Personal Subsidiary Farms (PSF) play a crucial role in Kazakhstan’s agricultural sector. They account for 70–80% of the country’s total milk and meat production, making a significant contribution to food security. However, the legislative framework governing PSF activities requires substantial improvements. According to paragraph 24 of the Work Plan for Cooperation between the Mazhilis of the Parliament of the Republic of Kazakhstan and the Institute of Parliamentarism for the Third Session of November 4, 2024, the Institute of Parliamentarism is engaged in the development of a draft law titled "On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan Concerning Personal Subsidiary Farms."
Currently, the legal regulation of PSF is based on the Land Code of the Republic of Kazakhstan (2003) and the Law on "State Regulation of the Development of the Agro-Industrial Complex and Rural Areas" (2005). However, these acts lack a clear and unified definition of PSF, which creates ambiguity in their legal application and complicates state support for such farms.
For example, as of February 1, 2024, 47.6% of the country’s cattle were raised in PSF, 42.2% in peasant or farm households, and 10.2% in agricultural enterprises. This means that nearly half of Kazakhstan’s cattle are in farms whose legal status remains undefined.
International Experience: What Can Be Learned?
An analysis of international practices demonstrates that the successful development of PSF is achievable when supported by a legal framework that clearly defines their status and includes mechanisms for state support. In Russia, for instance, Article 2 of the Federal Law of July 7, 2003, "On Personal Subsidiary Farms," designates PSF as a non-commercial activity focused on producing and processing agricultural products for the personal use of the citizen and their family. Importantly, land allocation for PSF is not linked to commercial activity, thus maintaining the social orientation of such farms. In Belarus, the Law of the Republic of Belarus "On Personal Subsidiary Farms" (Article 2) defines PSF as a form of economic and labor activity based on the use of land provided in compliance with land protection and utilization legislation. This model supports family farms, encourages rural development, and stabilizes the food sector. Uzbekistan’s "Law on Subsidiary Farms" (2021) regulates the organization and development of subsidiary farms, with Article 3 defining them as labor activities related to growing and processing agricultural products both for personal use and for trade. This type of farm is not considered entrepreneurial, and registration is not required. In France, PSF are small agricultural operations focused on producing food for personal consumption. French law permits the sale of excess products but sets a revenue threshold, beyond which the farm is reclassified as a commercial operation. This limitation is intended to preserve the PSF status and prevent large-scale commercialization. Once production reaches industrial levels or products are sold beyond local markets, the farm is required to register as a farm business and adhere to corresponding regulations. In Germany, PSF focus on personal consumption with the option to sell modest surpluses. Unlike larger farming operations that must register as legal entities, PSF are exempt from complex registration and taxation procedures as long as their income remains below a prescribed threshold.
What Reforms Are Needed in Kazakhstan?
• Clear Definition of PSF in Legislation: A precise definition is necessary to ensure clarity regarding the scope of PSF activities and to differentiate them from commercial enterprises. • State Support: Tax exemptions, subsidies, and simplified credit mechanisms could help stimulate the growth of PSF. • Simplified Registration Procedures: It is essential to create a framework that enables rural residents to legalize their farms without bureaucratic obstacles.
In conclusion, the experience of foreign countries indicates that the effective development of PSF requires a legal framework that defines their status, introduces simplified registration processes, and incorporates mechanisms for state support. We believe that Kazakhstan should consider the international experience to clarify the legal status of PSF, establish clear criteria for distinguishing them from commercial farms (such as peasant farms), and develop a comprehensive system of support. Creating a favorable environment for PSF will be a vital step in improving rural living standards, ensuring food security, and enhancing the overall economy.
