Ain’t gonna risk it on Kazakh farms no more

Farmers in Kazakhstan’s steppe region make production decisions based not only on potential profit, but must weigh expected income against the risk of economic volatility. That’s according to research in the International Journal of Business Information Systems, which has examined agricultural decision-making in the region. The researchers analysed detailed farm survey data and found that a combination of government subsidies and farmers’ attitudes toward risk also have an effect on the structure of agricultural production.

Risk aversion is a preference for more predictable outcomes over uncertain but potentially higher returns. In the agricultural context, this usually involves diversification. Spreading activities across different crops or livestock to reduce the likelihood that a single shock, such as a failed harvest or price drop, will severely damage income. The study confirms that diversification remains a central strategy for Kazakh farmers. However, it also found that even a limited degree of diversification into complementary activities could reduce risk especially for farms with limited resources.

The research found a big difference between outcomes from crop and livestock production. Crop farming is generally producing higher and more stable returns under current market conditions and needs less government support. Beef and dairy farming, on the other hand, often rely heavily on subsidies to remain viable.

The researchers point out that subsidies do more than simply raise income, they affect how willing a farmer might be to engage in riskier activities that might be beneficial in the long-term. While the work focused on Kazakhstan, it could have similar implications for other developing regions where governments might actively intervene to stabilise food supplies and farm incomes. Of course, it is worth noting that state support does introduce additional uncertainties, since subsidy schemes and price supports can change abruptly with policy shifts.

Mussina, G., Kussaiynov, T., Kadrinov, M., Sarsembayeva, G. and Assilov, B. (2025) ‘Searching for a risk-efficient production structure on crop-livestock farms’, Int. J. Business Information Systems, Vol. 50, No. 8, pp.22–37.