Assessment of the
CHALLENGES AND BARRIERS TO ENTRY
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Assessment of Regional Agri Logistics Centers in Uzbekistan FINAL
1.4 CHALLENGES AND BARRIERS TO ENTRY
While the GoU has undertaken significant industry-friendly reforms to promote export-led growth in the agricultural sector in Uzbekistan, there remain some barriers faced by horticultural farmers as summarized below: Currently, farmers pay a 15% VAT (initially 20% until October 1, 2019) to sell produce to domestic retailers. As a result, farmers are choosing to sell in the informal markets and bazaars. This may also include clandestine exports via Kazakh traders/transporters. In addition, there are challenges with access to finance for smallholder farmers. In order to overcome these challenges, the GoU has offered a 5% interest rate for loans to small-holder farmers to USAID.GOV ASSESSMENT OF REGIONAL AGRI-LOGISTICS CENTERS IN UZBEKISTAN | 12 grow certain horticulture products which can be exported and to incentivize small-holder farmers to grow according to international standards. Kazakhstan charges Uzbekistan carriers a special tariff to carry products into or through the country, whereas Kazakh carriers are not subjected to these tariffs. As a result, it is more expensive to use Uzbek carriers, which artificially inflates the cost of goods landed in Kazakhstan, Russia, etc. The GoU measures the amount of exports by region. As a result, some regional government administrators pressure farmers to only sell to traders who enter the region to purchase. For example: often village farmers will have an excess of a certain product and may wish to sell to an aggregator from another region who has buyers. The pressure is put on them to keep the product in the region. With no buyers to sell them to, the farmers must sell into the local market. In addition, farmers are recommended to grow only certain crops in certain regions as it is considered more profitable and the region has more favorable climatic conditions for certain crops. In many cases, farmers also lack linkages to potential buyers in export markets. Closer cooperation and linkages between Uzbek farmers and buyers in the export markets would inevitably serve to improve the quality and quantity of the agricultural products produced, based on demand and buyer tastes. Download 1.01 Mb. Do'stlaringiz bilan baham: |
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