Measures identified to increase productivity and interest in agriculture

    Uzbekistan 12 February 2024 1777

    On February 12, President Shavkat Mirziyoyev chaired a meeting on the use of new reserves in agriculture.

    Agriculture has been developing in both quantitative and qualitative aspects in recent years. High-performance technology and deep processing through a system of clusters are being introduced. In 2023, production in the industry increased by 4.1 percent, amounting to 426 trillion UZS. Exports reached almost $2 billion. 152 thousand hectares of orchards and vineyards were created, and processing capacities for 185 thousand tons of fruits and vegetables, 31 thousand tons of meat, and 485 thousand tons of milk were launched.

    For the first time in the country’s history, 3 million 700 thousand tons of cotton and 8 million tons of grain were obtained. The product accounting and sales system is completely digitalized.

    At the meeting, primary attention was paid to increasing productivity in agriculture, reducing costs and saving water, and tasks for the future were identified.

    The President emphasized the need for an innovative approach to working and increasing production in conditions of limited land and water resources and introducing industrial culture into the industry. For example, the average yield per hectare in the country is lower than in advanced countries, while fertilizers, fuel, and water are used twice as much. It was noted that it is possible to achieve cotton yields of up to 50 centners and grain yields of up to 100 centners per hectare by importing productive seeds and training farmers in new agricultural technologies.

    The Head of state emphasized the issue of farmers’ interest. Based on the new order, raw cotton is sold through the exchange. Cotton prices on the New York Stock Exchange are rising. Farmers’ incomes have doubled in grain farming due to the introduction of market relations.

    “If you interest a farmer, he can work without subsidies from the state. Such times will come, and this is my goal”, Shavkat Mirziyoyev said.

    To further stimulate interest, this year, a system of providing preferential loans directly to farmers in grain growing, similar to that used in cotton growing, will be introduced. In addition, the transportation and storage costs of wheat purchased with government resources will be fully covered by the budget.

    An important aspect of farm sustainability is cost reduction. In this regard, instructions were given to reduce the cost of production of mineral fertilizers by 15 percent this year, create sufficient supply on the stock exchange, and organize fertilizer warehouses in an additional 70 districts.

    The quality and markup on mineral fertilizers will also be taken under control. Farmers will be provided with conditions to purchase fertilizers at their own expense. The procedure for mandatory registration on the logistics portal for the transport of mineral fertilizers from warehouses will be canceled.

    To reduce water losses this year, 680 billion UZS have been allocated from the budget for concreting 75 large canals. A system has been introduced for providing loans at 14 percent for up to 5 years with a grace period of 3 years for the introduction of water-saving technologies. At the meeting, work in this direction was analyzed by region, and shortcomings were pointed out.

    Problems in the industry related to the discipline of calculations were noted. For example, the debt of clusters to farmers has not yet been fully repaid. According to the new procedure, a futures contract with a cluster that has not repaid the debt by April 1 will be canceled, and the farmer will have the right to sell cotton on the exchange. Farmers who entered data into the electronic platform and signed a futures contract should be provided with a loan within three days.

    Measures to increase production and export of fruits and vegetables were also discussed at the meeting. In addition to the 200 thousand hectares already allocated, another 60 thousand hectares of land will be distributed to the population. In addition, manufacturing products based on cooperation in personal subsidiary plots will be supported. For these purposes, preferential loans of up to 100 million UZS without collateral and up to 150 million UZS with reduced collateral will be provided. Farmers will be provided with the necessary equipment on lease from the Uzagroleasing JSC for a period of up to 10 years with a grace period of 3 years. Customs benefits for the import of motor cultivators and mini-tractors will be extended for 3 years.

    In recent years, the number of greenhouses in Uzbekistan and the volume of products produced in them have tripled. Today, more and more greenhouses are being built that do not require fuel for heating. The President approved this experience and emphasized expanding them and providing farmers with turnkey greenhouses. As part of the Family Entrepreneurship program, an unsecured loan of up to 100 million UZS will be issued for these purposes.

    Investments are also being actively attracted to agriculture. This year it is planned to attract $655 million of foreign investment. Special attention in the projects is paid to supplying quality products to the market and reducing food inflation. In particular, 342 projects are being implemented to produce 25 types of import-substituting food products.

    The importance of continuing this work, developing new projects, and attracting international brands was emphasized. Using World Bank funds, loans will be allocated for new projects for up to 10 years at 18 percent in national currency and for replenishing working capital – loans for up to 2 years. 50 percent of the costs of services of sourcing companies placing orders from world brands at domestic enterprises will be covered. For each attracted brand, a subsidy of up to 500 million UZS will be allocated.

    From now on, entrepreneurs exporting products for UZS will also receive a value-added tax refund.

    At the meeting, measures were identified to support livestock farming, sericulture, and fish farming. In particular, for the creation of livestock complexes, the purchase of livestock, and the production of compound feed, loans in national currency will be allocated at 17 percent with a grace period of 3 years for a period of up to 10 years. Livestock farms will also receive 1 trillion UZS of preferential loans for working capital. The part of the loan exceeding the 18 percent interest rate will be covered by the Entrepreneurship Support Fund.

    Sericulture will be developed industrially based on the experience of Vietnam and China, and net mulberry plantations will be created. Two sericulture stations will be launched at the Institute of Sericulture.

    A transition to market principles will be made in two stages to increase material interest in the industry. This year, at the first stage, the price of cocoons will be increased by 25 percent. The population will be provided subsidies for harvesting cocoons, and cocoon producers will be exempt from income tax. At the second stage, starting in 2025, state price regulation will be abolished, and certain districts and farmers will no longer be assigned to clusters. Cocoons will be sold at an accessible price based on an agreement between the farmer and the cluster or through the exchange.

    Tasks have also been identified to expand fish farming in river basins and private farms.

    At the meeting, reports and plans of responsible persons on the issues discussed were heard.