DUSHANBE, August 14, 2008, Asia-Plus — The Center for Strategic Studies today hosted a conference formally titled “”Measures to Settle Debts of Cotton-growing Farms and Implementation of National Commission’s Information Strategy.”
The conference is considering issues related to problems and measure to settle debts of the cotton-growing farms, press coverage of agricultural reforms and the debt resettlement process.
The conference participants include representatives from relevant ministries and organizations dealing with agriculture, especially the cotton sector.
The conference is organized by the Center for Strategic Studies under support of the UNDP CO Tajikistan, the Canada International Development Agency (CIDA) and the Information Center SPACE.
Speaking at the conference, Ms. Saodatsulton Soibnazarova, chairperson of the sectoral development department within the Center for Strategic Studies, said that debts of cotton-growing farms pose a threat to the vital capacity of the cotton sector in the country.
According to her, cotton farmers now owe $511 million to investors and $87 million to the country’s budget and off-budget funds.
“One of the main reasons for increase in debts of farming units is non-fulfillment by investor companies of their contractual obligations on the terms of supplying financial-and-technical resources in the necessary volumes that has led to decrease in cotton yields by at least 0.7 ton per one hectare,” a senior expert from the think tank said. “The other reason is a complicated procedure of setting prices for the resource supplied, payments for cotton, posting interest, etc.”
She added that imperfect tax collection system is also an important reason for increase in cotton farmers’ debts and the rate of social tax for farmers is very high.
Ms, Soibnazarova noted that lack or too poor access of farmers to various information about cotton-pricing and production-financing mechanisms as well as farmer’s poor legal and economic skills also led to increase in their debts.
A new mechanism of financing of the cotton sector has been introduced in Tajikistan this year. Under this mechanism, the cotton-growing farms are funded by loans provided by banks. There are 34 cotton-growing farms in Tajikistan; of them 19 are in Khatlon, 10 in Sughd and 5 of them are districts subordinate to the center.
Cotton makes an important contribution to both the agricultural sector and the national economy. Cotton accounts for 60 percent of agricultural output, supports 75 percent of the rural population, and uses 45 percent of irrigated arable land. At the national level, it is an important source of both export earnings and tax revenue. Tajikistan is the world’s fourth largest exporter of cotton, and there is strong demand on international markets for its high quality product.
