Friday, October 28, 2005
More on Cotton in Central Asia
One thing that is apparent is that cotton production in Central Asia reached its peak in the 1980s. Total production in Central Asia and Azerbaijan has gone from over 3.2 million metric tons in 1980 to a little more than 1.7 million in 2004. Twenty five years ago this region accounted for almost a quarter of all the world's cotton. Today it only produces 7%. For Uzbekistan and Tajikistan there has not been much to replace it as a source of revenue. Uzbekistan now exports some wheat and Tajikistan has aluminium and hydro power. But, increasingly these two countries along with Kyrgyzstan have been exporting labor to Russia and Kazakhstan. There are now an estimated one million Tajik citizens currently working in Russia out of a total population of less than six and a half million people. The economies of Kazakhstan and Russia are currently doing very well in comparison to their southern neighbors as a result of the export of oil. It looks like migrant workers will replace cotton as Central Asia's most important export. This will not be the first time in history that such a shift has taken place.
Posted by J. Otto Pohl at 2:01 PM
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I'm wondering what the reasons are for this decreas in cotton production in Central Asia. I'll read more of the archives, but why is it that countries that were producing so much cotton are now being made to export labor?
Thanks for stopping by. Under Soviet rule, Moscow subsidized the region at a loss. It also geared the region, particularly Uzbekistan, towards the production of cotton. They produced cotton for the USSR and export and little else. In exchange they got fuel, food, finished goods and almost everything else. The value of these inputs exceeded the worth of the cotton. When the USSR collapsed these subsidies ended.
The loss of Soviet subsidies and protected internal market led to a decline in production of about 30%. For instance Moscow used to provide Uzbekistan with much of its grain. The loss of this support has meant that Uzbekistan has had to acquire food from elsewhere. The Uzbek government dealt with this food deficit by switching land from cotton to the cultivation of wheat. Uzbekistan now exports wheat.
Another reason was the discentive to produce more cotton by the heavy indirect taxes imposed. Cut off from Moscow's subsidies, the export of cotton became the Uzbek regime's main source of income. It purchases cotton from farmers at a price far below market price and sells it on the international market. It then pockets the difference. The artificially low price paid by the state is a a discentive for farmers to produce more than their minimum quotas.
I will post more on the reasons behind the post-Soviet decline in Central Asain cotton production later.
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