To all appearances, the Kazakh government was totally unprepared for the unprecedented rise in bread prices aggravated by runaway inflation. At a government meeting on October 1, Prime Minister Karim Masimov, irritated by the helplessness of regional governors in coping with galloping prices, assigned them the task of creating grain reserves to stabilize the food situation in their respective regions. He warned that the government would establish a strict state monopoly on bread production if governors fail to cope with the task within a week.

The steep rise of bread prices in all regions of Kazakhstan, which came in the wake of parliamentary elections, flames up popular discontent with the ruling Nur Otan party and causes embarrassment for the government. Last September, a group of protesters picketed the Almaty office of Nur Otan, demanding urgent measures against the rising cost of living. This time, protesters dispersed peacefully, but the deteriorating situation on the domestic grain market and shortage of bread in major cities of Kazakhstan is heightening social tension. In Almaty, bread manufacturers complain they have run out of stocks of flour which normally last for months. In Qaraghandy and Pavlodar, one of the three major wheat-growing regions of Kazakhstan, bread prices hiked by 30 percent within a month. In North Kazakhstan, all attempts of the regional government to keep prices down and ration out bread failed. Shop owners openly ignore the calls for equal distribution of the staple food. Berdibek Saparbayev, Minister of Labor and Social Protection, who was dispatched to Pavlodar to calm down passions, publicly blamed “entrepreneurs” for “plotting a conspiracy” on the grain market.

Obviously, there is more than one reason for the widespread bread crisis in Kazakhstan, one of them being the globally rising food consumption and growing, and often uncontrolled, export volumes of Kazakh grain. But government officials persistently hush up domestic problems of food supply such as inconsistent agricultural reform, ineffective land use, rising costs of grain production and inadequate state support for farmers. Official sources indicate that this year over 300 small farms left 40,500 hectares of land unsown for lack of subsidized fertilizers, diesel oil and pesticides. This official figure could be doubled or tripled to get a more accurate picture of the real state of farming policy. Only a few government-favored wheat producing farms can afford expensive but efficient American John Deere harvesting machines. Every year, dozens of small farms end up in bankruptcy, unable even to cover production costs and pay back hard-obtained bank credits. This results in hundreds of hectares of abandoned agricultural land turning into barren wilderness from year to year. The dilemma for the government is that Kazakhstan, gearing up to join the World Trade Organization, faces demands for drastic reduction of state subsidies for agriculture, but the Ministry of Agriculture cannot abandon the old practice out of fear that the country will lose its position as a major grain exporter. At the same time, the government desperately struggles to create food reserves, making it mandatory for farers to sell part of their harvest to Prodkorporatsia, the state-owned food and grain corporation. But many farmers, lured by higher prices for their produce offered by foreign grain purchasing companies, look for buyers outside Kazakhstan. Last August alone, when some bakeries were standing idle for lack of flour, 91,000 tons of grain were exported from Kazakhstan. Prime Minister Masimov reiterated at recent government meeting that grain exporters should contribute 20 percent of their produce to emergency grain reserves at a price not higher than $200 per ton.

Paradoxically, the problem with the bread crisis is not the shortage of wheat, but rather overproduction of it. Kazakhstan is desperately short of transport facilities to ship the grain. This year Kazakhstan plans to export 9 million tons of grain, while 3.5 million tons would suffice for domestic consumption.

The Ministry of Agriculture announced that this year Kazakhstan will reap the richest harvest ever recorded since the independence of the country – 22 million tons, which tops last year’s achievement by four million tons. Prodkorporatsia announced that it would purchase the grain from farmers for $200 per a ton of wheat, fabulously higher than last year’s purchasing price of $80. A bumper harvest offers farmers a rare opportunity to buy new agricultural machines, to pay back bank credits and improve their financial position. But it does not solve the impending food crisis triggered not only by rising bread prices, poor land management, but also, to a larger extent, by the government’s inability to handle the situation. Akhmetzhan Yesimov, minister of agriculture, admitted that there was nothing the government could do about bread prices. He nevertheless urged regional governors to create local stocks of grain within the next four months and appealed to the patriotic sentiments of farmers. It seems that government members are going out of their way to avoid political consequences of the crisis which caught the government unprepared.

Kazakhstan is not an isolated case in the dramatic chain of food shortage which affected all Central Asian nations. But in Kazakhstan, generally depicted as a oasis of plenty in economically poor Central Asia, the bread shortage will have far more serious political reverberations. Even some public organizations, traditionally loyal to the government, are running out of patience with the inactivity of the elite. Siyazbek Mukashev, the chairman of the Trade Union of Kazakhstan, declared that the Council of Veterans and other public organizations would stage street manifestations and demand the resignation of the government if Nur Otan fails to fulfill its pre-election promises.

The bread price rises undermine public trust in the government and damage the political image of the ruling Nur Otan party, which heaped promises of a wealthy life before the elections. Growing public discontent may lead to further government reshuffles and unpredictable moves. But there is good reason to hope that the solid economic foundation will carry the country over the crisis without an excessive price to pay.