The reorganization of the former state farms into a collection of individual leaseholding farms and somewhat better incentives for individual farmers has contributed to an estimated 38 percent increase in cereal production in 1997. The area actually (as opposed to reportedly) sown to cereals increased by 50 000 hectares to 539 000 hectares. That sown to wheat increased at the expense of coarse grains, fodder crops and cotton. Growing conditions were better than last year, but the input supply situation remained difficult. A major contributing factor to the sharp increase in wheat production to 650 000 tons was the introduction of a contract system of farming for smallholders backed up by credit for essential inputs and services. The cotton harvest has suffered from adverse weather conditions (spring floods and a cool August), shortages of machinery, continued low availability of fertilizers and inadequate maintenance of the irrigation system. Output is likely to remain well below average but better than last year. Output of melons and other fruit is expected to decline, in response to limited marketing opportunities and the loss of export markets.
The food supply situation remains mixed and precarious in disadvantaged areas. Overall, the availability and choice of food has improved but a lack of purchasing power limits access and there are many infrastructural constraints. In urban areas, milk remains in short supply while in rural areas the wheat supply situation remains tight even after the harvest. People in depressed industrial areas and infertile rural areas are experiencing difficulties. Persons having an income below 120 000 manats, or U.S.$ 24 per month, are defined as vulnerable, and total 3.4 million according to official sources. These continue to receive flour, meat, milk, butter, tea on ration cards but the subsidy element is being steadily reduced. A household budget survey has been carried out but the results have not yet been disseminated.
Annual domestic cereal utilization has decreased to about 1.2 million tons including food consumption of 626 000 tons, other uses (mainly seed) of just under 170 000 tons and feed use of around 386 000 tons. Cereal stocks were drawn down in 1996/97 and are to be replenished this year. Against the total requirement of 1.42 million tons, domestic availability (stocks and production of cereals) are estimated at 863 000 tons. Allowing for some stock replenishment this leaves an import requirement of nearly 560 000 tons for 1997/98. This is expected to be covered commercially, mainly in Kazakhstan and the Ukraine but about 100 000 tons could be imported from outside the CIS.