In a meeting chaired by President Shavkat Mirziyoyev on November 9, the challenges within Uzbekistan's cotton-textile clusters came under scrutiny.
Financial irregularities were observed between clusters and farmers, with 122 clusters indebted to the Agricultural Fund, while 27 clusters failed to pay farmers for the 2022 cotton harvest. Likewise, farmers owed money to clusters.
In response, a new system for establishing clusters and managing relations with farmers was endorsed. The criteria for new clusters in each region will include financial performance, production capacity, and technical requirements, mandating a minimum two-step process.
Farmers are now empowered to engage in futures contracts with any cluster within their region and sell surplus through the stock exchange. Additionally, preferential loans, constituting a 60% advance for next year's cotton cultivation, will directly benefit farmers.
To streamline cluster financing, officials received instructions to institute a new procedure. The full processing of this year's cotton harvest is anticipated to elevate industrial product production to $9.6bn, with exports reaching $4.5bn in 2024.
In support of the textile industry, novel mechanisms include a 1% social tax for enterprises selling less than 50% of dyed fabric domestically, property tax installments, and covering 50% of transportation costs for cotton and artificial fiber imports until January 1, 2025. Exemptions from customs duties on essential technological equipment for textile and sewing-knitting enterprises are also introduced.
Significant projects, such as gauze and dyeing plants in Ukurchirchik and artificial fiber, gauze fabric, and a dyeing plant in Karakalpakstan, are underway. These ventures, scheduled for launch next year, will be offered to entrepreneurs based on industrial mortgages. Regional heads are tasked with overseeing the implementation of these large-scale projects.
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