Afrosiab St. 4B, Office 201, Tashkent, Uzbekistan 100031


April 11, 2017
Agriculture & Food Processing Subcommittee
under Trade & Investment Committee
Uzbekistan AmCham Conference Room
Tashkent, Uzbekistan

Participants: 28, see Attendance List following.

Opening at 1000, Closing at 1105:
Chairman Dale Henry welcomed participants and special guests from IFC to brief the committee on its Sustainable Development of the Cotton Value Chain in Uzbekistan project.

Presentation by Oksana Varodi (Ukrainian, 18 years with IFC):
This project aims to bring Environmental, Social and Financial Sustainability to Uzbekistan’s Cotton Value Chain. A package of productivity improvements (USA examples: conservation tillage, laser land leveling and irrigation control, precision seeding, advanced plant protection measures), economic balance of manual / mechanized harvest along with access to higher value markets (based on the Better Cotton Standard System – BCI) will meet these targets while mitigating against the risks of forced harvest labor issues.

Uzpakhtasanoatexport Holding Company is the key national level partner to IFC, acting in a consulting role. The Ministry of Labor, Trade Unions, local district government (“Hokimiyat”) Agriculture Department and Ministry of Agriculture and Water Resources will promote the Project at lower levels.

Project pilot phase January 2017 through 2018, followed during 2019 – 2022 with rolling out to eventually include all of Uzbekistan:
a) Manual harvest: Fergana region (6 farms) – the more uniform crop along with realistic labor prices will
give labor an economic advantage in this dense population part of Uzbekistan;
b) Mechanized harvest: Djizzak region (4 farms);
c) 2nd & 3rd party audits and invitation to BCI;
d) Targeted gins;
e) National Marketing.

Comments by Joachim Lenz (German Agronomist, Farmer & Organic Certification Auditor):
Tajikistan (through GIZ, using non-GMO cotton seed from Turkey) and Kazakhstan (through private networks) have been accessing the BCI process in the last few years. BCI allows for using GMO cotton seed.

BCI follows a stepped registration process, starting with Minimum Requirements in the first year, and additional Improvement Requirements for the subsequent 3 year period which makes it easier for producers and processors to meet those standards over time.

By 2020 the BCI market is expected to be 30% of world cotton production. In the past BCI did not gain a hearing with International Development Organizations in Uzbekistan but indications now are that the country is wanting to penetrate this market.

Other Remarks:
60% of Uzbekistan’s cultivated land continues to be tied up in the cotton / wheat rotation, so this project will be extremely important from a socio-economic aspect.

German, French and USA precision cotton planters are available. Significant savings of fuel, soil moisture and increase in soil organic matter is possible under conservation agriculture. Some cotton farmers are paying labor premiums to brigades of local pickers who do a better job as well as increased prices for the 2nd picking because the crop is less dense than 1st picking.

American cotton producers using Roundup Ready (GMO) cotton seed typically spray for weeds 3 times per season compared to 18 times in the past – but more attention must be paid to changing up chemical and mechanical cultivation techniques over time due to potential for developing chemical resistances (extra note by Dale Henry who took 12 Uzbek cotton farmers or MAWR officials to California, USA on a Conservation Agriculture tour in 2015).

Introduction of and Contribution by other Participants:
• several companies produce and export cotton yarn and / or textiles [Train Consultancy, UzTex (27K tons of yarn, teeshirts), Indorama Global (also looking to import fertilizers)];
• Cargill Cotton (purchased cotton 1991 – 2015, interested to buy again);
• Wakefield Inspection Services (testing Uzbek cotton quality for buyers over the last 25 years, suggestions to look also at Australia’s cotton production and processing industry – 39 gins vs Uzbekistan’s 99 gins (producing the same amount of bales), 5 Tons / ha vs Uzbekistan’s approximately 3 Tons / ha average), importance of following complete package of technical interventions (case of reducing expenditures for proper defoliant in early days of introducing Case harvesters, only 13% of 2016 Uzbekistan harvest picked by machines, Uzbek cotton seed is quite adequate);
• Coca Cola (looking into exporting agricultural produce);
• InterConcepts (interested in restoring the role of kenaf production & cotton – kenaf processing for canvas fabric, substantially increasing the per cent of cotton price paid to human cotton pickers for improved incentives);
• Central Asian Seed Co. (private processing of cotton seed in Syrdarya & Namangan regions. Following trends such as expansion of USA cotton acreage by 25% due to increased cotton prices, substantial increases in purchase of cotton in Vietnam and Cameroon, increased activity of the Liverpool Cotton Exchange, awareness of 6 private cotton / seed producer companies in Uzbekistan, suggestion to invite greater project participation by the private sector);
• USA Embassy (“less quantity of the better quality” – focus on profitability, Uzbek genetic engineering of cotton seed).

Minutes submitted by: Nargiza Saliyeva with support from Dale Henry of Oasis FES LLC

Minutes approved April 24, 2017 for distribution by: Anvar Nasritdinov, IFC Project Manager