Uzbekistan on the verge of a sharp increase in investment in gardening – historical decree


Uzbekistan on the verge of a sharp increase in investment in gardening – historical decree

03/06/2020

Uzbek entrepreneurs are advised not to rush with investments in the fruit and vegetable sector, but to begin with a detailed study of sales markets, requirements for varieties, packaging, quality

Today, the President of Uzbekistan Shavkat Mirziyoyev signed a truly historic decree for the country’s fruit and vegetable industry. The most interesting thing is that it is about a completely different industry, but this particular solution can lead to a sharp increase in the volume of investments in gardening, viticulture and the cultivation of nuts, berries and vegetables.

In fact, the decree concerns the liberalization of the cotton industry and the grain business. Already, starting this year, the state will cancel the plan for the production and mandatory sale of cotton, as well as liberalize pricing. Also, the plan for the mandatory sale of grain will decrease by 25%. Why will this have an impact on investments in horticulture and gardening? And because land users will decide for themselves what it is more profitable for them to grow.

“Today, gardening, viticulture, walnut growing, as well as the cultivation of vegetables, potatoes and berries in Uzbekistan bring many times more profits for farmers from each hectare than the cultivation of cotton and grain. Therefore, undoubtedly, having received this opportunity, many will switch to the cultivation of fruits and vegetables. Accordingly, we expect that in the near future in Uzbekistan there will be a sharp increase in demand for seedlings and even for seeds of vegetable crops, although even local experts are still not completely sure how the situation will be in practice with the application of this decree, ”says Andrei Yarmak, Economist, Investment Department, Food and Agriculture Organization of the United Nations (FAO).

“When this happened in our country, everyone hit a horticulture, and then they started planting gardens under the state gardening support program,” Bakhtiyor Abdukhuhidov, FAO consultant from Tajikistan, shared his experience. He also notes that cotton is grown on irrigated lands, which means that these lands are perfect for the production of fruits and vegetables.

At the same time, Andrei Yarmak also draws attention to potential problems from such a sharp increase in investments in the production of fruits and vegetables. “Today, Uzbekistan is already struggling with the volume of production of fruits, nuts and many types of vegetables that are grown. Prices for many types of products are at a very comparatively low level, since the export infrastructure and the efficiency of the entire supply chain are far from normal performance indicators, the selection of varieties is outdated, product quality does not meet market requirements and the product refinement infrastructure is in its infancy. The situation is aggravated by the remoteness of Uzbekistan from the markets, the expensive transport component, and the shortage of qualified agronomists and specialists in marketing, logistics and export promotion. Accordingly, further production growth without solving the existing problems may lead to a price collapse, which will make fruit production even less profitable than growing the same cotton or grain, ”says Andrei Yarmak.

See also: In Uzbekistan, proposals have been formed on the organization of 86 agricultural clusters

He advises Uzbek entrepreneurs not to rush into investments, but to begin with a detailed study of sales markets, requirements for varieties, packaging, quality, etc. Given the expensive logistics, he advises to pay attention, first of all, to those fruits, nuts, berries and vegetables, the prices of which are at a relatively high level and in the cultivation of which there is a high component of manual labor. This will give Uzbekistan advantages over countries with high cost and labor shortages. It will also reduce the transport component in the overall price, which offset the advantages of countries located closer to rich markets. He cites an apple as an example of poor investment in fruit growing in Uzbekistan. Read more on this blog.

Two more tips from Andrei Yarmak for Uzbek investors: the first is to pay attention to rich sales markets with a high level of prices, and try to produce a product that would satisfy their requirements. In this case, the geography of the sale of such a product will be virtually unlimited and there will be no dependence on the market conditions of one country. Another tip is to make the most of your own climate benefits. If a country can supply products when prices are high in other countries, then these products have good potential, of course, subject to other factors mentioned earlier.

In any case, the Uzbek horticulture and vegetable growing have gained new opportunities, which, we hope, will lead to another progress in the produce business of Uzbekistan in the coming years.

Eastfruit

The main news and analysis of the fruit and vegetable market on Facebook and Telegram East-Fruit.com

Subscribe!

Using the materials of the site is free if there is a direct, open to search engines, hyperlink to a specific publication of the analytical platform East-fruit.com.






->

.