Agricultural restructuring in Uzbekistan: An empirical analysis of land and labour arrangements

Abstract

The collapse of the Soviet Union led Uzbekistan to carry out farm restructuring and reform policies in agriculture during the last three decades. It is a key question for both the policymaking and research world to determine which model is alternative to former collective and state farm systems given the local context. In this study, empirically I have investigated land and labour relations in the context of continuous farm restructuring in Uzbekistan. Overall, this research work consists of four main parts: conceptual framing, overview of agricultural development, establishment of cotton clusters and labour incentives in agriculture. Methodically, this study covers both qualitative and quantitative research methods. In 2018, the government of Uzbekistan initiated a clustering policy in agriculture for which the cotton sector was a pioneer. This study explores the recent changes under the emerging cluster system through original case studies of the current situation and a review of emerging ‘grey literature’. The analyses show an organizational mismatch between clusters in theory and clusters in the Uzbek cotton context. By organizational design, clusters do not compete for the cotton of farmers. The cluster policy eliminated neither the procurement price nor the quota system for cotton. The cases studied show the supervision of cotton growing passed from the state to private enterprises that organize the clusters. This transformation has perpetuated monopsony conditions under which farmers have no alternative marketing channels. The input markets have been disconnected from state agencies, however farms lack access to private input markets, since clusters supervise and monitor the inputs used by farmers. I confirm the grey literature reporting that forced, and child labour has receded. Overall, from the farmers’ perspective, recent reform steps led to moderate changes at best, while clusters started to play a dominant role in cotton sector. This study contributes the understanding of labour arrangements in agriculture as well. In this research, I investigate the labour contractual forms and their effect on the farm production. I argue that different payment methods for the workers influence the farm outcome (revenue, profit). In this sense, I test the hypothesis using cross sectional farm survey data collected in Uzbekistan. I compare farms, which use mixed bonus or piece rate methods with farms, which use time rate labour contracts. The findings show the statistically significant effect of mixed bonus system on the farm outcome. Meanwhile, the strength of the effect of mixed bonus system is higher than piece rate system. I learn that incentivised workers through a mixed bonus system provide more effort, which increases farm output. The conclusion discusses the implications for a broader understanding of labour relations in agriculture of Uzbekistan.