Already in 6 th century BC the Greek philosopher Heraclitus said: “Everything flows everything changes “
It’s cliché – the world around us dramatically changed and it’s changing all the time with scary speed and little predictability…
(that’s well described in famous N. Taleb’s bestseller “Black swans”) and it’s also common knowledge – Uncertainty principle, formulated by Heisenberg.
Above-mentioned concepts should not be considered as sources of pessimism and apocalyptic speculations
On the contrary- understanding them stimulates adaptive and flexible behavior, effectively coping with any scenarios and situations.
Neuropsychologists argue that human brains consider new events as potential threats, requiring cancellation of the well-known and habitual behavioral algorithms
In the new circumstances the old patterns are not relevant anymore and brain is urgently trying to elaborate new, more adequately corresponding with changes strategies …
it’s complicated, energy – intensive and possibly dangerous for the status quos of the people concerned
Sic, authorities responsible for economic policy are not keeping up with ever changing situations and often reacting chaotically and late to challenges…
Uzbekistan needs holistic complex economic strategy based on deep analysis of the tectonic shifts in fundament of the universe, their sources and consequences, forecasting potential threats and challenges for our food security and react systematically and without panic.
In times of the global instability food security and intensive agricultural development becomes governmental priority and imminent responsibility. However, in the global food security index in 2022 Uzbekistan is only 73 rd. among 113 countries…
For the 27 percent of the Uzbek population living in the countryside-agricultural development is matter of survival
Scientifically impossible to abstract agriculture from the whole macroeconomic system of Uzbekistan, however for the sake of this short article I will try to concentrate on this painful topic
For the last 30 years in agricultural sector, I have been observing with the growing anxiety the steady decline of agricultural production. This tendency is real challenge for the food security and hence for the l sovereignty of our country
To my humble impression, our authorities have an illusion that shortage of the local food supply can be replaced by imports
I have to admit that scarce potatoes supply was replaced by annual growing import from Kazakhstan and Russia. Nota bene: we are talking about hundreds of millions of dollars in the situation of deficit of the hard currency in Uzbekistan due to negative trade balance
President of the Republic of Uzbekistan Mirzieev recently mentioned that for many years import into Uzbekistan surpassing export and this disproportionate trade balance badly impacts our economy
It’s one of the reasons of the galloping inflation (UZS is among the mostly depreciating currencies)
Taking into account the black swans like pandemic, military conflict’s, causing disruption of the existing logistics, price for the transport and fuel increases, high costs of the insurance and so on – all of which explains constant raise of the import’s costs
So, despite of the reluctance of our authorities they need as soon as possible to implement complex and long-awaited reforms in agriculture based on sustainable and long-term strategy of the food security it’s by the way refrain of the most of our President’s speeches
One question is bothering me for the long time – how come from the exporter Uzbekistan turned to be one of the biggest importers of the ware potatoes?
I am deliberately focusing on this issue because it seems to be excellent indicator of the long-lasting problems of the whole troubled agricultural sector in Uzbekistan
As usual the reasons for these dramatic downturns in our agriculture have objective and subjective causes.
Among the objective factors negatively affecting our economy are the following:
- Global warming combined with the local continental climate are causing multiple negative effects: the vegetation period is shortening, summer temperatures are rising, depleting water supplies from melting glaciers
- Rising prices for food production (globally)
- Global population growth
- Covid 19
- Military conflicts involving many countries and causing global crisis and recession, fluctuating prices and inflation…
And all these tendencies are getting worse in our local circumstances – (subjective causes).
1.Water shortages and drought caused by barbarous, archaic, enormous water consumption- whole regions are turning to desert totally unsuitable for horticulture
2. Soil degradation, lack of system of the resources distribution based on deep research on the norms of water and other resources consumption for the different crops, no crop rotation, in some cases deliberate transfer of the agricultural lands into real estate for the dubious purpose…
3. Among the consequences of this are yields and labor productivity declines in agricultural sector. To be perfectly honest I have to acknowledge that there’s substantial upgrade in cotton, fruit and wheat production. The government is heavily involved in supporting these industries by providing low rate loans and other measures Still the precise calculation of the proportion between input and output should be implemented in order to evaluate real effectiveness of these measures For instance, despite of growing wheat yields and overall production Uzbekistan is still purchasing huge amount of wheat from Kazakhstan and Russia to meet local demands So our extremely expensive irrigated hectares are being used without calculating of real output for the total economy from each crop.
4. Fast population growth in Uzbekistan Highly likely that our population will reach 40 million already in 2028.
5. Limited access to affordable long-term financing.
6. Lack of the private ownership of the land is obstacle for attracting capital inflows into agriculture for land cannot be used as collateral for the credits and since farmers don’t own the land, they are not interested in investing into it.
7. Scarcity of the modern agricultural equipment’s such as storehouses and processing plants which could contribute to better and longer storage of the agricultural products and creating products with higher added value.
8. Multiple barriers in regional trade and cooperation between neighboring countries in energy and water resources distribution and consumption.
9. Lack of scientific prognosis based on thorough study of environmental factors, soil quality, particular crops efficiency in terms of their heat resistance, water and other resources consumption, length of vegetation. Unforgivably slowly we inculcate new water and energy saving technologies. Plus, inconsiderate initiatives such as construction of many greenhouses without sufficient gas supply led to huge financial losses of the greenhouse’s owners, introducing VAT on the import of the goods led to increased prices and escaping of the many enterprises into shadow to avoid high tax burden.
10. Absence of the systematic strategy, intertwining all elements of macro and micro economics starting from reforms of the governing, simplifying, decentralizing, digitizing all state services, overcoming narrow departmental approaches to problem solving. Again, its worth to mention that Uzbek government is actively pursuing liberalization and digitization of the economy, tackling corruption and poverty, normalizing relations with neighboring countries – its solid foundation for the regional cooperation. – but still it’s slow and not sufficient resulting in disappointing failure in attaining and effective use of the capital investments into our economy, which has been heavily criticized by our President in his recent statements.
11. Among serious obstacles to the economic progress is extremely low level of the education of agricultural workers. They need knowledges in modern effective technology’s-and management, financial and law literacy, diversification of the crops to mitigate risks involved etc.
Considering all above-mentioned problems let’s try to find possible solutions for overcoming negative tendencies in agriculture and intensifying its development. Initially our government has to define methodological principles which will be applied to implement these tasks: market economy or planned administrative system.
If we orient on market economy, we have to urgently undertake the necessary measures such as:
1. Privatization of the land (foreseeing difficulties and debates) will make it part of the financial turnover at last. It will attract necessary investments in agriculture, enabling farmers to improve soils, infrastructure, modernization and automatization of agricultural production, usage of energy and water saving technologies, implementing ESG practices
2. Long awaited population census to understand the scale of the reforms and availability of the people able to implement them.
It’s not possible to make optimal analysis of the current state and strategic planning without knowing exact number, structure (gender, age, ethnic, professional, educational background) and future trends of the population.
3. Enhancement of the regional trade and cooperation in water and energy production and consumption, elimination of all remaining barriers
4. Solid education of the local Human Resources, it is impossible to realize ambitious reforms without highly skilled specialists
5. Creating the favorable tax and customs regime for the entire modernization of the agriculture to enhance total output and labor productivity. Cancellation of the VAT on imports of the agricultural machinery and equipment for processing and storage facilities, elite seed material and breeding stocks…
6. Preferential long-term loans to the farmers and agricultural enterprises with utilizing insurance of the risks, solid collaterals, flexible financial instruments such as factoring, overdrafts, escrow accounts and bank guarantees etc.
7. Alternative energy sources (solar, wind) to maintain sustainable growth of agricultural sector
Food security is foundation of the country’s sovereignty Definitely, it’s impossible to reach 100 percent of self-sufficiency , formation of the lasting and sustainable ground to avoid food deficit and price increases for the most important elements of the “food basket “ (some by means of stimulation of the local production choosing the best efficient crops in our climate and soil conditions, some by means of timely hence price efficient import ) – the key to sustainable development of people’s wellbeing and stability of the state system.
Adjunct professor of Webster university in Tashkent
Regional manager for CCA Agrico NL
