horticulture value chain infrastructure project: detailed ... · new jobs. during the period...

Horticulture Value Chain Infrastructure Project (RRP UZB 51041)

Supplementary Document 15:

Detailed Sector Assessment – Agriculture, Natural Resources, and Rural Development

http://www.adb.org/Documents/RRPs/?id=51041-002-3

TABLE OF CONTENTS

1. INTRODUCTION 1

2. AGRO-ECOLOGICAL CONDITIONS IN THE PROJECT PROVINCES 3

A. Agro-ecological features .................................................................................................... 3 B. Climatic features of Andija Province .................................................................................. 5 C. Climatic features of Samarkand Province .......................................................................... 6

3. ORGANIZATION OF THE HORTICULTURE MARKET SECTOR 7

A. The Current Market institutions .......................................................................................... 7 1. Market Institution at National Level .................................................................................... 7 2. Market Institution at Provincial Level ............................................................................... 12 3. Market Institution at Municipal Level ................................................................................ 13

B. Stakeholders at Large ...................................................................................................... 13 C. Other Stakeholders .......................................................................................................... 14

4. KEY HORTICULTURE PRODUCTS 15

5. SECTOR PERFORMANCE 16

A. Crop Areas ....................................................................................................................... 16 B. Production ........................................................................................................................ 17 C. Consumption .................................................................................................................... 19 D. Horticulture Share in the Agro-industry ............................................................................ 20 E. Export of Horticulture Products ........................................................................................ 23 F. Share of Horticulture Products in the National Production .............................................. 31 G. Share of Horticulture Products in the Wholesale Trade .................................................. 31 H. Losses in the Horticulture Chain ...................................................................................... 31

1. Crop Losses ..................................................................................................................... 31 2. Transportation Losses ..................................................................................................... 32 3. Overall Losses ................................................................................................................. 32

6. CURRENT MARKET INFRASTRUCTURE 33

A. Existing Wholesale Markets ............................................................................................. 33 1. Wholesale horticulture markets at National level ............................................................. 33 2. Andijan Markets ............................................................................................................... 33 3. Samarkand Markets ......................................................................................................... 33 4. Tashket Markets............................................................................................................... 34

B. Horticulture Chain Analysis .............................................................................................. 34 1. The structure of fruit value chain in Uzbekistan ............................................................... 34 2. Transportation .................................................................................................................. 35 3. Horticulture Processing .................................................................................................... 35 4. Cold Storage .................................................................................................................... 36

C. Norms and Standards ...................................................................................................... 38 D. Assessment of Needs ...................................................................................................... 40 E. Required Improvements for Sustainable Sector Development ........................................ 41

7. MARKET DEMAND ANALYSIS 42

A. Structure of the horticulture marketing ............................................................................. 42 B. Domestic Markets ............................................................................................................ 42 C. Supermarkets ................................................................................................................... 42 D. Use and Distribution of the Horticulture Produce ............................................................. 42 E. Export Markets ................................................................................................................. 43

8. SECTOR FORWARD STRATEGIES 44

A. Key strategies in the Agriculture Subsector ..................................................................... 44

B. Diversification of traditional agriculture ............................................................................ 45 C. International donor Funded Projects ................................................................................ 46 D. ADB Recommended Roadmap for Horticulture ............................................................... 46

1. ADB Sector Experience and Assistance Program ........................................................... 46 2. ADB Assistance to Uzbekistan in the Sector ................................................................... 46

APPENDIXES Appendix 1: Sector Regulatory Framework – Selected Items ................................................ 48 Appendix 2: List of Projects Implemented, being carried out or under study by the RRA ...... 65 Appendix 3: Characteristics of Horticulture products markets in Andijan province ................. 67

LIST OF ABBREVIATIONS

ADB Asian development bank CPS Country Partnership Strategy DCM Decree of the Council of Ministers EBRD European Development Bank EU European Union FAO Food and Agriculture Organization ha hectare IBRD International Bank for Reconstruction and Development IDA International Development Aid IFAD International Fund for Agricultural Development IFI International Funding Institution JICA Japan International Cooperation Agency JSC Joint Stock Company RFP Request for Proposal RCM Resolution of the Cabinet of Ministers RoU Republic of Uzbekistan RRA Rural Restructuring Agency TOR terms of reference

1. INTRODUCTION 1. The Republic of Uzbekistan (RoU) is endowed with particular agro-ecological conditions which provide favorable basis for its horticulture subsector. Consistent implementation of measures to develop and diversify the industry has allowed over the past 5 years ensuring the expansion of the resource base and increasing the volume of products. In particular, fruit and vegetable products increased, in particular grapes increased 160%, meat products by 140%, and dairy products by 140%.1

Figure 1.1 Map of Uzbekistan

2. Policy reforms which took place in horticulture subsector in recent years provide incentives to support private investment and efficient markets and promulgate policies that promote the optimum valorization of horticulture resources. Such as the Presidential Decree PP-2505 dated 5 March 2016 "On measures to further develop the raw materials base, deepen the processing of fruit and vegetable and meat and dairy products, increase production and exports of food products in 2016–2020" and PP-2716 dated 6 January 2017 "On additional measures to further deepen processing and create capacities for storage of fruit and vegetable products in 2017–2018" provides for the implementation of 434 projects in the amount of $740.1 million in the following areas:

(i) 163 investment projects focused on creating new production facilities for processing of fruits and vegetables in specialized areas (districts);

1 Press release on the theme: Reforms and prospects for processing agricultural products. Tashkent. 4 April 2017.

https://mineconomy.uz/ru/node/1539

https://mineconomy.uz/ru/node/1539

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(ii) 159 projects for the construction of warehouses equipped with refrigerating chambers for storing export-oriented fruit and vegetable products;

(iii) 36 projects to establish enterprises for the production of packaging materials; and (iv) 39 investment projects for the processing of meat and dairy products.

3. In accordance with the Strategy Action plans of the country, there were envisage modernization and intensive development of agriculture, providing reduction of crop area under cotton for 49,000 ha and 10,000 ha of grain areas. In the shortened fields, it is planned to sow crops such as potatoes for 8,100 ha, vegetables for 27,200 ha, intensive gardens for 5,900 ha, vineyards for 2,900 ha, fodder crops for 10,900 ha, and 4,000 ha of oilseeds (footnote 1). 4. The structural reforms emphasize the (i) expansion of the raw material base of the food industry, (ii) development of deep processing of agricultural products, (iii) full provision of domestic market with domestic products, and (iv) export of finished products with high added value. In this regard, there were plans of forming 14 logistic centers for storage, sorting, calibration, processing and packaging of exported fruit and vegetable products with a capacity of over 310,000 tons are being created to increase the export capacities of the country. 5. Implementation of these projects will increase the share of processing volume of fruit and vegetable production by 24% in 2017, which will ensure the creation of additionally 4.6 thousand new jobs. During the period 2017–2021, the production of food products is expected to increase by 140%, including fruit and vegetables and grapes by 140%, meat products by 130%, and dairy products by 150%. Export of fruit and vegetable products in 2021 will increase by 230% as compared to 2016, export of fruit and vegetable processed products by 200% (footnote 1). 6. The geographic trend of the exports of processes horticulture products will also extend to other countries such as China, Korea, the European Union, and United Arab Emirates in particular. 7. Last year’s performance indicated that sector enterprises of Uzbekistan exported 818,500 tons of fruits and vegetables in 2016,2 representing an increase of 38.3% in comparison with 2015. In 2017, exports are forecasted at 1.270 million tons (footnote 2). Horticultural export earnings trend has also surged in recent years, growing from USD 373 million in 2006 to USD 1.283 billion in 2014.3 Uzbekistan ranks 48th among the largest exporters in the total world export volume. 8. The total land assigned to horticulture in 2016 is estimated at 760,100 ha, significantly up from the 691,500 ha in 2012. This accounts for about 20.5% of the aggregate sown area, as compared to grain fields (41.8%), and cotton crops (34.1%) (footnote 3). 9. The total horticulture production in Uzbekistan has reached 21,100,0004 tons in 2016 and is expected to keep this trend in 2017 which places the RoU as the leader among the main horticulture producers in Central Asia. Accordingly, due to the convergence of increasing export demand and to the introduction of appropriate policies, the sector market has considerably expanded in latest years.

2 Brief news: On export of fresh and processed fruit and vegetables in 2016

(http://agro.uz/ru/information/about_agriculture/422/7720/) 3 Calculated according to the information which is received from Statistics Committee of the Republic of Uzbekistan. 4 Brief news: On export of fresh and processed fruit and vegetables in 2016

(http://agro.uz/ru/information/about_agriculture/422/7720/)

http://agro.uz/ru/information/about_agriculture/422/7720/

http://agro.uz/ru/information/about_agriculture/422/7720/

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10. In 2016, RoU has more than 132,000 farmers operating a total crop area of 3,138,000 ha (average crop area per farmer 23.8 ha), and 4.769 million backyard households5 (average crop area per farmer 0.10 ha; total crop area 480,000 ha) (footnote 3). In Andijan province, there are more than 15,000 farmers cultivating a crop area 196,500 ha, representing some 16.4 ha per farmer. The dehkan (small farms) households are estimated at 481,900 with a total land area of 28,400 ha (footnote 3) approximately 0.06 ha per household. In Samarkand, there is more than 19,900 farmers, cultivating 297,400 ha, around 15.0 ha per farmer. The dehkan households are more than 511,100 operating some 79,400 ha (footnote 3), or 0.11 ha per dehkan on average. 11. Growing fruits and vegetables is among the most profitable activities on both dehkan and private farms and, over the last ten years, the incomes generated from the subsector comprise a growing share of national gross domestic product. Nonetheless, the trade market value of fresh horticultural goods depends narrowly on their careful handling and rapid delivery to destination markets. Particular care to management of risks related to phytosanitary conditions and food safety in general is also an essential component in the distribution chain. In current times, it is essential to meet standards and requirements set under international trade agreements and by governments of importer countries where food safety hazards are carefully monitored and controlled at all stages of the food distribution chains, from field to consumer. 12. Considering the growing importance that the horticulture subsector is having in the country’s economy, the Government of Uzbekistan (GoU) has undertaken reforms encouraging the expansion of horticulture in exchange of cotton and other less profitable crops, providing national and internationally-funded loans to farmers and encouraging small to large scale industrial processing of horticultural crops. The GoU has also initiated additional institutional reform aimed at facilitating exports of fresh and processed horticultural products. Under the reform, the GoU has undertaken a number of donor-funded projects aimed at ensuring steady development of all components of the horticulture subsector chain, from production down to conservation, transformation, marketing, and export. 13. The Horticulture Value Chain Infrastructure Project (HVCIP) will have beneficial impact to all stakeholders along the value chain. The proposed wholesale market and logistic center is designed to serve local and external market. The new holistic wholesale markets will foster the production of horticultural crops due to increased export and reduction of postharvest losses due to improved infrastructure and cold chain practices. Traders will exchange goods and services under one roof.

2. AGRO-ECOLOGICAL CONDITIONS IN THE PROJECT PROVINCES

A. Agro-ecological features 14. Uzbekistan’s continental climate with hot summers is ideal for growing apple, pears, pomegranates, cherries, apricots, peaches, and other popular fruit crops.

5 See the “Law on Dehkans” No. 604-I of 30.04.1998.

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Figure 2.1 Climate classification of Uzbekistan according to Köppen

15. According to the regional classification system,6 Uzbekistan is in the middle Asian soil climatic zone, characterized by a continental (dry) climate, with soils that differ from those of the northern regions of Euro-Asia. The irrigated areas of Uzbekistan are located in three climatic zones: (i) northern, (ii) central, and (iii) southern. 16. The northern climatic zone comprises the Republic of Karakalpakstan, the Khorezm region, and the foothill districts of Tashkent and Samarkand. This zone has the shortest vegetative growth period (180 days to 200 days); the sum of temperatures does not exceed 3,600°C to 4,000°C, i.e. the sum of temperatures above 10°C during the growing period. In this zone, crops such as cotton, rice, melon, vegetables, and different fruit trees are grown. The summer temperatures range from 35°C to 42°C during the day, and 20°C to 28°C at night. 17. The first subzone of the northern climatic zone includes the northern districts of the Republic of Karakalpakstan and Khorezm Province. The soils are old-irrigated, hard, and loamy. The average water penetration is low and the water is highly saline. The groundwater has a high salt content (12 galloon per liter [g/l] to 30g/l). 18. The second subzone (foothill areas of Tashkent and Samarkand) of the northern climatic zone has sierozems and sierozem meadow soils, with a low salt content. The ground water contains little salt (1g/l to 3g/l); the vegetative period is of 200 days; the sum of temperatures does not exceed 3,600°C to 4,000°C; the amount of rainfall is 360 mm to 400 mm a year, falling mostly in the winter and early spring. 19. The central climatic zone includes the Fergana valley, Andijan, Tashkent, and Samarkand. In this zone, the vegetative period is from 200 days to 220 days, the sum of temperatures 4,000°C to 4,200°C; evaporation is higher than rainfall. In this climatic zone, crops

6 Fertilizer use by crops in Uzbekistan. Food and Agriculture Organization Corporate document repository. Natural Resources Management and Environment Department. Tashkent.

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such as cotton, wheat, barley, grapes, tobacco, potatoes, tomatoes, and other vegetable and fruit crops are grown. 20. In the first subzone of the central climatic zone (the Fergana Valley, Tashkent, Sir-Darya, and Samarkand regions), the soils are gleysols and meadow soils, non-saline or of low salinity, with good hydro-physical properties. The vegetative period is from 190 days to 200 days, rainfall from 320 mm to 380 mm, falling mainly in winter and spring. The sum of positive temperatures is 4,000°C to 4,200°C. 21. In the second subzone (Sir-Darya, Jizzakh, and Samarkand regions), the vegetative period is from 190 days to 200 days, the rainfall is 240–270 mm per year. The soils are typical gleysols, non-saline, gleysol-meadow soils, and meadow soils. 22. In the third subzone (the new irrigation zone of Jizzakh, Samarkand, and part of Kashkadarya), the soils are typical gleysols and meadow soils, non-saline or of low salinity. In this zone, the average temperature fluctuates during the vegetative period from 16°C to 20°C, the sum of temperatures is from 4,200°C to 4,400°C, the annual rainfall from 220 mm to 240 mm, 75% falling outside the vegetative period. 23. None of the provinces included in our project falls within the southern climatic zone, which includes the Bukhara and Surhandarya regions. The vegetative period is from 240 days to 260 days and the sum of temperatures is 4,600°C to 5,000°C. In this zone, subtropical crops such as melons, fine fiber cotton, and various vegetable and fruit crops are grown.

B. Climatic features of Andijan Province 24. Andijan province is located in the eastern part of the Fergana Valley in far eastern Uzbekistan. It borders with Kyrgyzstan, Fergana Region, and Namangan Region. It covers an area of 4,200 km2 with a population of 2.96 million,7 which makes this province the most densely populated province in Uzbekistan. 25. The climate of Andijan province is extremely continental, with relatively mild winter and continuous hot summer. Basic peculiarity of Central Ferghana's climate is a hot dry summer and an especially cool and humid winter. Based on observations of many years, the average monthly temperature of the coldest month of the year, January, is -3.4°С, and the hottest, July is 26.8°С. The absolute maximum of positive temperatures reached 44°С (in the shade) and the maximum of subnormal temperatures is 29°С. An average year-round temperature is 13.4°С. 26. The average yearly precipitations total is 208 mm. Their main part falls in winter and spring months, which is 89% of all precipitations. The minimum precipitation falls on the months of June, July, August, and September. March accounts for the largest amount of precipitations i.e., 33 mm. Mainly north and north-westerly winds are characteristic of this province. Heavy dust storms causing wind erosion are normally observed during April and May. 27. The main water course of the province is Karadarya River that crosses the province from the east to the west, its water is mainly used for irrigation. There are 3 reservoirs and several lakes.

7 State Statistic Committee of Uzbekistan, 2017.

https://en.wikipedia.org/wiki/Fergana_Valley

https://en.wikipedia.org/wiki/Uzbekistan

https://en.wikipedia.org/wiki/Kyrgyzstan

https://en.wikipedia.org/wiki/Fergana_Region

https://en.wikipedia.org/wiki/Namangan_Region

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C. Climatic features of Samarkand Province 28. Samarqand province is located in the center of the country in the basin of Zarafshan River. It borders with Tajikistan, Navoiy Region, Jizzakh Region and Qashqadaryo Region. It covers an area of 16,400 km². The population is estimated to be around 3.65 million8 with some 75% living in rural areas. 29. The climate in the province is sharply continental. The average annual air temperature is 12.9°C–14°C. The coldest month is January, with a minimum temperature -20°C–26°C, the hottest month is July with maxima temperature 40°C–42°C. The annual amount of precipitation is 204 mm–414 mm. The direction of the wind is southeastern and eastern. The duration of the frost-free period is 200 days. 30. The main waterway in the Samarqand province is Zarafshan River. It is fed from melting of glacial-snow accumulation in the from the Zarafshan mountain Range. Zarafshan is formed by the confluence of the rivers Matcha and Fandarya. Its main tributaries are Kshtut and Magiandarya, which flow on the left at 57 km and 88 km below the confluence of Match and Fandarya.

8 State Statistic Committee of Uzbekistan, 2017.

https://en.wikipedia.org/wiki/Zarafshan_River

https://en.wikipedia.org/wiki/Zarafshan_River

https://en.wikipedia.org/wiki/Tajikistan

https://en.wikipedia.org/wiki/Navoiy_Region

https://en.wikipedia.org/wiki/Jizzakh_Region

https://en.wikipedia.org/wiki/Qashqadaryo_Region

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3. ORGANIZATION OF THE HORTICULTURE MARKET SECTOR

A. The Current Market institutions

1. Market Institution at National Level 31. The Rural Restructuring Agency (RRA) has been constituted under the Ministry of Agriculture (MOA) pursuant Decree of Cabinet of Ministers (DCM) No. 462,9 concomitantly with the implementation of the IBRD supported “Rural Enterprise Support Project”.10 The RRA is headed by a General Director and has a staff of 80 of which 57 are management, technical, engineering, finance, and economist. Two deputy directors are in charge of (i) Implementation of investment projects, and (ii) development of new projects. Within the agency is a marketing research department specifically in charge of promoting marketing and the export of horticulture goods. Among other, the DCM 462 entrusts the RRA to coordinate and ensure efficient interaction among international financing institutions (IFI) providing support to projects in the agricultural sector. To date, the RRA has completed 6 agricultural infrastructure and agriculture enterprises support project totaling $443.8 million, of which $261.8 million are foreign investment provided by ADB, IBRD, and IDA. Currently, RRA is implementing another 7 projects in the areas of sustainable agriculture, horticulture value chain development, livestock, and adaptation to climate change, for a total estimated finance of $751 million of which $488 million provided by various IFIs, namely ADB, IFAD, IBRD, and IDA. The RRA is coordinating the preparation of no less than 5 perspective projects mainly towards horticulture value chain finance and development with an estimate financial requirement of $948.4 million of which $897.8 contributed by potential donors such as ADB, JICA, and IBRD. Moreover, RRA is carrying out preparatory studies for 2 additional projects also targeted to horticulture development with capital investment estimated at $374.7 million of which $374.7 million expected to be financed by EU and EBRD (Appendix 1).

9 Resolution of the Cabinet of Ministers No. 462 of 2 October 1997: “On measures to accelerate implementation of

the Rural Enterprise Support Project financed by IBRD. 10 The RRA was established under the Ministry of Agriculture and Water Resources in the form of an incorporated

agency as part of the government to facilitate the implementation of certain agriculture projects. As part of the ongoing reforms, the ministry was divided into the Ministry of Agriculture and the Ministry of Water Resources in February 2018. The government is considering reorganizing the RRA. Changes under consideration include (i) changing the RRA’s name from the Rural Restructuring Agency to the Agency for Implementation of Investment Projects in Agro-Industrial Complex, and (ii) changing the RRA’s parent organization from the Ministry of Agriculture to the State Committee of the Republic of Uzbekistan for Investment.

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Figure 3.1 Organizational Structure of the Rural Restructuring Agency

Source: Rural Restructuring Agency.

Total: 75p.

Specialists (4p.)

Deputy General Director, Head of Investment Projects Implementation (1 p.)

Specialists (2p.)

Specialists (1p.)

Technical staff (2p.)

Regional Specialists

(4p.)

Deputy Project Manager "Program on Adaptation to

Climate Change and Mitigation of its

Consequences for the Aral Sea Basin"(1 p.)

Deputy Project Manager, "Supporting the

Development of the Horticultural Sector in the Republic of Uzbekistan"

(1 p.)

Improvement of the meliorative state of the land plots of rice farms. (ADB)

Deputy General Director for New Projects Development (1 p.)

Development of the

livestock sector in the Republic of Uzbekistan

(IDA) (3 p.)

Development of the sector of horticulture growing in

the Republic of Uzbekistan.

Grant financing (EU)

Increasing the efficiency of the horticulture sector in the

Republic of Uzbekistan (JICA)

Development of the value chain in the horticulture sector. Phase-II (ADB)

Development of the value chain in the livestock sector.

(ADB)

General Director (1 p.)

Legal Department

(4 p.)

Accounting department

(5 p.)

Administrative and economic personnel (14 p. including 4 drivers, 2 office managers, 3 translators, 1

security. 3 cleaners)

Financial department

(5 p.)

Department of Ecology (4 p.)

Procurement Division (5 p.)

Monitoring department (6

p.)

Subprojects lending

department (6 p.)

Marketing Research

Service (3 p.)

Deputy Project Manager "Development of the value chain in the dairy sector"

(1 p.)

Deputy Head of the Project "Development of the Fruit and Vegetable Sector in the Republic of

Uzbekistan" (1 p.)

Deputy Head of the

project "Development of sustainable agriculture and

mitigation of climate change" (1 p.)

Deputy Head of the project "Horticulture Value Chain"

(1 p.)

Specialists (1p.)


Specialists (5p. 0,5 wage-rate). Specialists 1


Specialists (4p.)


32. The Uzbekozikovkatholding» holding joint-stock company was instituted through the Decree of the President of the Republic of Uzbekistan No. PP-249211 as replacement of the former Association of Food Industry Enterprises. The PP-2492 defines the tasks of the holding and provides guidelines of the organizational structure of the holding company (Appendix 1). Uzbekozikovkatholding includes a roster of 241 enterprises processing horticulture products, 45 enterprises processing meat and milk products, 79 enterprises processing other food products, and 13 service companies.

Figure 3.2 Organizational structure of the holding company “Uzbekozikvokatholding”

Source: Presidential decree PD-2492 of 18 February 2016.

33. The executive office of Uzbekozikovkat holding has a staff of 50. 34. The main tasks of the holding consist of (i) conducting marketing research on horticulture products; (ii) provide advice to enterprises in the various branches of processing horticulture products; (iii) provide support in a holistic way to the sector enterprises in the handling, conservation, enhancing marketing, and improving packaging; (iv) assist sector enterprises in promoting export of processed fruit and vegetable; and (v) provide information services and training to personnel at various level of the horticulture value chain.

11 Presidential Decree No. PP-249211 of February 18, 2016 "On measures to further improve the organization of the food industry of the republic" on the basis of the proposal of the Ministry of Economy, the State Committee of the Republic of Uzbekistan on privatization, Association of Food Industry Enterprises was abolished and the holding company "Uzbekozikovkatholding."

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Figure 3.3 Organizational Chart of the Executive Office of the Holding Company “Uzbekozikovkatholding”

Source: Presidential Decree PD-2492 of 18 February 2016.

35. The Joint Stock Company (JSC) “Uzagroexport”, under the umbrella of Uzbekozikovkatholding, is a foreign trade company that specializes in export of fresh and processed fruit and vegetable products through direct export contracts with foreign partners, as well as commission contracts concluded with private and dehkan farms, agricultural companies, and processing enterprises. The JSC “Uzagroexport” was instituted with Presidential Decree No. 2515 of 7 April 2016.12 Uzagroexport has a permanent staff of 50. The main activities of JSC “Uzagroexport” (Appendix 1) are to increase the volume and variety, as well as the geography of export of fresh and processed fruit and vegetable products of Uzbekistan, that demanded enough competition in the international markets.

12 Presidential Decree 2515, of April 7, 2016, "On measures to improve the procurement system for fruits and vegetables,

potatoes and melons, instituting the Uzagroexport.”

Department of organization

of export deliveries of logistics

General Director of the specialized foreign trade

company JSC “Uzagroexport”- Deputy

Chairman

Office of Marketing and organization of export

supply of food products

Marketing and Advertising Department

Department of Food Safety and Standardization

Department of personal and legal

affairs

Department for the introduction and Development of information and Communication Technologies

Office manager

Director of Economics and Prospective Development, Vice-

Chairman

Department on attraction of investments and monitoring of

investment projects

Department of Strategic Forecasting and Development of the Industry

Financial and Corporate Department

General Meeting of Stakeholders

Supervisory Board

Chairman

Audit committee

Internal Audit Service

Department for the organization of storage and

processing of fruit and vegetables

Director for production and introduction of modern

technologies, vice chairman

Department of the organization of harvesting, storage and sale of fruit and vegetable products

Department for the development of deep

processing and preservation of fruit and vegetables

Department for the development of meat and milk

products

Department for the development of food products

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Source: Presidential Decree PP-2505 of 5 March 2016.

Figure 3.4 Organizational Structure of the Foreign Trade Company JSC “Uzagroexport” 36. Uzagroexport relies upon 47 trades and purchasing bases and refrigeration infrastructure for the storage, calibration, and sorting of fresh fruit and vegetable products, 14 trade and logistics centers (one in each region, in the city of Tashkent and in the Republic of Karakalpakstan), 8 enterprises for packing horticulture products, 4 trading houses abroad (Russia), and other branch enterprises. The distribution of the affiliated branches within the 3 provinces are included in the HVCIP is as follows: Province Trade and purchasing

bases Trade and logistic

centers Packaging enterprises

Andijan 4 1 - Samarkand 2 1 2 Tashkent 6 1 2 Source: Uzagroexport.

37. The Council of farmers of Uzbekistan was established through the Decree of the President of Uzbekistan of 22 October 2012.13 The Decree established Farmers’ Councils at national, provincial, and district levels in each provinces and districts of Uzbekistan. Around 350 farmers from various provinces and districts have participated to the funding of the Farmers Council. The main scope of the Farmers’ Council of Uzbekistan is outlined as follows (i) support the technical and financial capacities of the farmers; (ii) ensure protection of farmer’s legal rights; (iii) provide technical support for the introduction of good agricultural practices in their activities like drip irrigation systems, modern communication technologies, and other practices; (iv) enhance the expansion and diversification of various forms of farmers’ cooperation, as well as production, procurement, processing activities, and marketing; (v) promote the establishment of extension

13 Presidential Decree No. 4478 of October 22 of 2012, on “Measures on establishment of farmers’ activities and perfection of development of farmers’ activities,” currently superseded by the Presidential Resolution dated on 9 October 2017 #PR-5199.

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services in rural areas to support and upgrade the farmer’s legal, economic, and agricultural knowledge and skills.

Figure 3.5 Organizational Structure of Council of Farmer of Uzbekistan

2. Market Institution at Provincial Level

38. At the provincial level there are Associations of Markets (the Association). These associations report directly to the Trade Department under the Provincial Hokimiyat. The Trade Department is responsible for management and coordination of all markets, household, and trade activities within the province. The main objective of the Markets Association is to ensure that there is enough fruits and vegetables in the market for the catchment area. 39. The Association “ToshBozorSavdo” was instituted through the Presidential Decree No. 1384 of 5 March 1996,14 following DCM No. 82 of 5 March 1995.15 The Association was officially registered on March 25 of 1998 as “Toshbozortayorlovsavdo” further to the Decree of Tashkent City Mayor No. 1 of 7 January 1998,16 and further renamed “Toshbozorsavdo” on 24 March 2012.

14 Presidential Decree No. 1384 of 5 March 1996, on “Establishment of market’s activities and measures on improvement

of additional separate services.” 15 DCM No. 82 of 5 March 1995, on “Market Activities and measures on their management and monitoring.“ 16 Decree of Tashkent City Mayor No. 1 of 7 January 1998, on merging the two companies: “ToshbozorSavdo” and

“Toshshaharmevasabzavotsanoat.”

13

40. The Association is responsible for the coordination and management of markets and trade complexes affiliated to the Association, protect their interests, increase their income, and perform other duties and tasks given by the Cabinet of Ministers and the Tashkent City Hokimiyat. Toshbozorsavdo falls under the Tashkent City’s “Department of Trade, Services and Production of Household Goods.” Currently, “Toshbozorsavdo” manages and monitors a network of 21 markets and trade complexes in Tashkent City; 12 of them are agricultural markets. Fourteen of the markets are registered as joint stock companies and 7 of them have Limited Liability Company (LLC) status.

3. Market Institution at Municipal Level 41. The Department of Trade, Service and Consumer Goods Production under the Tashkent City Administration, has been instituted with the Resolution of the Cabinet of Ministers (RCM) No. 264-34 of 26 May 199717 and the Decree of the Mayor of the City of Tashkent No.237 of 30 June 1997.18 On 31 January 2008 by the department was registered as a state-owned enterprise. 42. The scope of the department include the following main tasks (i) implement the city policy (at national and municipal level) in the consumer markets and services sector and participate in the preparation and implementation of national and city-specific programs in this area; (ii) ensure the provision of documents for the registration of licenses for business activity and the issuance of licenses for retail trade with certain types of goods; (iii) coordinate the establishment and activity of markets and trade centers; (iv) provide high quality service to Tashkent City residents and coordinate activities of enterprises operating in the consumer market and service sector; (v) participate in the preparation of legal and normative documents for further improvement of the system of trade, public catering, service sector and production of consumer goods, and preparation of relevant proposals; (vi) creating equal conditions for business entities in the sphere of trade, services, and production of consumer goods.

B. Stakeholders at Large

43. Other main players and beneficiaries of the horticulture chain are listed hereafter. 44. Growers. Farmers and small-scale backyard owners who produce the horticultural products. The new wholesale markets will stimulate the export of the agricultural products thus resulting in increased demand for local horticulture crops production. Not least, new fruits and vegetables varieties could be experimented and introduced in the horticulture chain due to increased demand from abroad. 45. Brokers or consolidators. This category of stakeholders is responsible in properly harvesting, sorting, grading, and packing as per customer’s demand. These stakeholders play an important role in the horticulture value chain and will be directly impacted by the proposed project through bolstering subsector markets activities and fostering increased export volume. They will involve number of activities using new technologies such as modernization of sorting, automatized packaging, controlled conservation, inducing added value activities in the provinces included in the project.

17 Resolution of the Cabinet of Ministers No. 264-34 of 26 May 1997 "On the order of procurement of basic foodstuffs for

public consumption.” 18 Decree of the Tashkent City Mayor No. 237 of 30 June 1997 "On the establishment of the Department of Trade, Public

Services, and Consumer Goods Production.”

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46. Wholesalers or traders. Will benefit from reduced postharvest losses due to introduction of modern infrastructure as well as of stable prices because of the steady supply of the fresh produce to the market. 47. Exporters. This category of stakeholders includes all relevant national and private enterprises and corollary entities like bank, custom, sanitary control, and laboratory facilities. Exporters will have an office or be stationed at the new wholesale logistic centers to improve export efficiency. 48. Processing companies. These include horticulture products processing companies specialized in either extracting, drying, caning, and juicing. The increased production of horticultural products will induce higher demand capacity of the food processing subsector. 49. Supermarket chains. Food supermarket enterprises are expected to rent stalls at the wholesale logistic centers to collect and transport products to the chain supermarkets in the cities. 50. Retail markets. The retailers will benefit from a more regular distribution, improved packaging, and quality control as well as from a more stable price in the market. 51. The HoReCa19 category is a main direct user of fresh and processed horticulture products. The category will benefit from larger varieties of products, better packaging, and improved food safety. 52. 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. It is expected that specialized type of transportation equipped with refrigerant facilities will further develop to satisfy the needs for improved transportation services of the fresh produce to the external market and other end users. 53. Market administration. The new wholesale logistic centers will require hiring of significant number of services such as processing companies, sorting-grading lines, cold storage facilities, trade center, banking, quality control and testing, terminal facilities, and parking. New types of wholesale market administration will have to be created in order to secure a sustainable management of the new wholesale markets in the long term. A successful implementation of this category of administrators will serve as a model for replication to other similar market infrastructure facilities.

C. Other Stakeholders 54. The State Cadaster is to provide adequate support in the process of selection suitable sites for the construction of the wholesale markets in the Andijan, Samarkand, and Tashkent provinces. Interactions with the State Cadaster will also be compulsory during the preparation of a resettlement plan in accordance with ADB Involuntary Resettlement Policy and ADB Safeguard Policy Statement (2009). 55. The Uzbekistan Railway Company (O’zbekiston temir yo’llari) might have a stake in the HVCIP through one, some, or all new wholesale markets that will be connected to an existing national railway of a railway station.

19 HoReCa: Hotel-Restaurant-Catering.

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4. KEY HORTICULTURE PRODUCTS 56. Tree fruits. Uzbekistan is one the leading producers of fresh deciduous and stone fruits in Central Asia. According to the Food and Agriculture Organization (FAO) statistics, Uzbekistan is among the top five producers of apricots in the world, the sixth largest producer of cherries, and 17th in apple production. In the past five years, Uzbekistan increased the total area of fruits 110% from 250,900 ha in 2012 to 279,600 ha in 2016. 57. Melons and water melons. These are very traditional crops for Uzbekistan, all of which are well known in the international markets (primarily the FSU countries) for their quality and flavor. The government and farmers work hard to maintain and develop this the opportunity for value addition in export markets. 58. Grapes. Uzbekistan has reputation of being the largest table grape producer and the leading fresh grape exporter in Central Asia. Most table grapes are grown in the south, specifically in Samarkand, Surkhandarya, and Tashkent regions, and the Ferghana Valley. The long warm weather period from early spring to late autumn allows farmers to grow more than 37 varieties of grapes. The most widespread grape varieties used in wine production are Soyaki (champagne, cognac), Saperavi (table and dessert wines), Rkatsiteli (dessert wines), May Black (dessert wines), Rosy Muscat (dessert wines), Hindogni (dessert and table wines), Bayan-Shirin (dry wines, champagne, cognac), and Aleatico (vintage and dessert wines). Popular grape varieties for fresh consumption are Khusayni, Rizamat, Kishmish, and Damskiy palchik. Over the past years, the GoU has paid considerable attention to the development of grape production and expansion of vineyard areas. The Presidential Decree No. 1937 of 13 March 201320 encourages the development of viticulture in the republic during the period 2013–2015. Under this decree, it is planned to optimize the regional distribution of prospective grape varieties, as well as expand the variety of vineyards. The decree contemplates also the provision of assistance to farmers and other enterprises in the wine industry to market their products for export through specialized trading companies, as well to assist agro-firms to establish their own trade houses in Commonwealth Independent States and other foreign countries. The GoU also plans to assist in pre-financing export contracts for grape producers and relevant processing industry. 59. Vegetables. Grown in all areas of Uzbekistan primarily by the dehkan farms, there are a number of specialized areas in each region that were always designated as the horticulture production centers. There are four key provinces where cotton is not the designated crop, vegetables have become especially important to the local economy, namely: Andijan, Samarkand, Surkhandarya, and Tashkent which account for more than 60% of all vegetable production in the republic. While soil conditions in these areas are generally good and more suited to vegetable production, it is the availability of water and the proximity to major urban consumption centers that has encouraged production in both Samarkand and Tashkent. Andijan has instead a special micro-climate more suited to vegetable production and also has well established proximity to routes for export of products northwards to Kazakhstan and beyond. The southernmost Surkhandarya has a well-established vegetable production system for out of season production due to its favorable winter climate that allows the production of cabbage and onions, along with tomatoes when these are not available from other areas.

20 Presidential Decree No. PP-1937 of 13 March 2013 “About measures on further development of vine sector in the

republic for the period of 2013–2015.”

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5. SECTOR PERFORMANCE

A. Crop Areas 60. Subsequently to recent government policies and reforms in the sector, namely: (i) DCM No. 311 of 20 November 2013,21 (ii) Presidential Decrees No. PP-4707 of 4 March 2015,22 (iii) No. 2520 of 12 April 2016,23 (iv) No. 2515, of 07 April 2016,24 (v) No. 2505 of 05.03.2016,25 and (vi) No. 2492 of 18.02, 2016,26 (Appendix 1) the areas occupied by the main horticulture crops within the republic have been steadily increasing throughout the period 2012–2016. Over the five-year period, areas cultivated with most yielding crops have increased by 12% for vegetables from 183,700 ha to 206,000 ha in 2016, 11% for fruits, from 250,900 to 279,600 ha, 11% for potatoes from 76,200 ha to 84,600 ha, 9% for melons from 53,800 ha to 58,700 ha, and 3% for grapes from 126,900 ha to 131,200 ha.

21 DCM No. 311 of 20 November 2013 “About the forecast parameters of production and use of horticulture products,

potatoes, melons and grapes in 2014”. The Decree looked to encourage further development of the horticulture sector to produce increased amounts of products, up to a further; 8,880,000 tons of vegetables, 1,594,000 tons of melons, 2,398,000 tons of potato, 2,472,000 tons of fruits and 1,362,000 tons of grapes.

22 Presidential Decree No. PP-4707 of 04 March 2015: On the measures for structural reforms, modernization, and diversification of production for 2015–2019

23 Presidential Decree No. 2520 of 12 April 2016: On policy initiative for state procurement system for fruits and vegetables.

24 Presidential Decree No. 2515, of April 7, 2016, "On measures to improve the procurement system for fruits and vegetables, potatoes and melons, instituting the Uzagroexport

25 Presidential Decree PP-2505 of 5 March 2016: On the measures to further develop the raw material base, expansion in processing of horticulture, meat and dairy products, increasing foodstuffs production and export within 2016–2020

26 Presidential Decree PD-2492 of 18 February 2016: "On measures to further improve the organization of the food industry of the Republic," constituting the "Uzbekoziqovqatholding.”

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Table 5-1 Crops Areas of Main Crops (1,000 ha)

Administrative territory 2012 2013 2014 2015 2016 Increase% Annual average

growth %

Potatoes

Republic of Uzbekistan 76.2 78.1 80.3 80.6 84.6 11% 2.7% Andijan 6.1 6.2 6.7 6.7 7.0 15% 3.5% Samarkand 11.6 11.4 11.7 11.9 13.0 12% 3.0% Tashkent 8.4 8.5 8.8 9.0 10.1 20% 4.8%

Vegetables


Melons


Fruits


Grape


Source: Ministry of Agriculture.

61. Crop areas cultivated with vegetables have increased most significantly in comparison with other categories of crops, at an average annual rate of 2.9% within the republic as well as in Andijan Province, by 4.7% in Samarkand, and 2.3% in Tashkent provinces. Over the same period, surfaces occupied with fruits crops have been expanded at an average of 2.8% annually over the national territory, by 2.7% in Andijan and in Tashkent, and by 5.6% in Samarkand. Areas occupied by potato crops have also significantly increased at an average rate of 2.7% in the country, 3.5% in Andijan, 3% in Samarkand, and 4.8% in Tashkent. Areas cultivated with melons have grown at an average rate of 2.4% annually throughout the country, 2.1% in Andijan, 6.3% in Samarkand, and 2.3% in Tashkent province. Grape cultivations have scored comparatively lower performance over the 5-year period, with an average annual growth of 0.8% over the country, 2.5% in Andijan, 0.5% in Samarkand, and 0.2% in Tashkent.

B. Production 62. Production of the main horticulture products has also grown steadily between 2012 and 2016 with the following average rates: 10.3%vegetables, 9.8% potatoes, grapes 9.5%, and melons 9.6%.

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Table 5-2 Production of Main Horticulture Crops (1,000 t/yr)

Administrative territory

2012 2013 2014 2015 2016 Increase% Annual average

growth %

Fruits Uzbekistan 2,052.8 2,261.1 2,490.6 2,746.1 3,042.8 48.2% 10.3% Andijan 439.5 478.1 522.9 574.7 634.4 44.3% 9.6% Samarkand 273.1 300.7 341.7 375.0 413.3 51.3% 10.9% Tashkent 162.2 173.1 188.5 204.7 223.0 37.5% 8.3%

Vegetables Uzbekistan 7,767.4 8,518.4 9,286.7 10,129.3 11,275.8 45.2% 9.8% Andijan 1076.9 1203.4 1308.9 1410.6 1596.2 48.2% 10.4% Samarkand 1253.4 1350.8 1457.7 1584.4 1767.9 41.0% 9.0% Tashkent 1572 1716.9 1841.7 2036.9 2244.3 42.8% 9.3%

Potatoes Uzbekistan 2,057.1 2,250.4 2,452.4 2,696.9 2,958.4 43.8% 9.5% Andijan 201.2 231.9 253.8 292.8 316.8 57.5% 12.1% Samarkand 449.4 480.9 526.8 572.6 619.2 37.8% 8.3% Tashkent 319.7 336.7 361.4 398.3 437.6 36.9% 8.2%

Grape Uzbekistan 1,206.0 1,322.1 1,441.2 1,579.3 1,735.8 43.9% 9.5% Andijan 52.4 57.3 63.4 68.6 76.7 46.4% 10.0% Samarkand 421.3 468.1 497.3 556.8 607.1 44.1% 9.6% Tashkent 137 140.9 155.9 167.9 174.1 27.1% 6.2%

Melons Uzbekistan 1,418.4 1,558.3 1,96.1 1,853.6 2,044.9 44.2% 9.6% Andijan 79.6 86.1 92.7 106.2 117.9 48.1% 10.4% Samarkand 82.6 89.7 97.2 103.7 123.4 49.4% 10.7% Tashkent 121.9 132.5 144.8 150.1 162.3 33.1% 7.4% Source: State Statistics Committee of the Republic of Uzbekistan.

Source: State Statistics Committee of the Republic of Uzbekistan.

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63. In 2016, the production of fruits was assessed at 634,400 tons in Andijan, 413,300 tons in Samarkand, and 223,000 tons in Tashkent scoring annual average rates of increase of 9.6%, 10.9%, and 8.3%, respectively. At the same date, production of vegetables was up to 1,596,200 tons in Andijan, 1,767,900 tons in Samarkand, and to 2,244,300 tons in Tashkent with corresponding annual average increase of 10.4%, 9%, and 9.3%, respectively. Still in 2016, harvesting of potatoes attained 316,800 tons in Andijan, 619,200 tons in Samarkand, and 437,600 tons in Tashkent with corresponding average growth rates of 12.1%, 8.3%, and 8.2%, respectively. Still in 2016, grapes were produced in the amounts of 76,700 tons in Andijan, 607,100 tons in Samarkand, and 174,100 tons in Tashkent with relevant annual average growths of 10%, 9.6%, and 6.2%, respectively. The production of melons reached 117,900 tons in Andijan, 123,400 tons in Samarkand, and 162,300 tons in Tashkent with average growing rates assessed at 10.4%, 10.7%, and 7.4%, respectively.


C. Consumption 64. Overall consumption of horticulture products within the republic in 2015 amounted to 80% or 15.2 million tons out of the total volume of the production (19.0 million tons). Around 2.5 million tons (13.2%), were processed; 589,000 tons (3.1%) exported; and 628,100 tons (3.3%) used for seeds. 65. Per capita consumption of fruits over the republic has augmented by some 2.1% annually, from an average 139.9 kg/yr in 2013 to 148.8 kg/yr in 2016, with similar scores in Samarkand (2.2%) and Tashkent 2.0%), whereas in Andijan the annual average consumption growth is significantly lower, at 0.5%. Conversely, the unit consumption of vegetables and melons has scored a tiny annual average growth rate of 0.1% with unit average consumption of 276.2 kg/yr in 2013 to 277.2 kg/yr in 2016. In the three provinces included in the HVCIP the per capita consumption of vegetables and melons has scored a growth of 0.4% per annum in Tashkent, while in Andijan and in Samarkand we observe negative trends with annual unit consumption growths averaging -0.6% in Andijan and -0.4% in Samarkand. The unit consumption of potatoes over the country was relatively stable with a recorded 56.4 kg/yr per person, unchanged from 2014 to 2016, slightly up from the 55.3/kg/yr in 2013, thereby indicating an annual average growth rate of 0.6% over the 4-year period. Higher amounts of per capita consumption of potatoes were recorded in Tashkent, with 58.0 kg/yr in 2013 increasing to 64.8 kg/yr in 2016, thus scoring also the highest annual average growth (3.8% annually) among the

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three provinces, whereas both Andijan and Samarkand are characterized by a negative annual consumption growth at -0.5%.

Table 5-3 Per Capita Consumption of Horticulture Products (kg/yr) Administrative

territory 2013 2014 2015 2016

% Increase on period

Annual average growth (%)

Potatoes

Republic of Uzbekistan 55.3 56.4 56.4 56.4 1.9% 0.6% Andijan 54.9 56.4 54.0 54.0 -1.6% -0.5% Samarkand 56.1 56.4 55.2 55.2 -1.6% -0.5% Tashkent 58.0 58.8 62.4 64.8 11.7% 3.8%

Vegetables and melons

Republic of Uzbekistan 276.2 277.2 276.0 277.2 0.4% 0.1% Andijan 277.1 276.0 272.4 272.4 -1.7% -0.6% Samarkand 271.8 277.2 272.4 268.8 -1.1% -0.4% Tashkent 273.6 276.0 277.2 277.2 1.3% 0.4%

Fruits and berries, including dried (in terms of fresh)

Republic of Uzbekistan 139.9 145.2 145.2 148.8 6.4% 2.1% Andijan 146.6 146.4 147.6 148.8 1.5% 0.5% Samarkand 137.5 146.4 147.6 146.4 6.5% 2.2% Tashkent 140.4 147.6 148.8 148.8 6.0% 2.0% Source: State Statistics Committee of the Republic of Uzbekistan.

D. Horticulture Share in the Agro-industry 66. The number of agro-enterprises involved in horticulture products processing has steadily increased in latest years, after an inflexion in 2013. In 2013, there were 92 enterprises nationwide who were involved in processing of vegetables, 38 fruits, and 50 grapes. These arose to 130, 74, and 63, respectively in 2016. Vegetable processing counts the largest number of manufactures in the subsector. Within the project provinces is noticeable that vegetable agro-enterprises have steadily increased from 20 in 2014 to 35 in 2016, while the number of such enterprises remained rather stable (18 to 22) throughout the period in Samarkand and constantly declined from 6 to 1 during the same period in Andijan. Samarkand endorses an important role in grape processing with the number processing units growing from 14 in 2014 to 25 in 2016. It was observed that between 2014 and 2016 fruit processing industries have decreased in all project districts: 11 to 3 in Andijan, 20 to 14 in Samarkand, and stable around 11 in Tashkent with however, a decline to 6 in 2014 and 2015.

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Table 5-4 Processing of Horticulture Products

Administrative Territory

2012 2013 2014 2015 2016 Increase over the period %

Average annual growth

(%)

Vegetable Uzbekistan 112,725.3 71,901.9 114,396.5 154,233.9 435,786.6 287% 60% Andijan 1,128.0 666.0 815.2 1,478.2 11,123.0 886% 179% Samarkand 39,143.2 25,644.8 39,063.9 27,855.0 75,648.2 93% 40% Tashkent 18,829.0 7,864.9 10,238.6 17,349.1 74,085.0 293% 92%

3 Provinces 59,100.2 34,175.7 50,117.7 46,682.4 160,856.1 172% 61%

52.4% 47.5% 43.8% 30.3% 36.9%

Grape Uzbekistan 125,555.8 78,102.2 83,984.5 137,223.3 113,345.1 -10% 4% Andijan 1,177.0 947.9 1,556.6 1,455.5 3,780.8 221% 50% Samarkand 29,949.3 30,555.7 29,924.6 44,104.1 35,179.7 17% 7% Tashkent 36,401.2 3,635.1 7,341.3 11,978.3 11,438.8 -69% 18%

3 Provinces 67,527.5 35,138.8 38,822.5 57,537.8 50,399.3 -25% 0%

53.8% 45.0% 46.2% 41.9% 44.5%

Fruit Uzbekistan 201,553.4 132,201.1 111,968.0 99,348.9 554,696.9 175% 99% Andijan 1,783.2 20,445.3 21,385.0 22,386.5 33,838.0 1,798% 277% Samarkand 114,885.9 41,072.4 34,440.0 42,046.5 106,860.1 -7% 24% Tashkent 25,494.1 23,418.7 13,357.5 4,302.6 64,213.4 152% 318%

3 Provinces 142,163.2 84,936.4 69,182.5 68,735.6 204,911.6 44% 35%

70.5% 64.2% 61.8% 69.2% 36.9%


67. Nationwide, the agro-alimentary production particularly related to vegetable and fruit processing, has substantially increased during latest years. Production of processed vegetables and fruits in 2016 has jumped from 154,233 tons to 435,786 tons and from 99,349 tons to 554,670 tons, respectively in comparison with the preceding year. In 2016, a total of 113,345 tons of grapes was processed in Uzbekistan, substantially unchanged in comparison with the 106,216 tons representing the average amount of grapes processed annually during the preceding 4-year period 2012–2015.


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68. The output of processed vegetable in the three provinces confirms the national trend with a reported production in 2016 of 74,085 tons compared with 17,349 tons of 2015 in Tashkent, 75,648 tons against 27,855 tons of the previous year in Samarkand and a still comparatively low but increasing 11,123 tons in Andijan, which is significantly higher than the 1,478 tons recorded in 2015. In terms of performance, the average annual growth of processed vegetables over the period 2012 to 2016 is estimated at 179% in Andijan, 40% in Samarkand, and 92% in Tashkent Province.


69. The output of processed fruits follows a pattern similar to that of the processed vegetables, with a constant upstaging from 2013, reaching amounts of 33,838 in Andijan, 106,860 in Samarkand and 64,213 in Tashkent. The average annual growths of processed fruits over the 5-year period 2012 to 2016 is estimated at 277% in Andijan, 24% in Samarkand and as much as 318% in Tashkent. Processed grapes in 2016 reached 3,780 tons in Andijan, 35,180 tons in Samarkand, and 11,439 tons in Tashkent, while the average annual growth of processed grapes is assessed at 50%, 7%, and 18% in the three provinces, respectively.


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E. Export of Horticulture Products 70. Export of horticulture products are conditioned by number of factors such as climate changes and rainfall, quality of harvest, handling infrastructure, general international market trends and political events particularly in Countries which are the traditional importers of horticulture products from Uzbekistan. Moreover, requirements regarding phytosanitary controls and hygiene standards in importer countries are becoming increasingly stringent. As a result, trends of exports of horticulture products do not rigorously follow production patterns. 71. Government’s support policies to boost the export potential of Uzbekistan Government had passed two major resolutions and decrees that directly support export potential

and promote export volume of Uzbekistan. At this moment, Uzbekistan exports only 5%–6% of all produced fresh agricultural products. Horticultural sector in Uzbekistan is developing on horizontal and vertical directions. Government has taken gradual steps to converting areas under the cotton and wheat into horticultural fields. In addition, previously hollow and deserted fields are also given to entrepreneurs to establish new orchards, vineyards, greenhouses, and other export-oriented crop fields to increase the production volume and export potential of the country. As per MAWR’s data in 2017, 40,000 ha of land was reassigned from cotton to horticultural sector, and it is planned to decrease additional 100,000 ha of land and convert them into horticultural fields in the following years. Moreover, according to the General Director of Uzbek Research and Production Center of Agriculture, Sherali Teshaev, it is planned to reduce 185,000 has of land or 14.5% of total land will be reassigned into horticultural fields. As a result, it is planned to increase the production volume of fruits and vegetables, grapes and melons by minimum of 230%. Within three years, the export volume of agricultural programs should increase by 300%. According to MAWR’s data, processing sector will increase from 17% to 30% due to increasing processing companies’ capacity and establishing new ones, and also because of expansion of horticultural fields in Uzbekistan. After Presidential Decree from 5 March 2016, PD-2505 “On measures for further development of the resource base and increased processing of agricultural products in 2016–2020” MAWR has developed 5-year strategy plan to increase the agricultural production and processing sector 72. According to MAWR’s strategy and optimization plan, 220,500 ha of land under cotton and wheat will be decreased and allocated to fruits, vegetables, grapes, melons, cereals, and other cash crops. Vegetable fields will increase from 191,500 to 282,500 ha, fruits from 261,877 ha to 279,878 ha, potatoes from 80,092 ha to 116,292 ha and grapes from 148,800 ha to 155,000 ha of land.

• On 21 June 2017, President of Republic of Uzbekistan issued a resolution (“On measures for further support of domestic exporting organizations and improvement of foreign economic activity”) on abolishing of Joint Stock Company Uzagroexport’s monopoly on export of horticultural products. From 1 July 2017, it is permitted for entrepreneurs on the basis of 100% advance payment to export fresh produce, grapes, melons and other horticultural products without Uzagroexport’s involvement. However, exporter has a choice to opt exporting route through UzAgroExport or directly.

• On 2 September 2017, the President of Republic of Uzbekistan issued a Decree No. 5177 (“on priority measures on liberalization of currency policy”) on cancelling the obligatory sale of 50% of foreign currency of exporters regardless of their form of ownership. From 5 September 2017, private entrepreneurs and farmers that have a foreign currency income from export can withdraw cash foreign currency from their bank account.

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Export market 73. Russia remains the largest export market destination for Uzbek fruits and vegetables, accounting for almost 70%–80% of all exported horticultural products. There is no official detailed statistics for other countries’ export share; however, Kazakhstan is the second largest market for Uzbek horticultural products after Russia. At this moment, vegetables account for 27%, grapes 25%, processed fruits and vegetables 17.6%, legumes 8.4% and melons 2% of total export value. According to MAWR’s data, Uzbekistan has trade ties with more than 80 countries and exports 180 different varieties of fresh and processed fruits and vegetables. For instance, small amounts of melons were exported to Japan and in 2017. Uzbekistan exports cherries, pomegranates, and melons to South Korea as well.

Table 5-5 Exports of horticulture Produce Nationwide (t/yr)

2012 2013 2014 2015 2016

Increase over the period

%


(%)

Vegetable 158,408 268,440 259,093 201,439 163,595 3.3% 6.2% Fruits 88,690 172,321 90,276 38,842 99,785 12.5% 36.7% Grape 131,309 31,039 77,272 122,773 91,273 -30.5% 26.5% Melon 40,498 43,157 56,067 4,140 2,119 -94.8% -26.2% Source: State Statistics Committee of the Republic of Uzbekistan.


74. In general, there has been an increasing trend of exports of major horticulture products in both quantity and financial value between 2012 and 2016 in the country. This trend has continued in 2017 (estimated 1.27 million tons).

Table 5-6 Value of Exports of Horticulture Produce Nationwide (1,000 $)


Average annual growth (%)

Vegetable 165,099 356,157 465,829 351,361 101,278 -38.7% 12.7% Fruits 128,096 402,859 298,297 123,094 76,779 -40.1% 23.0% Grape 194,825 92,936 248,046 237,913 80,758 -58.5% 11.1% Melon 21,967 60,243 54,020 2,341 553 -97.5% -2.0% Source: State Statistics Committee of the Republic of Uzbekistan.

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75. Exports of vegetables from the RoU jumped from 158,408 tons in 2012 to 268,440 tons in 2013 to subsequently decrease steadily to 163,595 tons in 2016 scoring an overall increase of 3.3% over the period. Exports of fruits followed a similar pattern increasing from 88,690 tons in 2012 to 172,321 tons in 2014 and further decreasing to 99,785 tons in 2016 with an average overall performance of 12.5%. The quantities of exported grapes, raw and manufactured, also followed an irregular trend but decreased from 131,309 tons in 2012 to 91,271 tons marking a diminution of 30.5% over the 5-year period. Exports of melons from the republic felt dramatically from to 2,119 tons in 2016, after constantly rising from 40,498 tons in 2012 to 56,067 tons in 2014.


76. In financial terms, the value of exports of major raw and manufactured horticulture products from Uzbekistan 2012 to 2015 have shown a trend similar to that of the quantities of exported goods, marked by a significant decrease of exports in 2016. Exports of vegetables valued at $165.1 million in 2012 have fallen to $101.3 million in 2016. During the same period, exports of grapes and melons which totaled $194.8 million and $22.0 million, respectively in 2012, have fallen to $80.8 million (-58.5%) and $0.6 million (-97.5%), respectively in 2016. Exports of fruits rose to $402.9 million in 2013 from $128.1 million in 2012, thereafter decreasing to $123.1 million in 2015 and $76.8 million in 2016 with an overall performance of -40.1% over the 5-year interval. Nevertheless, the annual average growth over the 5 years shows an average annual increment of export value of 12.7% for vegetables, 23.0% for fruits, and 11.1% for grapes while the annual growth of melons export is negative (-2.0%). 77. Export of horticulture products from the provinces included in the project do not follow systematically the trends observed at national level. In Tashkent, exports of vegetables were 21,434 tons in 2012, topped 132,590 tons in 2014, and declined to 39,789 tons in 2016 with nevertheless an average annual increment of 77.7% due to good performance between 2012 and 2015. Export of vegetables rose instead substantially in Samarkand, passing from 1,457 tons in 2012 to 73,939 tons in 2016 with an annual increment of 283% over the reference period, while in Andijan, the vegetables exported rose from 8,202 tons in 2012 to 36,003 tons in 2016 setting an annual average increment performance of 585%.

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Table 5-7 Exports of Vegetables (t/yr)



Average annual

growth (%)

Countrywide 158,408 268,440 259,093 201,439 163,595 3.3% 6.2% Andijan 8,202 13,854 30,497 1,535 36,003 338.9% 585.0% Samarkand 1,457 4,457 3,755 34,875 73,939 4,974.5% 282.7% Tashkent City 127,315 225,236 114,078 32,440 13,864 -89.1% -25.3% Tashkent 21,434 24,893 110,763 132,590 39,789 85.6% 77.7%



78. Some data on horticulture exports relative to Tashkent are generally distinguished between Tashkent City and the remaining territory of the province. It is to be observed that exports from Tashkent City include a consolidated amount of horticulture products coming also from neighboring provinces being exported through the air and railway cargo terminal facilities available in Tashkent. 79. Exports of fruits from the terminals of Tashkent City follow approximately the national pattern with a peak of exports in 2013 followed by a decrease and a moderate return in 2016. Total amounts of fruits exported from the Tashkent terminals fell from 88,690 tons in 2012 to 8,601 tons in 2016 after peaking to 134,315 tons in 2013. Exports of fruits from Tashkent increased from 18,739 tons in 2012 to 44,675 in 2016 with an average annual growth of 59.2%. Irregular exports of fruits in Andijan increased as a whole from 4,337 tons in 2012 to 25,626 tons in 2016 after falling to only 151 tons in 2015.

Table 5-8 Exports of Fruits (t/yr) Administrative

territory 2012 2013 2014 2015 2016

Increase over the period %


Contrywide 88,690 172,321 90,276 38,842 99,785 12.5% 36.7% Andijan 4,337 6,991 2,121 151 25,626 490.8% 4,205.9% Samarkand 37 3,096 20,883

Tashkent City 65,614 134,315 47,720 20,946 8,601 -86.9% -18.7% Tashkent 18,739 31,015 40,399 14,650 44,675 138.4% 59.2% Source: State Statistics Committee of the Republic of Uzbekistan.

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80. The consolidated exports of grapes from Tashkent City cargo facilities between 2012 and 2016 follow the national pattern, with a significant drop of exports in 2013 and an overall decline from 87,882 tons in 2012 to 4,940 tons in 2016, corresponding to a decrease of 94.4% over the reference period. In Andijan and Samarkand, the exports of grape rose from 4,645 tons and 8,736 tons, respectively in 2012 to respectable 16,997 tons and 53,292 tons in 2016, indicating remarkably good performance.

Table 5-9 Exports of Grapes (t/yr)


2012 2013 2014 2015 2016


%


(%)

Grape (fresh + dried) UZB 131,309.5 31,038.6 77,272.1 122,772.8 91,273.4 -30.5% 26.5% Andijan 4,644.9 1,019.6 39.1 199.3 16,997.3 265.9% 2166.3% Samarkand 8,735.9 6,561.2 7,361.7 26,346.5 53,293.5 510.0% 86.9% Tashkent City 87,882.0 21,312.5 32,536.5 35,650.5 4,940.0 -94.4% -24.9% Tashkent 30,046.6 2,145.4 37,334.8 60,576.5 16,042.6 -46.6% 384.0% Source: State Statistics Committee of the Republic of Uzbekistan.


81. Exports of melons from the three provinces also followed the national trend, marked by a significant decline of exports in 2015 and 2016. Exports from Andijan and Samarkand during the

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5-years period have been scarce and very variable, showing a general decline in Andijan from 1,027 tons exported in 2012 to 390 tons in 2016 and in Tashkent with 12,304 tons exported in 2012 to 868 tons in 2016. The quantities of melons exported from Tashkent City have drastically diminished from 27,124 tons in 2012 to 348 tons in 2016, after peaking up to 40,493 tons in 2014.

Table 5-10 Exports of Melons (t/yr) Administrative

territory 2012 2013 2014 2015 2016



Melons - Total 40,498 43,157 56,067 4,140 2,119 -94.8% -26.2% Andijan 1,027 50 60 390 -62.0%

Samarkand 44 370 514 1071.2%

Tashkent city 27,123 40,493 13,709 1,485 348 -98.7% -45.6% Tashkent 12,304 2,614 42,359 2,226 868 -92.9% 321.5%



82. The value of exported vegetable from Tashkent Province and from the Tashkent terminals follows approximately the national trend. The value of exported vegetables rose from $26.8 million in 2012 to $234.3 in 2015 then falling to $25.9 million in 2016 in Tashkent province. While exports from the Tashkent terminals declined from $130.5 million to $11.2 million over the same period. Exports of vegetable increased steadily in Samarkand from $2.6 million to $45.8 million and in Andijan from $5.2 million to $18.3 million over the 5-year period.

Table 5-11 Value of Export of Vegetables (1,000 US$)

Administrative Territory


Average annual

growth (%)

Vegetable, total export 165,099 356,157 465,829 351,361 101,278 -38.7% 12.7% Andijan 5,238 19,561 37,832 1,418 18,340 250.1% 366.0% Samarkand 2,554 14,243 20,062 58,460 45,831 1,694.2% 167.1% Tashkent City 130,512 283,294 211,741 57,224 11,174 -91.4% -15.4% Tashkent 26,795 39,058 196,194 234,259 25,932 -3.2% 94.6% Source: State Statistics Committee of the Republic of Uzbekistan.

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83. Exports of grapes from Tashkent City terminals and Tashkent Province follow again the national trend, but have been declining from $ 121.6 million and $41.7 million in 2012 to $3.9 million and $12.9 million, respectively in 2016, corresponding to an overall decrease of 96.8% and 69.2% over the 5 years. During the same period, the values of exports of grapes from Andijan and Samarkand have instead steadily augmented specifically from $5.3 million to $14.1 million (+168%) in Andijan, and from $26.2 to $49.9 million (+90.1%) in Samarkand.

Table 5-12Value of Exports of Grapes (1,000 $)

Administrative Territory 2012 2013 2014 2015 2016


%


(%)

Total 194,824.7 92,935.6 248,046.4 237,913.3 80,758.2 -58.5% 11.1% Andijan 5,254.4 3,376.7 174.4 433.9 14,083.6 168.0% 791.0% Samarkand 26,242.9 21,351.9 26,197.2 46,150.1 49,893.7 90.1% 22.1% Tashkent city 121,647.0 61,901.7 101,963.6 68,080.0 3,930.0 -96.8% -28.0% Tashkent 41,680.3 6,305.3 119,711.3 123,249.3 12,850.8 -69.2% 406.8%



84. Value of exports of melons has suffered a sharp decline in 2015 and 2016, thus reflecting the national trend. Financial value of exports of melons from Tashkent City terminals has sharply diminished from $15.3 million in 2012 to $ 0.1 million in 2016 after peaking up to $56.6 million in

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2014. Exports values of melons lessened also in Andijan, from $482,900 to $78,200 but increased in Samarkand with exports $29,200 in 2012 rising to $143,000 in 2016.

Table 5-13 Value of Exports of Melons (1,000 $) Administrative

Territory 2012 2013 2014 2015 2016



Total 21,966.7 60,243.2 54,020.2 2,341.2 553.2 -97.5% -2.0% Andijan 482.9 108.2 28.9 78.2 -83.8%

Samarkand 20.2 167.0 143.0 608.8%

Tashkent city 15,331.5 56,692.9 13,566.8 956.4 103.8 -99.3% 2.9% Tashkent 6,132.0 3,442.0 40,453.4 1,189.0 228.2 -96.3% 213.4% Source: State Statistics Committee of the Republic of Uzbekistan.


85. The value of exports of fruits nationwide has peaked up to $402.8 million in 2013 from $128.1 million in 2012 and thus progressively decreased $76.7 million in 2016. A similar trend is observed for Tashkent Province and Tashkent terminals, while still moderate exports of fruits from Andijan have steadily increased from $4.1 million in 2012 to 16.3 million in 2016.

Table 5-14 Value of Exports of Fruits (1,000 $) Administrative

Territory 2012 2013 2014 2015 2016 Increase

over the period

%


(%)

Uzbekistan 128,096.4 402,859.0 298,296.6 123,094.1 76,779.1 -40.1% 23.0% Andijan 4,144.9 19,660.6 11,160.1 822.6 16,319.6 293.7% 530.6% Samarkand 115.6 5,263.7 17,285.2 Tashkent City 90,063.1 308,888.5 169,536.0 50,545.5 6,958.4 -92.3% 10.4% Tashkent 33,888.3 74,309.9 117,484.9 66,462.3 36,215.9 6.9% 22.1% Source: State Statistics Committee of the Republic of Uzbekistan.

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F. Share of Horticulture Products in the National Production

86. The average share of main horticulture products from the three provinces against the national production over the reference period 2012–2016 represents 42.2% of the national production of fruits, 49.9% of vegetables, 46.4% of potatoes, 50.1% grapes, and 19.7% of melons. The annual share does not exhibit specific trends and exhibit very moderate variations in comparison with the average over the period.

G. Share of Horticulture Products in the Wholesale Trade

87. The share of vegetable production represented 0.4% of the national wholesale trade in 2016, practically unchanged in comparison with 2012. The share of fruits and melons instead rose from 0.1% in 2012 to 0.8 % in 2016. Potatoes represented a share of 0.1% from 2012 to 2016 and lost quotation in 2016.

H. Losses in the Horticulture Chain

1. Crop Losses 88. According to FAO estimates27 and Kader28 calculations the postharvest losses of the fresh produce could be up to 45% and differ among the crops and across the value chain. In developing countries, the postharvest losses are estimated at 22% at production, sorting, storage, transportation and until reaching the retail market, while at retail service and consumer’s level losses are low (10%). These 22% losses are due to lack of inadequate infrastructure in place such as proper cold storage facilities, absence of sorting and grading lines, and transportation on unrefrigerated trucks; but the most important factor is insufficient information and lack of knowledge. Conversely, in developed countries, the postharvest losses

27 FAO (2005) The state of Food Insecurity in the World. 28 Abdel A. Kader (2002). Postharvest Technology of Horrticultural Crops. University of California Agriculture and

Natural Resources, 2002. Technology & Engineering.

https://www.google.ch/search?tbo=p&tbm=bks&q=subject:%22Technology+%26+Engineering%22&source=gbs_ge_summary_r&cad=0

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are high (22%) in retail service and consumer level, and low (10%) at production until reaching the retail service. 89. There are no exact figures about the postharvest losses and waste of foods for Uzbekistan. However, most of the reports and article rely on FAO’s approximate estimates and sets losses at around 32% for Central Asian regions. It is important to note that, the postharvest losses in Uzbekistan have been shrinking for the last 10 years due to introduction of cold storage facilities and of modern processing lines. It is observed that the transportation of the largest amount of fresh horticulture produce to the Russian market is done by means of refrigerated trucks which along with the introduction of small-scale packaging crates and boxes, extends the produce’s life.

2. Transportation Losses 90. Many factors affect the horticultural produce during transport, namely: initial quality, temperature, air humidity and composition, physical stress, etc. It is assumed that the rather dry, continental type of climate of Uzbekistan, characterized by long lasting hot and dry summer months does not favor conservation of horticulture produce during transportation unless refrigerant vehicles are used. There is little or no information about losses of horticulture produce during transportation in Uzbekistan as well as in comparable countries. C. Vigneault29 et. Al. (2009),30 reported that approximately 40% of the vegetables never make it to the supermarket shelves due to damage during transit. (It is assumed that this figure refers to the cumulated loss from harvest to delivery). According to the same author, this produce loss can only be reduced by means of improved refrigerated transport. Packing and shipping of produce in temperature-controlled containers could reduce the spoilage to about 5%.

3. Overall Losses 91. Based on a research by Aulakh & Regmi31 the estimate overall food losses in traditional postharvest chains is between 30% and 55% while in mechanized chains the losses can be contained within 9% and 44%. The same authors referring to Gustavson (2011),32 estimated that losses of fruits and vegetables in developing countries would exceed 50%. The perception is that in Uzbekistan the largest share of horticulture produce loss occurs essentially on field, as well as during handling, transportation and storage.

29 Agriculture and Agri-Food Canada, Horticultural Research and Development Centre, 430 Gouin, Saint-Jean-sur-

Richelieu, Québec, Canada J3B 3E6. 30 C. Vigneault et. Al. (2009). Transport of fresh agriculture produce. Postharvest Technologies for Horticultural Crops,

2009, Vol. 2: 1-24. 31 Aulakh, J. and regmi, A. (2013). Post-harvest food losses estimation. Development of consistent methodology. 32 Gustavsson, J., Cederberg, C., Sonesson, U., van Otterdijk, R., Meybeck, A. 2011. “Global Food Losses and Food

Waste: Extent Causes and Prevention.” Rome, Food and Agriculture Organization (FAO) of the United Nations.

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6. CURRENT MARKET INFRASTRUCTURE

A. Existing Wholesale Markets

1. Wholesale horticulture markets at National level 92. There is no government entity on national level to manage and coordinate markets in Uzbekistan. All markets are managed at the provincial level by the local governments. There is an Association of Markets in each province which report directly to the Trade Department under Provincial Hokimiyat. The Trade Department is responsible for management and coordination of all markets, household, and trade activities within the province. 93. Each province has its own central wholesale market, usually located close to the cities, next to or within the retail fruit and vegetable market. The mechanism, structure, and operation of wholesale market are the same in all provinces. The majority of these wholesale markets start their activities early in the morning and usually by 9:00 in the morning, most of the good quality products are sold. During the day time, the smaller wholesale of fruits and vegetables takes places.

2. Andijan Markets 94. There are 25 fruits and vegetabl markets within the Andijan Province (Appendix 3). Four of them are located in Andijan City. These markets occupy areas ranging from 5.7 to 0.7 ha and with a number of plots included between 1595 (Yangibozor in Andijan) to 38 and representing a cumulated area for 62.15 ha for some 10,322 market plots, 506 permanent employees, and an annual financial turnover of US$2.1 billion in 2016. 95. Only two among these markets have a mixed vocation as retail and wholesale. The largest and central wholesale market known as “Jahon Bozor” (universe market) is also located in Andijan City. The “Johon Bozor” market has 4.7 ha of land for parking, trade activities, stalls, sheds, administration and other facilities. It has 60 plots and 16 permanent employees. The major trade activities in wholesale market take place early in the morning, while during the day time smaller traders continue the wholesale activity at smaller scale. The Kuyganyoqt market extends over 2.25 ha, has 900 sales plots and occupies a workforce of 26. These markets are not equipped with cool storage facility, which are available in the Andijan central city market (500 tons), and in three other provincial markets at Buloqboshi (100 tons), Izboskan (100 tons), and Marxamat (120 tons).

3. Samarkand Markets

96. In Samarkand, the central wholesale market known as “Yangi Bozor” is located in Samarkand City, not far from “Siyab Bozor” retail market. The market has 1.8 ha of open area where the trade activities take place. The peak wholesale time occurs early in the morning. During the day, smaller wholesale activities take place. Traders from other provinces exchange the agricultural products in the market. The market is the largest wholesale market in Samarkand City and among neighbouring provinces such as Kashkadarya and Jizzakh. There is no special low temperature pavilion and a stall with shed for the wholesale activities in the market. A “truck base sale” is the predominant method of trading in the market.

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4. Tashket Markets

97. There are 12 agricultural markets under the Markets Association in Tashkent City. 98. The central wholesale market known as “Kuyluk Bozor” is located in the outskirts of Tashkent City, along the main ring road. The market occupies 14 ha of land including parking, administration building, roofed areas for vegetables, area for “truck base sale”, and a section for packaging materials. The wholesale market administration directly reports to the Association of “ToshBozorSavdo”. The Kuyluk Market is the largest in the country and central Asia, and according to statistics, they trade 400,000 tons of products annually. Fresh products from all over the country are brought here mainly for Tashkent City’s population. Minor amounts are exported to Kazahstan and Russian markets. The traders sell both local and imported citrus and tropical products like oranges, tangerines, pineapple, bananas, and other crops. Retailers, HoReCa sector, and other customers visit the market daily. The market consists of several separate sections and areas for each specific crop. Potatoes, onion, turnip, and most of the fruits are sold under the industrial sheds either from the truck or on the ground. Moreover, there is an open parking area reserved to smaller trucks (200 kg–1,000 kg). 99. In 2017, 8 modern pavilions for wholesale activities with docking areas and other necessary facilities have been added to the Kuyluk Market. The pavilions and stalls will be kept under certain temperature to maintain the “cold chain” of the produce. The market administration plans to build more refrigerated capacity in the future in order to satisfy growing needs. 100. It was observed that most of the large retail markets in Tashkent city have their own wholesale section that take place early in the morning. However, these markets have two drawbacks (i) they carry out smaller wholesale activities and they handle mainly vegetables and not all variety, and few fruits; and (ii) the wholesale section activities take place between 05:00 to 9:00-10:00 AM, while for the rest of the time the structures function as retail markets. The majority of the customers in the market are typically private household people.

B. Horticulture Chain Analysis

1. The structure of fruit value chain in Uzbekistan 101. Structure of horticultural value chain has changed especially for the last 5 years, in particular after the construction of cold storage facilities. Before the availability of cold storage facilities, the exporters used to gather the fresh produce directly from the field or through local “brokers”. At a further stage, with the demand for export increasing, pre-cooling of the fresh produce before shipment became crucially important in order to secure quality and prolong the shelf life of the produce. Currently, most of the fresh horticulture produce is exported from the cold storage facilities; in fact, these cold stores are functioning as export platform for the fresh produce. Currently pre-cooling of 18–20 tons of fresh fruits range between USD 100 to USD 200. 102. The majority of exporters prefer to work with “brokers” or “consolidators” because these latter have a good knowledge of the local territory, the growers, the quality of the product, and they are well familiar with the expectancies of exporters regarding produce packaging. Usually the “broker” gets paid as service provided by exporters or he adds his own margin to the produce before passing it to the exporter.

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2. Transportation 103. Traders use regular unrefrigerated trucks for internal market, which is not good practice. Usually, these trucks are smaller compare to the trucks that are effectively required for export market. The fresh products from the cold store to wholesale markets also transported by means of insulated truck without refrigeration equipment. However, the transportation of fresh produce to Russian and Kazakhstan markets are done exclusively on refrigerated trucks or on refrigerated wagon. 104. In order to adequately respond to the increasing request of horticulture products by both the national and export trade market, it becomes necessary to secure rapid delivery of growing amounts of fresh products. Increasing the fleet of refrigerant transports is crucial in order to secure rapid answer to growing demand of horticulture products to end users and especially for export and minimize losses particularly during transportation.

3. Horticulture Processing 105. According to “Uzbekoziqovqatholding” there are 277 processing companies which process 17.6% of all horticultural products produced in the country. As of 2017, these companies process 3,738,100 tons of agricultural products. According to “Ozbekoziqovqatholding” forecasts, the share of the food processing will increase steadily and by 2020 the share of the processing sector will be 24.8%. Currently, 50% of the processing companies are concentrated in Fergana, Samarkand, and Tashkent provinces. 106. The processing companies obtain the produce either from farmers or brokers. Large processing companies sometimes provide the growers with input materials like seed, fertilizer, and advance payment; in exchange farmers are contractually bound to provide convened amounts of crop at agreed price. Usually, processing companies buy fruit produce which don’t meet required quality standards for export like shape, colour, as well as bruised or over ripened crops. Sometimes, due to price drop at export market, exporters and brokers have to sell the products internally at discounted price. 107. Andijan Province. There are 40 fruits and vegetable processing companies in Andijan Province with individual processing capacity between 400 and 80,000 t/yr and an agglomerate capacity of 279,100 t/yr (Appendix 4). Andijan processes 14.9% of total agricultural crops produced in the province, including the wine making sector. The majority of the processing companies are concentrated in four districts: Asaka (82,000 t/yr), Hojabod (80,000 t/yr), Balikchi (55,000 t/yr), and Andijan City (29,200 t/yr). 108. Samarkand Province. There are 25 fruits and vegetable processing companies within the province with total and annual capacity of 277,900 tons. The smallest and largest processing companies are 100 and 52,000 tons, respectively. Samarkand process 35% of total agricultural crops produced in the province, including wine making and raisin production sector. The majority of the processing companies are concentrated in following four districts: Samarkand (74,600 t/yr), Taylok (38,000 t/yr), Bulungur (49,000 t/yr), and Jomboy (61,000 t/yr).

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4. Cold Storage 109. The total capacity of the cold storage in Uzbekistan is estimated at about 1 million tons, though the official data indicates that total capacity is 588,000 tons. The majority of the cold storage facilities is concentrated in export-oriented provinces and horticultural production areas like Samarkand, Tashkent, and Fergana valley. Currently, the government and international financial institutions like ADB, the World Bank, and EBRD are providing long term loans for development of agricultural infrastructure including cold stores. As a result, recent data indicates that cold storage facilities are being built in all over the country due to increased demand for cold storage. Nevertheless, the current capacity of the cold storage facilities in the country is still not sufficient to meet the demand for cold storage of fresh produce. 110. Samarkand Province. According to Economic Department of Samarkand Province, as of January 2017, there were 72 cold storage facilities in the province with an accumulated capacity of 76,070 tons. According to plans, the cold storage capacity is being boosted to up to 93,170 tons as of end of 2017. At this stage there will be 42 cold storage infrastructures with a total capacity of 42,000 tons in Samarkand district alone, representing 45% of the total cold storage capacity within the province.

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Table 6-1 Cold Storage Facilities Operated in 2017 and Estimated for the year 2018–2019 in Samarkand Province

Cities and disticts

Operated as of 01.01.2017

Launched in 2017 Estimated to launch

as of 01.01.2018 Estimated to launch in 2018–2019 programme

Total estimation during 2018–2019

Increase compare as of 01.01.2018, % Quantity

Capacity (tons)

Quantity Capacity

(tons) Quantity

Capacity (tons)

Quantity Capacity

(tons) Quantity

Capacity (tons)

Samarkand 6 8,800 6 8,800 2 2,000 8 10,800 122.7 Kattakurgan 1 2,280 1 2,280 1 1,000 2 3,280 143.9 Bulungur 5 5,500 1 2000 6 7,500 2 4,500 8 12,000 160.0 Jomboy 6 6,500 1 500 7 7,000 2 1,400 9 8,400 120.0 Ishtixon 2 2 500 4 500 1 500 5 1,000 2 times Kattakurgan dist. 1 150 1 100 2 250 1 1,200 3 1,450 6 times Narpay 3 300 2 270 5 570 3 2,500 8 3,070 5 times Nurobod 1 80 1 80 2 580 3 660 8 times Oqdaryo 3 900 2 1850 5 2,750 2 3,200 7 5,950 2 times Payariq 4 650 4 650 2 3,000 6 3,650 5 times Pastdargom 6 2,850 2 2300 8 5,150 3 1,500 11 6,650 129.1 Paxtachi 1 1250 1 1,250 1 2,750 2 4,000 3 times Samarkand dist. 37 36,000 5 6000 42 42,000 7 8,600 49 50,600 120.5 Toyloq 4 7,000 2 1750 6 8,750 1 300 7 9,050 103.4 Urgut 16 2,990 1 500 17 3,490 4 4,050 21 7,540 2 times Kushrabot 2 2,150 2 2,150 1 500 3 2,650 123.3

Totals 72 76,070 21 17,100 93 93,170 35 37,580 128 130,750 140.3

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111. Andijan Province. There are 324 cold storage facilities in Andijan Province with a total installed capacity of 101,230 t/yr. The 61% of cold storage capacity is located in four districts: Andijan (18.5%), Asaka (15.36%), Andijon City (21.6%), and Hojabod Districts (5.8%). However, Hojabod District has the largest number of cold storages in the province, there are 53 small scale cold storages are located in Hojabod District.

Table 6-2 Cold Storage Facilities in Andijan Province

Cities and districts Cold storages Planned cold storages in 2018–2019

Quantity Capacity (tons) Quantity Capacity (tons)

Total 324 101,230 129 100,020

Andijan city 25 21,850 3 7,000 Xonobod city 4 400 1 400 Andijan district 32 18,690 10 10,100 Asaka district 29 15,550 11 13,420 Baliqchi district 19 2,530 11 5,400 Buz district 17 4,675 5 1,330 Buloqboshi district 18 3,200 11 3,600 Jalaquduq district 25 5,100 5 5,840 Izboskan district 26 5,350 4 2,350 Qurgontepa district. 14 3,700 19 10,100 Marxamat district 12 3,385 5 2,600 Oltinkul district 18 3,930 3 4,800 Paxtaobod district 9 1,190 10 5,830 Ulugnor district 7 1,170 5 2,750 Xujaobod district 53 5,860 17 13,500 Shaxrixon district 16 4,650 9 11,000


C. Norms and Standards 112. By normalization is meant the establishment of the rules that should govern the trade of the various products. Definition of the different types, categories, classes, etc., are the most important aspects because, in this way, it is possible to classify the different items in homogeneous lots. We understand by “typification” the physical operation consisting of classifying the items into homogeneous lots, according to the types, categories, classes, etc., that have been defined by the mandatory commercial quality standards of each product. 113. The “typification” or homogeneity can be based on officially established standards or be carried out according to criteria accepted by a certain number of market operators, although the advantages of typification will become more effective when they are based on official, unique and applicable standards in a wide geographical area. Another aspect, closely related to the standardization and classification of products, is the standardization and typification of containers and packaging used for products protection, storage and transport. 114. The normalization of the products is essential in order to classify them in homogeneous lots, to increase contracting agility, which, in turn, allows a transfer, fluidity and efficiency of the markets. Some of the advantages of standardization are the following:

(i) Tastes vary according to consumers and while some will prefer high quality products, others will settle for lower quality product if they go hand in hand with a lower price.

(ii) The price can better fulfil its function of transmitting to the producer the tastes of the consumer with typified product. If the consumer prefers, for example, medium sizes

39

oranges to large or small ones, those will have higher prices than the latter. When marketing works efficiently, these differences in consumer prices must be transmitted to prices in production, allowing the farmer to decide on the types or varieties that he is most interested in producing.

(iii) Standardization is essential to compare quotes between different markets. The information of markets does not have total utility if the product is not typified since the quoted prices associated to quality is unknown in certain markets. That is the situation that takes place at the moment; therefore, the prices will not be comparable. Standardization increases the transparency of the market. This is a priority action.

(iv) Purchase transactions are much simpler with the standardized product since the transactions do not need the inspection of the product because indicating the type or variety. The product characteristics are already known in advance even without seeing the product.

(v) In the cooperatives, the manipulation in origin of the items and the liquidation to each partner is significantly facilitated, depending on the average prices obtained for each type.

(vi) Normalization, in general, facilitates the valuation of the lots and the financing of the commercialization if credits, down payments, etc., needed.

(vii) Normalization establishes types based on product qualities. (viii) Qualities vary according to the products and, among them, we can mention flavour,

colour, size, weight, shape, uniformity, degree of maturity, density, resistance, possibilities of conservation, age, hardness, nutritional qualities, qualities for cooking, conditions for special use, etc.

(ix) Types that are established usually go from best to worst and are used to designate numbers, letters or words.

115. For standardization to be useful, it must be known and applied by all or, at least, by most market operators. Many traders and producer organizations follow rules that serve as a basis for the classification of their products and that have utility in the scope of their transactions, but by deviating from the standards used by other traders or other producer organizations, much is loss of the advantages of standardization. 116. It is therefore necessary to establish unique rules for the entire market and, in order for them to be adopted, they must be established by a state agency or a body representative of the corresponding sector. In this sense, collaboration with the technical services of the Ministry of Agriculture is essential. 117. At present, there is not enough implementation of traceability and food safety practices. To cover this objective, it is necessary to elaborate codes or Protocols of Good Practices. Through this work process, the foundations for the creation and development of what would be the technical-sanitary regulations of the sectors and/or productions would be laid. 118. Our recommendation is that a standardization committee be set up, composed of the heads of the Administration, sector professionals and other agents interested in the LCs Project. Some issues to consider

• Provisions concerning quality (i) Minimum quality requirements (ii) Minimum maturity requirements (iii) Classification (‘Extra’ class, Class I, Class II)

• Provisions concerning sizing

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• Provisions concerning tolerances (i) Quality tolerances (ii) Size tolerances

• Provisions concerning presentation (i) Uniformity (ii) Packaging (iii) Presentation

• Provisions concerning marking (i) Identification (ii) Nature of produce (iii) Origin of produce (Country) (iv) Commercial specifications

D. Assessment of Needs 119. There is an imbalanced situation between the production and the growing demand, for both national consumption and for export of horticulture produce, with regard to both fresh and processed products. 120. There are multi oriented markets functioning mainly as wholesale trade centres during given segments of the day time, usually early in the morning and as retail facility during the remaining of the working day. The main value chain operations such as sorting, packaging, or any other type of processing are not practiced even in the large market facilities. 121. At the provincial level, the overall cold storage capacity within Andijan and Samarkand provinces represents non-negligible 3.7% and 2.2%, respectively of the reported consolidated production of fruits, vegetable, potatoes, grapes, and melon, in 2016. As it appears from Tables 6.1 and 6.2, there are plans to extend the cold storage capacity. However, the cold storage capacity of the existing mixed wholesale-retail markets is still very limited.

Province Consolidated production 2016 (ton) Cold storage capacity (ton) in %

Andijan 2,742,000.00 101,230 3.7% Samarkand 3,530,900.00 76,070 2.2% Source: State Statistics Committee of the Republic of Uzbekistan.

122. Losses of horticultural produce from harvest to delivery are estimated at no less than 40% with the largest part of the loss occurring during transportation. Improvements to the various components of the horticulture chain can reduce substantially such losses. The cold transportation capacity is still significantly lagging behind in regard to a fast-increasing production and trade of fresh horticulture products. Inadequate cool transportation capacity is a major cause of loss of horticulture products. There is large scope for augmenting the fleet of truck-mounted refrigerant transportation capacity. 123. It is anticipated that with the introduction of more-efficient farming systems, better transport, better management, storage, and processing facilities which ensure that a larger proportion of harvested output is delivered to the markets, substantial reduction of horticulture

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produce will be achieved. The gradual improvement of extensive and effective cold chain systems will also help to prolong the shelf-life of food products.

E. Required Improvements for Sustainable Sector Development 124. Inflow of foreign currency to Uzbekistan is essential for sustainable development of the country. Currently, Uzbekistan exports less than 10% of its produced agricultural products mainly to the Russian market, though there are other potentially recipient markets as well like Europe and other Asian countries. In view of this Uzbekistan has developed strategies to increase the production and export of horticultural products by 2020. The GoU has initiated a sector reform which has been started by providing incentives to horticulture producers and followed by the Presidential Decree No. 519933 instructing the conversion of not suitable cotton crops into horticulture crops marks a fundamental step towards improvement of agricultural outputs. 125. One of the main obstacles for increasing the export of agricultural products at this stage is the requirement of 100% pre-payment and withdrawing the cash from the bank. All obstacles for the export of products should be phased out gradually. In this regard it is important to note that the government has undertaken significant steps to boost and increase the export of agricultural products. For instance, just one year ago exporters were obliged to sell 25% of their foreign currency to the government at official central bank’s rate, while all exports of agricultural products abroad had to be done through the monopoly company Uzagroexport. In very recent times, the GoU has opened the national currency to a fluctuating conversion rate against other major reference currencies. This will greatly facilitate exporters while the Uzagroexport’s monopoly on export of agricultural products was abolished. 126. The GoU undertakes to promulgate the horticulture chain also by means of international exhibitions. The International Exhibition of Food Industry and Food Products “UzAgroExpo is held annually in November, by the International Exhibition Group (IEG)34 Uzbekistan, in cooperation with the Ministry of Agriculture, the Tashkent City Administration, the Council of Farmers of Uzbekistan, and the “Uzbekozikovkatholding” company. The trade fair contains three thematic components: (i) agriculture, (ii) food industry, and (iii) food fair. The agriculture component focuses on farm machineries, grain production, and cattle breeding. The food industry part promotes equipment and materials for the food industry including horticultural products processing. The food fair focuses on the latest developments in food and beverages, while the "HoReCa" subsector covers tea and coffee equipment for restaurants and hotels. The XIIIth International Agriculture Exhibition “UzAgroExpo-2017” was held from 22 to 24 November 2017 at “UzExpoCenter” in Tashkent. Around 120 companies from 16 countries ensured their participation. National and international exhibitors were exposing equipment and services particularly related to the horticulture chain, namely: organization of collection and logistic centers, equipment for washing, calibrating, packaging as well as refrigerating systems.

33 Presidential decree No. 5199 dated 9 October 2017 “About measures on radical improvement of system of

protection of rights and lawful interests of farmers, dehkans and owners of household lands, effective use of sowing lands of agriculture”

34 http://www.ieg.uz/en

http://www.ieg.uz/en

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7. MARKET DEMAND ANALYSIS

A. Structure of the horticulture marketing 127. In general terms the following categories of markets can be distinguished:

• Informal markets - Dekhan markets;

• Domestic markets;

• Agro-company and other intermediaries;

• Supermarkets and large-scale consumers (hotels);

• Export markets.

B. Domestic Markets 128. Domestic markets have been significantly growing in the last decade due to rising incomes, population growth, and overall economic growth. This trend is anticipated to continue in the next decades. Accordingly, as introduced under Section 5, earnings from horticultural production have been increasing as well. 129. As a general rule, what is produced on dehkan farms is consumed directly by the producing households and a large share of the remaining production is sold in local market stalls or to intermediaries in small lots for cash. Large volumes of fruit and vegetables is marketed locally through this channel and seems to work well for this segment of the market. Yet, other destinations require features and services in addition to a good product.

C. Supermarkets 130. A very large share of the local horticultural produce sold in supermarkets, usually via intermediaries, but sometime directly from larger farms. Usually supermarkets have their own distribution centers, where farmers and wholesalers bring produce in bulk. In these distribution centers, products undergo some sorting, grading, and retail packaging, then are distributed to the stores. The efficiency of these chains is highly depending on the availability of pre-cooling and grading facilities, conditions which usually are not met, thus adding to wastage or losses.

D. Use and Distribution of the Horticulture Produce 131. Of the total consolidated production of vegetables, fruits, melons, grapes and potatoes in 2016, 80% went for local consumption in Andijan and 68.7% in Samarkand. Only a 7% of the consolidated production from Samarkand and 4.1% from Andijan were exported.

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Table 7-1 Use of Main Horticultural Produce in Andijan (2016)

Crop category

Total production

(ton) Seeds Processing Export

Tashkent and Health

Care Systemsa

Reserves Internal market

ton % ton % ton % ton % ton % ton % Fruits 538,494 0 0 52,379 9.73 31,500 5.850 9,363 1.74 10,169 1.89 435,083 80.80 Grape 84,031 0 0 12,798 15.23 8,499 10.2 2,205 2.62 230 0.27 60,298 71.76 Vegetables 1,713,903 29,800 1,74 185,200 10.81 65,400 3.82 28,981 1.69 31,640 1.85 1,372,882 80.10 Melons 136,841 2,982 2,18 150 0.11 7,300 5.40 1,270 0.93 5,565 4.07 119,574 87.38 Potatoes 310,355 37,400 12,05 0 0 0 0 4,928 1.59 17,513 5.64 250,514 80.72 Legumes 6,255 41 0,66 36 0.58 2,700 43.20 194 3.10 44 0.70 3,240 51.80 2,790,240 70,223 2,52 250,923 8.99 115,400 4.14 46,943 1.68 65,161 2.34 2,241,592 80.34

a Items sold at a fixed social price. Source: Department of Economy of Andijan Provincial Administration.

132. Samarkand District is one of five districts that are free from production of state order crops like cotton and the districts fully focus on horticultural products. Majority of the export companies and brokers are concentrated in Samarkand District. Samarkand is considered as agro-industrial district not only in the provincial level but also in national level. The largest and export-oriented export companies are also located in Samarkand Districts.

Table 7-2 Use of main horticultural produce in Samarkand (2016)

Crop category

Total Production

(ton) Seeds Processing Export

Tashkent and Health

Care Systems

Reserves Internal market

ton % ton % ton % ton % ton % ton % Vegetables 1,767,944 31,683 1.8 292,448 16.5 121,346 6.9 21,486 1.2 86,366 4.9 1,214,615 68.7 Fruits 414,110 0 0 58,729 14.2 41,739 10.1 8,830 2.1 35,700 8.6 269,112 65.0 Melons 138,828 92 0.1 0 0 15,162 10.9 2,140 1.5 7,714 5.6 113,720 81.9 Grape 625,298 0 77,585 12.4 71,150 11.4 30,354 4.9 18,213 2.9 427,995 68.4 Potatoe 619,207 92,881 15.0 0 0 30,960 5.0 12,818 2.1 482,548 77.9

3,565,388 124,656 3.5 428,762 12.0 249,398 7.0 93,770 2.6 160,810 4.5 2,507,991 70.3

Source: Department of Economy of Samarkand Provincial Administration.

E. Export Markets 133. Russia and Kazakhstan have been traditionally and remain the key export market targets for Uzbekistan. To these two countries alone are bound more than half of the fresh cherries, grapes, melons, and cabbage exported. Also, supermarkets have been expanding quickly in Russia and this trend is expected to accelerate with Russia’s World Trade Organization membership and the entry of foreign retailers. Russian supermarkets command no less than 60%–70% of fresh fruits and vegetables export from Uzbekistan and this trend is increasing, thus requiring pre-cooling and adequate packaging of the horticultural produce. 134. Uzbekistan is also targeting at expanding the marketing of fresh and processed horticulture products to other countries such as in Japan, Korea, Saudi Arabia and emirates, as well as to EU countries. 135. A key ingredient to the success of horticultural produce export is building a reputation for quality, safety and reliability. In this respect the GoU has initiated reforms aimed at ensuring

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quality in addition to quantity of horticulture produces.35 Furthermore, the GoU is to ensure continued development of strategies and action plans aimed to implement food-related safety projects even with finance by international donors. In particular, standard requirements should be further improved with the enforcement of certificates of origin and quality. Certified biologically oriented horticulture should also be constantly promoted in forthcoming years and decades.

8. SECTOR FORWARD STRATEGIES

A. Key strategies in the Agriculture Subsector 136. The government’s Welfare Improvement Strategy for 2012–2015 aimed to reduce poverty through improved rural productivity and the creation of income-earning activities. Strategy elements included (i) further structural reforms in agriculture, and the diversification of agricultural production; (ii) mechanization of agriculture, improvement of infrastructure, and development of agribusiness; (iii) more productive use of land and water; and (iv) greater financial stability of farm entities; and (v) more market-oriented agricultural policies. These approaches continue to form the basis of the government’s welfare strategy. 137. For agriculture, the Ministry of Agriculture (MOA) has developed a sector development plan to 2020 that includes further reductions in cotton and wheat production, and enhancement of horticulture production. A strategy for further land reform will result in production-area increases for potatoes by 36,000 ha, vegetables by 91,000 ha, fruit orchards by 18,000 ha, and vineyards by 11,200 ha.36 The strategy will also target improved logistics, processing, and exports for several activities including horticulture.37 A further policy initiative established a state procurement system for fruit and vegetables. It is intended that fruit and vegetable product procurement-for delivery to processors and for storage to ensure adequate off-season supply for consumers-and the export of fresh fruit and vegetables will be entrusted to two state entities. 138. The Uzbekistan's Development Strategy for 2017–202138 has been adopted. This document has approved Uzbekistan’s Five-Area Development Strategy for 2017–2021 (Strategy 2017–2021) which was developed following comprehensive study of topical issues, analysis of the current legislation, law enforcement practices, best international practices, and including public consultation. 139. Five priority areas were identified in the Strategy 2017–2021and Priority 3.3 focused on Modernization and Intensive Development of Agriculture. Priority 3.3 highlights the following goals:

(i) deepening of structural reforms and achieving rapid development of agricultural production, ensuring food security, expansion of production of eco-friendly products, achieving significant increase of export potential of the agricultural sector;

35 Presidential Decrees No. 2015, 2505, 2515, 2520. 36 Approved by the Cabinet of Ministers on 29 December 2015. 37 Presidential Decree PP-2505 of 5 March 2016. “On measures to further develop the raw material base, expansion

in processing of horticulture, meat and dairy products, increasing foodstuffs production and export within 2016–2020.”

38 Decree of the President of the Republic of Uzbekistan. Uzbekistan's of 7 February 2017. Development Strategy for 2017–2021.

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(ii) further optimization of the sown areas, aimed at reducing areas under cotton and cereal crops and planting on released lands of potatoes, vegetables, forage and oilseeds, creating new intensive gardens and vineyards;

(iii) encouraging and creating of favorable conditions for the development of farms, especially the multidisciplinary ones, which are engaged in agricultural production and processing, preparation, storage, marketing, construction works and provision of services;

(iv) implementing of investment projects on construction of new, Restructuring and modernization of existing processing plants, equipped with modern high-end equipment for more advanced processing of agricultural products, production of semi-finished and finished food products, as well as packaging products;

(v) further expansion of infrastructure for storage, transportation and sale of agricultural products, provision of agro-chemical, financial and other up-to-date market services;

(vi) further improvement of irrigated lands, development of the network of reclamation and irrigation facilities, widespread introduction in agricultural production of intensive methods, especially modern water- and resource-saving agricultural technologies, using high-performance agricultural machinery;

(vii) carrying out research and development (R&D) aimed at creating and introduction of new crop varieties and animal breeds with high productivity, resistant to diseases and pests and adapted to local soil, climatic and environmental conditions;

(viii) adoption of systemic measures to mitigate the negative impact of climate change and drying of the Aral Sea to the development of agriculture and the livelihoods of people.

140. It is noted that 5 out of the 8 goals are in support of horticulture value change infrastructure development.

B. Diversification of traditional agriculture 141. The GoU intends to continue the diversification of land use policy among farmers and to intensification of horticulture production value chain by reducing inefficient used cotton crop areas. In the current year, more than 40,000 ha of cotton areas have been converted into alternative, predominantly horticulture crops. For 2018 it is planned to convert another 100,000 ha for fruit and vegetables crops. The successful conversion of cotton into horticulture-based crops has induced planners to stimulate the processing of fruits and vegetables up to 30% instead of 17% as previously planned as an important component of the horticulture value chain. 142. The Presidential Decree No. 5199 of 9 October 2017, targets some 480,000 ha of family farms land cultivated with not efficiently yielding crops or of for which crops there are not there are not effective market mechanisms. Most of such farmers practiced single crop-oriented harvests. The new regulations provide measures for transforming farmers from mono-sectoral approach to a diversification of activities including processing, storing, and selling finished products and providing services during the period 2018–2021. 143. Under the Decree 5199, the Horticulture Value Chain Development Project has been implemented with a $ 154 million finance provided by the ADB. The main objective of the project is to provide farmers, agro-processing enterprises, owners, and operators of cold storage facilities, with access to market-based funds channeled through banks as well as other trading and logistics service suppliers in the horticulture value chain.

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C. International donor Funded Projects 144. During 2001–2016, the government has implemented through RRA seven projects in the various segments in agriculture and horticulture for a total of $443.9 million. Of these, three projects cost $278.4 million were carried out with finance provided by ADB (Appendix 2). RRA is currently implementing the following projects in the horticulture chain subsector: (i) supporting the development of the horticulture sector in the Republic of Uzbekistan ($28.4 million of which $20.4 IFAD loan); (ii) development of the sector of horticulture growing in the Republic of Uzbekistan ($219.3 million of which $150 million from IBRD); and (iii) development of the Value Chain in the Horticulture ($241 million of which $154 million from ADB). 145. Feasibility studies are also in preparation by RRA for three horticulture projects being financed by various donors expected to be undertaken and completed between 2017 and 2023, namely: (i) Development of the horticulture sector in the Republic of Uzbekistan ($24.2 million grant from EU); (ii) Development of the Value Chain in the Horticulture. Phase II ($195 million, with $150 million from ADB); and (iii) Horticulture Value Chain Infrastructure Project ($140 million of which $100 from ADB). In addition, RRA is considering to undertake preparatory studies for the following Projects: (i) Increasing the efficiency of the horticulture sector in the Republic of Uzbekistan ($148.4, with $97.8 from JICA); and (ii) Development of the horticulture sector in the Republic of Uzbekistan. Phase III ($500 million from IBRD).

D. ADB Recommended Roadmap for Horticulture

1. ADB Sector Experience and Assistance Program 146. Since 1996, ADB has supported agriculture and enterprise development in Uzbekistan. For agriculture, ADB has supported irrigation rehabilitation and land improvement that have enhanced water supply for cotton and wheat production to improve soil management and support farm enterprises. ADB has previously provided support via Horticulture Value Chain Development Project that supports the government agriculture sector objectives while enhancing agricultural productivity and supporting the sustainable financial and economic viability of horticulture producers and agribusiness enterprises. 147. ADB’s Country Partnership Strategy (CPS) defined ADB’s approach in Uzbekistan for 2012–2016 and is aligned with the Strategy 2020, the government’s development strategy. The CPS supports Uzbekistan's transformation into a modern industrial and service economy through sustained and inclusive growth, reduced poverty, and expanded regional cooperation. Strategic assistance to be provided under the CPS will catalyze industrial development, accelerate economic diversification, promote private sector development, ensure climate-resilient investment, and create new employment opportunities.

2. ADB Assistance to Uzbekistan in the Sector 148. The Rural Restructuring Agency (RRA), is currently implementing the Horticulture Value Chain Development Project with a $154.0 million ADB loan.39 The main objective of the project is to provide a preferential loan to farmers, dehkans and other planning to engage in the horticulture chain. The implementation of the project covers all 13 regions of the country.

39 Presidential Decree PD-2813 dated on 02 March 2017.

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Distribution of the loans will go through 8 national commercial banks. The RRA is currently seeking for additional $100 million in order to complete project implementation. 149. RRA has also completed the $28.3 million “Supporting the development of the horticulture sector in the Republic of Uzbekistan Project” with a $20.4 million provided by IFAD, the $219.3 million “Development of the sector of horticulture growing in the Republic of Uzbekistan” with $150 million financed by the IBRD. In addition, RRA is carrying out feasibility studies for the preparation of projects in the horticulture subsector, namely: (i) Development of the Value Chain in the Horticulture. Phase II ($195 million, with $150 million from ADB); and (ii) Horticulture Value Chain Infrastructure Project ($140 million of which $100 from ADB). 150. Other ADB projects emphasized for financed by ADB in the sector are: (i) the $50 million “Improvement of the meliorative state of the land plots of rice farms” planned for implementation between 2018 and 2020, and (ii) the $150 million “Development of the Value Chain in livestock sector.”

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Appendices

Appendix 1: Sector Regulatory Framework – Selected Items Name of Law, No. and

date adopted Main provisions Remarks

Decree of the Council of Ministers (DCM) No.311 of 20.11.2013 “About the forecast parameters of production and use of horticulture products, potatoes, melons and grapes in 2014”

In order to create optimal conditions for the production and

harvesting of fresh horticultural products, potatoes, melons

and grapes, to provide the processing factories with raw

products, to fill the internal market with domestic products

and expansion of export supplies in 2014 the Cabinet of

Ministers:

- Approved the focast parameters of production and use

of horticulture products, potatoes, melons and grapes

in 2014 on the national and regional levels according to

Annex 1 and 2;

The Decree looked to encourage further development of

the horticulture sector to produce increased amounts of

products, up to a further; 8,880 thousand tons of

vegetables, 1,594 thousand tons of melons, 2,398

thousand tons of potato, 2,472 thousand tons of fruits and

1,362 thousand tons of grapes.

DCM No.334 of 4.12.2014 “About the forecast parameters of production and use of horticulture products, potatoes, melons and grapes in 2015”






Ministers:




Annex 1 and 2;

- Etc.

Presidential Decree No. PP-1937 of 13.03.2013 “About measures on further development of vine sector in the republic for the period of 2013-2015”

Aiming at further development of a vine sector in the

Republic, expansion of vineyards and optimization of their

planting schemes taking into account soil-climatic

conditions of regions, strengthening a scientific base of

vine sector, application of new perspective high yielding

sorts, as well as expansion of volume of processing of

grapes and increasing export potential of the sector:

- To approve the Programme of further improvement of organization and development of vine sector for 2013-2015;

- Etc.

Presidential decree PD-2492 of 18 February 2016: "On measures to further improve the organization of the food industry of the Republic", constituting the

The Decree establishes legal and organizational structure, main tasks and areas of activity of the holding company "Uzbekzokovaktholding", resumed hereafter:

• carry out of deep marketing researches of internal and external markets of fruit and vegetable and other food products and on this basis the development of programs for the development of the industry for the

49

Name of Law, No. and date adopted

Main provisions Remarks

"Uzbekoziqovqatholding” medium and long term;

• organization at the enterprises of the branch of the modern technological cycle of in-depth processing of agricultural raw materials with the aim of producing high-value food products of high value added in demand on the domestic and foreign markets;

• holistic introduction of modern logistics for the promotion of agricultural products, including its procurement, storage, more in-depth processing and sale on the basis of market relations between agricultural producers, processing enterprises, procurement and trading organizations;

• organization of production of modern packaging products using advanced foreign technologies and design;

• introduction of modern high-performance innovative technologies for processing fruits and vegetables, meat and milk and other types of food agricultural raw materials into production, attracting strategic investors for these purposes, primarily direct foreign investments;

• the organization of export of processed fruit and vegetable, as well as other food products, the development of measures to increase the competitiveness of products, the introduction of modern international systems for assessing the quality of food products;

• assistance to enterprises of the industry in the organization of work on standardization and certification of manufactured products, provision of information services to industry enterprises, organization of training, retraining and advanced training of personnel.

Presidential Decree PP-2505 of 5 March 2016: On the measures to further develop the raw material base, expansion in processing of horticulture, meat and dairy products, increasing foodstuffs production and export within 2016–2020

The decree stipulates the expansion the range and increase of the production and export of high-quality competitive foodstuffs with high added value on the basis of accelerated development of the raw material base, construction of new ones and modernization of existing production facilities with the attraction of foreign investments for deeper processing of agricultural raw materials, creation of modern trade and logistics centers and refrigeration capacities for storage and processing of fruit and vegetable products: To approve the Program for the further development of raw materials base, in-depth processing of fruit and vegetable products developed by the Ministry of Economy, the Ministry of Foreign Economic Relations, Investments and Trade, the Ministry of Agriculture of the Republic of Uzbekistan jointly with interested economic associations, the Council of Ministers of the Republic of Karakalpakstan, the regional khokimiyats and Tashkent and meat and dairy products and increase in production and export of food products for 2016–2020, which provides:

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• forecast parameters of the production of the main types of agricultural products for the development of the raw material base of the food industry;

• list of investment projects for the construction of new, reconstruction and modernization of existing enterprises for deeper processing of agricultural products, the production of semi-finished products and finished food products, as well as packaging materials

• forecast parameters of additional construction of new enterprises for processing and production of fruit and vegetable, meat and dairy and other food products;

• forecast parameters of construction of new modern refrigerating chambers for storage of agricultural products;

• target parameters for the production of semi-finished products for the food industry;

• target parameters of production of finished food products;

• target parameters for the supply of fresh and processed fruit and vegetable products for export;

• Ministry of Agriculture of the Republic of Uzbekistan, HC "Uzbekozikavkatholding", Association "Uzulgurzhisavdoinvest" to ensure the system monitoring of the implementation of the forecast parameters for the development of raw materials and food industries, provided by this program.

Annex 2 provides the list of investment projects for the construction of new, reconstruction and modernization of existing enterprises for deeper processing of agricultural products, the production of semi-finished products and finished food products, as well as packaging materials. Annexes 3-3B show the forecast parameters of additional construction of new enterprises for processing and production of fruit and vegetable, meat and dairy and other food products. Annex 4 presents forecast parameters for construction of new modern refrigerating chambers for storage of agricultural products.

Presidential Decree No. 2515, of 7 April 2016, "On measures to improve the procurement system for fruits and vegetables, potatoes and melons, instituting the Uzagroexport

The Decree is to valorize use the export potential of the country in the most complete and effective way, to increase the volume and expand the assortment of export demand for competitive fresh and processed fruits and vegetables on the external markets on the basis of deep market research of world markets, as well as the accelerated development of the trade and logistics infrastructure for the promotion of goods for export: The Decree institutes and defines the main tasks and activities of the specialized foreign trade company "Uzagroexport", as follows:

• carry out of deep marketing researches of a conjuncture of the world and regional markets of fruit-and-vegetable production, maintenance of advancement of domestic

51



fresh and processed fruit-and-vegetable production for export, search and development of the new markets of its sale;

• study the system of supply and demand in foreign markets for specific, produced in Uzbekistan, vegetables, fruits, grapes and gourds, and on this basis to develop proposals for the placement of crops and cultivation of these crops farming enterprises, expand production of competitive finished products;

• cause the establishment of permanent relations with reliable foreign buyers, conclusion of long-term and short-term contracts with them for the export of fresh and processed fruit and vegetable products;

• promote the organization of the annual International fruit and vegetable fair in the Republic of Uzbekistan with the conclusion of export contracts and ensuring full and timely performance of contractual obligations of the parties;

• ensure the development and strengthening with a broad participation of foreign investors of the material and technical base of enterprises and organizations that are members of the company, construction, reconstruction and modernization of specialized vegetable storage and refrigeration facilities for export of fruit and vegetable products, organization of production of modern packaging products using advanced foreign technologies and design;

• enhance wide introduction of a modern logistics system to promote the export of fresh and processed fruits and vegetables, pre-export preparation of products by sorting, calibrating and packaging that meets international requirements and standards;

• ensure the selection and upbringing of managers and specialists who own modern methods of export promotion of fruit and vegetable products and specialize in studying demand and markets for its sale.

Presidential Decree No. 2520 of 12 April 2016: On policy initiative for state procurement system for fruits and vegetables

The Decree is to create a unified system for the production and purchase of fresh vegetables, potatoes, fruits and melons for stable supply of raw materials to the processing enterprises of the republic, which is stable during the year of saturation of the domestic consumer market, as well as to increase the volume and expand the range of export supplies in demand on the external markets of competitive fresh and processed fruit and vegetable products: Determines that the state order for the purchase of fruits and vegetables, potatoes, melons and grapes is formed on the basis of the need for these types of products for:

• stable supply of raw materials to processing enterprises with a private form of ownership that are part of the holding company "Uzbekkozikavkatholding";

• bookmarks for the winter-spring period with a view to sustainable saturation of the domestic consumer market;

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• export of fresh fruit and vegetable products in demand on foreign markets.

Assigns functions and responsibilities for:

• ensuring the reliability of accounting for the volume of production of fresh produce, potatoes, melons and peasants by farmers and dehkan farms, monitoring the implementation of contract agreements concluded by them - territorial departments and departments for the integrated development of the territories of the khokimiyats of regions and districts;

• purchase of fresh fruits and vegetables, potatoes, melons and grapes for their further industrial processing - to the holding company "Uzbekzokovaktholding";

• the laying of fresh fruit and vegetables, potatoes, melons and grapes for the winter-spring period - to the association "Uzbekzokovaktatzahira";

• export of fresh fruit and vegetable products - to the specialized foreign trade company "Uzagroexport".

Establishes an order in accordance with which, within the framework of the state order:

• purchase for subsequent industrial processing is carried out on the basis of contracts of contracting concluded between farmers and dehkan farms - suppliers, on the one hand, and processing enterprises with a private ownership of HC "Uzbekkozovaktavholding" - consumers, on the other hand, with an advance of not less than 40 percent from the contract value;

• purchase of fresh produce, potatoes, melons and grapes from farmers and dehkan farms is made at contractual, market prices;

• export of fresh and processed fruit and vegetable products is carried out by the specialized foreign trade company "Uzagroexport" on the basis of direct export contracts with foreign partners, as well as under commission agreements concluded with farmer and dehkan farms, agrofirms and processing enterprises;

• when exporting fresh and processed fruit and vegetable products under commission contracts, the amount of the commission should not exceed 1 percent;

• export of fresh, dried and processed fruit and vegetable produce, grapes and melons and melons are carried out on terms not less than 30 percent of the preliminary payment from the value of the shipped products, and for the remainder a confirmed bank letter of credit is issued or a first-class foreign bank guarantees;

• At the same time, the specialized foreign trade company "Uzagroexport" JSC has the right to export and sell fresh, dried and processed fruits and vegetables, grapes and melons on the basis of direct export contracts, as well as commission contracts concluded with farmer and dehkan farms, agrofirms and processing enterprises, without prepayment, the opening of a confirmed bank letter of credit, or the execution of a first-class foreign

53



bank guarantee and submission of a certificate of settlement x, in the address;

• overseas joint ventures and trading houses JSC "Uzagroexport."

Presidential Decree No. PP-4707 of 4 March 2015: On the measures for structural reforms, modernization, and diversification of production for 2015–2019

The Decree is to ensure the consistent structural transformation, modernization and diversification of production, the further development of high-tech industries that can become the locomotives of sustainable economic growth, the fullest use of available reserves to reduce the energy intensity of products, material and labor costs, and expand the production of competitive finished products and semi-finished products, demand in world and regional markets, actively attract foreign investment to it and, including by creating joint ventures with leading foreign companies on a parity basis: Determines the priority directions of structural transformation, modernization and diversification of industrial production for 2015–2019:

• consistent modernization of existing and creation of new generating capacities in electric power industry on the basis of wide introduction of resource-saving combined cycle plants and modern approved technologies for the use of solar energy;

• increase in volumes and expansion of the range of products with high added value in the oil and gas and petrochemical industry on the basis of deep processing of natural gas and gas condensate;

• diversification of production and exports to the chemical industry through the introduction of modern technologies for the production of complex mineral fertilizers, polymers, synthetic rubber, methanol, as well as a wide range of household chemicals;

• creation of new and expansion of existing production capacities together with technological leaders of import-substituting types of agricultural machinery, trucks, aggregates and components;

• improvement of the commodity structure of the textile and leather and footwear industries at the expense of production, on the basis of deep processing of local raw materials, competitiveness in the world and domestic markets of competitive finished products and semi-finished products, including colored yarn, fabrics, leather, knitwear, sewing, footwear and leather products;

• accelerated development and development of high-tech industries for the production of electrical equipment, the creation of new facilities for the production of equipment and accessories for information and communication technologies, a wide range of environmentally friendly building materials;

• cardinal expansion of production volumes and assortment of products of the pharmaceutical industry, both under licenses and patents of the world's leading

54



companies, as well as with the production of domestic medicines based on own developments and raw materials;

• expansion of the production potential of the food industry due to the widespread use of sublimation technologies, vacuum packaging, deep freezing and other modern methods of processing fruit and vegetable products that are in demand in the world markets of semi-finished products for food.

Presidential Resolution No.УП-5199 of 9 October 2017 “About measures on radical improvement of system of protection of rights and lawful interests of farmers, dehkans and owners of household lands, effective use of sowing lands of agriculture”

In order to implement tasks, set in Strategy of Actions for 2017–2021, further support agricultural producers, ensure effective use of sowing lands of farmers, dehkans and households, at the end, change the attitude of landowners to increasing their incomes: 1. Determine, at the current stage, as priority directions of protection of rights and lawful interests of farmers, dehkans and household land owners, as well as increasing effective use of agricultural sowing lands: -first, further development of activities of farmers, dehkans and private land owners, creation of effective systems of protection of their rights and lawful interests, improvement of legal base in this sphere; -secondly, increase personal interest and responsibility of farmers, dehkans and household land owners in effective use of sowing lands, and establishment of effective system of parliamentary, representative and public control; -… 2.Note that according to the decision of the Conference of Council of Farmers of Uzbekistan it is now reorganized as the Council of Farmers, Dehkans and Household Land Owners of Uzbekistan (on national, provincial and district levels). 3.Set an order starting from 2018 yields according to which: -effective use of lands by farmers will be discussed quarterly at the Meeting of District Deputies, and by dehkans and household land owners monthly at the citizens’ self-management authorities (makhalla); -in regard to farmers, dehkans and household land owners which used lands ineffectively, did not fully sow with agricultural crops, did not implement agro-technical measures in-time, strict liability measures will be applied including termination of their rights to land plots.

Presidential Decree No. 3377 of 06.11.2017 “On additional measures to support domestic exporters of fruit and vegetables, grapes, melons, beans and dried fruits and vegetables”

The Presidential Decree simplifies procedures and requirements for the export of horticulture products. Article 1. Particularly, granted the right for economic entities to export fruits and vegetables without making export contracts on the basis of an invoice, under the following conditions:

a) the amount of delivery horticulture products does not exceed the equivalent of 20 thousand US dollars on the day of registration of the export customs declaration;

b) receipt of 100% advance payment in foreign

55



currency, including in the form of a bank transfer, payment on international bank cards, as well as cash deposits in the national currency purchased in exchange offices of commercial banks;

c) entering data on export supply into the Unified Electronic Information System of Foreign Trade Operations;

d) to make adjustments to the invoice value of exported fruit and vegetable products within the limits of the natural loss norms established by the legislation while storing, transporting and selling it.

Article 2. Starting from the date 15 November 2017: - there was implemented a new procedure which is

required from households do not provide any documents confirming their land plot products when they were selling their products to the economic entities;

- if the exporter has overdue accounts receivable on previously exported deliveries, the export of goods is not allowed only to that foreign buyer who has overdue accounts receivable;

- registration of cargo customs declaration for the export of fruit and vegetable products is carried out after drawing up the inspection report within a period of not more than 3 hours.

Article 7. The State Plant Quarantine Inspectorate under the Cabinet of Ministers of the Republic of Uzbekistan together with the concerned ministries and departments shall ensure the issuance of certificates for the export of fruit and vegetable and perishable goods within no more than one working day from the time the exporter provides the necessary documents. Article 9. “Uzbekoziqovqatholding” HC jointly with the State committee of the Republic of Uzbekistan for Investments, the Council of Ministers of the Republic of Karakalpakstan, the khokimiyats of the regions and the city of Tashkent will prepare and submit to the Cabinet of Ministers a program for the creation of logistics centers for processing, transportation and storage of fruit and vegetable products within two months based on a studying real needs and routes of transportation horticulture products. At the same time, to identify a specific list of projects, special attention should be given to the optimal and rational placement of centers, the timing of their creation and attraction of foreign investments, including the funds of international and foreign financial institutions. Article 11. To recommend to commercial banks to ensure the issuance of cash from deposit accounts of economic entities - exporters of fruit and vegetables and procurement organizations according to their applications for purchasing fruit and vegetable products.

Law of Dehkans No. 604-I of 30.04.1998

The Law will serve to determine the legal basis for the establishment, operation and liquidation of dekhkan farms, regulates their rights and obligations, regulates relations

56



with other legal entities and individuals. The Law of Dehkans consists 7 chapters and 31 articles: First chapter is devoted for the general provisions of the forming dehkan farms and their status. It cover 6 articles from 1 to 6. Second chapter is about provisions of land to the dehkan farms, land tenure, land use and water consumption procedures. It cover 5 articles from 7 to 11. Third chapter is devoted for the rights and obligations dehkan farms and its members. It cover 3 frticle from 12 to 14. Fourth chapter cover the issues related with property ownership (including inheritance of the property) of dehkan farms. It cover 4 articles from 15 to 18. Fifth chapter regulates basic activities of the dehkan farms, including production activities, hiring employees, the procedure for the sale of products, joint activites, taxation of dehkan farms, lending and insurance of dekhkan farms, accounting and state support activities. It cover 8 articles from 19 to 26. Sixth chapter is about liquidation (termination) procedures of the dehkan farms. It cover 2 article from 27 to 28. Seventh chapter regulated dispute resolutions, liability for the obligations and responsibility for the violation of legislation about the dekhkan farms. It cover 3 article from 29 to 31.

Name of Law, No. and

date adopted Main provisions Remarks

Decree of the Council of Ministers (DCM) No.311 of 20 November 2013 “About the forecast parameters of production and use of horticulture products, potatoes, melons and grapes in 2014”






Ministers:




Annex 1 and 2;

The Decree looked to encourage further development of

the horticulture sector to produce increased amounts of

products, up to a further; 8,880 thousand tons of

vegetables, 1,594,000 tons of melons, 2,398,000 tons of

potato, 2,472,000 tons of fruits and 1,362,000 tons of

grapes.

DCM No.334 of 4.12.2014 “About the forecast parameters of



57



production and use of horticulture products, potatoes, melons and grapes in 2015”




Ministers:


of horticulture products, potatoes, melons, and grapes


Annex 1 and 2;

- Etc.

Presidential Decree No. PP-1937 of 13.03.2013 “About measures on further development of vine sector in the republic for the period of 2013-2015”

Aiming at further development of a vine sector in the

Republic, expansion of vineyards and optimization of their

planting schemes taking into account soil-climatic

conditions of regions, strengthening a scientific base of

vine sector, application of new perspective high yielding

sorts, as well as expansion of volume of processing of

grapes and increasing export potential of the sector:

- To approve the Programme of further improvement of organization and development of vine sector for 2013–2015;

- Etc.

Presidential decree PD-2492 of 18 February 2016: "On measures to further improve the organization of the food industry of the Republic", constituting the "Uzbekoziqovqatholding”

The Decree establishes legal and organizational structure, main tasks and areas of activity of the holding company "Uzbekzokovaktholding", resumed hereafter:

• carry out of deep marketing researches of internal and external markets of fruit and vegetable and other food products and on this basis the development of programs for the development of the industry for the medium and long term;

• organization at the enterprises of the branch of the modern technological cycle of in-depth processing of agricultural raw materials with the aim of producing high-value food products of high value added in demand on the domestic and foreign markets;

• holistic introduction of modern logistics for the promotion of agricultural products, including its procurement, storage, more in-depth processing and sale on the basis of market relations between agricultural producers, processing enterprises, procurement and trading organizations;

• organization of production of modern packaging products using advanced foreign technologies and design;

• introduction of modern high-performance innovative technologies for processing fruits and vegetables, meat and milk and other types of food agricultural raw materials into production, attracting strategic investors for these purposes, primarily direct foreign investments;

• the organization of export of processed fruit and vegetable, as well as other food products, the development of measures to increase the

58



competitiveness of products, the introduction of modern international systems for assessing the quality of food products;

• assistance to enterprises of the industry in the organization of work on standardization and certification of manufactured products, provision of information services to industry enterprises, organization of training, retraining and advanced training of personnel

Presidential Decree PP-2505 of 5 March 2016: On the measures to further develop the raw material base, expansion in processing of horticulture, meat and dairy products, increasing foodstuffs production and export within 2016–2020

The decree stipulates the expansion the range and increase of the production and export of high-quality competitive foodstuffs with high added value on the basis of accelerated development of the raw material base, construction of new ones and modernization of existing production facilities with the attraction of foreign investments for deeper processing of agricultural raw materials, creation of modern trade and logistics centers and refrigeration capacities for storage and processing of fruit and vegetable products: To approve the Program for the further development of raw materials base, in-depth processing of fruit and vegetable products developed by the Ministry of Economy, the Ministry of Foreign Economic Relations, Investments and Trade, the Ministry of Agriculture of the Republic of Uzbekistan jointly with interested economic associations, the Council of Ministers of the Republic of Karakalpakstan, the regional khokimiyats and Tashkent and meat and dairy products and increase in production and export of food products for 2016–2020, which provides:

• forecast parameters of the production of the main types of agricultural products for the development of the raw material base of the food industry;

• list of investment projects for the construction of new, reconstruction and modernization of existing enterprises for deeper processing of agricultural products, the production of semi-finished products and finished food products, as well as packaging materials;

• forecast parameters of additional construction of new enterprises for processing and production of fruit and vegetable, meat and dairy and other food products;

• forecast parameters of construction of new modern refrigerating chambers for storage of agricultural products;

• target parameters for the production of semi-finished products for the food industry;

• target parameters of production of finished food products;

• target parameters for the supply of fresh and processed fruit and vegetable products for export;

• Ministry of Agriculture of the Republic of Uzbekistan, HC "Uzbekozikavkatholding", Association "Uzulgurzhisavdoinvest" to ensure the system monitoring of the implementation of the forecast

59



parameters for the development of raw materials and food industries, provided by this program.

Annex 2 provides the list of investment projects for the construction of new, reconstruction and modernization of existing enterprises for deeper processing of agricultural products, the production of semi-finished products and finished food products, as well as packaging materials; Annexes 3-3B show the forecast parameters of additional construction of new enterprises for processing and production of fruit and vegetable, meat and dairy and other food products; Annex 4 presents forecast parameters for construction of new modern refrigerating chambers for storage of agricultural products.

Presidential Decree No. 2515, of 7 April 2016, "On measures to improve the procurement system for fruits and vegetables, potatoes and melons, instituting the Uzagroexport

The Decree is to valorize use the export potential of the country in the most complete and effective way, to increase the volume and expand the assortment of export demand for competitive fresh and processed fruits and vegetables on the external markets on the basis of deep market research of world markets, as well as the accelerated development of the trade and logistics infrastructure for the promotion of goods for export: The Decree institutes and defines the main tasks and activities of the specialized foreign trade company "Uzagroexport", as follows:

• carry out of deep marketing researches of a conjuncture of the world and regional markets of fruit-and-vegetable production, maintenance of advancement of domestic fresh and processed fruit-and-vegetable production for export, search and development of the new markets of its sale;

• study the system of supply and demand in foreign markets for specific, produced in Uzbekistan, vegetables, fruits, grapes and gourds, and on this basis to develop proposals for the placement of crops and cultivation of these crops farming enterprises, expand production of competitive finished products;

• cause the establishment of permanent relations with reliable foreign buyers, conclusion of long-term and short-term contracts with them for the export of fresh and processed fruit and vegetable products;

• promote the organization of the annual International fruit and vegetable fair in the Republic of Uzbekistan with the conclusion of export contracts and ensuring full and timely performance of contractual obligations of the parties;

• ensure the development and strengthening with a broad participation of foreign investors of the material and technical base of enterprises and organizations that are members of the company, construction, reconstruction and modernization of specialized vegetable storage and refrigeration facilities for export of fruit and vegetable products, organization of production of modern

60



packaging products using advanced foreign technologies and design;

• enhance wide introduction of a modern logistics system to promote the export of fresh and processed fruits and vegetables, pre-export preparation of products by sorting, calibrating and packaging that meets international requirements and standards;

• ensure the selection and upbringing of managers and specialists who own modern methods of export promotion of fruit and vegetable products and specialize in studying demand and markets for its sale.

Presidential Decree No. 2520 of 12.04.2016: On policy initiative for state procurement system for fruits and vegetables

The Decree is to create a unified system for the production and purchase of fresh vegetables, potatoes, fruits and melons for stable supply of raw materials to the processing enterprises of the republic, which is stable during the year of saturation of the domestic consumer market, as well as to increase the volume and expand the range of export supplies in demand on the external markets of competitive fresh and processed fruit and vegetable products: Determines that the state order for the purchase of fruits and vegetables, potatoes, melons and grapes is formed on the basis of the need for these types of products for:

• stable supply of raw materials to processing enterprises with a private form of ownership that are part of the holding company "Uzbekkozikavkatholding";

• bookmarks for the winter-spring period with a view to sustainable saturation of the domestic consumer market;

• export of fresh fruit and vegetable products in demand on foreign markets.

Assigns functions and responsibilities for:

• ensuring the reliability of accounting for the volume of production of fresh produce, potatoes, melons and peasants by farmers and dehkan farms, monitoring the implementation of contract agreements concluded by them - territorial departments and departments for the integrated development of the territories of the khokimiyats of regions and districts;

• purchase of fresh fruits and vegetables, potatoes, melons and grapes for their further industrial processing - to the holding company "Uzbekzokovaktholding";

• the laying of fresh fruit and vegetables, potatoes, melons and grapes for the winter-spring period - to the association "Uzbekzokovaktatzahira";

• export of fresh fruit and vegetable products - to the specialized foreign trade company "Uzagroexport".

Establishes an order in accordance with which, within the framework of the state order:

• purchase for subsequent industrial processing is carried out on the basis of contracts of contracting concluded between farmers and dehkan farms - suppliers, on the one hand, and processing enterprises with a private ownership of HC "Uzbekkozovaktavholding" -

61



consumers, on the other hand, with an advance of not less than 40 percent from the contract value;

• purchase of fresh produce, potatoes, melons and grapes from farmers and dehkan farms is made at contractual, market prices;

• export of fresh and processed fruit and vegetable products is carried out by the specialized foreign trade company "Uzagroexport" on the basis of direct export contracts with foreign partners, as well as under commission agreements concluded with farmer and dehkan farms, agrofirms and processing enterprises;

• when exporting fresh and processed fruit and vegetable products under commission contracts, the amount of the commission should not exceed 1 percent;

• export of fresh, dried and processed fruit and vegetable produce, grapes and melons and melons are carried out on terms not less than 30 percent of the preliminary payment from the value of the shipped products, and for the remainder a confirmed bank letter of credit is issued or a first-class foreign bank guarantee;

• At the same time, the specialized foreign trade company "Uzagroexport" JSC has the right to export and sell fresh, dried and processed fruits and vegetables, grapes and melons on the basis of direct export contracts, as well as commission contracts concluded with farmer and dehkan farms, agrofirms and processing enterprises, without prepayment, the opening of a confirmed bank letter of credit, or the execution of a first-class foreign bank guarantee and submission of a certificate of settlement x, in the address;

• overseas joint ventures and trading houses JSC "Uzagroexport."

Presidential Decree No. PP-4707 of 04.03.2015: On the measures for structural reforms, modernization, and diversification of production for 2015–2019

The Decree is to ensure the consistent structural transformation, modernization and diversification of production, the further development of high-tech industries that can become the locomotives of sustainable economic growth, the fullest use of available reserves to reduce the energy intensity of products, material and labor costs, and expand the production of competitive finished products and semi-finished products, demand in world and regional markets, actively attract foreign investment to it and, including by creating joint ventures with leading foreign companies on a parity basis: Determines the priority directions of structural transformation, modernization and diversification of industrial production for 2015–2019:

• consistent modernization of existing and creation of new generating capacities in electric power industry on the basis of wide introduction of resource-saving combined cycle plants and modern approved technologies for the use of solar energy;

• increase in volumes and expansion of the range of products with high added value in the oil and gas and

62



petrochemical industry on the basis of deep processing of natural gas and gas condensate;

• diversification of production and exports to the chemical industry through the introduction of modern technologies for the production of complex mineral fertilizers, polymers, synthetic rubber, methanol, as well as a wide range of household chemicals;

• creation of new and expansion of existing production capacities together with technological leaders of import-substituting types of agricultural machinery, trucks, aggregates and components;

• improvement of the commodity structure of the textile and leather and footwear industries at the expense of production, on the basis of deep processing of local raw materials, competitiveness in the world and domestic markets of competitive finished products and semi-finished products, including colored yarn, fabrics, leather, knitwear, sewing, footwear and leather products;

• accelerated development and development of high-tech industries for the production of electrical equipment, the creation of new facilities for the production of equipment and accessories for information and communication technologies, a wide range of environmentally friendly building materials;

• cardinal expansion of production volumes and assortment of products of the pharmaceutical industry, both under licenses and patents of the world's leading companies, as well as with the production of domestic medicines based on own developments and raw materials;

• expansion of the production potential of the food industry due to the widespread use of sublimation technologies, vacuum packaging, deep freezing and other modern methods of processing fruit and vegetable products that are in demand in the world markets of semi-finished products for food.

Presidential Resolution No.УП-5199 of 9 October 2017 “About measures on radical improvement of system of protection of rights and lawful interests of farmers, dehkans and owners of household lands, effective use of sowing lands of agriculture”

In order to implement tasks, set in Strategy of Actions for 2017–2021, further support agricultural producers, ensure effective use of sowing lands of farmers, dehkans and households, at the end, change the attitude of landowners to increasing their incomes: 1. Determine, at the current stage, as priority directions of protection of rights and lawful interests of farmers, dehkans and household land owners, as well as increasing effective use of agricultural sowing lands: -first, further development of activities of farmers, dehkans and private land owners, creation of effective systems of protection of their rights and lawful interests, improvement of legal base in this sphere; -secondly, increase personal interest and responsibility of farmers, dehkans and household land owners in effective use of sowing lands, and establishment of effective system

63



of parliamentary, representative and public control; 2.Note that according to the decision of the Conference of Council of Farmers of Uzbekistan it is now reorganized as the Council of Farmers, Dehkans and Household Land Owners of Uzbekistan (on national, provincial and district levels). 3.Set an order starting from 2018 yields according to which: -effective use of lands by farmers will be discussed quarterly at the Meeting of District Deputies, and by dehkans and household land owners monthly at the citizens’ self-management authorities (makhalla); -in regard to farmers, dehkans and household land owners which used lands ineffectively, did not fully sow with agricultural crops, did not implement agro-technical measures in-time, strict liability measures will be applied including termination of their rights to land plots.

Presidential Decree No. 3377 of 06.11.2017 “On additional measures to support domestic exporters of fruit and vegetables, grapes, melons, beans and dried fruits and vegetables”

The Presidential Decree simplifies procedures and requirements for the export of horticulture products. Article 1. Particularly, granted the right for economic entities to export fruits and vegetables without making export contracts on the basis of an invoice, under the following conditions:

e) the amount of delivery horticulture products does not exceed the equivalent of 20 thousand US dollars on the day of registration of the export customs declaration;

f) receipt of 100% advance payment in foreign currency, including in the form of a bank transfer, payment on international bank cards, as well as cash deposits in the national currency purchased in exchange offices of commercial banks;

g) entering data on export supply into the Unified Electronic Information System of Foreign Trade Operations;

h) to make adjustments to the invoice value of exported fruit and vegetable products within the limits of the natural loss norms established by the legislation while storing, transporting and selling it.

Article 2. Starting from the date 15 November 2017: - there was implemented a new procedure which is

required from households do not provide any documents confirming their land plot products when they sell their products to the economic entities;

- if the exporter has overdue accounts receivable on previously exported deliveries, the export of goods is not allowed only to that foreign buyer who has overdue accounts receivable;

- registration of cargo customs declaration for the export of fruit and vegetable products is carried out after drawing up the inspection report within a period of not more than 3 hours.

Article 7. The State Plant Quarantine Inspectorate under the Cabinet of Ministers of the Republic of Uzbekistan

64



together with the concerned ministries and departments shall ensure the issuance of certificates for the export of fruit and vegetable and perishable goods within no more than one working day from the time the exporter provides the necessary documents. Article 9. “Uzbekoziqovqatholding” HC jointly with the State committee of the Republic of Uzbekistan for Investments, the Council of Ministers of the Republic of Karakalpakstan, the khokimiyats of the regions and the city of Tashkent will prepare and submit to the Cabinet of Ministers a program for the creation of logistics centers for processing, transportation and storage of fruit and vegetable products within two months based on a studying real needs and routes of transportation horticulture products. At the same time, to identify a specific list of projects, special attention should be given to the optimal and rational placement of centers, the timing of their creation and attraction of foreign investments, including the funds of international and foreign financial institutions. Article 11. To recommend to commercial banks to ensure the issuance of cash from deposit accounts of economic entities - exporters of fruit and vegetables and procurement organizations according to their applications for purchasing fruit and vegetable products.

Law of Dehkans No. 604-I of 30.04.1998

The Law will serve to determine the legal basis for the establishment, operation and liquidation of dekhkan farms, regulates their rights and obligations, regulates relations with other legal entities and individuals. The Law of Dehkans consists 7 chapters and 31 articles: First chapter is devoted for the general provisions of the forming dehkan farms and their status. It cover 6 articles from 1 to 6. Second chapter is about provisions of land to the dehkan farms, land tenure, land use and water consumption procedures. It cover 5 articles from 7 to 11. Third chapter is devoted for the rights and obligations dehkan farms and its members. It cover 3 frticle from 12 to 14. Fourth chapter cover the issues related with property ownership (including inheritance of the property) of dehkan farms. It cover 4 articles from 15 to 18. Fifth chapter regulates basic activities of the dehkan farms, including production activities, hiring employees, the procedure for the sale of products, joint activites, taxation of dehkan farms, lending and insurance of dekhkan farms, accounting and state support activities. It cover 8 articles from 19 to 26. Sixth chapter is about liquidation (termination) procedures of the dehkan farms. It cover 2 article from 27 to 28. Seventh chapter regulated dispute resolutions, liability for the obligations and responsibility for the violation of legislation about the dekhkan farms. It cover 3 article from 29 to 31.

65

Appendix 2: List of Projects Implemented, Being Carried Out or Under Study by the RRA

№ Projects Donor Amount Implementation Basement

Completed Projects

1. Support of agricultural enterprises

IBRD Total amount- $43.46 million. USD Loan of IBRD $36.14 million

2001–2008 No RCM-356 from 19 August 1998

2.

Support infrastructure development and restructured farms in the Akaltyn district of the Syrdarya region

ADB Total amount- $72.0 million. USD Loan of

ADB $36.0 million 2002–2010

No RCM-201 from 02 May 2001 No RCM-462 from 27 November 2001

3. Increasing the productivity of cereals

ADB Total amount- $40.0 million. USD Loan of

ADB 26.0 million 2004–2009

No RCM-492 from 21 October 2004

4.

Prevention and response to the threat of a bird flu pandemic in the Republic of Uzbekistan

IDA Total amount- $2.96 million Grant of IDA

2007–2009 NoRP-176 from 26 October 2007

5.

Improvement of land reclamation in Bukhara, Navoi and Kashkadarya regions

ADB Total amount- $166.4 million Loan of ADB

$60.201 million 2007–2015

NoRP-698 from 26 September 2007 NoRP-1813 from 03 September 2012

6. Support of agricultural enterprises. Phase II

IDA Total amount- $118.96

million Credit of IDA $103.43 million

2008–2016

NoRCM-196 from 27 August 2008 NoRP-2129 from 14 February 2014

Total amount: $443.8 million, of which foreign investments are $261.8

million

Ongoing Projects

1.

Development of sustainable agriculture and mitigation of climate change impacts

GEF Total amount- $12.7 million

2014–2018 NoRP-2129 from

14 February 2014

2.

Supporting the development of the horticulture sector in the Republic of Uzbekistan

IFAD Total amount- $28.337 million Loan of IFAD $20.445 million

2014–2019 NoRP-2113 from 22 January 2014

3.

Development of the sector of horticulture growing in the Republic of Uzbekistan

IBRD Total amount- $219.3 million Loan of IBRD 150.0 million

2015–2021 NoRP-2410 from

21 September 2015

4.

Program of adaptation to climate change and mitigation of its consequences for the Aral Sea basin

IDA Total amount- $20.7 million $14.0 million IDA Credit

2017–2021 NoRP-2784 from

16 February 2017

66

5. Development of the Value Chain in the Dairy Sector of Uzbekistan

IFAD Total amount- $39.4 million Credit of IFAD $23.9 million

2017–2021 NoRP-2795 form

22 February 2017

6. Development of the Value Chain in the Horticulture

ADB Total amount- $240.98 million Loan of ADB 154.0 million

2017–2021 NoRP-2813 from 02 March 2017

7. Development of the livestock sector in the Republic of Uzbekistan

IDA Total amount- $229.0 million $150.0 million IDA credit

2017–2021 NoRP-3283 from

16 September 2017

Total amount: $751 million, of which foreign investments are $488

million

Up-coming Projects (implementation is planned for 2018)

1.

Development of the horticulture sector in the Republic of Uzbekistan. Grant financing

EU Total amount- $24.2

million 2017–2021

NoRP-2410 from 21 September

2015

2.

Development of the horticulture sector in the Republic of Uzbekistan. Phase II

IBRD Total amount- $500.0 million Loan of IBRD

$350.0 million 2018–2019

NoR-4681 from 25.07.2016

3 Development of the Value Chain in the Horticulture. Phase II


$150.0 million 2018–2022

No1921-xx from 23.02.2017

4 Horticulture Value Chain Infrastructure Project

ADB Total amount- 140.0 mln. USD Loan of

ADB 100,0 mln.USD 2018–2023

No1921-xx from 23 February

2017


million

Perspective Projects (implementation is planned for 2019-2022)

1.

Increasing the efficiency of the horticulture sector in the Republic of Uzbekistan

JICA Total amount-$148.4 million Credit of JICA $97.8 million

2019–2023

NoR-4308 from 01.07.2014

NoRP-2292 from 02 February

2015

2.

Development of the horticulture sector in the Republic of Uzbekistan. Phase III

IBRD Total amount- $500.0 million Loan of IBRD $500.0 million

2019–2022 NoR-4681 from

25 July 2016

3. Improvement of the meliorative state of the land plots of rice farms

ADB Total amount- $50.0 million Loan of ADB $50.0 million

2019–2020 No1921-xx from

23 February 2017

4 Development of the Value Chain in livestock sector


$150.0 million 2019–2021y.

No1921-xx from 23 February

2017


million

Total amount of all projects: $2,902.4 million, of which foreign investments are

$2,171.8 million

67

Appendix 3: Characteristics of Horticulture Products Markets in Andijan Province

Cities and districts

Names of the Dehkan

markets

Wh

ole

sale

activity in

th

e

Ma

rlet:

ye

s/n

o

Esta

blis

he

d

Sp

ace

(h

a)

Nu

mb

er

of

sa

le p

lots

in

the

Ma

rke

t

Nu

mb

er

of

em

plo

yee

s

Ye

arl

y inco

me

(mln

.UZ

S)

Ye

arl

y e

xp

ence

(mln

.UZ

S)

Available services in the Market

Acting

cold

sto

rag

e

ca

pacity (

ton

s)

So

rtin

g

Pa

ckig

ing

Pro

cessin

g

Andijan City

Central no 8/4/20

04 4.1 1014 41 1,136,715 105,703 500 no no no

Yangibozor no 8/4/20

04 2.88 1595 61 1,216,575 147,606 no no no

Soybuyi no 8/4/20

04 3.52 132 17 642,639 320,394 no no no

Wholesale Yes 9/23/2

015 4.7 60 16 309,816 110,567 no no no

Xonobod City

Xonobod no 8/4/20

04 2.55 150 3 124,557 62,509 no no no

Andijan District

Kuyganyoq Yes 3/18/2

010 2.25 900 26 1,963,396 723,602 no no no

Asaka City

Asaka no 8/4/20

04 5.7 1296 60 2,706,858 1,286,255 no no no

Kurgantepa no 8/4/20

04 1.7 49 4 72,976 66,289 no no no

Baliqchi

Baliqchi no 8/4/20

04 1.25 181 16 516,362 114,854 no no no

Chinobod no 8/4/20

04 1.5 234 5 71,094 25,842 no no no

Buloqboshi Buloqboshi no 8/4/20

04 4.68 510 32 908,110 445,708 100 no no no

Buz Buz no 8/4/20

04 0.91 160 8 155,119 147,451 no no no

Jalakuduk

Jalakuduk no 8/4/20

04 2.67 187 16 443,400 266,040 no no no

Oyim no 8/4/20

04 1.17 101 7 110,393 48,496 no no no

Izboskan Izboskan no 8/4/20

04 1.98 432 22 537,552 322,531 100 no no no

Oltinkul Oltinkul no 8/4/20

04 3.56 529 16 726,878 275,232

no no no

Marxamat Marxamat no 8/4/20

04 2.9 318 22 930,747 435,360 120 no no no

Ulugnor Ulugnor no 8/4/20

04 0.96 68 8 111,401 38,713 no no no

Paxtaobod Paxtaobod no 8/4/20

04 0.95 558 21 554,748 206,775 no no no

68

Madaniyat no 8/4/20

04 3.2 190 4 70,480 31,030 no no no

Xujaobod Xujaobod no 8/4/20

04 2.7 367 20 830,969 372,551 no no no

Shaxrixon Shaxrixon no 8/4/20

04 3.53 625 45 1,327,683 550,893 no no no

Qurgantepa

Qurgantepa no 8/4/20

04 1.35 388 25 1,233,087 396,764 no no no

Qorasuv no 8/4/20

04 0.72 240 8 165,504 38,952 no no no

Dardoq no 8/4/20

04 0.72 38 3 25,890 12,356 no no no

69

Appendix 4: Horticulture Produce Processing Companies

Horticulture Processing Companies in Andijan Province

Companies Type of products (specification) Capacity

(tons)

Andijan district "MADINABONU ZIYNATI" -LLC Fruit 1,000 "ORBIL INDUSTRY" Private company (PC)

Fruit 1,000

"SAXOVAT BIZNES HAMKOR" LLC Fruit 1,000 "ZAMIN MUROD SAXOVATI" PC Fruit and vegetables 1,000 "ZIROATKOR ISHONCH" PC Fruit and vegetables 1,500 "IXTIYORJON ABDULAZIZ FAYZI" Farmer

Fruit and vegetables 700

Asaka "MASK" Agrofirm LLC Fruit and vegetables 40,000 "ROAD IMPORT" LLC Fruit and vegetables (drying) 25,000 "ASIL DALA MEHNATI" Farmer Fruit and vegetables (drying) 500 "TEMUR AND MALIK" Fruit and vegetables 700 "ANDIJAN-MOSKVA 33" Fruit and vegetables 1,000 "Obod turmush orzusi" Farmer Fruit and vegetables (drying) 15,000

Baliqchi "ANDIJON-O'ZBEGIM" LLC Fruit and vegetables (Jam) 55,000

Buloqboshi "Bukontrastagro" LLC Fruit and vegetables (Jam) 1,000

Buz "Gulxayo Nurli oqshomi" LLC Fruit and vegetables (drying) 2,000 "Vodiy Imkon Invest" LLC Fruit and vegetables (drying) 500

Izboskan "Nasibjon" LLC Fruit and vegetables 2,000

Marxamat "Manzur" Farmer Fruit and vegetables 1,000 "Nuriosiyo" PC Fruit and vegetables (drying) 600

Oltinkul "KO'HINUR-INVEST" PC Fruit and vegetables (drying) 4,000 "Kashtan Elit Agrofirma" LLC Fruit and vegetables (drying) 1,000

Paxtaobod district "EASTERN ROOT ANDIJON" JVC Fruit and vegetables (drying) 5,000 "Inomiddin Isomiddin" LLC Fruit and vegetables (drying) 500 "Meva sabzovotlarni xarid qilish va sotish" PC

Fruit and vegetables (drying) 1,000

"Andijon business solutions" LLC Organization of processing and packing of

leguminous products 5,000

Xujaobod "Navigul" JV Fruit and vegetables (drying) 80,000

Kurgantepa "VODIY QO'RG'ON TARAQQIYOTI" LLC

Fruit and vegetables (drying) 1,000

"Sharq nafis guli" PC Fruit and vegetables (drying) 400 "Oq suv" Farmer Freezing of fruits and vegetables 1,000

Andijan City "BEST NOVO PAC" LLC Fruits 3,000 "DACHA" JSC Grapes 10,000 "EVEREST PREMIUM" PC Fruits 1,500 "GLOBAL INVEST OPTIMA" LLC Fruits 1,000

70

Companies Type of products (specification) Capacity

(tons)

"GUMBAZ HAMKOR LYUKS" LLC Fruits 1,000 "MARVEL AGRO ANDIJAN" LLC Fruits 4,000 "VERY GOOD JUICE" PC Fruits 2,000 "Vodiy sarbon omadi" LLC Fruits 5,000 "Royal silk" LLC Fruits 1,000 "Andijan Vita Service" LLC Fruits 700

Xonobod "Pkizlik nashidasi" PC Fruits 500

279,100

71

Horticulture Processing Companies in Samarkand Province

Companies Type of products

(specification) Total capacity

(tons/year)

Bulungur district

"Afrasiyab mevalari" Joint Venture Company Fruit 20,000 "Bulungur Sandvik" JVC Vegetables 25,000 "Bulungur -1" LLC Grape 3,000 "Mexnat" agrofirm Grape 1,000 49,000

Jonboy district "Lazzat meva JVC Fruit and vegetables 35,000 "Orifen JVC Fruit and vegetables 16,000 "Samarkand Jomboy LLC Grape 10,000 61,000

Ishtixon district

"Mitan sharobi LLC Grape 1,000 1,000

Oqdaryo district

"Dustbek Okdaryo Fruit and vegetables 15,000 "Agro gren farm LLC Fruit and vegetables 12,000 "Turon kup tarmokli LLC Fruit and vegetables 2,000 29,000

Pastdargom district

"Sam-Grape" JVC Fruit and vegetables 1,500 1,500

Payariq district

"Tanais sharbat" LLC Vegetables 10,000 10,000

Samarkand district

"Samfruit" JVC Vegetables 10,000 "Agromir-Juice" JVC Fruit and vegetables 52,000 "Samarkand-Conserva" SC Fruit and vegetables 7,500 Agromir conserva JVC Fruit and vegetables 3,500 "Sugdiona Conserva" JVC Fruit and vegetables 100 Balhien Grape 1,500 74,600

Tayloq district

"Siyor sahovat JVC Fruit and vegetables 25,000 "Bogizagon" JVC Grape 6,000 "Adas-Agro-Invest" JVC Grape 7,000 38,000

Urgut district

"Muminobod" JVC Grape 1,800 1,800

Samarkand city

"Hovrenko" JVC Grape 7,000 7,000

Kattakurgan city

"Shamsidding Bibihomin” JVC Fruit and vegetables 5,000 5,000

Total for Samarkand province 277,900