A number of policy constraints have been identified (Kerven 2002a):
Policies on breaking up state farms have been implemented without being replaced by government extension services for privatised farmers. There is now no link between researchers and producers, so there is little possibility for research to be realigned to farmers' priorities or for farmers to become aware of new technologies appropriate for their circumstances.
The cessation of state purchases at fixed prices has allowed private entrepreneurs to buy, re-sell and export livestock products. However, there are no market information services that reach farmers, with the exception of Kyrgyzstan. Farmers therefore remain unaware of destination market prices particularly for wool, animal fibres and pelts that are mostly exported. This lack of information places producers in a very disadvantageous bargaining position when selling these products to local middlemen who then export or re-sell these products.
Farm privatisation policies have also had a major negative effect on the conservation of economically-valuable breeds and strains. State farms formerly dictated breeding programmes to ensure standardised production of wool, other animal fibres and Karakul sheep pelts. With the break-up of the Soviet Union, guaranteed outlets for these products disappeared and had not been replaced by profitable new markets until the late 1990s. Privatised farmers therefore had little interest in preserving the more valuable wool breeds and strains, which are now in great danger of being lost through mortality, slaughter of animals for meat, and uncontrolled mating.
Policies to withdraw financial support to state farms have left new smallholder privatised farmers without capital or credit to adopt new technologies, even if they are aware of these technologies. Such technologies include improved breeds, wool carding equipment etc. necessary for increasing the value of wool, other animal fibres and pelts.
Policies on exporting livestock products are not 'business-friendly' and discourage both domestic and international entrepreneurs. Exporting is hampered by complex certification and customs procedures, and in Turkmenistan, by a dual exchange rate, which sets the official rate at less than one-third of the informal open market rate. Lack of transparency in official and business transactions also discourages wider participation, foreign investment and thus greater competition in business
development. Streamlining and modernising some of these procedures and advertising a more business-friendly approach to potential investors would go far in improving returns from marketing and processing.
Privatisation policies and financial constraints have led to the closure or greatly reduced operation of the large factories built in the Soviet period for processing wool, fibre and pelts. Those that remain open are operating at well below capacity due to debts, lack of capital and modern equipment. Their products usually do not meet world standards. Some recent joint ventures with foreign companies have failed due to interference from local government administrations. However, after initial difficulties, a few factories are now operating successfully, with foreign investment and expertise. These factories now require better quality and larger quantities of raw fibres.
National policies accord a low priority to supporting the scientific infrastructure and as a result, state finance for agricultural research has declined sharply since
independence. National research institutes now have very limited financial resources, are losing their personnel and are unable to undertake new market-based and client-driven research.
