Water Management And Agricultural Development In Central Asia: Case Of Uzbekistan

Uzbekistan has been going through the transition process for the past 10 years. Many old collective and state owned production units have been privatized. The emergence of new businesses in manufacturing and retail service sectors in the small and medium size has been observed. Liberalization of markets has also started, but the progress has been slow in Uzbekistan. Agriculture in Uzbekistan still plays a significant role in the national economy. This sector occupies about 27.0 percent of the Gross Domestic Product (GDP) in production (Figure 1). It also provides working opportunities for 36.2 percent of the total labor force (Figure 2). The slow pace of the changes in these figures indicates the slow progress in reforming the structure of the economy in Uzbekistan. Agricultural products are the major sources of foreign currency earnings for this economy. Cotton has been historically produced taking advantage of the natural conditions suitable for this crop’s cultivation with the existence of extensive rural infrastructure in water resource management that was developed during the period of the Soviet Union. Cotton has remained important as a strategic crop for hard currency earning. This crop earns about one third of the foreign currency revenue through exports. Private ownership of agricultural land has not been allowed even after the country’s independence in 1991 from the Soviet Union. The government has been offering long-term leasing contracts to the private farmers for their use of agricultural land. Typical lengths of the leasing contracts range between 10 years to 20 years. The share of the private farms in agricultural production stays still small, but this sector should play a major role in agricultural production as the progress is made in liberalizing the agricultural and related markets in the future. This current study looks into issues related with technical efficiency and water resource management for this important sector in Uzbekistan agriculture. For this sector’s survival in the market economy, the improvement in technical efficiency is critical. In this study, using a set of surveyed data for private farms from the Djizak region of Uzbekistan, technical efficiency in the individual farm level is estimated and the factors accounting for the difference in technical efficiency are identified to derive policy implications. Water resource management issues will be considered there. The structure of the paper is as follows. The current status of Uzbekistan agriculture is described first. The methodology and data utilized in this study is explained next. The results of data analysis are presented in the following section. Then, discussions are made to derive policy implications in the last section.