Forecasts and threats

Despite a certain reduction of crop sown areas, in general the future harvest will be enough for both the domestic consumption and the export. Moreover the forecast for this year harvest in Russia is quite unfavourable. The strongest drought destroyed spoiled big sown areas on Kuban, Volga area and Krasnodar region. It is expected that the purchasing price for grain will grow approximately by 20 per cent by the end of the year. It creates favourable competitive possibilities for Kazakhstani grain on Russian market, allowing not only to increase the export volume, but also to extend its nomenclature at the expense of the third class grain, of which the main volume of Kazakhstani harvest consists.

Already today in Kustanai, North Kazakhstan and other grain sowing oblasts grain traders got more active in their business, showing interest to virtually all sorts of grain, starting from foods and finishing with forages. And if we consider that another Kazakhstani "competing partner" on grain market - Ukraine, the grain business doesn't go too well either (significant areas of winter crops were ruined by unexpected spring frosts), the prospects of Kazakhstani export seem to be even more optimistic. Thus, according to experts, Kazakhstan can export around five tons of grain this year.

But the forecasts aside, the real life makes its corrections here anyway. A good harvest is a good in itself. In the market area it becomes a value only when it may be sold in some way. The grain sales system emerging slowly and with difficulties received a serious blow from authorities. Kazakhstani parliament approved changes into the law "On grain", which, if they are adopted, can paralyse various links in the grain production chain and maybe even the whole system.

An object of the negatively close attention of the deputies are the bread procurement points - BPP, or, simply, the grain elevators. Each year in parliamentary circles, at their sessions, accusations are made against these enterprises, "robbing" unprotected peasants, lowering prices, voluntarism in the definition of grain grades and in general behave as "blood sucking kulaks". Moreover, on their basis new, "non-profile" enterprises emerge - battery farms, cattle breeding workshops, grain, meat processing ventures etc. Considering it to be inadmissible, the parliamentarians decided to rectify the situation. Firstly, to forbid the BPP to deal with any activities, unrelated with the storage of grain. Secondly - to guarantee the execution of duties on the so called grain receipts that peasants receive for their yielded grain that afterwards must be changed for real money.

These receipts are the same bills of debt and this initiative of the legislators could be recognised as a sound beginning. It is suggested that all BPP enterprises will enter a social fund of guaranteeing obligations on grain receipts. It will help the elevators to pay in time to their grain suppliers, and to those to provide themselves with financial resources for the next agricultural works. But the whole issue is: who will pay for the new service? The BPP income is made mainly at the expense of prices that it quotes to the suppliers for the maintenance and processing of grain. Naturally, in this new situation the elevators will follow the simplest way - they will include insurance costs into the price of their services. The peasants supplying an elevator with grain will have to pay more. But here there is at least some certainty that from now on they will be receiving real money for their grain receipts instead of a usual answer: "No money, wait!".

If a ban on various BPP activities is introduced there wouldn't be even this small, but real positive effect. All this reminds a classic example of administrative interference into the market economy, which a Nobel prize winner in economics A.Hayeck called "ruinous amateurism". The essence of the term is in a wrong understanding of the economic interests of the "managed" - peasants - by the "managers" (in this case parliamentarians) - and a wish to establish, starting from one's own, often emotionally coloured, ideas about some more "honest", "just" rules of management and partnership.

The same Hayeck in his work, on the example of market economy showed that a concentration of financial and industrial capital starts in certain "points of growth", where the profit is the highest and possibilities for managing manoeuvres are the widest. The BPP became such "points of growth" for our economy. Whether you like it or not, they are a real centre of the economic life in the village. Exactly there, not in a bank or a rural akimat, a peasant can receive a real aid - a loan, seeds, fuel for his equipment. With our vast distances, with our ruined infrastructure the elevators are sources for a vivid market economy, the main criterion of which is an economic efficiency. If it is profitable for an elevator to hold a battery farm or a pig farm on the basis of its waste products, at which costs would be two or three times lower, than on the neighbouring farm - who's going to lose on that? Naturally - competitors, who start to write complaints to all authorities. But a growth and concentration of agriculture - are natural consequences of a competitive struggle and it can be only welcomed that they are happening in Kazakhstan with quite a big speed. The present elevators, with their diversified production can become for varied industrial and trade agricultural holdings, as it happened in the developed countries, for instance, in France, USA. Of course, their specialisation can and will change, various mergers and splits are possible for them. But their grand advantage is that they emerge and will continue to do so being led by their main criterion - the economic efficiency, an urge towards profit and predictability of the business. Nothing else that wouldprovide a survival of rural economy has been found by history.

In the wish to command over the rural economy, obviously, there's a lot of populism. And idea about big economic subjects, like elevators, being parasites sucking the blood of peasant grain producers - is not more than an after-effect of the Soviet kolkhoz thinking, guided by ideological myths and stereotypes, not by pragmatic economic calculations. An element of self-conscious lobbying is also not excluded, because many Kazakhstani BPP became a place for the application of transnational capital, Russian one in the first place. During the privatisation, in the beginning of the 90-s, the Kazakhstani business was still too weak to secure for itself the most profitable elements of agricultural infrastructure. Today the capitals of Kazakhstani businessmen have grown significantly and the increased financial opportunities must be realised. Simply taking the attractive enterprises away from "Varangians" is impossible, therefore there is only one way - to increase pressure on them, to make their work less profitable and thus to push them away from the market. Of course they could be purchased, but as for today prices - it's a waste of money. All these transparent motives are easily guessed in the actions of this strategy carriers - the deputies. Because the real economic dividends from a "ban on profession" for the living and growing market organisms, like the BPP, are quite ghostly. And the damage, if the amendments are adopted, will be perceived by rural folks immediately.