Impacts of Liberalization on Agriculture and Trade: A Case Study of Uzbekistan

The agricultural sector of Uzbekistan is still characterized by unsustainable production patterns and the agricultural institutions of the country are controlled to a large extent through government intervention. The Government takes the decision to grow cotton and wheat and fix the output prices. The decision about the production quotas for cotton and wheat leads to a restricted area and water availability for growing other crops. The country is affected by a locally occurring climate change as well as regional climate change threatens to aggravate existing water use conflicts. The current and expected climatic conditions are showing the additional irrigation applications for a sustainable and fruitful agricultural production. The partial implementation of reforms such as privatization and liberalization of agricultural markets affect the development of agriculture and agricultural trade in Uzbekistan. This paper highlights the major effects of market and price liberalization on agricultural trade using the partial equilibrium model AGRISIM which is based on the "Static World Policy Simulation Model" (SWOPSIM)of the U.S. Department of Agriculture (USDA).With the help of the model, changes in general economic conditions and policy intervention in agricultural markets and foreign trade are simulated. The study suggests that the issues of sustainable agriculture development and food security in Uzbekistan can be achieved through, liberalization of agricultural markets and trade specially wheat and cotton.