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"The Dark Horse" of the Export Market

26.01.2019

Several years ago, Kyrgyzstan's smallest and least populated northern region made a surprising breakthrough into the global agriculture market by becoming one of top twenty - top ten, according to some data - exports of kidney beans, rivaling such giants as China, Argentina, and Egypt.

The phenomenon, which became known as "Talas Wonder", is also remarkable due to the fact that historically Kyrgyzstan had never had substantial kidney bean production. Furthermore, the export build-up and global market penetration happened without any government support, through the efforts of small farmers alone.        

"Talas Wonder" has generated considerable interest among researchers. In 2018 the University of Central Asia’s Institute of Public Policy and Administration conducted a study Production and Exports of Kidney Beans in the Kyrgyz Republic: Value Chain Analysis, which not only detailed how this success came to be, but also offered various scenarios of further development. Kidney bean was first introduced to Talas region in early 2000s by a Turkish firm, which had discovered that the local climate was perfect for its cultivation. Starting out with mere 230-hectares of sown area, kidney bean production has since then expanded to 55 000 hectares, making it the dominant crop in the region and number one agricultural product in Kyrgyzstan with exports to more than 20 countries.

After breaking into the global market in 2007, "Talas Wonder" reached its peak price point in 2013, when competing countries experienced drop in beans production: Egypt went through coup d'état, harvests in Argentina and Turkey were slammed by drought, and China temporarily suspended its exports.

Further evidence for highly competitive advantage of Talas kidney beans was presented when other countries were forced to put in place trade barriers as a response to "Kyrgyz expansion". Still remains unresolved the issue of eliminating the duty of 19.6% on the import of beans from Kyrgyzstan to Turkey, from where it goes to European markets. The Kyrgyz government keeps raising this issue in interstate negotiations, but so far there is no success.

What instructive results does this success story yields? It supports the idea that small-scale farmers are able to shift from traditional crops to a new type of production when markets are open and stable. Households that increased their crop area for beans experienced, on average, an increase in the value of agricultural production, and this supported an improvement in the wealth of rural farmers in Talas region. Experts believe that this experience can be used for replication in other regions for farmers to advance their business.