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Agriculture and Water Management

About agriculture

In the Republic of Uzbekistan, a deeply thought-out strategy of agricultural development aimed at ensuring the country’s food security is being consistently implemented. This approach to the production of fruits and vegetables as an important part of the entire system of life support of the population, maintaining their health, as well as creating employment conditions has become one of the main vectors of the state’s economic and social policy.

Thus, one of the first measures that radically changed the approach to achieving food independence in Uzbekistan was an unprecedented decision, adopted in 1989, on allocating more than 400 thousand hectares of irrigated land for household plots in the regions of the Republic of Uzbekistan.

Further steps on implementing market and institutional reforms in the agricultural sector included a change in the structure of sown areas, a reduction of almost 48.5 thousand hectares of cotton in favor of grain crops. As a result, Uzbekistan, which previously imported more than 80% of its need for grain, gained grain independence. Every year, more than 7 million tons of grain are produced in the country, and there is also a potential to increase this indicator several times through advanced technologies.

Since 1997, the agriculture of our country has been demonstrating a steady positive growth rate, which is 6-7% per year. This made it possible to increase per capita meat consumption by 1.3 times, milk and dairy products – 1.6 times, potatoes – 7 times, vegetables – more than 2 times, fruits – almost 4 times.

The share of agriculture of Uzbekistan in GDP amounted to 17.3% of GDP in 2017. The industry shows steady growth rates of 6–7% per year. These indicators make Uzbekistan one of the leading countries in the CIS for production of fruits and vegetables, fruits, grapes, as the soil and climatic conditions allow us to grow almost all types of agricultural crops.

In 2017, the republic for the first time in its practice introduced a year-round sowing of various agricultural crops. Another solution aimed at increasing the production of fresh vegetables and fruits in the country, their cultivation by the method of hydroponics. In 2018, it is planned to build 352 hectares of greenhouses using this method. Moreover, the corresponding technologies will be imported from South Korea, Iran and Japan. This will allow by the end of 2020 to bring the production of fruits and vegetables to 32 million tons.

The main grain crops of Uzbekistan: wheat, barley, corn, and rice, which are grown in intensively irrigated oases, but at the same time do not have adequate funding for further development, by attracting advanced technologies. There is also great demand, but sesame, onion, flax, and tobacco are grown in small quantities. Fresh fruits are mainly consumed in the domestic market of the country, while dried fruits are exported. Uzbekistan’s watermelons, known for their unique taste are widely in demand in major cities of the CIS.

The skin of Karakul sheep breed, which is a traditional export commodity, is bred in Bukhara and its surroundings, but their contribution to the total export volume is insignificant today. The production of Karakul sheep skins was reduced from 1.4 million units to 700 thousand units. Cattle, sheep and chickens are mainly raised for getting meat. In Uzbekistan, about 3 million cows are bred, which produce 5 million liters of milk annually. According to statistics, one cow produces 1600 liters of milk, which is one of the lowest in the CIS (compared to 2500 liters per cow a year in Russia, Ukraine and Moldova). In this regard, there is the possibility of developing animal husbandry, including increasing the efficiency of milk production.

Export

In recent years, Uzbekistan has become a major exporter of high-quality and competitive fruit and vegetable products. To ensure it throughout the year, much attention is paid to the issues of processing and storage. Significant investments are required in this area, as well as introduction of advanced technologies.

The geography of exports of fruit and vegetable products and viticulture is expanding. If earlier the republic traditionally supplied it mainly to Russia, Kazakhstan and other CIS countries, today, more than 120 countries of the world are importing from Uzbekistan. In particular, the geography of deliveries has expanded due to establishment of exports to Indonesia, Norway, Mongolia, Saudi Arabia, Slovakia, the USA, Thailand and Japan.

The export potential is estimated at more than $5 billion. The main markets for Uzbek fruits are Russia and Kazakhstan. For about 60% of total exports accounts only for the Russian Federation. Over the past year, the supply of Uzbekistan fruits and vegetables to Russia doubled. On December 15, 2017 export duties on most types of goods were canceled. Licensing of most export products has also been abolished. This step should facilitate the conduction by enterprises of foreign economic activity.

Single export brand

Uzbekistan has launched a new single brand UzAgro for the export of fruits and vegetables. Due to UzAgro trademark, fresh, processed agricultural and food products will be able to occupy a worthy place in the international market.

Strategic planning of brand development will minimize the costs that now beat Uzbek exporters – overproduction or insufficient production of various goods, spontaneous pricing, losses in high-risk markets when choosing potential partners, expensive logistics and high costs of servicing loans, and much more.

Privileges

In the period from 2013 to 2017, land users and farms at the expense of the state it is envisaged to allocate on a preferential basis of long-term loans for the implementation of drip irrigation on an area of ​​25 thousand hectares. Farms that have implemented water-saving technologies in their activities are exempt from paying land and other taxes for 5 years.

In order to ensure stable provision of the population with fruit and vegetable products, changes have been introduced to the organizational structure of “Uzbekoziqovqatzakhira” Association. Territorial branches of “Oziqovqattaminot” are created in the Republic of Karakalpakstan, regions and the city of Tashkent.

Activities of organizations that are part of the Association, engaged in procurement activities, is equal to trading activities. Accordingly, they will be taxed as a trade enterprise – to a single tax payment.

At the same time, in terms of the sales of agricultural products, these organizations are exempted from paying a single tax payment for a period of 5 years.

Funds released in connection with the provision of the above benefits are distributed as follows:

— 50% – Associations for financing the construction and modernization of warehouses, equipment for the processing and packaging of food products;

— 50% – remain at the disposal of organizations and are used to finance the purchase, laying and storage of fruits and vegetables.

Also, multidisciplinary farms – single taxpayers from the time of registration are exempt from all taxes on income not related to the cultivation of agricultural products for a period of five years.

In addition, now for farms engaged in diversified activities, when renting state property in the lease rate is set at a reduced amount of two times. Tax-exempt funds will be directed by farms to increase the volume of cultivation and processing of agricultural products.

Perspectives

According to the industry development program until 2020, during 2016–2020, 170.5 thousand hectares of cotton and 50 thousand hectares of grain areas will be placed on food crops. The program envisages expanding the area of ​​crops of vegetable crops and potatoes by 1.5 times, orchards and vineyards by 7% compared with 2015. Thus, the share of land for fruit and vegetable crops will be more than 30%.

By the end of 2020, the program measures will serve to increase potato production by 35%, fruits by 23.8%, grapes by 17.6%, and vegetables by 30%.

By 2020, the establishment of 14 trade and logistics centers in the regions for processing, storage, packaging and export of fruits and vegetables is envisaged. When organizing them, attention is paid to the availability of appropriate infrastructure that provides high-quality transportation, storage, sorting, calibration, packaging, certification, as well as export.