The Fruits of a Command Economy

by Nathan Hamm on 10/13/2004

Turkmenistan’s cotton industry is an absolute mess, and IWPR reports that the response is likely a rush to pass new land reforms.

The disappointing cotton harvest has raised many questions about the state agricultural policy, making the possible implementation of the draft law very timely indeed. However, President Saparmurat Niazov refuses to admit that there is a serious problem with the agricultural production, and has chosen to blame individuals instead.

Niazov has already punished his officials for the poor return on the harvest. At a September 27 cabinet meeting, he docked three months’ wages from several high-ranking officials including the deputy prime minister in charge of agriculture, the heads of two state agricultural companies, the water resources minister, and all but one of the republic’s regional governors.

However, one former high-ranking agriculture ministry official – who spoke to IWPR on condition of anonymity – described the president’s displeasure as “misplaced”. The poor harvest is not the result of official negligence, he said, but rather a crisis in the agricultural system instead.

Turkmenistan is well-below target for this year’s harvest.

The target set for this year’s harvest was 2.2 million tonnes, and officials claim that around 600,000 have been collected so far. But these figures are disputed. Insiders claim that around half that figure has been harvested and that the entire 2004 crop is unlikely to top more than around half a million tonnes.

The agriculture ministry claims that around 800,000 hectares were planted with cotton this year. But the former official told IWPR that in fact more than 1.25 million hectares of land were sown with the crop – to allow regional heads to boast that they had collected a record harvest of cotton per hectare.

As in Uzbekistan, many of the problems can be traced back to excessive government control over the entire cotton industry.

Nepes-aga, a farmer near the capital Ashgabad, told IWPR that he was forced to plant cotton on the two hectares of land he rents from the authorities, but that the seeds and fertiliser provided by the state proved to be of poor quality.

“As a result, there was no harvest this year, and we were left with nothing,” he explained. “It’s good that our two elder sons have jobs in the city – we live on their earnings.”

The state supports farmers who grow grain and cotton, giving them seeds and providing equipment to till and irrigate the land – in return for a very low purchase price when the government buys the crop from them.

Economists argue that this system is actually helping farmers to get into debt rather than aiding them to produce a good harvest. It results in a vicious cycle where farmers are increasingly restricted in what they can afford to invest in the land, knowing that the eventual return from the state will be less than they need to prepare for the following year.

Emphasis mine.

The problem seems so intractable that it’s hard to make any comment.

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– author of 2991 posts on 17_PersonNotFound.

Nathan is the founder and Principal Analyst for Registan, which he launched in 2003. He was a Peace Corps Volunteer in Uzbekistan 2000-2001 and received his MA in Central Asian Studies from the University of Washington in 2007. Since 2007, he has worked full-time as an analyst, consulting with private and government clients on Central Asian affairs, specializing in how socio-cultural and political factors shape risks and opportunities and how organizations can adjust their strategic and operational plans to account for these variables. More information on Registan's services can be found here, and Nathan can be contacted via Twitter or email.

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