The impact of uncertainty on smallholder farmers' income in Kyrgyzstan

Abstract

The farming systems in the mountain areas of Kyrgyzstan are primarily characterised by small-scale crop and livestock activities. Farmers are faced with several environmental, socio-economic and political challenges and constraints that result in significant uncertainties affecting their operations. This paper attempts to model how various sources of uncertainty collectively affected the smallholders’ farm incomes during a mid-term horizon using Monte Carlo simulation. The analyses were based on data collected through a survey of 235 smallholder farms in the medium and high-elevation mountains ranges and expert interviews. We defined a static and a dynamic scenario, the latter of which incorporating likely adjustments in land use and production methods by farmers in response to changing prices and factor costs. Our results suggest that to benefit from improving market opportunities, farmers should adjust and modify their farm management by expanding cash crops in the medium-elevation ranges or increasing herd sizes and fodder cultivation in high-altitude ranges. Results also indicate that farmers in the medium elevations benefit more from these opportunities than farmers in higher altitudes. The paper concludes with some practical recommendations for agricultural policy making in Kyrgyzstan.