World Bank Document

productive deployment of resources, especially in cotton, are addressed.  Currently, 

Uzbekistan’s farming system is dominated by cotton and wheat, which account for 70 percent of 

cultivated land but less than 20 percent of gross agricultural output.  Smallholder (dehkan) farms 

operate on less than 10 percent of land but produce about 70 percent of gross agricultural output 

through horticulture and livestock. Export earnings from horticulture have recently exceeded those 

from cotton. Cotton production remains largely controlled by state-level decisions and supported 

by state-controlled monopolistic companies with limited innovation and efficiency. As a result, 

cotton continues to use not only excessive land and water resources but also government resources 

through large and inefficient subsidies that distort farming decisions, offer non-remunerative 

prices to farmers, limit private investments, and contribute to unsustainable and socially 

unacceptable practices in cotton production, especially at harvest time. Against this background, 

Focus Area 2 is built around two objectives designed: (a) to facilitate a market-led modernization 

of the cotton sub-sector; and (b) to sustain agricultural growth through diversification to higher-

value, more job-intensive but less water-intensive crops. 

 

50. 

While contributing towards market-led modernization of cotton, the WBG will help 

the government implement its recently prepared Action Plan for Improving Labor Conditions,