The events of recent years, including the pandemic, have led to the fact that the world's food security problems have turned into a global food crisis, the characteristic features of which are a wide coverage of countries and territories, a significant increase in grain prices. At the heart of this process is not so much the volume of production as the change in energy prices. As a result, the cost of mineral fertilizers, transportation and other services provided to the agricultural sector has sharply increased. In addition, the logistics chain formed over many years of world trade has been disrupted.
Exporting countries have begun to invest more in stocks, and importing States do not have enough of the necessary funds to purchase them. According to analysts, this trend will continue in subsequent seasons. Although it is very difficult to make forecasts not only for the long term, but also for the medium term.
Agricultural production is one of the most conservative branches of the real economy. Low profitability makes it unattractive for investments, especially private ones. The fertility of the land, water availability, labor resources and their skills, weather and climatic features - these are the key factors determining the orientation of the agricultural sector and ensuring its effectiveness. All this together forms the comparative advantages of the industry underlying quantitative and qualitative economic indicators.
Towards the end of the last century, the direction was popular, which many international organizations and the agricultural scientific community urged to follow. Its essence was that small and medium-sized countries (taking into account natural factors) were recommended to produce mainly only those products that are dictated by comparative advantages. This formed the basis of world trade in agricultural products. Adherents of another direction argued that each state should strive to produce a basic list of necessary products independently.
One thing is obvious: the current food crisis will affect to a lesser extent those countries that, along with the production of products based on comparative advantages, grow strategically important products for their own needs to the maximum extent possible, even when their cost is higher than the world and it is more profitable to buy them on the side. It is important to ensure an optimal balance of economic benefits from the production of high-margin crops with food security objectives. Uzbekistan has chosen this path since gaining independence. Gradually, priorities began to change.
The change in the organizational and legal forms of rural commodity producers made it possible to significantly increase the production of potatoes and other vegetables. And the state policy in the field of animal husbandry has made it possible to increase the security of its own production of meat and milk. In the last five years alone, fish production (the weakest position in the food basket) has tripled. The measures taken to develop the production base have significantly improved the supply of domestic food to the population. At the same time, food imports have also grown significantly. Our country initially had low indicators of food security, plus high population growth rates require great efforts in this direction.
The unfolding food crisis cannot but affect Uzbekistan. With this in mind, the leadership of the republic was among the first in the region and in the post-Soviet space to take measures to expand food imports, curb inflation rates for food products, and create favorable conditions for domestic producers. Most importantly, reforms in agriculture have been continued with enthusiasm, measures have been taken more actively on accumulated and urgent issues. The most important factor radically changing the domestic grain market was the decision to abolish the system of its purchase for state needs at non-fixed market prices, adopted in May 2022. This is a long overdue problem, and its solution has given dynamism to agrarian reforms, has become an important tool in increasing grain production and ensuring the financial stability of producers.
The next step in the development of the industry should be the presentation of the opportunity for producers themselves to determine the size of areas, types and varieties of grain crops, the demonopolization of service structures. This will eliminate the legal basis for government interference in the activities of economic entities and will be even more significant than free pricing.
For a true owner, the possibility of freedom of action is the most important factor. This right should be considered as a significant investment in the industry and in the development of human capital.
The course of the New Uzbekistan on the priority of good-neighborly relations is now perceived with great interest by the countries of the Central Asian region. The political weight and economic opportunities of Uzbekistan are seen as a good opportunity to solve problems on a mutually beneficial basis. A special place among them is occupied by agro-industrial cooperation, the effective use of the comparative advantages of each of the Central Asian states in solving food security problems. If earlier, speaking about successes in this issue, we focused mainly on the growth of mutual trade, now we can cite many other examples.
Agro-industrial cooperation allows, without closing at the national level, to use the achievements of other countries and successfully solve common problems. By combining efforts, it is possible to achieve an effect that exceeds traditional trade. This is one of the directions of agro-industrial cooperation. However, it should cover not only the issues of direct production, but also include a wide range of activities "from the field to the counter".
In recent years, there have been shifts in this direction. In particular, a project is being worked out to create a fruit and vegetable cluster on the territory of two regions of Kazakhstan with the participation of farmers of Uzbekistan. It is planned to allocate about 25 thousand hectares of irrigated farmland for these purposes. Entrepreneurs of Kazakhstan have accumulated some experience in organizing the storage, processing and transportation of food. They show interest in building a business with our colleagues.
Traditional ties, joint research activities of the Research Institutes of Uzbekistan and Kazakhstan have gained a new breath in recent years. So, joint initiatives are being worked out in the field of harmless biological products that heal the soil and increase its fertility through the synthesis of organic matter. Agricultural technologies are being developed for the production of lentils and soybeans bred by Kazakh breeders in Uzbekistan, and seed and stone crops of Uzbek breeding in Kazakhstan. A project is being implemented with the participation of scientists from both countries to develop new varieties of cotton, a joint laboratory for biological plant protection.
Kyrgyzstan is showing great interest in the development of grain growing using Uzbek seeds, as well as early-maturing varieties of cotton, seedlings of fruit trees. The similarity of weather and climatic conditions plays an important role here. It is planned to implement a project to create a joint seed-growing enterprise with an area of 256 hectares in Kyrgyzstan for growing wheat seeds and other grain crops, subject to the copyright of Uzbek breeders. Funds of the Uzbek-Kyrgyz investment fund will be allocated to finance these projects.
The food crisis as a global phenomenon did not arise spontaneously and is likely to have a long history. We must be ready, using our capabilities and internal resources, as well as relying on international cooperation, to mitigate its consequences. At the same time, this process should be considered as a chance to give a new breath to the agricultural industry and solve a number of tasks.
Nosirjon Yusupov.
Chief Researcher of the International Institute of Central Asia, Doctor of Economics.