Agricultural land – 21.5 million hectares;
Irrigated land – 4.2 million hectares;
Average annual number of sunny days – 320;
Possibility of harvesting – 3 times a year;
Number of commissioned logistics centers – 6.
Agriculture is one of the key sectors of Uzbekistan’s economy. The land used for agricultural production occupies 45% of the territory of the country, about 50% of the population lives in rural areas.
Together with water and forestry, the industry employs 3.6 million people (27% of employed in the economy as a whole) and 18% of GDP. The export of agricultural products brings the Republic of Uzbekistan about 20-25% of total export revenues.
The volume of agricultural production has increased by almost 3 times over 20 years, reaching 24 million tons of fruits and vegetables, of which 11, 3 million tons of vegetables, 3.1 million tons of fruits, 1.7 million tons of grapes and 2.1 million tons of melons. In addition, there are more than 12 million heads of cattle, more than 20 million heads of small cattle, about 72 million birds, as well as more than 2.4 million tons of meat, more than 10 million tons of milk, 37 thousand tons of wool and more than 7 billion eggs annually in the country.
Currently, in order to develop agriculture, the government is taking measures on modernizing and diversifying agriculture. Attracting foreign investment plays an important role in implementation of the above mentioned measures.
Attracting investment in agriculture is carried out in three directions, such as attracting investment under the guarantee of the government, foreign direct investment, as well as attracting funds for free technical assistance.
In accordance with land use statistics in 2016-2017, the net cultivated area amounted:
Uzbekistan is a manufacturer of about one hundred types of fruits and vegetables, of which 70 are exported. The country ranks third in the export of persimmon, fourth in the export of fresh and dried apricots and raisins, fifth in the export of prunes, tenth in the export of grapes. In 2018, Uzbekistan ranked the fourth place in the export of cherries, ahead of Spain.
In Uzbekistan there are the following factors contributing to development of fruits and vegetables production:
According to the FAO (Food and Agriculture Organization of the United Nations), the annual loss of fruits and vegetables in the world reaches 30-35% of world production. The Government of the Republic of Uzbekistan has developed a plan for development of agricultural infrastructure until 2021 for reducing losses.
According to the Ministry of Agriculture of Uzbekistan, until 2018, 382 thousand tons of storage facilities and 682 thousand tons of cold stores were created in the country. The volume of stored products amounts only to 4.4% compared with the total production of fruits and vegetables. In 2017, 6 logistics centers were commissioned, with additional refrigeration storage capacity of 120 thousand tons of products, as well as 7 metric tons per hour of individual quick freezing (IQF) and 45 refrigerated vans. According to the plan for development of agricultural infrastructure, by 2021 it is planned to create another 600 thousand tons of cold stores connected to a common logistics network. For investors, this is the best time to invest in this sphere.
In 2016-2017, 288.5 million USD was allocated for implementation of 568 projects in the sphere of horticulture at the expense of IFIs, including for creation of a modern cold store with a capacity of 160 thousand tons, an intensive garden for 2,532 hectares, production on processing of products with a capacity of 570 thousand tons per year and modern greenhouses on 212.9 hectares.
There are more than 57 thousand greenhouse complexes on more than 8,300 hectares in the country, and they produce:
The total volume of the global market for greenhouse products amounts to 12.6 billion USD. The annual growth of the market is 11%.
The state has developed a plan for development of greenhouse complexes in Uzbekistan, according to which their total area in 2018–2030 should exceed 68.0 thousand hectares.
In addition, in 2018–2020, it is planned to complete the creation of at least one food testing laboratory in each region – a total of 14. IFI funds are attracted for achieving this goal.
In addition to the growing population, including urban, its purchasing power, the growth of retail trade in Uzbekistan, the availability of markets of nearby countries can be considered as the main factors for the growth of the industry. So, if the domestic market of Uzbekistan consists of a population of 33 million people, the CIS countries market available in free trade zone is 300 million people.
At present, Uzbekistan is pursuing a policy of further diversifying agriculture, including:
Food industry has become one of the important segments in terms of its contribution to Uzbekistan’s economy, since it contributes 13% of GDP.
The number of registered food industry enterprises increased from 8,050 in 2014–2015 to 12,065 in 2017–2018.
Investments in fixed assets in the registered sector of food industry increased from 102.0 million USD in 2015-2017 to 495.7 million USD in 2018, while the growth rate amounted to 485%.
This sector accounts for 6.4% of total Uzbekistan’s exports and 9.8% of total industrial investment. In addition, the sector is considered the 4th largest FDI acceptor in Uzbekistan.
Banks of Uzbekistan have opened credit lines for projects in the agricultural sector with an interest rate from 3.5% to 14%. The government annually allocates a credit line at the expense of the Fund for Reconstruction and Development and the National Bank (NBU) for providing affordable credit to food industry enterprises and individual food producers.
The credit lines of the Asian Development Bank, the European Bank for Reconstruction and Development and other credit lines for development of food industry and agriculture are operating in Uzbekistan.
“Uzbekoziqovqatholding” company together with the Ministry of Agriculture developed a comprehensive document defining the national policy in food industry, and distributed among interested organizations for receiving suggestions and recommendations. The document is aimed at creating a national food network of Uzbekistan and a single national information portal for investors.
By the Decree of the President of the Republic of Uzbekistan DP-3594 of April 11, 2005, enterprises attracting foreign direct investment and specialized in manufacturing products (services) are exempt from paying corporate income tax, property tax, single tax payments for micro companies and small enterprises, as well as mandatory contributions to the Republican Road Fund.
The indicated tax benefits are provided with the volume of direct private foreign investment:
Bukhoro-Agro free economic zone is organized in accordance with the resolution of the President of the Republic of Uzbekistan of July 10, 2018, No. RP-3843.
Tax benefits for participants of Bukhoro-Agro FEZ depending on the volume of attracted foreign investments:
Participants are exempt from paying a single tax for small enterprises, land tax, income tax, property tax, targeted state funds in the above mentioned period.
Participants are exempt from customs duties for:
Conditions for participants:
Pepsi (the United States)
Coca-Cola (the United States)
British American Tobacco (the United Kingdom – the United States)