 Agriculture moving away
from simple cotton production |
Uzbekistan's economy has always been dominated by agriculture, and its region's warm climate, long growing season, and solid farming history have assured the country of high yields of healthy crops. Although large areas of the region are semi-arid and suitable only for grazing, the 9% of arable land is fertile and has provided the country with decades of cotton crops and enough fruit and vegetables for self-sufficiency. The agricultural sector comprises 60% of the country's GDP and employs 1/3 of the working population. Although cotton remains the country's primary crop, the government has realised the importance of reducing the economy's reliance on this price-sensitive commodity and the necessity to move towards self-sufficiency by encouraging diversification of the agricultural sector. As a result 41% of cultivated land was devoted to cotton, 32% to grains, 11 % to fruit plantations, and 12% to vegetable crops in 2000.
Towards the end of the Soviet rule, about 25% of total farm output was privately produced as continued to be the case even after the independence. It was only in 1995 that houses, small businesses and farms were privatised, increasing the non-state sector's share from 55% to 68% by 1998. During the privatisation process the number of privately owned farms increased 2,7 times. Although much has been done in terms of privatisation and assistance to individual farmers, there is still need for modernisation and reform in all areas of this key industry. Farming machinery and tractors need to be upgraded and modernised, and farmers consultancy especially on aspects such as crop selection, irrigation and agricultural methods is taking place.
In the 1980's Uzbekistan was the 2nd largest raw cotton producer in the world yielding around 10 million tons annually. Now, still a top producer, it is the 5th largest cotton producer and 3rd largest exporter, comprising 40% of the country's export revenue, 90% of which is taken by the state as the main source of budget revenue. The years 1996 to 1998 saw a decline in the cotton harvest due mainly to the bad weather and a need for modern technology and methods, but Dunavant a key player in the cotton industry agree that whereas in 1999 the cotton harvest showed a considerable increase. The Uzselkhozmash Holding, a government organisation responsible for the agricultural sector's improvement, has an ultimate goal to technically re-equip the agricultural industry with the latest farming technology and techniques aiming at the increase of production and export. Part of this goal has already been achieved by the introduction of brand new tractors supplied by Case Corporation promising a positive outlook for future crop yields.
In an effort to move from a cotton-based mono-agriculture to more diversified crops, other crops besides cotton has been introduced in order to achieve self-sufficiency. For example, cereal production increased to 4,3 million tons last year, boosting the overall agricultural production by 5%. Rice crops have also been introduced and more land has been allocated for vegetable farming. The Ministry of Agriculture has decided to cut back on cotton crops in favour of grain in order to create a self sufficient agricultural sector, reduce the importation of food and to move away from relying on cotton production and export as a major contributor to the country's GDP. | 
Uzbekistan is also the largest producer of silk in the former Soviet Union moving towards becoming the 2nd largest silk producer in the world. "The contribution into the economy is that we have already brought 10 million USD profit to Uzbekistan. I consider that the development of our industry goes hand in hand with the development of the economy of Uzbekistan as whole. As a leader of the industry I believe that the profit we will bring into Uzbekistan will make up 50 million USD by 2005 and that will continuously grow as the years pass", says Mr. Abdumanop Akhmadaliev, Chairman of the Board of Uzbek Ipagi. Currently, about 20 000 silk cocoons are produced per year, 2000 tons of silk thread and 10 million meters of various silk materials. Modernisation of the silk growing and processing is underway with the introduction of new machines, technologies, etc. Foreign investment in this industry comprises Japanese, German, American and Chinese partners who are presently producing silk for the sole purpose of export. This will increase the export potential of silk to $50 million per year - 25 000 tons of pure silk.
The Fergana Valley is the most fertile area of Uzbekistan, and this northeastern part of Uzbekistan is also the centre of the silk production. Other agricultural activities in this area are cotton, cereal, fruit plantations and vegetable crops. Moving southwest towards Bukhara and Navoi where it is more arid, agriculture consists of cotton, cereal and karakul lambs that are raised for their pelts. In the Khorezm area northwest of the country, cotton, cereal and rice, are grown. The Syrkhandarya region, besides being the largest cotton producer in the country, also produces wheat, barley rice and other cereals. The province of Syrdarya, situated on the banks of the Syrdarya River, has thousands of hectares of virgin soil that has been researched for agricultural purposes. These fields have a suitable irrigation infrastructure and facilities that were mainly installed in the last few years. As the irrigation has always been a major issue in Uzbekistan, a lot of effort has been put into it by establishing large-scale projects, now operating throughout the country, especially in the more arid regions in the west. The proportion of irrigated land has steadily increased from 33% to 70% between 1993 and 1998 bringing an overall increase in agricultural production. More than 9% of the value of agricultural production comes from irrigated land.
The export potential of fresh produce is enormous, and packaging, storing and transportation are problems that have been given priority status by President Karimov, as the government would like to see this sector grow to its fullest potential. The agricultural sector, therefore, offers the foreign investor involvement opportunities starting from the very beginning with farming itself, into moving on to processing and finally to marketing.
The mono-agriculture practice of past Soviet times has left its mark on the country leaving soil depletion and water deficiency as problems that affect the country's agricultural future. A pro-active move towards diversified crops is bound to improve the situation over the time and with the introduction of modernised farming equipment, mechanised farming methods and increased capital, and experts believe that productivity can be improved significantly. Uzbekistan, being a nation of farmers, also offers an experienced workforce and competent expertise. As the country is looking more and more into diversifying their present agricultural situation, it offers a wealth of unexplored and undeveloped opportunities. The gradual privatisation of the sector calls for the wise investor, especially in service related areas, to position itself in the market at its early stage. |
