Asset-pooling in uncertain times : implications of small-group farming for agricultural restructuring in the Kyrgyz Republic

Substantial theoretical and policy debate in the early 1990s led to an excessive focus on de-collectivisation and individualisation of land rights through privatisation across the former communist bloc. The objective of this paper is to examine “individualised” production systems more closely in order to understand better how certain specific organisational approaches to production differ with respect to a set of indicators of technical efficiency. In this paper we provide quantitative analysis of these new types of farming units and provide a rationale for a deeper exploration into the nature of these groups. Overall we find that the total factor productivity of small groups formed on familial and social ties is higher than that of individual farms, given the uncertain rural environment in Kyrgyzstan and the resource constraints facing landholders at this point in time. The explanation for this hinges primarily on understanding the assetpooling, risk-sharing and labour specialisation functions of groups. In-depth qualitative fieldwork performed in conjunction with this study confirms these explanations (see Sabates-Wheeler 2004). As transition agriculture continues to adapt to land reform choices that were made ten years ago, a major policy question facing the Kyrgyz government must be, what kind of agrarian structure should be facilitated in order to promote agricultural growth? Despite the push for de-collectivisation there remains a place for encouraging group farming, on grounds of both poverty alleviation and agricultural growth. Keywords: Kyrgyzstan; agricultural restructuring; asset-pooling.