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2. EXECUTIVE SUMMARY

2. Executive Summary

Representatives of the Global Forum of Agricultural Research, heads of the departments and specialists of the Ministry of Agriculture, directors and scientists of the research institutes, agrarian universities and academies, scientific and research centers of Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikistan, Azerbaijan, Armenia, Georgia (the list of participants is enclosed) and Ukraine, joined at the last stage, participated in the Workshop.

The main results of three-day discussion of post-harvest sector problems in Central Asia and Caucasus are as follows:

1. Each of the participating country is distinguished by its own specific nature and climate conditions, structure and level of economic development, demographic peculiarities. Under their influence specialization of agricultural production and processing industry was formed. The given table 1 depicts the character of main plant growing specialization in countries.

Table 1.

Main plant growing specialization

Kazakhstan	Grain production (wheat), potato growing ; in south –cotton growing, адарство, viticulture, horticulture, rice growing, tobacco growing
Kyrgyzstan	Technical crops (sugar beet, cotton, tobacco),potato growing, vegetable growin.
Tajikistan	Cotton growing, viticulture, fruit growing, vegetable growing melon production, lemon growing
Uzbekistan	Cotton growing, viticulture, fruit growing, fruit growing,
Azerbaijan	Technical crops (cotton, tobacco), viticulture, fruit growing (citrus crops).
Armenia	Viticulture, fruit growing, cultivation of tobacco, sugar beet, geranium and melon production crops.
Georgia	Fruit growing (citrus cultures), viticulture, tea growing, vegetable growing, ether oilsе.

Processing industry, agrarian machine building, scientific organizations, i.e. the whole post-harvest sector built on to agrarian specification.

2. Agriculture and processing sector in all countries present the most promising sphere of economy characterized at the same time by complicated problems. The sector is promising due to its significant role in economy growing and development in the nearest future. Presence of great and various resources and highly qualified labor force form the priority of this sector. This sector is and will remain the main supplier of food raw materials at internal markets and significant source of export entry into economy. Moreover, gradual health rendering of agriculture and post-harvest sector and ensuring of steady economic grow will promote the increase of income and demand for food products of high quality, improvement of population nutrition ration structure.

3. The main task is to sector transfer into market system under conditions of economic non-stability and economic fall in all countries of the region. The further sector revival is to be carried out in complicated economic situation characterized by population income reduction and demand on food goods under conditions when the break of traditional trade relations led to the loss of commodity market and emerge of sharp deficit of main production resources, to the lack of information and work experience in market conditions. Non-consequent privatization of processing enterprises –fruit and vegetable, mill, wine, oil-fat and other plants and factories oriented at large scale production in all countries were destroyed or reconstructed. The created small shops didn’t provide the necessary volume of production and the quality of products. That resulted in two and more times reduction of processed food goods production, decrease of labor places, and reduction of added price. Most products of agriculture reached the consumer’s table non-processed.

4. Recently the general economic crisis is gradually being overcome in all countries. The positive dynamics is observed for volume production both of separate agrarian production and the total production of agriculture in a whole. The population demand at food market rises. Thus, the total volume of agrarian production in 2000 compare with 1999 has risen at 12% in Tajikistan,

4, 5 % in Kyrgyzstan, and in Kazakhstan in 2001 – at 59,8%. This forms the favorable basis for PHS development. Definite growing of food industry production is also observed. Production of this branch in price manifestation has increased in Kazakhstan at 7% in 2001 in comparison with 1999.

5. Despite some positive tendencies in the work of agrarian and post-harvest sector during last 2-3 years the situation in agro-industrial complex branches remains rather complicated. Decrease of state support and price disparity at agrarian and industrial production in all countries has resulted in reduction on investment possibilities and negatively reflected at the state of industrial potential.

Lack of infrastructure development and action coordination in region countries make the exit to inter-regional and world markets complicated. As a result they are dominated by numerous mediators that lead to support of very high level of price and reduction of population consumer demand.

De-specialization of agrarian production and non-grounded orientation at self food supply increase resulting in some cases in considerable rise in cost.

This is clearly seen at the development of grain production. All countries of Central Asia, excluding Kazakhstan, have increased grain production to necessary for internal use volume. At the same time, Kazakhstan, producing the cheapest grain, has twice reduce its production for the commodity markets loss.

6. One of the main reasons of agrarian and processing industry crisis is the sharp weakening of the resource providing sphere. As a result supply of new technique, new technological lines, and equipment was reduced and the wear of acting machines and facilities rose.

Technical and technological equipment of enterprises and processing industry doesn’t provide the implementation of wastless technological processes.

Great amount of morally old, low productive, physically worn equipment is exploited in industry. Insufficient temps of renew of the main parts of productive founds during last years led to the fact that specific gravity of equipment exploited for more than 10 years made in processing industry more than 40% in a whole, in sugar, oil-fat, tobacco, yeast, bakery and some other branches – from 50 to 75%.

Wear and removal of main production founds has passed ahead their action implementation, one-third of equipment has worked for more than two amortization periods; labor production at enterprises processing agrarian raw materials 2-3 times lower than at analogous enterprises of the developed countries , more than 50% of laborious operations are made by hands; fruit and berries Drying is realized by traditional people methods.

Deficit of refrigerator capacities for raw material and ready products remains the vital problem in fruit and vegetable industry. One-third of refrigerators require urgent reconstruction and restoration;

In oil-fat industry with the appearance of the so-called “small enterprises” more than 20% of oil seeds are processed only by press method without extraction that lead to the loss of oil;

Absence of the industry for tare production and tare packing materials made more than 40% of native food products and agrarian raw materials enter the retail trade unpacked. The most hard situation is observed in fruit and vegetable tinned industry which is till now equipped with old facilities for packing fruit and vegetable production in 2-3 liters jars the depend for which greatly fell.

The absence of capacities for fruit and vegetable juices production in the country, their pour into small and convenient for consumer tare led the native fruit and vegetable raw materials be used irrationally.

This is not referred to separate enterprises which modernized the technologies, manufacture production at the level of European standards and master the NIS market.

7. Insufficient state of science financing caused the reduction of scientific potential of agro-industrial complex, post-harvest sector in particular. As a result, the productions of science capacity kinds of production, determining the technical and technological levels of the branch are being closed. Negative processes touched both basic and applied sciences as well as implementation of scientific and technological progress achievements.

In some countries there were remained special scientific institutions dealing with the development of technologies for local raw materials processing, new recipe of products and etc.(Kyrgyzstan, Tajikistan).

8. Inter-state and inter-ethnic conflicts (Azerbaijan-Armenia, Tajikistan), non-regulation of inter-state water division of frontier rivers at water use for agriculture crops watering (Kazakhstan, Kyrgyzstan, Uzbekistan) prevent the development of post-harvest sector, information exchange, technologies, trade.

9. All the participants of the Workshop pointed out at weak marketing and management and insufficient state regulation in industrial provision of post-harvest sector: limit of legislative base on food safety, on food products safety for human health, tax action, credit and investment, absence of standards for food products corresponding to world market demands; inter-state unification of these documents is necessary. Communications modernization and widening are required: means of communication, roads, transport means, Internet access. This will provide the improvement of inter-state trade in the region and exchange of scientific information.

10. The great role of qualified personnel of high and medium qualification, working professions was marked. Higher educational institutions (universities) started to prepare market specialists and managers, economists and lawyers for branches of agro-industrial complex. But the training of technologists, engineering and technical specialists reduced. Many countries narrowed the net work of professional-technical colleges training labor personnel for the branch that negatively influenced the professional orientation and employment of youth. It is possible to use external resources.

11. Surplus of labor force and deficit of labor places in the place of living cause intensive migration process. Especially it is typical for Armenia, Kyrgyzstan, and Tajikistan. To find a job people move to other NIS state, countries of West Europe. Development of small, medium enterprises and restoration of large ones of processing industry will promote the creation of new labor places at the living territory, reduce migration flows and provide income for unemployment population.

12. Potential possibilities of post-harvest sector of countries of Central Asia and Caucasus in direction of increase of the production of highly qualified food products and satisfy the population demands are great. Generally they may be expressed as follows:

● sufficient for agrarian production development land resources and favorable nature conditions (plenty of solar light and warmth);

● surplus of labor force;

● presence of initial industrial base for storage and processing of agrarian crops harvest;

● high level of education of rural population; availability of qualified personnel;

● availability of transport communications for development of inter-state trade of agrarian production both in fresh and processed kind

● traditional skills of population for initial fruit and vegetable processing;

● formed sector of private farms interested in the development of efficient agro business;

● availability of scientific, research and educational institutions for research conduction and personnel training.

The development of post-harvest sector constraints by:

Deficit of land (Armenia, Kyrgyzstan), water resources for obtaining full of value harvest (Kazakhstan, Uzbekistan);

Low payable capacity of population at internal market of the countries;

Old technologies of processing, packing, food goods packing, weak technical equipment of processing enterprises and shops;

Deficit of investment sources for technical re-equipment of enterprises of food and processing industry; banks unwillingly credit both farmers and post-harvest sector;

Insufficient accessibility to scientific developments for the absence of service for scientific and technological achievements implementation into production (Extension service);

Management system not requiring the demands of each target market;

Use of old standards of agrarian and food raw material, not meeting the world level;

Destroyed system of all level specialists training for processing enterprises;

Lack of special transport means, ruined auto roads, poor and expensive communication. Internet access is available only at large companies.

Non-effective state strategy

Small scaled land plots of peasant farms and absence of cooperation between them;

High transport tariffs and prices for power-systems;

Solved inter-state and inter-ethnic conflicts;

Poor marketing, management and information provision of post-harvest sector