Prior to the demise of the Soviet Union in 1991, Karakul sheep in Kazakhstan were raised mainly on large collective state farms, sovkhozes. Farmers had to meet quotas on lamb and pelt numbers and received wages, while state farms provided veterinary and breeding services, animal feed and marketing. With the break–up of the Soviet Union, land ownership, farm facilities, animals and payment of state farm employees were transferred to Kazakhstan. The Kazakhi government could not support such a system and encouraged privatisation by dissolving state farms in 1993. Government budget support and subsidies were discontinued and there was a lack of an adequate banking system to provide credit to farmers. As a result, farmers were forced to sell and barter livestock, mainly sheep, for labour costs, pensions, supplies and farm maintenance needs. Today, smallholder farms produce about 90% of the livestock; however, many homesteads exist at subsistence levels due to mainly poor marketing and capital constraints.
Keywords: Kazakhstan, sovkholz, market economy, state farms, Karakul sheep, sheep production, collective enterprises, Soviet Union break–up, collectives, privatisation, government support, government subsidies, adequate banking, credit, subsistence farming, marketing, capital constraints