14.02.2020

On February 14, President of the Republic of Uzbekistan Shavkat Mirziyoyev chaired a videoconference session to discuss the effective organization of the activity of fruit and vegetable clusters, and gradual phasing out of the cotton and grain harvesting system for state needs.

Agriculture is an industry extremely important for economic development, population employment and income growth. In this regard, measures are being taken to advance the agricultural sector in accordance with modern requirements, building on strategic approaches.

The Agricultural Development Strategy for 2020-2030 was adopted with the decree of the head of state on 23 October 2019. Specific areas of agricultural transformation were identified in the recent Address by the President to the Oliy Majlis.

By 2025, it is planned to bring the country’s gross domestic product to 100 billion US dollars, and exports to $ 30 billion. Large reserves and opportunities to achieve these indicators are available in agriculture.

In order to effectively organize the exports of fruits and vegetables as well as relations between producers and exporters in horticulture and viticulture, a cluster system is being introduced. All the necessary organizational and legal terms were created by a presidential decree signed 11 December 2019.

At the videoconference meeting, priority tasks for the efficient organization of the work of fruit and vegetable and viticulture clusters were discussed.

It was noted that the proper regulation of contractual relations in the field and the concrete definition of the rights, duties and responsibilities of procurers, processors and exporters of products are of paramount importance.

Instructions were given regarding the placement of export-oriented crops based on the proposals of clusters, providing them with necessary seeds, seedlings, mineral fertilizers and fuel.

It was determined that the first deputy hokims of regions and districts are personally responsible for the effective organization of cluster activities on the ground.

One of the deputy chairmen of the Central Bank and commercial banks will be responsible for providing fruit and vegetable clusters with working capital and timely funding of their projects.

“The main purpose sought by the establishment of clusters is to boost exports. And for this it is essential to look for new markets. There will be no exports without a market, nor will the cluster system work. Therefore, it is crucial to constantly study demand abroad, effectively use the opportunities, ensure the steady growth in exports,” Shavkat Mirziyoyev said.

The Uzbekozikovkatholding company was tasked with individually working with each export item created, deeply analyzing export contracts and facilitating the conclusion of additional agreements, taking into account the allocation of working capital.

Regional hokims reported on plans for setting up fruit and vegetable clusters, growing and processing goods in demand on the market, increasing exports and expanding their geography.

Issues of improving cotton-cultivation clusters, phasing out the system of harvesting cotton and grain for state needs were also discussed.

In his Address to the Oliy Majlis, the President noted the need for a gradual transition to a system of purchasing cotton and grain based on market principles, forsaking the practice of state orders for the procurement of these products.

As a first step in this direction, prices for molded bread, flour, wheat, cotton seeds, and cottonseed oil were liberalized. Thanks to the careful preparation that preceded the liberalization, prices did not undergo a sharp jump.

With the participation of World Bank experts, appropriate measures have been developed to renounce the state order for cotton and grain.

“This year we are embarking on extensive reforms in agriculture. Hokims should thoroughly study the issues accompanying the transformation. There is no way back. If we do not liberalize agriculture, increase interestedness, we won’t be able to secure economic growth and efficiency,” the President put it.

The meeting participants comprehensively analyzed issues of improving the effectiveness of clusters and financial support for them.

The Ministries of Justice and Agriculture were instructed to streamline the work of clusters by defining their rights and obligations.

The current cotton harvesting system raises many financial issues among farmers and clusters. On the one hand, it causes a lack of funds for cotton processing and production of finished products, while on the other, it limits the ability to pay farms for harvested raw materials.

In this regard, the need for improving the cluster financing system, introducing lending to production and processing of goods in clusters as a separate type of activity was noted.

It was determined that in places where cotton-textile clusters are not organized, farm cooperatives will be created on the basis of ginneries.

For example, this experience paid off in Turkey. An important feature of this system is that farmers will be interested not only in the sale of crude cotton, but also in the products obtained from its processing (fiber, seeds, meal, husk, et al).

Moreover, cotton harvesters will have competition. The rivalry among clusters and cooperatives will benefit farmers, that is, those who own land.

Repudiation of government order when harvesting cotton and grain will lead to the eradication of the race for the plan. From now on, hokims, together with Kengashes of people’s deputies, will control the efficient use of sown land and the proper distribution of crops. They will also be responsible for improving the agricultural infrastructure, for repairing irrigation networks, introducing water-saving technologies, and efficiently spending funds and subsidies allocated for these purposes. They will take measures to provide farmers with services, pest control, and increase the level of mechanization of cotton picking.

Special attention was also paid at the videoconference session to the issue of creating grain reserves.

Shavkat Mirziyoyev stressed that there will be a transition from the mandatory sale of grain for the needs of the state to the state reserve system, and farmers are granted the right to freely sell grain. Since this issue is related to food security, the state is scheduled to abandon the mandatory sale of grain in two stages.

This year, the volume of grain purchases for state needs will be reduced, that is, more than 1 million tons of grain will remain at the disposal of farmers.

And from 2021, the plan for the sale of grain to the state will be completely revoked, and the products will be sold at market prices.

The President noted the significance of these transformations and gave relevant instructions.

During a dialogue with cluster leaders through video conferencing, emphasis was placed on the development of lemon cultivation. The head of state pointed out that this industry is highly profitable, came up with recommendations regarding the organization of limonaria in regions. It was determined that Turonbank will provide $ 100 million of loans for these purposes.

Separate attention was paid to problems in the allocation of land. The necessity of eradicating cases of misappropriation of irrigated fields, the use of each inch of soil in the interests of the people was indicated. Building on this, the head of our state identified tasks to bolster the responsibility of local officials.

Leaders of the sphere, regions and industries provided information on the issues discussed at the meeting.

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