when considering the impact of such policies on production incentives and the likely spill- over impacts of restrictive trade policies on neighbouring countries. Additionally, it is important that policy responses do not conflict with the key longerterm reform agenda. For example, many of the restrictive trade and price controls that governments in the region adopted in response to the food price increases in 2007 have not been reversed and together with lower food prices, these policies could further increase the poverty gap between urban and rural areas. Unfortunately, some of such policy response measures have been already been 20

repeated since August 2010.

Recommendations and follow up actions The best strategy for improving food security is to reduce poverty through economic growth, including agricultural productivity. Growth in agricultural and food production and the consequent increase in employment alternatives can have a positive effect on household incomes and can contribute to the government budget. These effects will reduce poverty in two ways. Firstly, increases in household incomes have a direct effect on poverty and secondly, the increase in government budgets can be used to enhance social protections system including food safety nets, helping to bring the poor above the poverty line. In CA countries in which the rural population represents around 50 percent of the entire population, growth in the non-agricultural economy is necessary to absorb the surplus labour. In the region, a further reduction of over- employment in the sector is crucial to enhancing productivity and increases in agricultural output. Recent experience shows that these countries are still not rationally integrated though regional and bilateral trade agreements. Trade issues play an important role in the current market situations and create unfavourable conditions for importing countries. The rules and norms of international trade can be applied to both WTO members and non-members and restore trust in the international trading system with improved multilateral or plurilateral rules and agreements. The experiences of the restrictive trade policies employed by many countries in reaction to the food price crisis, and the increased protectionism that has been seen since 2008 and the financial crisis, have created distrust in the global trading system and increased the cost of doing business on international markets. A Doha Round agreement would be an important step in restoring confidence in the trading system and in further reducing distortions that restrict trade and create more uncertainties for farmers and traders. Although it is very tempting for countries to look inward and limit exposure of their own consumers and producers to world market volatility in times of trouble, one of the best ways to protect food security in a global market is to expand trade and reduce restrictive trade policies. However, these actions have to be carried out in parallel with long term measures such as market interventions and improving how the market functions, the implementation of risk management tools, enhancing rural development investments in social protection and food safety networks, and promoting investments in the agricultural sector itself by creating enabling business environments both for local and foreign capital. Due to the fact that food security deteriorates in the event of sharp weather fluctuations and natural disasters it is recommended that risk monitoring on climate change, hydro - meteo conditions as well as protection of natural resources such as land and water be improved. Transitory food insecurity may arise in times of crisis and the countries need to improve and in some cases set up food safety nets which operate in targeted and transparent ways.

Follow up actions on further cooperation A. Improve market functions and avoid market distortions by facilitating regional trade and better integrating with global commodity markets. Farmers and national economies alike would gain from improvements in market efficiency, which can include improved transport infrastructure, improved market information systems, increased competition in the marketing chain, and increased efficiency and transparency in regulatory systems. In transition countries with fledgling market institutions, it is especially important to strengthen these institutions and let them play their role in market adjustment. The government role is important in terms of creating an enabling environment for new farms and agribusinesses to develop, and it should focus on improving financial services, technical support services, information services and the like. 21

B. Develop Risk management tools for farmers Farmers face risks associated with yields and price variability that can be mitigated with good risk management tools. Yield insurance, revenue insurance, contracting and improved access to futures market tools can all assist farmers in managing risk. Governments can assist the private sector in developing and offering such tools and could even use prudent incentive measures to encourage the adoption of such risk management tools. These all require a proper information system and monitoring capacity. C. Enhance rural development and rural infrastructure investments In CA countries around 57.7 (Annex 5, page 29) percent or more of the population lives in rural areas, and this proportion is increasing in many cases. Rural development is not the same as agricultural development and it needs targeted attention of its own, including the provision of rural development support systems and social infrastructure. A rural development support system provides rural residents and local governments with information, coordination, and technical assistance. Social infrastructure needs will vary from place to place, but will include such things as roads and highways, schools and child care facilities, hospitals and clinics, community centres with libraries, internet connections and adult learning facilities. These support measures are territorial rather than sectoral and they improve the rural business environment as well as the capacity of rural residents to improve their own human capital, increase their economic opportunities and enhance the quality of life in rural areas. D. Invest in social protection or safety net measures to protect vulnerable populations â&#x20AC;&#x153;Safety netâ&#x20AC;? is an umbrella term that covers various programmes aimed at assisting vulnerable population groups. It includes targeted food distribution programmes; targeted cash transfer schemes, feeding programmes and employment schemes (FAO 2009a). The concept of social protection or a safety net is to cushion the biggest impacts of market and financial shocks in order to limit the long-term consequences. For example, when unemployment increases, incomes decline and high food prices or shortages threaten households, they may dispose of valuable assets, interrupt the education of their children or suffer malnutrition. These are but a few examples in which the short run impacts of a crisis create long run damage to the householdâ&#x20AC;&#x2122;s earning power. Therefore, the safety net measures are temporary and targeted at mitigating the worst consequences of a financial or food crisis. E. Create enabling business environment and promoting investments Increased investments have been a major driving force behind recent economic growth. In the agrifood industry in other more economic advanced transition countries, such as the new member states of the EU, foreign investment has been one of the main engines driving productivity growth, quality improvements, and enhanced competitiveness. The inflow of FDI in the food industry and the associated pressure on domestic firms to restructure will lead to important changes in the agricultural supply chain. The task of the government will be to provide a favourable institutional and policy environment for stimulating more FDI. They can do this by providing a favourable institutional and regulatory climate for foreign investors. F. Integrating nutrition and food security considerations into sectoral policies, programmes and cross-sectoral partnerships Technical support for capacity development in nutrition is essential for sustainability in food security and nutrition. Nutrition should be integrated into development strategies, sectoral policies, programmes and cross - sectoral partnerships with an emphasis on food-based approaches to reduce malnutrition. This should be promoted through inter-sectoral collaboration between agriculture, research, food technology, health and education. 22

******* TABLE 11: MATRIX ON FOLLOW UP ACTION ON FOOD SECURITY RISK MITIGATION

Activity Country Partnership Import Dependency FAO, EADB, WB, and CA-5 ADB, UNDP food price volatility Monitoring Climate Change & FAO, UNEP, WB, CA-5 Weather UNDP Conditions &

Land and Water

CA-5

FAO, ICARDA, WB, UNDP

Malnourishment/ Nutrition

TJ, KG, UZ

FAO, WFP, WHO, UNICEF

Poverty reduction

TJ, KG, UZ

WB, ADB, FAO, EBRD, UNDP

TJ, KG, UZ,

FAO, EU, USAID, WHO, WFP,UNICEF, UNDP

Regular monitoring of food security for risk mitigation

Output Study and Regional Discussions Research, institutional arrangements, and publications Implementation of new technologies

Outcome Trade Regional Facilitation and Cooperation Information sharing and strengthened capacity Improved productivity. water sanitation and stabilization of land erosion etc.

Improved quality and control of food Rural development and employment generation

References Slay, B. 2010. Tajikistan, Kyrgyzstan face food crises. Central Asia, Available at WWW.CENTRALASIANEWSWIRE.COM/TAJIKISTAN/TAJIKISTAN-KYRGYZSTAN-FACE-FOOD-CRISES/VIEWSTORY.ASPX?ID=1286

Trilling, D. 2010. Food Crisis Next Challenge for Kyrgyzstan? Available at WWW.EURASIANET.ORG/NODE/61637

Asymbekov, E. Cooperation in the Central Asian agriculture: current state and outlooks. Kyrgyz Research Institute. Available at WWW.CIMERA.ORG/FILES/CP/CP4/CP4DUSHANBE_OCT02_%20EMIL%20ASYMBEKOV.PDF IMF. October 2010.World Economic Outlook. Available at WWW.IMF.ORG/EXTERNAL/PUBS/FT/WEO/2010/02/PDF/TEXT.PDF

FAO. 2008. An introduction to basic concepts of food security. Available at WWW.FAO.ORG/DOCREP/013/AL936E/AL936E00.PDF

FAO/WFP. December 2010. Crop and food security assessment mission to Kyrgyzstan. Rome. WWW.FAO.ORG/DOCREP/013/AL970E/AL970E00.HTM

FAO. 2010. The state of food and agriculture 2010-11, Women in agriculture. United Nations. 2010. The MDGs in Europe and Central Asia. New York and Geneva. Available at HTTP://WWW.UNECE.ORG/COMMISSION/MDGS/2010_MDG_OPTIMIZED.PDF

World Bank PovcalNet, Online Poverty Analysis Tool. Available at HTTP://WEB.WORLDBANK.ORG/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTPROGRAMS/EXTPOVRES/EXTPO VCALNET/0,,CONTENTMDK:21867101~PAGEPK:64168427~PIPK:64168435~THESITEPK:5280443,00.HTML

FAO. Global Information and Early Warning System (GIEWS). Price Bulletin. December 2010. Available at HTTP://WWW.FAO.ORG/GIEWS/COUNTRYBRIEF/ FAO. October 2009. Crop and Food Security Assessment Mission to Tajikistan. Special Report. Rome FAO/ UkrAgroConsult. January 2010. Barriers to Trade in CIS Grain Markets and their implications for LIFDCs of the region. Draft paper FAO REU. May 2010. The impact of the Economic and Financial Crises on Agriculture and Food Security in Europe and Central Asia: a Compendium. Budapest

Annexes Annex 1. FAO Activities in CA countries

Activity Crop production and protection

Conservation Agriculture for irrigated Area

Country

Partnershi p

All CA countries

ICARDA, CIMMYT ICAC ECO TICA

Kazakhstan Turkmenista n Uzbekistan

ICARDA ICAC

Animal Health/ Trans boundary Disease

Tajikistan Kyrgyzstan

Fishery and aquaculture

Output Report on CA Awareness Raising on Rotterdam and Stockholm Conventions, training and networking Conference, consultation and supervision of projects on improvement of productivity and sustainability

Outcome

Improved awareness and capacity

Promotion of a new technology for sustainability and protection of ecosystem

Improved veterinary services and reduction of brucellosis in humans. Adopted agriculture laws and certification; building of diagnostic capacity of the state veterinary services Strategies for Fisheries and Aquaculture Sector Development in KZ , conception on aquaculture and capture fisheries development in UZ, Strategy for Fisheries and Aquaculture Development for poverty Alleviation in TJ

Workshop, meetings, consultations,

Kyrgyzstan, Tajikistan, Uzbekistan

Sector review studies and strategy for fishery and aquaculture for KG, TJ, UZ

Agriculture and food security programmes

CA Region

ADB, WB, EBRD, IDB, OPEC, EU

Fostering publicprivate partnership

Capacity building on formulation of investment projects

Forestry

Kazakhstan Kyrgyzstan Tajikistan Uzbekistan

UNECE, TICA, EU, JICA

workshops and meetings, studies

Legislation development Improved local community livelihood

Information System on Food Security

Kyrgyzstan Tajikistan

Training, publications, networking

Setting up of monitoring system for decision makers

WB, Interstate Committee

Land and Water

Software CROPWAT

Capacity Development

ANNEX 2: ECONOMICALLY ACTIVE POPULATION, AGRICULTURAL SHARE OF ECONOMICALLY ACTIVE POPULATION AND FEMALE SHARE OF ECONOMICALLY ACTIVE IN AGRICULTURE IN 1980, 1995 AND 2010

Economically active population Countries

Central Asia Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

Total (thousands) 2010 29,095 8,427 2,547 2,896 2,437 12,788

1995 21,059 7,773 1,885 1,678 1,635 8,088

Females economically active in agriculture (%) 2010 1995 41.0 42.4 24.4 30.4 29.8 37.7 53.0 52.2 53.0 51.6 43.5 46.2

Agricultural share (% of total) 1995 27.6 19.7 28.9 37.4 35.4 31.2

2010 20.5 13.8 20.8 27.4 29.7 21.4

SOURCE: THE STATE OF FOOD AND AGRICULTURE 2010-11, WOMEN IN AGRICULTURE, FAO, 2010

Annex 3: Share of households in rural areas that are female-headed, most recent and earliest observations and total agricultural holders and female share of agricultural holders, most recent observations

Share of rural households that are female headed % Most recent Earliest observation observation Central Asia Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

17.6 22.0 18.0 18.6 11.6

23.4 -

Agricultural holders Thousands

% of total

Total

Female Share

246,901 -

12.3 -

Source: The state of food and agriculture 2010-11, Women in agriculture, FAO, 2010

ANNEX 4: SHARE OF ADULT POPULATION WITH CHRONIC ENERGY DEFICIENCY (CED - BODY MASS INDEX LESS THAN 18.5) BY SEX AND SHARE OF CHILDREN UNDERWEIGHT BY SEX, RESIDENCE AND HOUSEHOLD WEALTH QUINTILE, MOST RECENT OBSERVATIONS

Share of adult population with CED (% of total)

Share of children underweight (% of total) By sex

Central Asia Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

Women 6.9 7.4 4.2 9.9 5.9

Men 3.2 3.8

By residence

Male Female Urban 8.6 7.4 7.8 4.0 3.0 4.0 4.0 3.0 3.0 18.0 17.0 17.0 12.0 9.0 10.0 5.0 5.0 5.0

Rural 8.4 5.0 3.0 17.0 12.0 5.0

By household wealth quintile Poorest Richest 5.2 9.6 1.0 5.0 3.0 3.0 14.0 22.0 5.0 12.0 3.0 6.0

SOURCE: THE STATE OF FOOD AND AGRICULTURE 2010-11, WOMEN IN AGRICULTURE, FAO, 2010 Annex 5: Total population, female share of population and rural share of population in 1980, 1995 and 2010

World Countries in developing regions Asia excluding Japan

total Female share Rural share (thousands) (% of total) (% of total) 1980 1995 2010 1980 1995 2010 1980 1995 2010 4,428,081 5,713,069 6,908,685 49.7 49.6 49.6 60.9 55.3 49.4 3,299,983 4,538,389 5,671,456

49.0

49.1

49.2

70.7

62.4

54.7

2,450,128 3,322,591 4,039,744

48.6

48.7

64.9

57.4

50.7

Central Asia

53,399

61,349

50.8

50.9

57.0

57.7

Kazakhstan Kyrgyzstan Tajikistan Turkmenistan Uzbekistan

15,926 4,592 5,775 4,187 22,919

15,753 5,550 7,075 5,177 27,794

51.7 50.8 50.0 50.6 50.4

52.4 50.6 50.6 50.7 50.3

44.1 63.7 71.1 54.7 61.6

41.5 63.4 73.5 50.5 63.1

Source: The state of food and agriculture 2010-11, Women in agriculture, FAO, 2010

ANNEX 6. FAO HUNGER MAP

UZB, TUR, KYR

TAJ

UZB, TUR, KYR

TAJ

Annex 7. Comparison of Import Requirements Dynamics in CIS, 1998-2008

ANNEX 8. RETAIL PRICES OF WHEAT FLOUR IN TAJIKISTAN, 2008-2010

Annex 9. Wheat Flour and Bread Prices in Kyrgyzstan, national average and by locations, 2009-2011