DUSHANBE, December 26, Asia-Plus — Beginning on January 1 2008, a new mechanism of financing of the agrarian sector will be introduced in Tajikistan and the government will resolve the issue of restructuring cotton farmers’ debts within the next few days, Asia-Plus has learned from Safar Mahmadiyev, head of the economic policy department of the Ministry of Agriculture and Environmental Protection (MoAEP).
According to him, a process of restructuring the debts will last till 2020. “Until 2010, farmers may not think about debts; they will start gradually repaying their debts only after 2010 at the rate of $40-$50 per hectare,” the MoAEP official said.
He added that cotton farmers now owe $511 million to their creditors, taking into account this year’s cotton harvest, which has not yet been sold.
“A special center has been set up to study debt crisis among cotton producers,” said Mahmadiyev, “The major of the cotton debts is interest payable and fines.”
The MoAEP official noted that as of January 1 2007, cotton farmers’ debts have amounted to $409, while their profit for 2,000-2,006 has amounted to some $1.3 billion.
“Since 2003, debts of farming units for water and electricity have reached $164 million and they will be exempted from repaying them,” Mahmadiyev said.
According to the MoAEP, more than 30,000 dehqon (peasant) farms now function in Tajikistan, and futures companies have worked in the country since February 1997. At present there are 40 futures companies; the largest of them are HIMA and Karimi Olimzod.
Cotton makes an important contribution to both the agricultural sector and the national economy o Tajikistan. 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.
