STATUS OF DOMESTIC AND GLOBAL VALUE CHAINS IN UZBEKISTAN Agriculture is one of the sectors of Uzbekistan’s economy, contributing 25% to the...
STATUS OF DOMESTIC AND GLOBAL VALUE CHAINS IN UZBEKISTAN Agriculture is one of the sectors of Uzbekistan’s economy, contributing 25% to the country’s GDP, providing a third of national employment and almost half of total export earnings. Uzbekistan continues to be the major supplier of fresh and processed fruits and vegetables. Horticulture is an important part of agricultural production, although the subsector accounts for only about 16% of aggregate arable lands, in contrast to grains (47%) and cotton (37% of fruits and vegetables is among the most profitable activities for both dehkan (smallholder farms)51 and more commercial farms. The economic importance of the subsector is therefore significant, considering that it accounts for more than 35% of the agricultural export value. Uzbekistan has become a major producer of horticultural products in the region, placing the country among the world’s top 10 exporters in several categories of fruits, vegetables, and nuts. According to the Food and Agriculture Organization (FAO) statistics, Uzbekistan exports of dried apricots are the second largest in the world, while exports of fresh apricots from Uzbekistan are the 4th largest, plums the 7th largest, cabbage the 8th, and raisins the 9th largest worldwide. The country is the sixth largest producer of cherries, and 17th in apple production; production of peaches and grapes from Uzbekistan is the 10th largest in the world.52 Despite delayed returns and higher investment costs, horticultural crops generate revenues to farmers that are significantly higher than wheat and cotton.53 The government has also made further efforts to liberalize the horticulture sector by adopting a new resolution, 54 which allows horticulture farmers and agricultural enterprises to sell their products directly in domestic and foreign markets.
By 2020, the Government of Uzbekistan aims to have converted over 200,000 hectares into horticulture production, away from cotton and wheat.55 According to the Ministry of Agriculture, Uzbekistan has trade ties with more than 80 countries and exports 180 different varieties of fresh and processed fruits and vegetables. Uzbekistan annually exports fresh and dried fruits and vegetables products to the amount of about 700,000 tons. Uzbekistan exports only 5%–6% of all produced fresh agricultural products. In terms of value, this indicator varies depending on the conjuncture of the main markets. The main markets for Uzbek products are Kazakhstan (67% of total exports), the Russian Federation (17%), Afghanistan (5%), the Kyrgyz Republic (2%), and other countries (9%). Horticultural export revenues have more than tripled, from about $500 million in 2006 to almost $1.2 billion in 2016. 56 (see Figure 25). Uzbekistan exports to the Russian Federation and Kazakhstan because of proximity and lower quality thresholds, though margins are far higher in Europe and East Asia. Uzbekistan aims also to expand the marketing of fresh and processed horticulture products to other countries, including Japan, the Republic of Korea, Saudi Arabia, United Arab Emirates, as well as EU countries. During the period 2017–2021, the production of food products is expected to increase by 140%, including fruit and vegetables and grapes by 140%. Export of fruit and vegetable products in 2021 will increase by 230% compared to 2016, and the export of fruit and vegetable processed products by 200%.
Main players of the horticulture chain include growers, market consolidators or brokers, wholesalers or traders, exporters, processing companies, supermarket chains, retail markets, transportation enterprises, market administration, and others. Growers include: (i) a large group of rural smallholding households (dehkans); (ii) private (or commercial) farms; and (iii) agricultural enterprises (agrofirms). Dehkan farms, according to the State Statistics Committee, account for more than 90% of horticulture production while occupying 65% of total sown area under vegetables (excluding melons), 43% under melons, and 20% under fruit crops (including grapes). Brokers or consolidators: They are responsible for properly harvesting, sorting, grading, and packing as per customers’ demand. Wholesalers: Local wholesale markets, specialized trading companies wholesale logistics centers to collect and transport products to the chain supermarkets in the cities. Exporters: National and private enterprises.
Processing companies: Horticulture products processing companies, specialized in either extracting, drying, caning, and processing. Supermarket chains: Food supermarket enterprises and large retail networks (Korzinka, Makro, etc.) Transportation: Large to single-owner transportation enterprises are involved in the transportation of horticulture products from sites of production to processing centers, wholesale markets, and then to retail distribution and export terminals. Table 12 presents the strengths, weaknesses, opportunities, and threats (SWOT) analysis of the horticulture value chain based on survey of value chain players.
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