PRODUCTIVITY AND SUSTAINABILITY IN AGRICULTURE: A STUDY OF SOEs VS. PRIVATE FARMS

The agricultural sector plays a critical role when it comes to economic development, food security, and environmental sustainability. This particular study looks at factors that affect total factor productivity (TFP) in agricultural state-owned enterprises (SOEs) and private farms. The research identified and evaluated land use efficiency, labor productivity, capital investment, and the adoption of sustainable practices for over 11,982 farms in Kazakhstan within a ten-year timeframe. The results exhibit productivity differences between SOEs and private farms. A larger share of private farms outcompetes SOE due to more efficient labor utilization and allocation of resources while the SOEs are more productive due to self-sufficient capital investment and infrastructure. As expected, lagged TFP (TFP from the last period) turns out to be an important predictor of TFP within the industry, for which there has been a great emphasis in the cross-section analysis. Additionally, the consequences of land use and agricultural sustainability positively contributed to TFP. These results confirm the expectations about responsible farming with a focus on resource optimization. On the other hand, crop yield was discovered to have an inverse relationship with TFP. This implies low levels of TFP growth because of efficiences associated with over-relies on inputs. This research is useful for policymakers and stakeholders as it expands the range of possibilities for multi-targeted approaches. Keywords: Total Factor Productivity (TFP), agriculture, capital investment, sustainable farming practices, State-Owned Enterprises (SOEs)