Doctor of Economics, Chief Researcher at the International Institute for Central Asia
The events of recent years, including the pandemic, the deterioration of the international situation, the imposition of restrictive measures and sanctions by the West, show that individual countries of the world give greater priority to their own group interests, to the detriment of the solution of global problems and threats.
The political conjuncture prevails over the economic one, which requires revision of some fundamental provisions and norms of international relations.
Food security, solving its problems on the basis of the “green revolution” has recently created the confidence that it will be achieved in the next decade. All that was needed was to join forces. But this did not happen.
Global problems of food security grew into a global food crisis.
Its characteristics are as follows:
– a much wider coverage of countries and territories, poor and middle classes;
– a significant increase in grain prices. The basis of this process is not the volume of production, but the increase in energy prices. As a result, the cost of mineral fertilizers, transportation and other services to agriculture has risen sharply;
– the rise in grain prices as a basic indicator, has a strong impact on the prices of other foodstuffs and, in general, on the inflationary process;
– The disruption of supply chains developed over many years of global trade, the imposition of bans or restrictions by exporting countries on demanded goods, increased tariff and non-tariff regulation, division of importing countries into friendly and unfriendly and a number of others.
Life has repeatedly proved the correctness of the dictum of the famous philosopher Jean-Jacques Rousseau “The only way to keep the state in a state of independence from anyone – is agriculture. If you possess all the riches of the world, if you have nothing to eat, you depend on others… Trade creates wealth, but agriculture ensures freedom”.
With independence, the most important task in creating economic security for Central Asian countries was to achieve food security as soon as possible.
The need for food security was dictated primarily by the low initial level of food security of these countries within the former Union. But even this level significantly decreased during the economic crisis of the second half of the 80s and early 90s. Another reason was the high rate of population growth.
At the same time, the negative factors limiting the growth of food production became more and more evident. These were mainly due to limited natural resources.
Agriculture in the region is based on irrigated agriculture. However, in recent years, the water crisis has intensified, affecting all countries in the region.
According to the classification of the Eurasian Research Institute under the Kazakh-Turkish University named after A.Yassawi, Uzbekistan and Turkmenistan belong to the countries exposed to “strong water stress”, and Kyrgyzstan and Kazakhstan – to the countries dominated by “moderate water stress”.
Land resources are also subject to negative impacts. In particular, about 70% of the agricultural area of Uzbekistan is subjected to degradation. The picture is roughly the same in other countries of the region.
Another challenge is related to climate change. Central Asia is warming faster than the world average. Average annual temperatures over the past three decades increased by 0.5 degrees Celsius and are projected to increase by 2.0-5.7 degrees by 2085. The increase in the frequency and speed of extreme weather events and disasters primarily threatens agricultural production and the solution of food supply problems.
Agricultural production is one of the most conservative sectors of the real economy. Its low profitability makes it unattractive for investments, especially private ones. Fertility of land, water availability, labor resources and its skills, weather and climatic features are the main factors determining its focus and efficiency. All these together form the comparative advantages of the industry. They are the basis of quantitative and qualitative production and economic indicators of the branch. It is quite logical to organize the agricultural production with this in mind.
But it is not quite right to be limited to this, as the events of recent years show. Toward the end of the last century there was a popular direction, which many international organizations and agricultural scientific communities called to follow. Its essence was that small and medium-sized countries (taking into account natural factors) produce mainly only those products whose expediency is determined by comparative advantage. This was the basis of world trade in agricultural products. Adherents of the other direction argued that the main list of necessary products each country should strive to produce at home.
One thing is clear: the current food crisis has had less impact on those countries which, along with the production of products on the basis of comparative advantage, grew as much as possible strategically important products for the domestic market.
Even in the case 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 the objectives of food security.
Uzbekistan with the beginning of its independence chose the way of combining political and economic interests in this issue, moving away from extremes. There were supporters of strengthening the material and technological base of cotton production and at the expense of high incomes from this sphere to buy in the world markets the missing products to solve the problems of food security. Moreover, at that time, there was a favorable conjuncture for this sphere. Uzbekistan chose its own model, which absorbed something from the first and the rest from the second direction.
Beginning from mid-90s, cereals production began to develop at high rates, at the expense of reducing the area under cotton. The task was set to achieve grain independence in a short period of time. By the end of the 2010s the republic achieved good indicators, but this did not mean absolute grain independence. And it would be unwise to strive for it. Over the years, priorities began to change. Thus, the stable growth of grain yield in recent years (69.7 cwt/ha in 2022) created the preconditions for reducing the area under this crop and expanding production of more demanded foodstuffs.
Changes in the organizational and legal forms of rural producers, progress on the path of market reforms, and measures taken to develop the production base made it possible to improve the supply of the population with home-produced foodstuffs. Production of potatoes and other vegetables, livestock products increased significantly.
In 2022 the production of eggs per capita exceeded the sanitary norms and amounted to 225 eggs, and the production of chicken meat in the coming years the country will reach the volumes that allow to ensure the recommended norm and will send the surplus for export. Only for the last five years the production of fish, the weakest position in the food basket of Uzbekistan, increased threefold.
Recent years are characterized by high dynamism of Uzbekistan’s fruit and vegetable exports. Historically, the country was famous for this position and fully provided not only domestic needs.
In order to limit influence of the world food crisis the country uses both its internal capacities and possibilities, which are provided by the world trade. Among the first in the region and in the post-Soviet space, the country’s leadership has taken measures to increase food imports, curb inflation on food products and create favorable conditions for domestic producers.
Reforms in the agricultural sector continued and measures were taken on the issues that had accumulated and needed urgent solution. So, the most important, cardinally changing the internal grain market was the decision to cancel the system of its purchase for state needs at unfixed, market prices, adopted in May 2022. Solution of this long-standing problem gave good production and economic results already in the first year.
No less important is the decision adopted in 2022 to lease 200,000 ha of land to the youth.
We are talking about territories with good water supply, located close to settlements, released from cotton and grain and being in use of farms and clusters.
This will undoubtedly give good results. Such measures taken in the country in the initial period of independence made it possible to significantly reduce the severity of the problem of food supply and prevent economic and social cataclysms.
Other countries of Central Asia are also purposefully implementing measures based on the food security laws they have adopted. Market principles are being introduced in the management of agricultural production and a multi-structural economy is being created.
The new Uzbekistan’s course on the priority of good-neighborly relations has been accepted by the countries of the region with great interest. Political weight and economic opportunities of Uzbekistan are considered by them as a good basis to solve many problems on a mutually beneficial basis. These primarily encompass the following issues.
The water problem. The crux of the issue is not only that water is scarce in the region, the area of glaciers that feed the rivers is rapidly shrinking. But also the fact that these main rivers serve the needs of six countries in the region (the sixth consumer Afghanistan was recently added). It means all issues should be solved jointly, on the basis of consensus. To date, the main issues have been solved, and joint efforts are yielding results.
Development of the transport and logistics network. The countries of the region have an understanding of this problem, work on its implementation is underway. The great prospects associated with it are evidenced by the research.
Thus, according to the Eurasian Development Bank, the formation in the region of the Eurasian commodity distribution network (ETCN) will contribute to the elimination of transport and logistics constraints, under the influence of which losses of own agricultural products reach 40%. Thanks to this, 70% of food that can be produced in the region, but is imported from third countries, can be abandoned.
Agro-industrial cooperation makes it possible to use the achievements of other countries and successfully solve common problems without becoming isolated at the national level. Food production requires seeds, plant protection products, modern agricultural technologies, machinery and, most importantly, labor resources with the appropriate knowledge and skills. Together, all this constitutes the agro-potential, on the skillful use of which depends the high productivity of natural resources. With this in mind, at the meeting of the Supreme Eurasian Economic Council in 2022, the President of Uzbekistan Mirziyoyev raised this issue and proposed to develop a specific program of action on agricultural cooperation.
If earlier, when speaking about successes in regional cooperation, it was noted mainly the growth of mutual trade in foodstuffs, now we can give many examples of industrial and scientific activities. The following projects implemented on the basis of cooperation allow effective use of common potential:
– A project to create a fruit and vegetable cluster in two regions of Kazakhstan with the participation of Uzbek farmers is under development. It is planned to allocate about 25 thousand hectares of irrigated farmland for this purpose;
– LLP “National Goods Distribution Systems” from Kazakhstan, specializing in storage, processing and transportation of food products, intends to establish similar enterprises in the territory of Uzbekistan together with local partners;
– joint projects of Uzbek and Kazakh researchers in the field of harmless biopreparations, healing the soil, increasing its fertility through the synthesis of organics are being developed.
Agro-technologies of lentil and soybean production in conditions of Uzbekistan, bred by Kazakh breeders, seed and stone crops of Uzbek selection – in Kazakhstan are being developed. The project with participation of scientists from both countries on development of new varieties of cotton, joint laboratory on biological protection of plants is being implemented;
– Kyrgyzstan shows great interest in development of grain farming using Uzbek seeds, as well as early-ripening varieties of cotton, seedlings of fruit trees. It is planned to implement a project on establishment of a joint seed production enterprise.
The efforts of Central Asian countries to achieve food security are paying off. This is clearly reflected in the indicators of international food security indices.
For example, according to the Global Food Security Index (GFSI) compiled by the British news agency “The Economist” by the end of 2022 Kazakhstan ranked 32nd (in 2021 – 41st), Uzbekistan – 73rd (in 2021 – 78th), Tajikistan – 75th (in 2021 – 83rd) out of 113 countries.
And in terms of the highest growth rate in 2019-2022, Uzbekistan ranked first among the 10 countries.
Overall, the food crisis, as a global phenomenon, did not arise spontaneously and will have a prolonged history. We need to be prepared, first and foremost, by utilizing our capabilities and internal resources, as well as relying on international cooperation, to mitigate its consequences for our country. However, this crisis should be seen as an opportunity to breathe new life into the industry and address many domestic and international issues.