Some could have it all: Comparing cotton cultivation in Kazakhstan and Uzbekistan


November 03, 2014.  

 

 

In May 2014, ZEF-senior researcher Anastasiya Shtaltovna presented the results of a comparative study on cotton farming and production in Kazakhstan and Uzbekistan at the “Open Society Foundation” in Washington D.C., which organized a two-day event on 'The social cost of the Uzbek cotton industry'. The study Mrs. Shtaltovna presented was co-authored with Anna-Katharina Hornidge (ZEF-Director) and sponsored by the Open Society Foundation*).

 

 

Did you have any working experience in Uzbekistan and Kazakhstan before you started conducting this study?
Yes, I did my PhD research on agrarian change and rural transformation processes in Uzbekistan and have spent one year conducting field research in Uzbekistan. Thus, I have some knowledge of Uzbekistan. In addition, I have worked in other former Soviet countries such as Tajikistan, Georgia and Ukraine. I was even able to use some of the data collected in the context of my doctoral research for this study.

Why is research in these countries interesting and relevant?
Although they have a similar history, the countries have taken different paths after the Soviet Union era. In Uzbekistan, cotton remained a strategic and therefore a crucial export crop for the country. In Kazakhstan cotton plays a minor role and is only grown on a small scale in the southern part of the country.

What are the main differences between cotton growing systems in the two countries?
The main difference between Kazakhstan and Uzbekistan regarding cotton production is its relative importance to each country. In Uzbekistan, cotton is cultivated on up to half of the country’s total cropland area (USDA 2013; Djanibekov et al. 2013; Djanibekov et al. 2010). As a result, cotton is of immediate strategic importance to the national budget (Wehrheim et al. 2008). Uzbekistan is still one of the world’s major cotton exporters (11 percentage of the world cotton export; FAO, 2011: Djanibekov et al. 2013; Rudenko et al. 2012). Kazakhstan, on the other hand, benefits from more important sources of rent such as oil and gas. Therefore, an average of 140,000 ha only is allocated annually to the cultivation of cotton (USDA 2010; Dobrota 2012c). Cotton, being grown in five districts of the Southern Kazakhstan oblast, is rather a regionally important project than a crop of strategic importance. Unsurprisingly, state attention devoted to cotton production varies greatly between the two countries. As a consequence, two entirely different approaches to cotton growing have been adopted.

So what role does the state play in the cotton cultivation systems of these countries?
By offering a range of different subsidies as well as a freedom of choice on what to grow to maximize profit, the government of Kazakhstan creates conditions under which farmers in Southern Kazakhstan can develop. In contrast to this, Uzbek farmers work under a state procurement system that exerts strict state control over the agricultural production system, with only limited opportunities for farmers to make profits. Apart from actually carrying out their farming activities, farmers spend lots of time dealing with state inspections. They even struggle to receive permission from the state to conduct various kinds of transactions such as obtaining permission to grow something else than cotton and wheat.

What scope do farmers have to negotiate?
The conditions under which farmers have access to cash money and inputs for growing cotton are also different in the two countries: Kazakh farmers have access to funds allocated from a range of banks as well as to their own savings. There are also numerous private input providers, from whom Kazakh farmers can purchase any input they deem necessary. Uzbek farmers have to negotiate with the bank in order to gain permission for deciding how to use the money they ostensibly have (i.e. how to invest and operate their farm business). Moreover, almost all agricultural service providers are under governmental control, and can thus exploit their monopoly status. Facing these difficulties is a great challenge and is only rarely overcome by creative initiatives on the part of farmers.

Who attended your presentation and were they interested to hear the findings?  
The meeting was attended by organizations involved in eradicating enforced labor, such as EU lobby groups, representatives from Human Rights Organizations in Uzbekistan, the Cotton-Campaign, Marks and Spencer, representatives of IKEA, representatives from the World Bank and the US Government. Apart from my findings, I presented recommendations what can be improved in both countries, especially in Uzbekistan. My research-based results were well received.

What were the main findings of your research?
We organized a joint workshop of Uzbek and Kazakh farmers, so they could exchange their experiences in cotton growing. One of the results coming out of this exchange is a cost-benefit analysis of cotton growing done by farmers. It shows that the average yield in Uzbekistan is higher than in Kazakhstan. But cotton production in Uzbekistan is consistently unprofitable for the average farmer as it leads to a loss of roughly 584.50USD/ha. In Kazakhstan, in contrast, it is regarded as a profitable venture with the average farmer receiving around 1,500 USD/ha (including state subsidies for cotton growing).

Did you give any recommendations to improve the situation of farmers in Uzbekistan?
The Uzbek farmers developed three scenarios of how they would want their cotton production system to function. These are scenarios of cotton growing under the market capitalistic system (1), under the improved state procurement system (2) and under a cooperative farming system (3).  In all three scenarios, the farmers agreed upon the following: state intervention in farmers’ business must be reduced to a minimum; prices for cotton must be increased and transparency strengthened; access to cash and profit has to be guaranteed; the tax system for Uzbek farmers has to be simplified; there is a need for alternative agricultural service providers; agricultural producers have to be developed into entrepreneurs; land rights have to be assured; favourable conditions should be created in which different models of cotton growing (similar to the three scenarios presented) can co-exist, similar to the experience in neighbouring Kazakhstan.

With what suggestions did the Kazakh farmers come up to improve their system of cotton growing?
These were similar to those for Uzbekistan. Recommendations for improving the cotton sectors of Kazakhstan and Uzbekistan included the following:Improving communication between farmers and the state; improving old or establishing new channels of agricultural knowledge; establishing farmers associations from bottom-up; diversifying cropping structure; additional processing of cotton on site (would bring more profit), creating jobs and promoting economic growth in cotton-growing areas. The same recommendations apply to fruit and vegetable production.

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*) The Open Society Foundations is financed by the Soros Foundation and “works to build vibrant and tolerant societies whose governments are accountable and open to the participation of all people” (www.opensocietyfoundations.org). Especially after the end of the Soviet Union the Soros Foundation has been supporting projects on building civil society in the region. Among others, the Open Society Foundations has been working on eradicating enforced labor in the Uzbek cotton industry.

Interview by Sebastian Eckert.

 

 

 

 

Contact

Anastasiya Shtaltovna

Dr. Anastasiya Shtaltovna

Phone.:
+49-228-73-