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Cotton in Uzbekistan: Water and Welfare

Cotton in Uzbekistan: Water and Welfare. Iskandar Abdullaev, Mark Giordano, Aziz Rasulov International Water Management Institute (IWMI). ”Cotton Sector in Central Asia: economic policy and development challenges”

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Cotton in Uzbekistan: Water and Welfare

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  1. Cotton in Uzbekistan: Water and Welfare Iskandar Abdullaev, Mark Giordano, Aziz Rasulov International Water Management Institute (IWMI) ”Cotton Sector in Central Asia: economic policy and development challenges” the School of Oriental and African Studies, University of London, November 3-4, 2005

  2. Cotton Production in Uzbekistan: Peaks • Starting in the 1950s, cotton lint production grew from 300,000 MT tons to a peak of 3 million MT by the mid 1980’s (Uzbekistan Review. 1990) • First, irrigation was expanded • Second, newly irrigated and other lands were used to grow cotton on the large scale state and cooperative farms that dominated the agricultural economy • This took place as part of a centrally coordinated and planned national system

  3. Why has Uzbek cotton production declined? • Drop in Uzbek cotton production and exports is complex • Causes of drop on cotton production can be divided into two broad categories: • The first is political; it includes direct cotton policy and other policies indirectly affecting the sector • The second is environmental and includes both the “natural” environment and the ability of farmers to adapt to that environment

  4. Political environment and other policies Natural Environment • Water Resources Development and the Aral Sea • Salinity and water logging • Water availability and reliability • Institutional unconformities of Water Management • Outdated technical infrastructure • Immediate response to Soviet Collapse • The production quota system • Lower procurement prices • Farm Restructuring Decline of cotton Production Yields, t/ha Production , MT Causes of Cotton Production Decline in Uzbekistan

  5. A. Causes of Cotton Production Decline: Political environment and other policies • Immediate response to Soviet Collapse • The production quota system • Lower procurement prices • Farm Restructuring

  6. A. Causes of Cotton Production Decline: 1. Immediate response to Soviet Collapse • At the end of 1980s over 0.5 million ha of irrigated lands (more than 10% of total irrigated area) was allocated for small scale production, mainly vegetable growing • winter wheat area rose from 620,000 ha in 1991 to 1,200 000 ha in 2004

  7. A. Causes of Cotton Production Decline: 2. The production quota system • In 1991, 100 percent quota for all crops • 1992 to 1995 partial (50%) quota for cotton and yields did reverse their slow decline, rising from 0.76 t/ha in 1992 to 0.83 t/ha in 1995 • For cotton, the most malign part of the quota system is not amount of the production to be sold to the state (100%), but the quota on the area which must be sown with cotton.

  8. A. Causes of Cotton Production Decline: 3. Lower procurement prices • Procurement prices by the state relatively steady • The difference between the international, export and internal (procurement price from farmers) prices can be substantial (e.g. in 1995 the internal procurement price for cotton was almost 50% lower than the external price) • Internal and external prices became almost equal as world prices declined until 2001, but the gap has now again risen to levels of the mid-1990s.

  9. A. Causes of Cotton Production Decline: 4. Farm Restructuring • Soviet period cotton was produced in the large scale collective farms, typically of sizes of 2000-3000 ha • At the end of 1980s collective farms were inefficient and their land was split after independence into smaller, though still collective, farm units known as “shirkat” • The result was that the land management units no longer matched the input units, and poor performance ensured • Transformation of the shirkats into individual farms.

  10. B. Causes of Cotton Production Decline: Environmental factors • Water Resources Development and the Aral Sea • Salinity and water logging • Water availability and reliability • Institutional unconformities of Water Management • Outdated technical infrastructure

  11. Conclusions • Cotton production in Uzbekistan has declined by approximately one third • Decline is a result of a reduction in the area and a minor decrease in yields • Environmental problems have contributed to the difficulty in maintaining, or increasing, cotton productivity. • The shift from large collective farms towards family organization has resulted in a vacuum of responsibility and organization for operation and maintenance of some irrigation and drainage systems • Water scarcity is a factor in Uzbek cotton production because of tradeoffs between agriculture (in downstream Uzbekistan) and energy production (in upstream Kyrgyzstan and Tajikistan), not between agriculture and the environment • It is not the natural environment which has held down cotton productivity but rather the policy environment which is the culprit

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