Measures defined for further developing market relations in agriculture
On December 12, President Shavkat Mirziyoyev chaired a meeting to discuss measures for further improving the raw cotton procurement system.
At the meeting chaired by the Head of state, held on November 9 this year, existing problems in the cotton industry were analyzed, and the need to organize relations between clusters and farmers and cotton seed production based on new approaches was noted.
Proposals developed in accordance with these instructions were considered at the meeting today.
In particular, starting from the 2024 harvest, relations between raw cotton producers and cotton-textile clusters will be established in a new way.
Before planting seeds, farmers and clusters within one region will enter into futures contracts for cotton procurement based on soil fertility indicators in the “raw cotton section” of the Commodity Exchange at auctions held separately for each region.
In this case, the farmer places the amount of cotton he has grown on the exchange and enters into a futures contract with the cluster within his region that offers a higher price. The initial price is determined based on the average price of cotton fiber on the New York Stock Exchange over the past 12 months.
Farmers can sell the volume of cotton harvested more than the fulfillment of the futures contract, as well as primary and secondary products obtained from raw materials, directly to the cluster with whom the futures contract was concluded or to any other entity on the exchange.
In the case of farmers growing raw cotton using their funds, including commercial loans, raw cotton and primary and secondary products obtained from it can be freely sold on the exchange.
At the meeting, the importance of organizing workshops for farms growing raw cotton on the procedure for participating in exchange trading was noted. It has been determined that clusters and other enterprises will accept cotton raw materials only through electronic scales and will introduce an automated system for accounting for cotton fiber.
Starting from the 2024 harvest, a new system will be introduced to allocate loans to farmers and clusters from the Agriculture Support Fund for the cultivation of raw cotton and final payments.
When implementing agrotechnical activities using allocated loans, suppliers of goods, works, and services, including material resources, are selected independently by farms and clusters.
Loan applications will be submitted entirely electronically.
The need to update the procedure for organizing cotton-textile clusters was emphasized at the meeting.
Thus, those wishing to create a cluster will have to establish at least two stages of production of textile products and should not have overdue debts on taxes, mandatory deductions, or bank loans.
The Republican Commission for Coordinating the Activities of Cotton-Textile Clusters will be disbanded, and applicants wishing to organize the cluster’s activities will be selected based on an open and transparent online competition.
The Ministry of Agriculture will maintain a register of clusters and regularly publish it on its website. The ministry has been tasked with creating a program for automated rating of clusters based on a system of critical performance indicators.
Developing seed production and increasing cotton yields were also discussed at the meeting.
The presidential resolution developed for this purpose provides, as an experiment, the ability to sow foreign varieties of cotton in 10 percent of cotton areas starting next year.
Also, as an experiment, high-yielding local and foreign varieties will be placed in plots in 14 districts with low soil fertility scores and complex water supplies.
The importance of introducing special agrotechnical and simplified quarantine requirements for imported cotton varieties and the cultivation of these varieties under special quarantine control and based on scientific instructions from the Cotton Council was noted.
Cotton clusters and farms will be free to place cotton varieties in accordance with a guaranteed seed reserve.
Several tasks are being defined to stimulate the creation of new productive and industrial cotton varieties in the country.
In particular, clusters and farmers will be allowed to act as co-authors of the corresponding variety when developing local promising cotton varieties, producing elite quality seeds, and commercializing the variety. It is planned to gradually transfer the procurement of certified seeds to clusters and private seed-growing enterprises.
Starting in 2024, varieties with less than 30 centners will be regularly identified and replaced with high-yielding domestic and foreign varieties.
The Ministry of Agriculture has been tasked with developing a mechanism for introducing this system and transforming the activities of the Seed Production Center.
Since there is no particular institution in fiber crops, fiber production, and the cotton industry in Uzbekistan, it was proposed to create a Research Institute of Fiber Crops at the research body of the Cotton Council – Pakhtasanoat Ilmiy Markazi JSC.
Scientific expertise on the safety of genetically modified organisms and their processed products will also be introduced in the country, and a national database of genetically modified varieties will be formed. Thanks to this, an assessment of the safety of produced and imported GMO products and an analysis of information about GMO products will be launched.
The “e-urug” platform will be launched by the end of 2024 to digitalize the industry. This will create opportunities for mutual integration of seed enterprises and farms, obtaining information about seed supply and reserves, their suitability for regions, agricultural technology, accessible and transparent placement, redistribution, and certification of seeds for varieties and hybrids.
The President approved these proposals and gave several instructions for implementing the new system.
