Commodities

Kazakhstan to Correct False Harvests That Echo Soviet-Era Deceit

Brandon spring wheat is harvested near Winkler, Manitoba, Canada, on Wednesday, August 8, 2018. Photographer: Shannon VanRaes/Bloomberg (Shannon VanRaes/Bloomberg)

(Bloomberg) -- Regional officials, seeking to win favor with Kazakhstan’s leadership, overestimated the country’s grain harvest by as much as 3 million tons last year, according to the deputy prime minister.

In a throwback to Soviet-era misinformation, Kazakhstan’s grain crop was overstated by about 20%. The figures, including 2.1 million tons of wheat, were falsified by regional heads in a system that rewarded higher production, Deputy Prime Minister Serik Zhumangarin, who’s responsible for trade and agriculture, said in interview.

Now the government wants to correct the figures, as they’re distorting the strengths and weaknesses of the Kazakh agricultural sector, as well as causing subsidies to be misallocated. The misleading numbers could also hinder the country’s drive to expand farm output, Zhumangarin said.

“To plan such things we need to understand whether we have correct statistics data or not,” he said. “We started a statistics amnesty.” 

Kazakhstan’s President Kassym-Jomart Tokayev is seeking to boost the economy , targeting growth of 6%. Part of his efforts focus on cracking down on the embezzlement of state finances and seeking to return more unused agricultural land to farmers.

The overstated wheat production means that yields were much lower than officially reported, according to Zhumangarin. From 2025, the government may not offer subsidies to grain farmers producing below a certain yield, he said.

Milk output was also overestimated, obscuring a domestic shortage. Potato crops and cattle herds will also need to be revised downward.

Still, the deputy prime minister is optimistic that doubling Kazakhstan’s application of fertilizers over the next two years will boost farm output.

“In the nearest time, we will forget about those numbers that were records for us in the past,” Zhumangarin said. 

©2024 Bloomberg L.P.

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