Wednesday, 29 October 2008

UZBEKISTAN OPTS FOR FOOD CROPS PRODUCTION

Published in Field Reports

By Erkin Akhmadov (10/29/2008 issue of the CACI Analyst)

On 20 October 2008, the President of the Republic of Uzbekistan adopted the presidential decree “On Measures for Optimizing Cultivated Areas and Increasing Food Crops Production”. The decree largely aims to increase the amount of land growing food crops by decreasing the volumes of cotton crops.

On 20 October 2008, the President of the Republic of Uzbekistan adopted the presidential decree “On Measures for Optimizing Cultivated Areas and Increasing Food Crops Production”. The decree largely aims to increase the amount of land growing food crops by decreasing the volumes of cotton crops. Since Uzbekistan is one of the largest producers and exporters of cotton in the world, the decree caught many by surprise. Shortly before the adoption of the decree, Uzbekistan’s Minister of External Economic Relations, Investments and Trade, Elyor Ganiev stated at the opening of IV Uzbek International Cotton Fair that the amount of areas growing cotton will remain as before. The text of the decree explains the decision through persistent shortages of water that creates numerous problems for growing cotton, constant price rises for food in the global market and an intention to increase the variety of food crops grown in the republic to satisfy the population’s needs, and to improve the welfare of the rural population. As always, the intentions of the government seem honorable, however, some possible outcomes and consequences of the measure should be considered.

Based on the data of the Ministry of Agricultural and Water Industry, cotton crops are currently cultivated on 1391000 hectares. In accordance with the decree, 76000 hectares will be freed from cotton crops; 50000 of those freed from cotton will be used for sowing grain and barley and the rest for vegetables, melons and gourds. In light of persistent water shortages, it is questionable how much water the state will actually be able to save. The largest portion of the land will still be used for growing cotton and any type of crop needs water to grow.

At first sight, it seems that the government of Uzbekistan is concerned with the state’s food security. Considering that grain prices on average more than doubled over the last few years, and that the winter promises nothing good, the plan seems quite logical. As reflections of some peasants published in local newspapers suggest, with the decree implemented, their welfare will improve greatly since before, when only cotton crops were sown, peasants had to buy fruit, vegetables and food crops. Now, they will supposedly have their own. Closer scrutiny may reveal, however, that besides improving the welfare of peasants and farmers, the state may also gain some profits. Uzbekistan produces seven million tons of vegetables annually and demand for these grows constantly. Thus, preliminary estimates suggest that with local market saturation, the export of vegetables might grow by 5-10%.

Among other explanations for Uzbekistan’s decision to “change gears” could be the persistent problem of the country’s cotton-picking practices and the international community’s discontent with these. Since some major European and American trading partners for cotton have suspended cooperation with Uzbekistan because it exploits child labor, the government may have decided to smoothly change the state’s mode of production. Interestingly enough, by doing this the state seeks to shift the focus from one type of rights violation, but in fact ends up embarking upon another one. By commanding what to grow, the state ignores the interests of farmers, the owners of the land. Ideally, they should be the ones to decide what to grow and how much. In real life, however, it is the state that regulates such matters.

The last but not least factor to consider concerns Uzbekistan’s interest in obtaining external funding. On 23 October 2008 first vice-premier, Minister of Finances Rustam Azimov and the head of the World Bank office in Uzbekistan Lu Brefor signed an agreement on credit financing for the second phase of a project supporting agricultural enterprises of Uzbekistan – RESP II, for which the International Association of Development aims to provide a credit of US$68 million. It will allow farmers of ninety areas of seven regions of the republic to increase the productivity of the agricultural industry, improve land reclamation and irrigation, and introduce new systems for quality and enterprise management. The intensity of cotton cultivation in Uzbekistan is not in line with the objectives of this initiative. Therefore, the government’s decision to reduce cotton farming and expand the variety of agricultural produce could be viewed by the project representatives as a positive change.

In general, the presidential decree to reduce cotton production and increase that of food crops seems to aim at improving the situation in the agricultural sector and people’s welfare in Uzbekistan. However, looking at the possible reasons and effects of the decree, it is still questionable whether the desired results will be achieved without bringing even more harm.
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The Central Asia-Caucasus Analyst is a biweekly publication of the Central Asia-Caucasus Institute & Silk Road Studies Program, a Joint Transatlantic Research and Policy Center affiliated with the American Foreign Policy Council, Washington DC., and the Institute for Security and Development Policy, Stockholm. For 15 years, the Analyst has brought cutting edge analysis of the region geared toward a practitioner audience.

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