Measures to develop agricultural sectors discussed
01:17 / 2023-11-10

On November 9, President Shavkat Mirziyoyev chaired a meeting on improving the activities of cotton-textile clusters, supporting and increasing the productivity of agricultural sectors.

The impact of the deteriorating situation and trade restrictions in the world is also felt in the domestic economy. In particular, these factors had a negative impact on food and textile exports. In this situation, the correct way is to reduce costs by increasing agricultural productivity, investments in deep processing, creating added value, and increasing exports.

In this regard, measures to support agriculture with new approaches, organizational and financial assistance were discussed at the meeting. The Head of state touched upon each industry separately and presented new proposals and initiatives.

According to the analysis, this year, in 41 cotton-textile clusters, the harvest exceeded 40 centners, and in 9 – less than 30 centners. In Jizzakh, Kashkadarya, Namangan, Samarkand, and Tashkent regions, profitability did not exceed 10-11 percent due to low productivity and high costs.

There are also positive experiences. For example, in “Navbahor” cluster in Navoi region, a new foreign cotton variety produces on average more than 70 centners of yield per hectare, the cost of which is almost two times lower than in Jizzakh region.

New approaches to the production of cotton seeds are similarly indicated. Thus, in one of the districts of each region with a low-quality score, insufficient access to water, and a yield of less than 30 centers, the import of cotton seeds with a yield of more than 70-80 centners will be allowed. Planting of varieties with a yield of less than 30 centners will also be stopped and replaced with new high-yielding varieties developed by seed institutes.

Another pressing issue in the sphere is the violation of the discipline of mutual settlements between some clusters and farmers. 122 clusters have debts to the Agriculture Fund and farmers. 6 clusters were provided with preferential loans, although they do not have production facilities.

Based on this, a decision was made to introduce a new system for organizing clusters and their interaction with farmers.

From now on, newly created clusters will be required to have sufficient financial indicators, production capacity, and equipment. They will be selected based on an open competition. They will have to have at least a two-step processing.

Farmers can enter into futures contracts with any cluster within the same region. They can also sell a portion of the crop above the futures through the exchange.

Also, preferential loans in the form of a 60 percent advance for growing cotton for next year’s harvest will be allocated directly to farmers.

Clusters will be financed through the purchase of grown cotton and the provision of funds for harvesting. Separate funds will be allocated for deep processing.

Responsible persons have been instructed to establish a new procedure for financing clusters and farms and to settle receivables and payables between them. The need to transfer clusters to international financial standards was noted.

With this year’s cotton harvest fully processed in 2024, industrial output is estimated to reach $9.6 billion and exports to $4.5 billion.

In particular, projects have been launched to organize the production and dyeing of fabrics worth $350 million in Yuqorichirchiq district of Tashkent region, the production of artificial threads, fabrics, and their dyeing for $60 million in Karakalpakstan. These enterprises will be launched next year and transferred to entrepreneurs on industrial mortgage terms. They will create the opportunity to export products worth $1.5 billion.

To support the development of this industry, the President of the Republic of Uzbekistan signed a resolution to create a new system to support textile, dyeing, and clothing production. In particular:

– enterprises that sell at least 50 percent of dyed fabrics to the domestic market pay social tax at a rate of 1 percent;

– they are allowed to pay property tax in installments for 3 years;

– until January 1, 2025, 50 percent of transport costs for the import of cotton and artificial fiber will be compensated;

– technological equipment and spare parts imported by textile, sewing, and knitting enterprises are exempt from customs duties.

The President emphasized the importance of using these opportunities to increase the number of projects, covering half of infrastructure costs.

It was noted that 16 thousand hectares of orchards and 10 thousand hectares of vineyards have low productivity. This means they are losing at least 3-5 thousand dollars per hectare, an average of $100 million annually.

In this regard, in each district, under the leadership of the hokim, a working group will be formed with the participation of agricultural specialists, tax authorities, and statistics, which will conduct an inventory of orchards and vineyards at least once a year. If they are ineffective, the benefit that exempts them from the land tax will be canceled, and the tax will be collected in full. Next year, differentiated land tax rates will be introduced for orchards and vineyards, depending on productivity and yield.

The tasks of growing food crops between rows in gardens and on private lands were also discussed.

The poultry industry produces 690 thousand tons of meat and 8.7 billion eggs annually. Prices for these products have increased significantly in recent months. The problem with feed does not allow for a reduction in the cost of food. Therefore, it was instructed to organize 8 large granaries.

Another important issue: Uzbekistan does not have a pure line of first-order poultry parent flocks, as a result of which we have to import 3 million chickens. Obtaining such a line will increase production by 3 times and reduce the cost of chicken by 10 percent. Most importantly, it will be possible to export $50 million worth of hatching eggs and chicks annually. In this regard, the task has been set to reach an appropriate agreement with U.S. companies.

Instructions for creating livestock clusters in 25 districts and state support for enterprises producing and processing milk were given. Issues of increasing fish production and constructing reservoirs based on the experience of Slovenia were also raised.

The issue of financing the agricultural sector was also analyzed at the meeting. It was noted that funds raised from international financial organizations are not fully used.

Although these funds are attracted for 20-25 years, banks allocate them to entrepreneurs for 5-7 years. The period for reviewing projects for a loan lasts up to one year. Due to the limited use areas, these resources are of little interest to entrepreneurs.

Therefore, it was emphasized that these resources should be distributed in attractive conditions for both banks and entrepreneurs. It was decided that the term of loans for agricultural projects would be extended to 15 years with a three-year grace period, and their consideration would be reduced to 2 months.

The Ministry of Agriculture has been instructed to organize an internal audit service for the targeted use of funds allocated by international financial organizations, the budget, and banks.

It was also noted that large retail chains have not created equal conditions for local producers, which affects competition and prices.

At the meeting, particular attention was paid to ensuring budget revenues. It was noted that there are shortcomings in some regions and cities and that the size of revenues does not correspond to the growth in production, exports, and investments in these regions.

It was emphasized that serious preparations have been made for the autumn/winter. Therefore, responsible persons have been tasked with providing the regions with natural gas and streamlining the accounting of its consumption.