Agriculture and Agro-industry Sector of Kyrgyz Republic

The Kyrgyz Republic’s economy is predominately driven by agriculture and has relatively small manufacturing industry. The agricultural sector contributes nearly 40 percent to the country’s GDP and employs about half of total registered employment. Following the break-up of state owned enterprises, the agricultural sector has increasingly moved away from large scale collective farming to smaller subsistence level of family farming. Specifically, 40 percent of agricultural output is produced by private farmers and 54 percent from family farms.

The major food and agricultural commodities, produced in Kyrgyz Republic are potatoes, wheat, cow milk, sugar beets, and maize. Cotton lint and tobacco leaf are the major exporting agricultural commodities and wheat and sugar are major importing agricultural items.

As part of its effort to stimulate the development of the cotton sector, the government has set aside about 3 percent of total arable land for cotton production. This resulted in growth of cotton production from 75,000 ton in 1995 to about 122,000 ton in 2004. Nearly 80 percent of the cotton is grown by private farmers, which generates almost 5 percent of the total value of the country’s exports. However, high production costs from lack of fertilizers, pesticides, and herbicides weaken the industry and negatively affect country’s cotton export potential. Tobacco is also an important cash crop for the Kyrgyz agricultural sector. However, most of tobacco is grown by state owned enterprises and local value-added production activities are very limited.