Landlocked Uzbekistan has gone through a long process of restructuring its farming industry since the dissolution of the Soviet Union and it is preparing to do more, shifting its grains sector to a more market-oriented system.
In its most recent Grains Market Report, the International Grains Council (IGC) forecasts Uzbekistan’s 2019-20 grains production at 7.6 million tonnes, unchanged from its figure of a month earlier and up from 6.6 million tonnes the previous year.
The country’s total grains imports are put at 2.9 million tonnes, an unchanged forecast that is down from 3 million tonnes in 2018-19.
In a Global Information and Early Warning System (GIEWS) report published May 28, the United Nations Food and Agriculture Organization (FAO) reported on the good conditions that Uzbekistan had experienced for the production of its 2019 grain crops.
“Between October 2018 and April 2019, precipitation was adequate, and although in the first half of May rain levels were well below the average across the country, remote sensing data shows good crop conditions in the most cropping areas,” the FAO said.
The UN organization explained that the 2018 crop, which it set at 6.8 million tonnes of mainly wheat, was 14% down on the five-year average, “reflecting adverse weather conditions between March and May 2018, which had a negative impact on yields.”
The result was 2018-19 grain import requirements that were 15% above the five-year average.
“Over the last years, the country decreased the imports of wheat flour (which halved between 2011-12 and 2017-18) and raised its purchases of high-quality wheat grain from Kazakhstan, due to increased local milling capacities,” the FAO explained. “This allows the country to satisfy its domestic needs of wheat flour and export additional supplies of wheat flour to neighboring countries.”
The International Grains Council (IGC) forecasts Uzbekistan’s imports of wheat flour in 2019-20 at 900,000 tonnes, unchanged from the previous year.
The state company Uzdonmahsulot dominates the processing sector, with 58 flour mills, 114 bakeries, 46 pasta shops, 45 feed mills and 2 groats shops.
According to its website, Uzdonmahsulot installed 77 modern bakery machines produced by German company Wachtel from 2010 to 2017, improving quality and raising production.
Agriculture development strategy
According to a report carried by the Tashkent Times, President Shavkat Mirziyoyev approved Uzbekistan’s Agriculture Development Strategy for 2020-2030 by decree Oct. 23. The new plan includes the development and implementation of national policies on food security, including food safety and improving diets. It would mean the introduction of market prices for farm products, including grains.
The strategy foresees a reduction in the role of the state in a sector the government wants to make more attractive to private investment.
Programs will be developed to increase labor productivity on farms, to improve product quality and to create high added value. The government also plans to create a transparent system of sector statistics.
The European Union has put its weight behind the plan. In a Sept. 30 statement, its representation in Tashkent said the E.U. wants to strengthen its partnership with Uzbekistan and assist with the implementation of the new strategy. The E.U. is already the largest provider of grant funding to the country’s farming and rural sector, with projects designed to improve sector competitiveness and productivity, enhance farm and rural incomes and create new employment opportunities in rural areas.
“We promote better farming for better living,” said the head of the E.U. Delegation to Uzbekistan, Ambassador Eduards Stiprais. “Agriculture is a critically important sector for the economic and social development of the country.”
The E.U.’s representation stressed that “the draft strategy recently published by the government for public consultation provides a clear roadmap that, when officially adopted and implemented, will allow the government to create new and improved public services to the sector, and to provide farmers and agribusinesses with the support and freedom they need to develop their businesses.”
The statement forecast that the strategy will “position Uzbekistan as one of the leading producers and exporters of high-value agri-food products in Central Asia.”
The European representation also noted that with the new strategy draft, the government has further reiterated its on-going commitment and dedication to bringing real and lasting change to the agriculture sector of the country.
“If this draft strategy is adopted in its current form, it will ensure that the wave of reforms and liberalization measures that have already been introduced since early 2017, under the leadership of President Shavkat Mirziyoyev, will be maintained and extended,” it said.
The E.U. said it was supporting this process and congratulated the president and his team for this bold initiative.
The statement describes the strategy outlining “a plan for the gradual transition from the historical focus on the production of cotton and wheat to the production of alternative crops in which Uzbekistan has a comparative advantage, such as in the production of certain high-value horticulture products that can be exported to both traditional markets and extended to other fast-growing markets in Asia and the E.U.”
“To meet the demands of these new export markets requires significant restructuring and development of both public and private sector agri-food support services and systems from farm to fork,” the E.U. statement said. “If successful, this transformation will contribute significantly to the protection of the country’s natural resources by reducing the reliance on water-intensive crops like cotton and wheat.
“Diversification into higher-value crops will also help to improve rural livelihoods throughout the country.”
Restructuring the farming sector
A January 2019 World Bank report considered the history of restructuring in Uzbekistan’s farming sector over recent years.
“During the 1990s up to 2007, the former collective farms were hesitantly dismantled and split into smaller individual farms,” the report said. “However, land ownership remained public and farms continued to be subjected to cotton and wheat delivery quotas that persist up to date. Inputs like seed, fertilizer, and machinery have been mostly provided by government agencies, also focusing on cotton and wheat production. Farmers obtained the right to produce and sell crops other than cotton or wheat on private terms. The main policy goals were to maintain a persistent supply of raw cotton to secure government’s export revenues and of wheat to secure essential food supply.”
However, it noted that after 2015, the official policy turned to the diversification of crop rotations away from cotton and wheat.
“Wheat self-sufficiency has progressed through expanding the wheat sown area and rising yields, to which farm restructuring has partially contributed,” the World Bank said. “Yet, wheat imports, mainly from Kazakhstan, have grown recently, accounting for 43% of wheat production in 2017 compared to 25% in 2010.
“Thus, the increase in demand for wheat from Uzbekistan’s consumers, which grew from 7.7 million tonnes in 2010 to 9.7 million tonnes in 2017, was largely met by imports, not domestic production, due to the mismatch in wheat quality between locally-produced wheat and higher quality imports demanded by consumers. Uzbekistan has struggled to find a post-socialist model for its farming sector.”
A 2018 FAO study on the application of biotechnology in the Asia Pacific region wondered if the country might be on the brink of stepping up adoption of the new products.
“Uzbekistan is boosting investments in science and technology and has ambitious plans to transform itself into an innovation economy,” the FAO said. “These developments will need to be closely monitored to determine their impact on capacity in biotechnology.”