Cotton Sector in Tajikistan: Challenges and Opportunities

1. Cotton Sector in Tajikistan from macro-economic impact to social and environmental consequencesConference Cotton Sector in Central Asia: economic policy and development challenges,November 3-4, 2005, London By Nargis Halimova MS Student, Land Management, 05/06 Real Estate Planning and Land Law Royal Institute of Technology, Stockholm, Sweden Address: Halimova Nargis Bamba Yakouba, Jupitervagen 50, 181 63 LIDINGO Tel.: 076-2776722, cell. in Stockholm, Sweden Email: hnargis@yahoo.com.ph

2. About Tajikistan Location: Mountainous country, in Central Asia, to the west of China, shares borders with Afghanistan, Kyrgyzstan, and Uzbekistan. The capital is Dushanbe. Area: 143,100 sq km, with 93% of its territory consisting of mountains and 7% of arable lands. Independence: September 1991 (Tajikistan was one of the affiliated Republics of former USSR) Language: State Language is Tajik. Russian is widely spoken in business and government affairs Climate: The average temperatures range from: –8 (in high mountains) to -61 in winter and +22 (+49 in Panj) in summer. Regions: The country is consisted of four regions: RRS, Khatlon, Sugd and GBAO Population: 6.34 million, above 70% living in rural areas as of January 1, 2001.

3. Macro economic performance Transition to market economy Macroeconomic performance has improved significantly. In 1997-2001, economic growth averaged about 7.5% which accelerated in the last three years (9.2% growth on average since 2001 and 8.6% year on year in the first half of 2003) supported by (including): • Increased production of key commodities (mainly aluminum, hydropower, and cotton); • Increasing remittances from migrants abroad (mainly in Russian Federation); • Improvements in fiscal management, reducing the fiscal deficit from 3.8% of GDP in 1998 to 0.1% of GDP in 2001 and a surplus of 1.% of GDP in 2003; • Relatively stable exchange rate, with an average annual growth rate of around 10%; • Liberalized foreign trade regime and prices, besides public utility services; • Improved legislation and regulations(Mainstream law and regulations the requirements of free market economy)

4. Cotton Sector in Tajikistan from macro-economic impact to social and environmental consequences. • To a certain extent, synthetic fibers have caused a decline in cotton’s share of textiles. However, cotton remains an important fiber and China, the United States, India, Pakistan, and Uzbekistan are main exporters of cotton worldwide. • Cotton production from irrigated areas remains the mainstay of the agricultural economy of Tajikistan, although with low yield by international standards. • The agricultural sector employing 52% of total labor force contributed 21.6% of GDP in 2004. • There is a cotton monoculture in the agricultural sector of Tajikistan. Along with other products like aluminum, electricity, mineral products, precious stones, it is a main export product. • Tajikistan was one of the largest cotton producing republics in the Soviet Union with a production capacity of up to 1 million tons in 1980. • Table indicates cotton growing in Tajikistan for 1998-2003.

5. Cotton Sector in Tajikistan from macro-economic impact to social and environmental consequences. In 2004, Tajikistan produced 556,991 tons of cotton (91.3% of target), of which: • 60% was grown in Khatlon oblast, • 30% in Sugd oblast and • 10% was grown in the RRS. This yield did not reach the production target of 610,000 tons. The average yield per ha in 2004 was 1.9 ton, which is very low by world standards. • Cotton dominates in the export and production of crops. In 2004, 284,367 ha of arable land was planted with cotton. • Nevertheless cotton and aluminum are the country’s two main exports and account for 70% of GDP and over 70% of total export earnings. A number of factors resulted in low productivity and profitability of cotton farms: • The global rise of prices for inputs (fuel, transport costs, etc) • Fall in cotton fiber price and unfavorable weather conditions effect the yield and increase production costs for farmers (heavy rains, second sowing) • Lack of improved capacity: management, mechanizations, technology, adequate irrigation and drainage system, etc. • Consequently, farms fail to pay credits on time and get into debt ($US 186,016,155 as of September 1, 2004). Debts grow and farmers’ harvests only cover debts. • Moreover, debts of reorganized large farms are inherited by newly-formed farms together with the land title(Government Decree dated Dec 25, 2003 #542 “About adjustment of debts of reorganized and to be reorganized farms and agriculture enterprises”, President of Republic of Tajikistan)

6. Cotton Sector in Tajikistan from macro-economic impact to social and environmental consequences. • The gender issue is unavoidable in the cotton sector. Majority of male labor force are migrants (IOM calculates 620,000 labor migrants of Tajik citizenship). • About 90% of laborers in the field are women, but a number of factors prevent women enjoying their civil rights although Tajikistan has very gender-equal legislation. • Following the Constitution, all laws establish the equality of everybody to the law, (the state guarantees the rights and freedom of everybody) regardless of nationality, race, sex, language, beliefs, political commitments, education, and social and property status • Ratification of a number of international conventions and treaties on human rights; state-member of CEDAW since 1993. • National Policies: - President’s Decree on “Enhancing women’s status in Tajikistan” -“National Action Plan on enhancing the status and role of women during 1998-2005” -State Program “Main directions of the state policy on guaranteeing the equal rights and opportunities for men and women from 2001-2010” -Moreover, in May 2005, the Government of Tajikistan adopted the Law “About Gender Equality”. Unfortunately, the issue of gender equity remains a challenge for Tajik society and government, including ensuring women’s rights to access economic resources. As of Jan 2004, • out of 7.173 Dehkan farms in Khatlon Oblast women head only 240 or 4%. • out of 4725 Dehkan Farms, in Sugd Oblast, women head 239 or 5%. • The majority of laborers in cotton fields are rural householders, the poorest segment of the population • Cotton revenues do not reach farmers which worsens their living conditions. • Exploitation of child labor, rural women; in particular, female-headed households have to take their children to the field

7. Sectors’ Implications • Studies indicate to links between cotton and poverty. Most of the poor reside in rural areas, in particular in two cotton-growing provinces, Sughd and Khatlon. • Poverty rate is 78% and 64% in Khatlon and Sugd compared to 49% and 45% in Dushanbe and RRS respectively. • Land reform -since 1996, the reorganization of large collective and state farms (kolkhozes and sovkhozes). Members of reorganized farms are acknowledged as shareholders by law and are given land plots with inherited land use rights (According to the Constitution of Republic of Tajikistan, land is a state ownership) • Cotton ginning in Tajikistan was officially privatized in 1998 and all state owned gins were sold to the private sector by 2000. Inefficient ginneries affect the cotton proceeds to farmers • Cotton revenues do not reach farmers-unfavorable business interrelations • Central Government sets targets for cotton production; by the targets, the majority of agriculture is cotton - 70% of cropland. • The absence of a classification system to present the cotton in pure true to type lines is a major impediment for buyers to assess Tajik cotton in the world market. • Along with other factors this affects revenues from cotton sales, and consequently the state of the economy and welfare of people • As a consequence, interest and participation in agriculture is reduced, which in turn leads to increased poverty that mostly effect female-headed households, children and leads to increased labor migration.

8. Ecological implications of the cotton sector • The present practices and conditions in the cotton sector create negative consequences • For the last 15 years, growing cotton as a monoculture with no practices of crop rotation has resulted in soil degradation, destruction of its structure and fertility. • Soil degradation affects about 97,9 % of the territory of the republic. Annually about 50 thousand hectares of cultivated land undergo desertification to various degrees • Cotton requires significant irrigation, but poor functioning of current irrigation and drainage systems leads to soil salinization and waterlogging; arable lands can become marshland which threatens an increase of ecological refugees • Poor irrigation and drainage networks and excessive water usage leads to rising water tables and extensive salinization of irrigated land • The intensive overuse of fertilizer and chemicals during soviet times caused the destruction of soil structure and fertility salinization • Poor irrigation systems, wind and water erosion leads to land degradation. However, at present cotton is the key agricultural sector in the economy of the country. Tajikistan cannot convert from cotton in the near future: it brings stable foreign currency to country and has demand in the world market. Although cotton is a large industry in Tajikistan, the current situation of the sector affects economic and social status of population, has a negative impact on the environment and potential security consequences.