DUSHANBE, August 29, Asia-Plus — Tajikistan intends to tackle the problem of debt of cotton farmers to domestic and foreign creditors through working out a new mechanism of financing the country’s cotton sector, Shavkat Bozorov, the head of unit for implementation of project for settling cotton farmers debts, remarked at a briefing in Dushanbe on August 29.
According to him, “the main locomotive for launching mechanism should become restructuring of the cotton farmers debts.” “Specialist have not yet determined precisely a total debt of the cotton-growing farms for investors,” said Mr. Bozorov, “However, according to preliminary data, the Tajik cotton farmers’ debt to domestic and foreign creditors now fluctuates from US$270 million to some US$300 million.”
“Today, farming units do not participate in distribution of income and they do not know in what prices investors realize cotton fiber,” said Mr. Bozorov, “Actually, producer do not have any incentives to grow cotton, and under the present system of financial-economic relations cotton growing proves to be at a loss.”
According to him, it is the main reason for reduction in cotton yields and areas under cotton in the country. “To rising prices and non-supply of fuel and mineral fertilizers farming units respond by untargeted use and misappropriation of funds,” said Bozorov, “To cheating and short weight by cotton ginning factories they respond by sale of cotton to unauthorized companies.”
“Proceeding from this, we have deiced to work out the new mechanism of financing the cotton sector taking into consideration shortcomings of the present system of economic relationships along the whole chain of production-processing-realization of the cotton product,” Shavkat Bozorov said.
To speed up this process a special working group has been set up for formation of the new mechanism of financing cotton growing in the republic. The main objective of a program for restructuring debts of the cotton farmers is financial revival and rehabilitation of solvency of the cotton farming through mitigating their debt obligations and providing conditions for serving and clearing off the debt.
During the briefing it was also pointed to the necessity of providing cotton growers with real access to direct financial and credit resources without mediators.
11,000 cotton-growing farms have to date operated in Tajikistan. 90 present of them are in debt to domestic and foreign creditors. Tajikistan’s largest futures companies are “Ismoili Somonis – 21
st
Century” holding, open joint stock company “Olimi Karimzod”, “HIMA” corporation and so forth.
