Uzbekistan dismantles state monopoly exporting cotton and raises fee for picking cotton
Cotton pickers. Tashkent region, 6 October 2017. Photo by Timur Karpov
Shavkat Mirziyoyev by his presidential decree dismantled the "Uzpahtasanoatexport" holding company - state monopolist in the field of processing and export of raw cotton and its products. The Norma.uz website published the document.
A special commission led by Deputy Prime Minister and Minister of Agriculture and Water Resources Zoyir Mirzaev will handle the liquidation of the holding. The commission consisting of 13 members - the ministers of economy, foreign trade, finance and justice, the head of "Uzpahtasanoatexport" Akmal Kamalov, the heads of companies of the holding, the chairs of the Council of Farms, the State Committee for Assistance to Privatised Enterprises and others - in 15 days will propose further organisation of the cotton processing industry of the country.
The late President Islam Karimov established the "Uzpahtasanoatexport" company in October 2015. The government explained the creation of the monopoly by the "requirements of the world market," the need to improve the quality of cotton products and attract foreign investment. The current head of state, Shavkat Mirziyoyev, has repeatedly criticised the management of the holding for unsatisfactory work on modernising the industry and implementing investment projects, including the creation of centres for processing raw cotton, said Sputnik.
The source of Fergana News from Tashkent commenting on this news noted that it has more questions than answers. "Apparently, the authorities want to create a freer cotton market within the country. But why to liquidate "Uzpahtasanoatexport" - it is unclear. It is also unclear what will replace it. The decree itself explains nothing," the source said adding that nobody has cancelled the state order for cotton imposed on farmers yet.
On the same day, the Uzbek government raised tariffs to pay cotton pickers. Since 17 October, it pays 700 soms ($ 0.08) for one kilogramme of raw cotton handed over, reports Norma.Uz.
Harvesters working in the fields of Tashkent, Djizzak and Syrdarya regions will reap even more - 800 soms, as well as in Mirishkor, Nishon, Koson and Kasbin districts of Kashkadarya region.
In September, all cotton pickers gained 450 soms ($ 0.05) per kg, from 1 October - 500 soms ($ 0.06) per one kg. In 2016, the fee was 285 soms ($ 0.04) per one kg.
The government also approved procurements prices for raw cotton harvested in 2017. For example, one ton of the first class long-fibre raw cotton cost 3,000,740 soms ($ 369) in September, and since 17 October, the state will pay 3,352,570 soms ($ 413) for the same amount. Last season, one ton of raw cotton could profit 2,143,350 soms ($ 264) from a cotton sale.
Uzbekistan ranks sixth in the world producing cotton fibre, and the fifth exporting it. Uzbekistan grows about 3.5 million tons of raw cotton annually and produces 1.1 million tons of cotton fibre. In recent years, the country has reduced the area of cotton fields. According to the State Statistics Committee, in 2015, cotton dominated 1,298 thousand hectares, which was 99.8 percent compared with 2014. In 2016, the area reduced by another 30.5 thousand - up to 1,267.5 thousand hectares. According to the Sputnik news agency's source in the Ministry of Agriculture and Water Resources of Uzbekistan, the cotton area reduced by 40 thousand hectares in 2017, and in 2018 the cotton industry will lose about 100 thousand hectares. Grain or vegetables substitute cotton on the released land.
In early October 2017, Deputy Prime Minister Nodir Otajonov said that the current harvest campaign collected more than 60 percent of the cotton. Workers pick 90 percent of cotton manually in Uzbekistan within the framework of the state system of forced labour.