The Challenges to Rural Development Policy in the New Independent States (NIS) Eugenia Serova FAO Investment Centre.

The Challenges to Rural The Challenges to Rural Development Policy in the Development Policy in the NewNewIndependent States (NIS)Independent States (NIS)Eugenia SerovaFAO Investment Centre

Diversity of rural areas in CIS

suburban rural with intensive agricultural

production rural with agricultural and non-

agricultural activities remote rural and marginal

Kazakhstan: grouping of rural settlements: criteria

• economic potential• soil fertility – 12 points• distance to markets – 9 points

• entrepreneurial activity – 5 points

• development of food processing - 5 points

• ag. machinery provision - 8 points

• use of irrigation systems – 0-7 points

• arable land p.c.- 7 points• pastures p.c.-7 points

• infrastructure• water supply – 7• roads – 7 points• gas supply – 3 points• electricity supply – 7 points• communications – 6 points

• social development• education- 3 points• healthcare- 3 points• housing – 23 points• employment – 1 point • poverty – 1 point

• environment• radiation• soil salinity• water quality

Kazakhstan: grouping of rural settlements: clusters

Highly developed >70 p Moderately developed 35-69 p Underdeveloped 1-34 p With extremely bad

environment 0

1062 (14%) 5664 (74%) 776 (10%) 22 (0,3%)

in 136 (1.7%) settlements there is no population

Challenges

Decreasing labour productivity Impending reduce in ag.

employment Worsening of human capital in

rural area

Labour Productivity

Swinnen, Johan, EastAgri

-50

0

50

100

150

200

1990 1992 1994 1996 1998 2000 2002 2004 2006

Ch

an

ge i

n A

LP

in

dex

(%

)

Central Europe

Balkan

Baltics

European CIS

Transcaucasia

Central Asia

Impending reduce in ag. employment

-80

-60

-40

-20

0

20

40

60

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Ch

an

ge i

n a

gric

ult

ura

l em

ply

men

t in

dex

(%

)

Central Europe

Balkan

Baltics

European CIS

Transcaucasia

Central Asia

Swinnen, Johan, EastAgri

Impending reduce in ag. employment

Serova, Eu. , 2006

0

0,5

1

1,5

2

2,5

3

40 50 60 70 80 90 100

Share of ind.farms in GAO

Ch

aтg

e in

ag.

em

ploy

men

t

RusMol

Ucr

Bel

UzbKaz

Tur

Geo

Aze

Taj Kyr Arm

Change in Agricultural Employment in 1987-2003 (times) and Share of Individual Farms in Gross Agricultural Output (%)

Impending reduce in ag. employment

Serova, Eu. , 2006

30

40

50

60

70

80

90

100

60 65 70 75 80 85 90 95 100

Rus

Tur

Ukr Mol

Kaz

Arm

Geo Kyr

Aze

,,

Change in Labour Productivity and Share of Individual Farms in Gross Agricultural Output, %

Impending reduce in ag. employment

Share of average ag. wage in total average wage in economy, %

CIS STAT 2009

0.0

20.0

40.0

60.0

80.0

100.0

120.0

19 80

19 82

19 84

19 86

19 88

19 90

19 92

19 94

19 96

19 98

20 00

20 02

20 04

20 06

20 08

A z erbaijan

A rm enia

B elarus

G eorgia

K az ak hs tan

K y rgy z s tan

M oldova

Rus s ia

Tajik is tan

Turk m enis tan

Uz bek is atn

Uk raine

Worsening of human capital in rural area

63

64

65

66

67

68

69

70

1980-1981

1990 1995 2000 2001 2002 2003 2004 2005 2006 2007 2008

Total

Urban

Rural

Russia: Life expectancy of rural and urban population, years

Rosstat, 2009

Policy challenges

Poverty Quality of human capital

Low attractiveness for investors

Low incomes

Low taxes Undervelopment of infrastructure

Solution

Sound national rural policy targeted at: establishment of non-agricultural

sources of income in rural areas creation of appropriate living

standards facilitating attraction of effective supply of labour for rural economy

Policy existed

Russia Federal program Social development of rural areas

till 2012

Ukraine State target program on development of Ukrainian

rural areas till 2015

Kazakhstan State program on development of rural territories in

2004-2010