Asset-pooling and labor specialization in uncertain times: Implications of small-group farming in the Kyrgyz Republic for agricultural restructuring.
During the last decade, as the former system of socialist collectivized agriculture has been broken up, private farms and household plots have become the dominant form of agricultural production unit in much of Central Asia and the Caucasus. The aim of the paper is to provide background for a closer analysis of these new types of farming units. The data used for the analysis were collected during a farm survey performed in 2001-2002. The full sample consisted of 463 farms and is representative in terms of geography and different farm types for Kyrgyzstan. Overall we find that the total factor productivity of small groups formed on familial ties is higher that that of other individual farms and larger groups. While this suggests that familial groups are more efficient at utilising their factors of production, perspective plots of production land and labour suggest that these groups are not optimising production as they appear to be operating on increasing returns to scale. Some discussion is provided at the end to explain why the different groups may be operating under different returns to scale technology, chiefly based on labour specialisation, asset pooling and risk sharing.