Efficiency of Agriculture Subsidies in Kazakhstan

Abstract

Agricultural subsidies are a vital instrument for fostering the development of Kazakhstan’s agricultural sector. This study evaluates the effectiveness of government support in enhancing agricultural productivity and explores farmers’ perceptions of subsidy programs. The research analyzes key economic indicators, including subsidies, loans, and investments in fixed assets, to understand their influence on labor productivity. Additionally, survey data from 323 farmers provide insights into the challenges and benefits associated with subsidy mechanisms. The results highlight that subsidies and loans positively impact productivity, while excessive employment growth and over-reliance on subsidies may reduce efficiency. Farmers view subsidies as essential for sustaining their activities but identify challenges such as insufficient funding, complex application processes, and technical issues with automated systems. Furthermore, regression analysis reveals that expanding acreage, increasing income, and improving access to credit significantly enhance productivity, whereas short-term investments require further optimization. This study contributes to the existing literature by addressing the role of state support in transitional economies and providing policy recommendations to improve the efficiency and accessibility of agricultural subsidies. The findings emphasize the need for balanced resource allocation, enhanced financial literacy among farmers, and streamlined subsidy distribution processes to foster sustainable growth in Kazakhstan’s agricultural sector.