Supplementary Document 15: Detailed Sector Assessment - Agriculture, Natural Resources, and Rural Development - Asian ...

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Supplementary Document 15: Detailed Sector Assessment - Agriculture, Natural Resources, and Rural Development - Asian ...
Horticulture Value Chain Infrastructure Project (RRP UZB 51041)

      Supplementary Document 15:

Detailed Sector Assessment – Agriculture,
Natural Resources, and Rural Development
Supplementary Document 15: Detailed Sector Assessment - Agriculture, Natural Resources, and Rural Development - Asian ...
TABLE OF CONTENTS
1.           INTRODUCTION                                                                                                                        1
2.           AGRO-ECOLOGICAL CONDITIONS IN THE PROJECT PROVINCES                                                                                 3
     A.      Agro-ecological features .................................................................................................... 3
     B.      Climatic features of Andija Province .................................................................................. 5
     C.      Climatic features of Samarkand Province .......................................................................... 6
3.           ORGANIZATION OF THE HORTICULTURE MARKET SECTOR                                                                                      7
     A.      The Current Market institutions .......................................................................................... 7
       1.    Market Institution at National Level .................................................................................... 7
       2.    Market Institution at Provincial Level ............................................................................... 12
       3.    Market Institution at Municipal Level ................................................................................ 13
     B.      Stakeholders at Large ...................................................................................................... 13
     C.      Other Stakeholders .......................................................................................................... 14
4.           KEY HORTICULTURE PRODUCTS                                                                                                         15
5.           SECTOR PERFORMANCE                                                                                                                16
     A.      Crop Areas ....................................................................................................................... 16
     B.      Production ........................................................................................................................ 17
     C.      Consumption .................................................................................................................... 19
     D.      Horticulture Share in the Agro-industry ............................................................................ 20
     E.      Export of Horticulture Products ........................................................................................ 23
     F.      Share of Horticulture Products in the National Production .............................................. 31
     G.      Share of Horticulture Products in the Wholesale Trade .................................................. 31
     H.      Losses in the Horticulture Chain ...................................................................................... 31
        1.   Crop Losses ..................................................................................................................... 31
        2.   Transportation Losses ..................................................................................................... 32
        3.   Overall Losses ................................................................................................................. 32
6.           CURRENT MARKET INFRASTRUCTURE                                                                                                     33
     A.      Existing Wholesale Markets ............................................................................................. 33
       1.    Wholesale horticulture markets at National level ............................................................. 33
       2.    Andijan Markets ............................................................................................................... 33
       3.    Samarkand Markets ......................................................................................................... 33
       4.    Tashket Markets............................................................................................................... 34
     B.      Horticulture Chain Analysis .............................................................................................. 34
       1.    The structure of fruit value chain in Uzbekistan ............................................................... 34
       2.    Transportation .................................................................................................................. 35
       3.    Horticulture Processing .................................................................................................... 35
       4.    Cold Storage .................................................................................................................... 36
     C.      Norms and Standards ...................................................................................................... 38
     D.      Assessment of Needs ...................................................................................................... 40
     E.      Required Improvements for Sustainable Sector Development ........................................ 41
7.           MARKET DEMAND ANALYSIS                                                                                                            42
     A.      Structure of the horticulture marketing ............................................................................. 42
     B.      Domestic Markets ............................................................................................................ 42
     C.      Supermarkets ................................................................................................................... 42
     D.      Use and Distribution of the Horticulture Produce ............................................................. 42
     E.      Export Markets ................................................................................................................. 43
8.   SECTOR FORWARD STRATEGIES                                                                                                                 44
     A.      Key strategies in the Agriculture Subsector ..................................................................... 44
Supplementary Document 15: Detailed Sector Assessment - Agriculture, Natural Resources, and Rural Development - Asian ...
B.     Diversification of traditional agriculture ............................................................................ 45
C.     International donor Funded Projects ................................................................................ 46
D.     ADB Recommended Roadmap for Horticulture ............................................................... 46
  1.   ADB Sector Experience and Assistance Program ........................................................... 46
  2.   ADB Assistance to Uzbekistan in the Sector ................................................................... 46

APPENDIXES
Appendix 1: Sector Regulatory Framework – Selected Items ................................................ 48
Appendix 2: List of Projects Implemented, being carried out or under study by the RRA ...... 65
Appendix 3: Characteristics of Horticulture products markets in Andijan province ................. 67
LIST OF ABBREVIATIONS

ADB    Asian development bank
CPS    Country Partnership Strategy
DCM    Decree of the Council of Ministers
EBRD   European Development Bank
EU     European Union
FAO    Food and Agriculture Organization
ha     hectare
IBRD   International Bank for Reconstruction and Development
IDA    International Development Aid
IFAD   International Fund for Agricultural Development
IFI    International Funding Institution
JICA   Japan International Cooperation Agency
JSC    Joint Stock Company
RFP    Request for Proposal
RCM    Resolution of the Cabinet of Ministers
RoU    Republic of Uzbekistan
RRA    Rural Restructuring Agency
TOR    terms of reference
1. INTRODUCTION

1.     The Republic of Uzbekistan (RoU) is endowed with particular agro-ecological conditions
which provide favorable basis for its horticulture subsector. Consistent implementation of
measures to develop and diversify the industry has allowed over the past 5 years ensuring the
expansion of the resource base and increasing the volume of products. In particular, fruit and
vegetable products increased, in particular grapes increased 160%, meat products by 140%,
and dairy products by 140%.1

                                           Figure 1.1 Map of Uzbekistan

2.       Policy reforms which took place in horticulture subsector in recent years provide
incentives to support private investment and efficient markets and promulgate policies that
promote the optimum valorization of horticulture resources. Such as the Presidential Decree PP-
2505 dated 5 March 2016 "On measures to further develop the raw materials base, deepen the
processing of fruit and vegetable and meat and dairy products, increase production and exports
of food products in 2016–2020" and PP-2716 dated 6 January 2017 "On additional measures to
further deepen processing and create capacities for storage of fruit and vegetable products in
2017–2018" provides for the implementation of 434 projects in the amount of $740.1 million in
the following areas:
      (i)    163 investment projects focused on creating new production facilities for processing
             of fruits and vegetables in specialized areas (districts);

1   Press release on the theme: Reforms and prospects for processing agricultural products. Tashkent. 4 April 2017.
    https://mineconomy.uz/ru/node/1539
(ii)    159 projects for the construction of warehouses equipped with refrigerating chambers
               for storing export-oriented fruit and vegetable products;
      (iii)    36 projects to establish enterprises for the production of packaging materials; and
      (iv)     39 investment projects for the processing of meat and dairy products.

3.      In accordance with the Strategy Action plans of the country, there were envisage
modernization and intensive development of agriculture, providing reduction of crop area under
cotton for 49,000 ha and 10,000 ha of grain areas. In the shortened fields, it is planned to sow
crops such as potatoes for 8,100 ha, vegetables for 27,200 ha, intensive gardens for 5,900 ha,
vineyards for 2,900 ha, fodder crops for 10,900 ha, and 4,000 ha of oilseeds (footnote 1).

4.      The structural reforms emphasize the (i) expansion of the raw material base of the food
industry, (ii) development of deep processing of agricultural products, (iii) full provision of
domestic market with domestic products, and (iv) export of finished products with high added
value. In this regard, there were plans of forming 14 logistic centers for storage, sorting,
calibration, processing and packaging of exported fruit and vegetable products with a capacity of
over 310,000 tons are being created to increase the export capacities of the country.

5.     Implementation of these projects will increase the share of processing volume of fruit and
vegetable production by 24% in 2017, which will ensure the creation of additionally 4.6 thousand
new jobs. During the period 2017–2021, the production of food products is expected to increase
by 140%, including fruit and vegetables and grapes by 140%, meat products by 130%, and dairy
products by 150%. Export of fruit and vegetable products in 2021 will increase by 230% as
compared to 2016, export of fruit and vegetable processed products by 200% (footnote 1).

6.      The geographic trend of the exports of processes horticulture products will also extend to
other countries such as China, Korea, the European Union, and United Arab Emirates in
particular.

7.     Last year’s performance indicated that sector enterprises of Uzbekistan exported
818,500 tons of fruits and vegetables in 2016,2 representing an increase of 38.3% in comparison
with 2015. In 2017, exports are forecasted at 1.270 million tons (footnote 2). Horticultural export
earnings trend has also surged in recent years, growing from USD 373 million in 2006 to USD
1.283 billion in 2014.3 Uzbekistan ranks 48th among the largest exporters in the total world export
volume.

8.     The total land assigned to horticulture in 2016 is estimated at 760,100 ha, significantly up
from the 691,500 ha in 2012. This accounts for about 20.5% of the aggregate sown area, as
compared to grain fields (41.8%), and cotton crops (34.1%) (footnote 3).

9.      The total horticulture production in Uzbekistan has reached 21,100,0004 tons in 2016 and
is expected to keep this trend in 2017 which places the RoU as the leader among the main
horticulture producers in Central Asia. Accordingly, due to the convergence of increasing export
demand and to the introduction of appropriate policies, the sector market has considerably
expanded in latest years.

2   Brief     news:      On     export   of     fresh    and    processed      fruit  and     vegetables     in    2016
    (http://agro.uz/ru/information/about_agriculture/422/7720/)
3   Calculated according to the information which is received from Statistics Committee of the Republic of Uzbekistan.
4   Brief     news:      On     export   of     fresh    and    processed      fruit  and     vegetables     in    2016
    (http://agro.uz/ru/information/about_agriculture/422/7720/)

                                                           2
10.    In 2016, RoU has more than 132,000 farmers operating a total crop area of 3,138,000 ha
(average crop area per farmer 23.8 ha), and 4.769 million backyard households5 (average crop
area per farmer 0.10 ha; total crop area 480,000 ha) (footnote 3). In Andijan province, there are
more than 15,000 farmers cultivating a crop area 196,500 ha, representing some 16.4 ha per
farmer. The dehkan (small farms) households are estimated at 481,900 with a total land area of
28,400 ha (footnote 3) approximately 0.06 ha per household. In Samarkand, there is more than
19,900 farmers, cultivating 297,400 ha, around 15.0 ha per farmer. The dehkan households are
more than 511,100 operating some 79,400 ha (footnote 3), or 0.11 ha per dehkan on average.

11.     Growing fruits and vegetables is among the most profitable activities on both dehkan and
private farms and, over the last ten years, the incomes generated from the subsector comprise a
growing share of national gross domestic product. Nonetheless, the trade market value of fresh
horticultural goods depends narrowly on their careful handling and rapid delivery to destination
markets. Particular care to management of risks related to phytosanitary conditions and food
safety in general is also an essential component in the distribution chain. In current times, it is
essential to meet standards and requirements set under international trade agreements and by
governments of importer countries where food safety hazards are carefully monitored and
controlled at all stages of the food distribution chains, from field to consumer.

12.     Considering the growing importance that the horticulture subsector is having in the
country’s economy, the Government of Uzbekistan (GoU) has undertaken reforms encouraging
the expansion of horticulture in exchange of cotton and other less profitable crops, providing
national and internationally-funded loans to farmers and encouraging small to large scale
industrial processing of horticultural crops. The GoU has also initiated additional institutional
reform aimed at facilitating exports of fresh and processed horticultural products. Under the
reform, the GoU has undertaken a number of donor-funded projects aimed at ensuring steady
development of all components of the horticulture subsector chain, from production down to
conservation, transformation, marketing, and export.

13.     The Horticulture Value Chain Infrastructure Project (HVCIP) will have beneficial impact to
all stakeholders along the value chain. The proposed wholesale market and logistic center is
designed to serve local and external market. The new holistic wholesale markets will foster the
production of horticultural crops due to increased export and reduction of postharvest losses due
to improved infrastructure and cold chain practices. Traders will exchange goods and services
under one roof.

                  2. AGRO-ECOLOGICAL CONDITIONS IN THE PROJECT PROVINCES

      A. Agro-ecological features

14.  Uzbekistan’s continental climate with hot summers is ideal for growing apple, pears,
pomegranates, cherries, apricots, peaches, and other popular fruit crops.

5   See the “Law on Dehkans” No. 604-I of 30.04.1998.

                                                        3
Figure 2.1 Climate classification of Uzbekistan according to Köppen

15.     According to the regional classification system,6 Uzbekistan is in the middle Asian soil
climatic zone, characterized by a continental (dry) climate, with soils that differ from those of the
northern regions of Euro-Asia. The irrigated areas of Uzbekistan are located in three climatic
zones: (i) northern, (ii) central, and (iii) southern.

16.    The northern climatic zone comprises the Republic of Karakalpakstan, the Khorezm
region, and the foothill districts of Tashkent and Samarkand. This zone has the shortest
vegetative growth period (180 days to 200 days); the sum of temperatures does not exceed
3,600°C to 4,000°C, i.e. the sum of temperatures above 10°C during the growing period. In this
zone, crops such as cotton, rice, melon, vegetables, and different fruit trees are grown. The
summer temperatures range from 35°C to 42°C during the day, and 20°C to 28°C at night.

17.     The first subzone of the northern climatic zone includes the northern districts of the
Republic of Karakalpakstan and Khorezm Province. The soils are old-irrigated, hard, and loamy.
The average water penetration is low and the water is highly saline. The groundwater has a high
salt content (12 galloon per liter [g/l] to 30g/l).

18.    The second subzone (foothill areas of Tashkent and Samarkand) of the northern climatic
zone has sierozems and sierozem meadow soils, with a low salt content. The ground water
contains little salt (1g/l to 3g/l); the vegetative period is of 200 days; the sum of temperatures
does not exceed 3,600°C to 4,000°C; the amount of rainfall is 360 mm to 400 mm a year, falling
mostly in the winter and early spring.

19.   The central climatic zone includes the Fergana valley, Andijan, Tashkent, and
Samarkand. In this zone, the vegetative period is from 200 days to 220 days, the sum of
temperatures 4,000°C to 4,200°C; evaporation is higher than rainfall. In this climatic zone, crops

6   Fertilizer use by crops in Uzbekistan. Food and Agriculture Organization Corporate document repository. Natural
    Resources Management and Environment Department. Tashkent.

                                                         4
such as cotton, wheat, barley, grapes, tobacco, potatoes, tomatoes, and other vegetable and
fruit crops are grown.

20.    In the first subzone of the central climatic zone (the Fergana Valley, Tashkent, Sir-Darya,
and Samarkand regions), the soils are gleysols and meadow soils, non-saline or of low salinity,
with good hydro-physical properties. The vegetative period is from 190 days to 200 days, rainfall
from 320 mm to 380 mm, falling mainly in winter and spring. The sum of positive temperatures is
4,000°C to 4,200°C.

21.    In the second subzone (Sir-Darya, Jizzakh, and Samarkand regions), the vegetative
period is from 190 days to 200 days, the rainfall is 240–270 mm per year. The soils are typical
gleysols, non-saline, gleysol-meadow soils, and meadow soils.

22.    In the third subzone (the new irrigation zone of Jizzakh, Samarkand, and part of
Kashkadarya), the soils are typical gleysols and meadow soils, non-saline or of low salinity. In
this zone, the average temperature fluctuates during the vegetative period from 16°C to 20°C,
the sum of temperatures is from 4,200°C to 4,400°C, the annual rainfall from 220 mm to 240
mm, 75% falling outside the vegetative period.

23.    None of the provinces included in our project falls within the southern climatic zone,
which includes the Bukhara and Surhandarya regions. The vegetative period is from 240 days to
260 days and the sum of temperatures is 4,600°C to 5,000°C. In this zone, subtropical crops
such as melons, fine fiber cotton, and various vegetable and fruit crops are grown.

      B. Climatic features of Andijan Province

24.    Andijan province is located in the eastern part of the Fergana Valley in far eastern
Uzbekistan. It borders with Kyrgyzstan, Fergana Region, and Namangan Region. It covers an
area of 4,200 km2 with a population of 2.96 million,7 which makes this province the most densely
populated province in Uzbekistan.

25.    The climate of Andijan province is extremely continental, with relatively mild winter and
continuous hot summer. Basic peculiarity of Central Ferghana's climate is a hot dry summer and
an especially cool and humid winter. Based on observations of many years, the average monthly
temperature of the coldest month of the year, January, is -3.4°С, and the hottest, July is 26.8°С.
The absolute maximum of positive temperatures reached 44°С (in the shade) and the maximum
of subnormal temperatures is 29°С. An average year-round temperature is 13.4°С.

26.      The average yearly precipitations total is 208 mm. Their main part falls in winter and
spring months, which is 89% of all precipitations. The minimum precipitation falls on the months
of June, July, August, and September. March accounts for the largest amount of precipitations
i.e., 33 mm. Mainly north and north-westerly winds are characteristic of this province. Heavy dust
storms causing wind erosion are normally observed during April and May.

27.    The main water course of the province is Karadarya River that crosses the province from
the east to the west, its water is mainly used for irrigation. There are 3 reservoirs and several
lakes.

7   State Statistic Committee of Uzbekistan, 2017.

                                                     5
C. Climatic features of Samarkand Province

28.     Samarqand province is located in the center of the country in the basin of Zarafshan
River. It borders with Tajikistan, Navoiy Region, Jizzakh Region and Qashqadaryo Region. It
covers an area of 16,400 km². The population is estimated to be around 3.65 million8 with some
75% living in rural areas.

29.      The climate in the province is sharply continental. The average annual air temperature is
12.9°C–14°C. The coldest month is January, with a minimum temperature -20°C–26°C, the
hottest month is July with maxima temperature 40°C–42°C. The annual amount of precipitation
is 204 mm–414 mm. The direction of the wind is southeastern and eastern. The duration of the
frost-free period is 200 days.

30.     The main waterway in the Samarqand province is Zarafshan River. It is fed from melting
of glacial-snow accumulation in the from the Zarafshan mountain Range. Zarafshan is formed by
the confluence of the rivers Matcha and Fandarya. Its main tributaries are Kshtut and
Magiandarya, which flow on the left at 57 km and 88 km below the confluence of Match and
Fandarya.

8   State Statistic Committee of Uzbekistan, 2017.

                                                     6
3. ORGANIZATION OF THE HORTICULTURE MARKET SECTOR

    A. The Current Market institutions

                        1. Market Institution at National Level

31.     The Rural Restructuring Agency (RRA) has been constituted under the Ministry of
Agriculture (MOA) pursuant Decree of Cabinet of Ministers (DCM) No. 462,9 concomitantly with
the implementation of the IBRD supported “Rural Enterprise Support Project”.10 The RRA is
headed by a General Director and has a staff of 80 of which 57 are management, technical,
engineering, finance, and economist. Two deputy directors are in charge of (i) Implementation of
investment projects, and (ii) development of new projects. Within the agency is a marketing
research department specifically in charge of promoting marketing and the export of horticulture
goods. Among other, the DCM 462 entrusts the RRA to coordinate and ensure efficient
interaction among international financing institutions (IFI) providing support to projects in the
agricultural sector. To date, the RRA has completed 6 agricultural infrastructure and agriculture
enterprises support project totaling $443.8 million, of which $261.8 million are foreign investment
provided by ADB, IBRD, and IDA. Currently, RRA is implementing another 7 projects in the
areas of sustainable agriculture, horticulture value chain development, livestock, and adaptation
to climate change, for a total estimated finance of $751 million of which $488 million provided by
various IFIs, namely ADB, IFAD, IBRD, and IDA. The RRA is coordinating the preparation of no
less than 5 perspective projects mainly towards horticulture value chain finance and
development with an estimate financial requirement of $948.4 million of which $897.8
contributed by potential donors such as ADB, JICA, and IBRD. Moreover, RRA is carrying out
preparatory studies for 2 additional projects also targeted to horticulture development with
capital investment estimated at $374.7 million of which $374.7 million expected to be financed
by EU and EBRD (Appendix 1).

9  Resolution of the Cabinet of Ministers No. 462 of 2 October 1997: “On measures to accelerate implementation of
   the Rural Enterprise Support Project financed by IBRD.
10 The RRA was established under the Ministry of Agriculture and Water Resources in the form of an incorporated

   agency as part of the government to facilitate the implementation of certain agriculture projects. As part of the
   ongoing reforms, the ministry was divided into the Ministry of Agriculture and the Ministry of Water Resources in
   February 2018. The government is considering reorganizing the RRA. Changes under consideration include (i)
   changing the RRA’s name from the Rural Restructuring Agency to the Agency for Implementation of Investment
   Projects in Agro-Industrial Complex, and (ii) changing the RRA’s parent organization from the Ministry of Agriculture
   to the State Committee of the Republic of Uzbekistan for Investment.

                                                           7
General Director (1 p.)

      Deputy General Director, Head of Investment                                                                   Deputy General Director for New Projects
             Projects Implementation (1 p.)                                                                                  Development (1 p.)
                                                                         Legal                      Accounting
   Deputy Project Manager                                                                                                                    Development of the
                                                                       Department                   department
  "Program on Adaptation to                                                                                                                livestock sector in the
                                                                         (4 p.)                       (5 p.)
     Climate Change and                                                                                                                    Republic of Uzbekistan
        Mitigation of its           Specialists (2p.)                                                                                            (IDA) (3 p.)
    Consequences for the                                              Procurement                    Financial
     Aral Sea Basin"(1 p.)                                            Division (5 p.)               department                           Development of the sector
                                                                                                       (5 p.)                             of horticulture growing in
  Deputy Project Manager,                                                                                                                      the Republic of
                                    Specialists (1p.)                                                                                            Uzbekistan.
       "Supporting the
    Development of the                                                 Monitoring                  Department of                            Grant financing (EU)
  Horticultural Sector in the    Technical staff (2p.)                                             Ecology (4 p.)
                                                                      department (6
  Republic of Uzbekistan"                                                  p.)                                                            Increasing the efficiency of
             (1 p.)              Regional Specialists
                                                                                                                                         the horticulture sector in the
                                         (4p.)                                                                                                     Republic
    Deputy Head of the                                                                                                                       of Uzbekistan (JICA)
                                   Specialists (1p.)                    Marketing                   Subprojects
  Project "Development of
                                                                        Research                      lending
  the Fruit and Vegetable                                                                                                                 Development of the value
                                                                       Service (3 p.)               department
  Sector in the Republic of      Technical staff (1p.)                                                                                     chain in the horticulture
                                                                                                        (6 p.)
        Uzbekistan"                                                                                                                        sector. Phase-II (ADB)
             (1 p.)

    Deputy Head of the                                                                                                                    Development of the value
   project "Development            Specialists (4p.)                               Administrative and                                    chain in the livestock sector.
       of sustainable                                                         economic personnel (14 p.                                              (ADB)
      agriculture and                                                         including 4 drivers, 2 office
    mitigation of climate                                                      managers, 3 translators, 1
                                                                                  security. 3 cleaners)                                      Improvement of the
       change" (1 p.)
 Deputy Project Manager         Specialists (5p. 0,5 wage-                                                                               meliorative state of the land
"Development of the value         rate). Specialists 1                                                                                    plots of rice farms. (ADB)
 chain in the dairy sector"
            (1 p.)                Technical staff (2p.)

Deputy Head of the project
                                    Specialists (4p.)
                                                                    Figure 3.1 Organizational Structure of the Rural Restructuring Agency
"Horticulture Value Chain"
           (1 p.)                 Technical staff (2p.)      Source: Rural Restructuring Agency.
                                                                                                                                                 Total: 75p.

                                                                                           8
32.    The Uzbekozikovkatholding» holding joint-stock company was instituted through the
Decree of the President of the Republic of Uzbekistan No. PP-249211 as replacement of the former
Association of Food Industry Enterprises. The PP-2492 defines the tasks of the holding and
provides guidelines of the organizational structure of the holding company (Appendix 1).
Uzbekozikovkatholding includes a roster of 241 enterprises processing horticulture products, 45
enterprises processing meat and milk products, 79 enterprises processing other food products, and
13 service companies.

          Figure 3.2 Organizational structure of the holding company “Uzbekozikvokatholding”

          Source: Presidential decree PD-2492 of 18 February 2016.

33.        The executive office of Uzbekozikovkat holding has a staff of 50.

34.    The main tasks of the holding consist of (i) conducting marketing research on horticulture
products; (ii) provide advice to enterprises in the various branches of processing horticulture
products; (iii) provide support in a holistic way to the sector enterprises in the handling,
conservation, enhancing marketing, and improving packaging; (iv) assist sector enterprises in
promoting export of processed fruit and vegetable; and (v) provide information services and training
to personnel at various level of the horticulture value chain.

11   Presidential Decree No. PP-249211 of February 18, 2016 "On measures to further improve the organization of the food
     industry of the republic" on the basis of the proposal of the Ministry of Economy, the State Committee of the Republic of
     Uzbekistan on privatization, Association of Food Industry Enterprises was abolished and the holding company
     "Uzbekozikovkatholding."
Figure 3.3 Organizational Chart of the Executive Office of the Holding Company
                                        “Uzbekozikovkatholding”

                                                    General Meeting of Stakeholders

                                                                                                               Audit committee
                                                            Supervisory Board
                                                                                                             Internal Audit Service
                                                                 Chairman

  Director for production and             Director of Economics and               General Director of the            Department of
    introduction of modern              Prospective Development, Vice-           specialized foreign trade         personal and legal
 technologies, vice chairman                       Chairman                           company JSC                       affairs
                                                                                 “Uzagroexport”- Deputy
                                      Department of Strategic Forecasting                Chairman                 Department for the
     Department for the                and Development of the Industry                                             introduction and
 organization of storage and                                                     Office of Marketing and           Development of
   processing of fruit and                                                        organization of export           information and
         vegetables                   Financial and Corporate Department         supply of food products           Communication
Department  of the organization
of harvesting, storage and sale                                                                                      Technologies
of fruit and vegetable products            Department on attraction of          Marketing and Advertising
      Department for the                 investments and monitoring of                Department                     Office manager
    development of deep                       investment projects
processing and preservation of                                                  Department of organization
     fruit and vegetables                                                        of export deliveries of
                                                                                        logistics
                                                                                Department of Food Safety
     Department for the                                                            and Standardization
development of meat and milk
         products
     Department for the
development of food products

  Source: Presidential Decree PD-2492 of 18 February 2016.

  35.    The Joint Stock Company (JSC) “Uzagroexport”, under the umbrella of
  Uzbekozikovkatholding, is a foreign trade company that specializes in export of fresh and
  processed fruit and vegetable products through direct export contracts with foreign partners, as well
  as commission contracts concluded with private and dehkan farms, agricultural companies, and
  processing enterprises. The JSC “Uzagroexport” was instituted with Presidential Decree No. 2515
  of 7 April 2016.12 Uzagroexport has a permanent staff of 50. The main activities of JSC
  “Uzagroexport” (Appendix 1) are to increase the volume and variety, as well as the geography of
  export of fresh and processed fruit and vegetable products of Uzbekistan, that demanded enough
  competition in the international markets.

  12   Presidential Decree 2515, of April 7, 2016, "On measures to improve the procurement system for fruits and vegetables,
       potatoes and melons, instituting the Uzagroexport.”

                                                                 10
Source: Presidential Decree PP-2505 of 5 March 2016.

         Figure 3.4 Organizational Structure of the Foreign Trade Company JSC “Uzagroexport”

36.    Uzagroexport relies upon 47 trades and purchasing bases and refrigeration infrastructure for
the storage, calibration, and sorting of fresh fruit and vegetable products, 14 trade and logistics
centers (one in each region, in the city of Tashkent and in the Republic of Karakalpakstan), 8
enterprises for packing horticulture products, 4 trading houses abroad (Russia), and other branch
enterprises. The distribution of the affiliated branches within the 3 provinces are included in the
HVCIP is as follows:

Province                         Trade and purchasing            Trade and logistic        Packaging enterprises
                                        bases                         centers
Andijan                                    4                             1                             -
Samarkand                                  2                             1                             2
Tashkent                                   6                             1                             2
Source: Uzagroexport.

37.      The Council of farmers of Uzbekistan was established through the Decree of the
President of Uzbekistan of 22 October 2012.13 The Decree established Farmers’ Councils at
national, provincial, and district levels in each provinces and districts of Uzbekistan. Around 350
farmers from various provinces and districts have participated to the funding of the Farmers
Council. The main scope of the Farmers’ Council of Uzbekistan is outlined as follows (i) support the
technical and financial capacities of the farmers; (ii) ensure protection of farmer’s legal rights; (iii)
provide technical support for the introduction of good agricultural practices in their activities like drip
irrigation systems, modern communication technologies, and other practices; (iv) enhance the
expansion and diversification of various forms of farmers’ cooperation, as well as production,
procurement, processing activities, and marketing; (v) promote the establishment of extension

13   Presidential Decree No. 4478 of October 22 of 2012, on “Measures on establishment of farmers’ activities and
     perfection of development of farmers’ activities,” currently superseded by the Presidential Resolution dated on 9
     October 2017 #PR-5199.

                                                          11
services in rural areas to support and upgrade the farmer’s legal, economic, and agricultural
knowledge and skills.

                 Figure 3.5 Organizational Structure of Council of Farmer of Uzbekistan

                                       2. Market Institution at Provincial Level

38.      At the provincial level there are Associations of Markets (the Association). These
associations report directly to the Trade Department under the Provincial Hokimiyat. The Trade
Department is responsible for management and coordination of all markets, household, and trade
activities within the province. The main objective of the Markets Association is to ensure that there
is enough fruits and vegetables in the market for the catchment area.

39.     The Association “ToshBozorSavdo” was instituted through the Presidential Decree No.
1384 of 5 March 1996,14 following DCM No. 82 of 5 March 1995.15 The Association was officially
registered on March 25 of 1998 as “Toshbozortayorlovsavdo” further to the Decree of Tashkent City
Mayor No. 1 of 7 January 1998,16 and further renamed “Toshbozorsavdo” on 24 March 2012.

14 Presidential Decree No. 1384 of 5 March 1996, on “Establishment of market’s activities and measures on improvement
   of additional separate services.”
15 DCM No. 82 of 5 March 1995, on “Market Activities and measures on their management and monitoring.“
16 Decree of Tashkent City Mayor No. 1 of 7 January 1998, on merging the two companies: “ToshbozorSavdo” and

   “Toshshaharmevasabzavotsanoat.”

                                                         12
40.    The Association is responsible for the coordination and management of markets and trade
complexes affiliated to the Association, protect their interests, increase their income, and perform
other duties and tasks given by the Cabinet of Ministers and the Tashkent City Hokimiyat.
Toshbozorsavdo falls under the Tashkent City’s “Department of Trade, Services and Production of
Household Goods.” Currently, “Toshbozorsavdo” manages and monitors a network of 21 markets
and trade complexes in Tashkent City; 12 of them are agricultural markets. Fourteen of the markets
are registered as joint stock companies and 7 of them have Limited Liability Company (LLC) status.

                                3.      Market Institution at Municipal Level

41.    The Department of Trade, Service and Consumer Goods Production under the Tashkent
City Administration, has been instituted with the Resolution of the Cabinet of Ministers (RCM) No.
264-34 of 26 May 199717 and the Decree of the Mayor of the City of Tashkent No.237 of 30 June
1997.18 On 31 January 2008 by the department was registered as a state-owned enterprise.

42.     The scope of the department include the following main tasks (i) implement the city policy
(at national and municipal level) in the consumer markets and services sector and participate in the
preparation and implementation of national and city-specific programs in this area; (ii) ensure the
provision of documents for the registration of licenses for business activity and the issuance of
licenses for retail trade with certain types of goods; (iii) coordinate the establishment and activity of
markets and trade centers; (iv) provide high quality service to Tashkent City residents and
coordinate activities of enterprises operating in the consumer market and service sector; (v)
participate in the preparation of legal and normative documents for further improvement of the
system of trade, public catering, service sector and production of consumer goods, and preparation
of relevant proposals; (vi) creating equal conditions for business entities in the sphere of trade,
services, and production of consumer goods.

      B. Stakeholders at Large

43.     Other main players and beneficiaries of the horticulture chain are listed hereafter.

44.     Growers. Farmers and small-scale backyard owners who produce the horticultural
products. The new wholesale markets will stimulate the export of the agricultural products thus
resulting in increased demand for local horticulture crops production. Not least, new fruits and
vegetables varieties could be experimented and introduced in the horticulture chain due to
increased demand from abroad.

45.     Brokers or consolidators. This category of stakeholders is responsible in properly
harvesting, sorting, grading, and packing as per customer’s demand. These stakeholders play an
important role in the horticulture value chain and will be directly impacted by the proposed project
through bolstering subsector markets activities and fostering increased export volume. They will
involve number of activities using new technologies such as modernization of sorting, automatized
packaging, controlled conservation, inducing added value activities in the provinces included in the
project.

17 Resolution of the Cabinet of Ministers No. 264-34 of 26 May 1997 "On the order of procurement of basic foodstuffs for
   public consumption.”
18 Decree of the Tashkent City Mayor No. 237 of 30 June 1997 "On the establishment of the Department of Trade, Public

   Services, and Consumer Goods Production.”

                                                          13
46.     Wholesalers or traders. Will benefit from reduced postharvest losses due to introduction of
modern infrastructure as well as of stable prices because of the steady supply of the fresh produce
to the market.

47.     Exporters. This category of stakeholders includes all relevant national and private
enterprises and corollary entities like bank, custom, sanitary control, and laboratory facilities.
Exporters will have an office or be stationed at the new wholesale logistic centers to improve export
efficiency.

48.    Processing companies. These include horticulture products processing companies
specialized in either extracting, drying, caning, and juicing. The increased production of horticultural
products will induce higher demand capacity of the food processing subsector.

49.   Supermarket chains. Food supermarket enterprises are expected to rent stalls at the
wholesale logistic centers to collect and transport products to the chain supermarkets in the cities.

50.   Retail markets. The retailers will benefit from a more regular distribution, improved
packaging, and quality control as well as from a more stable price in the market.

51.     The HoReCa19 category is a main direct user of fresh and processed horticulture products.
The category will benefit from larger varieties of products, better packaging, and improved food
safety.

52.    Transportation. Large to single-owner transportation enterprises are involved in the
transportation of horticulture products from sites of production to processing centers, wholesale
markets, and then to retail distribution and export terminals. It is expected that specialized type of
transportation equipped with refrigerant facilities will further develop to satisfy the needs for
improved transportation services of the fresh produce to the external market and other end users.

53.      Market administration. The new wholesale logistic centers will require hiring of significant
number of services such as processing companies, sorting-grading lines, cold storage facilities,
trade center, banking, quality control and testing, terminal facilities, and parking. New types of
wholesale market administration will have to be created in order to secure a sustainable
management of the new wholesale markets in the long term. A successful implementation of this
category of administrators will serve as a model for replication to other similar market infrastructure
facilities.

       C. Other Stakeholders

54.     The State Cadaster is to provide adequate support in the process of selection suitable sites
for the construction of the wholesale markets in the Andijan, Samarkand, and Tashkent provinces.
Interactions with the State Cadaster will also be compulsory during the preparation of a
resettlement plan in accordance with ADB Involuntary Resettlement Policy and ADB Safeguard
Policy Statement (2009).

55.    The Uzbekistan Railway Company (O’zbekiston temir yo’llari) might have a stake in the
HVCIP through one, some, or all new wholesale markets that will be connected to an existing
national railway of a railway station.

19   HoReCa: Hotel-Restaurant-Catering.

                                                  14
4. KEY HORTICULTURE PRODUCTS

56.    Tree fruits. Uzbekistan is one the leading producers of fresh deciduous and stone fruits
in Central Asia. According to the Food and Agriculture Organization (FAO) statistics, Uzbekistan
is among the top five producers of apricots in the world, the sixth largest producer of cherries,
and 17th in apple production. In the past five years, Uzbekistan increased the total area of fruits
110% from 250,900 ha in 2012 to 279,600 ha in 2016.

57.     Melons and water melons. These are very traditional crops for Uzbekistan, all of which
are well known in the international markets (primarily the FSU countries) for their quality and
flavor. The government and farmers work hard to maintain and develop this the opportunity for
value addition in export markets.

58.     Grapes. Uzbekistan has reputation of being the largest table grape producer and the
leading fresh grape exporter in Central Asia. Most table grapes are grown in the south,
specifically in Samarkand, Surkhandarya, and Tashkent regions, and the Ferghana Valley. The
long warm weather period from early spring to late autumn allows farmers to grow more than 37
varieties of grapes. The most widespread grape varieties used in wine production are Soyaki
(champagne, cognac), Saperavi (table and dessert wines), Rkatsiteli (dessert wines), May Black
(dessert wines), Rosy Muscat (dessert wines), Hindogni (dessert and table wines), Bayan-Shirin
(dry wines, champagne, cognac), and Aleatico (vintage and dessert wines). Popular grape
varieties for fresh consumption are Khusayni, Rizamat, Kishmish, and Damskiy palchik. Over the
past years, the GoU has paid considerable attention to the development of grape production and
expansion of vineyard areas. The Presidential Decree No. 1937 of 13 March 201320 encourages
the development of viticulture in the republic during the period 2013–2015. Under this decree, it
is planned to optimize the regional distribution of prospective grape varieties, as well as expand
the variety of vineyards. The decree contemplates also the provision of assistance to farmers
and other enterprises in the wine industry to market their products for export through specialized
trading companies, as well to assist agro-firms to establish their own trade houses in
Commonwealth Independent States and other foreign countries. The GoU also plans to assist in
pre-financing export contracts for grape producers and relevant processing industry.

59.     Vegetables. Grown in all areas of Uzbekistan primarily by the dehkan farms, there are a
number of specialized areas in each region that were always designated as the horticulture
production centers. There are four key provinces where cotton is not the designated crop,
vegetables have become especially important to the local economy, namely: Andijan,
Samarkand, Surkhandarya, and Tashkent which account for more than 60% of all vegetable
production in the republic. While soil conditions in these areas are generally good and more
suited to vegetable production, it is the availability of water and the proximity to major urban
consumption centers that has encouraged production in both Samarkand and Tashkent. Andijan
has instead a special micro-climate more suited to vegetable production and also has well
established proximity to routes for export of products northwards to Kazakhstan and beyond.
The southernmost Surkhandarya has a well-established vegetable production system for out of
season production due to its favorable winter climate that allows the production of cabbage and
onions, along with tomatoes when these are not available from other areas.

20   Presidential Decree No. PP-1937 of 13 March 2013 “About measures on further development of vine sector in the
     republic for the period of 2013–2015.”

                                                          15
5. SECTOR PERFORMANCE

     A. Crop Areas

60.     Subsequently to recent government policies and reforms in the sector, namely: (i) DCM
No. 311 of 20 November 2013,21 (ii) Presidential Decrees No. PP-4707 of 4 March 2015,22 (iii)
No. 2520 of 12 April 2016,23 (iv) No. 2515, of 07 April 2016,24 (v) No. 2505 of 05.03.2016,25 and
(vi) No. 2492 of 18.02, 2016,26 (Appendix 1) the areas occupied by the main horticulture crops
within the republic have been steadily increasing throughout the period 2012–2016. Over the
five-year period, areas cultivated with most yielding crops have increased by 12% for vegetables
from 183,700 ha to 206,000 ha in 2016, 11% for fruits, from 250,900 to 279,600 ha, 11% for
potatoes from 76,200 ha to 84,600 ha, 9% for melons from 53,800 ha to 58,700 ha, and 3% for
grapes from 126,900 ha to 131,200 ha.

21 DCM No. 311 of 20 November 2013 “About the forecast parameters of production and use of horticulture products,
   potatoes, melons and grapes in 2014”. The Decree looked to encourage further development of the horticulture
   sector to produce increased amounts of products, up to a further; 8,880,000 tons of vegetables, 1,594,000 tons of
   melons, 2,398,000 tons of potato, 2,472,000 tons of fruits and 1,362,000 tons of grapes.
22 Presidential Decree No. PP-4707 of 04 March 2015: On the measures for structural reforms, modernization, and

   diversification of production for 2015–2019
23 Presidential Decree No. 2520 of 12 April 2016: On policy initiative for state procurement system for fruits and

   vegetables.
24 Presidential Decree No. 2515, of April 7, 2016, "On measures to improve the procurement system for fruits and

   vegetables, potatoes and melons, instituting the Uzagroexport
25 Presidential Decree PP-2505 of 5 March 2016: On the measures to further develop the raw material base,

   expansion in processing of horticulture, meat and dairy products, increasing foodstuffs production and export within
   2016–2020
26 Presidential Decree PD-2492 of 18 February 2016: "On measures to further improve the organization of the food

   industry of the Republic," constituting the "Uzbekoziqovqatholding.”

                                                         16
Table 5-1 Crops Areas of Main Crops (1,000 ha)
                                                                                           Annual average
Administrative territory        2012      2013    2014         2015    2016    Increase%
                                                                                             growth %
                                 Potatoes
Republic of Uzbekistan           76.2    78.1      80.3         80.6    84.6      11%           2.7%
Andijan                           6.1     6.2       6.7          6.7     7.0      15%           3.5%
Samarkand                        11.6    11.4      11.7         11.9    13.0      12%           3.0%
Tashkent                          8.4     8.5       8.8          9.0    10.1      20%           4.8%
                                Vegetables
Republic of Uzbekistan          183.7 189.3       192.0        194.0   206.0      12%           2.9%
Andijan                          17.3    18.1      18.6         18.7    19.4      12%           2.9%
Samarkand                        24.9    26.8      26.9         27.9    29.9      20%           4.7%
Tashkent                         33.7    34.2      33.7         33.3    36.8       9%           2.3%
                                  Melons
Republic of Uzbekistan           53.8    50.7      51.7         52.0    58.7       9%           2.4%
Andijan                           2.1     1.7       1.9          1.9     2.2       5%           2.1%
Samarkand                         2.4     2.2       2.2          2.5     3.0      25%           6.3%
Tashkent                          4.5     4.2       4.3          4.5     4.9       9%           2.3%
                                  Fruits
Republic of Uzbekistan          250.9 254.6       261.9        266.4   279.6      11%           2.8%
Andijan                          29.5    29.2      29.3         29.3    32.7      11%           2.7%
Samarkand                        30.1    30.2      32.3         33.8    37.3      24%           5.6%
Tashkent                         33.6    34.3      34.5         35.5    37.3      11%           2.7%
                                  Grape
Republic of Uzbekistan          126.9 127.8       128.9        128.3   131.2       3%           0.8%
Andijan                           4.0     4.0       4.1          4.1     4.4      10%           2.5%
Samarkand                        38.3    38.7      39.0         38.9    39.0       2%           0.5%
Tashkent                         18.0    18.1      17.4         17.6    18.1       1%           0.2%
 Source: Ministry of Agriculture.

 61.     Crop areas cultivated with vegetables have increased most significantly in comparison
 with other categories of crops, at an average annual rate of 2.9% within the republic as well as in
 Andijan Province, by 4.7% in Samarkand, and 2.3% in Tashkent provinces. Over the same
 period, surfaces occupied with fruits crops have been expanded at an average of 2.8% annually
 over the national territory, by 2.7% in Andijan and in Tashkent, and by 5.6% in Samarkand.
 Areas occupied by potato crops have also significantly increased at an average rate of 2.7% in
 the country, 3.5% in Andijan, 3% in Samarkand, and 4.8% in Tashkent. Areas cultivated with
 melons have grown at an average rate of 2.4% annually throughout the country, 2.1% in
 Andijan, 6.3% in Samarkand, and 2.3% in Tashkent province. Grape cultivations have scored
 comparatively lower performance over the 5-year period, with an average annual growth of 0.8%
 over the country, 2.5% in Andijan, 0.5% in Samarkand, and 0.2% in Tashkent.

     B. Production

 62.   Production of the main horticulture products has also grown steadily between 2012 and
 2016 with the following average rates: 10.3%vegetables, 9.8% potatoes, grapes 9.5%, and
 melons 9.6%.

                                                          17
Table 5-2 Production of Main Horticulture Crops (1,000 t/yr)
Administrative                                                                               Annual average
                         2012       2013       2014        2015        2016      Increase%
territory                                                                                      growth %
                                           Fruits
Uzbekistan              2,052.8    2,261.1 2,490.6        2,746.1     3,042.8        48.2%        10.3%
Andijan                   439.5      478.1     522.9        574.7       634.4        44.3%         9.6%
Samarkand                 273.1      300.7     341.7        375.0       413.3        51.3%        10.9%
Tashkent                  162.2      173.1     188.5        204.7       223.0        37.5%         8.3%
                                       Vegetables
Uzbekistan              7,767.4    8,518.4 9,286.7       10,129.3    11,275.8        45.2%         9.8%
Andijan                  1076.9     1203.4 1308.9          1410.6      1596.2        48.2%        10.4%
Samarkand                1253.4     1350.8 1457.7          1584.4      1767.9        41.0%         9.0%
Tashkent                   1572     1716.9 1841.7          2036.9      2244.3        42.8%         9.3%
                                         Potatoes
Uzbekistan              2,057.1    2,250.4 2,452.4        2,696.9     2,958.4        43.8%         9.5%
Andijan                   201.2      231.9     253.8        292.8       316.8        57.5%        12.1%
Samarkand                 449.4      480.9     526.8        572.6       619.2        37.8%         8.3%
Tashkent                  319.7      336.7     361.4        398.3       437.6        36.9%         8.2%
                                           Grape
Uzbekistan              1,206.0    1,322.1 1,441.2        1,579.3     1,735.8        43.9%         9.5%
Andijan                    52.4       57.3      63.4         68.6        76.7        46.4%        10.0%
Samarkand                 421.3      468.1     497.3        556.8       607.1        44.1%         9.6%
Tashkent                    137      140.9     155.9        167.9       174.1        27.1%         6.2%
                                          Melons
Uzbekistan              1,418.4    1,558.3    1,96.1      1,853.6     2,044.9        44.2%         9.6%
Andijan                    79.6       86.1      92.7        106.2       117.9        48.1%        10.4%
Samarkand                  82.6       89.7      97.2        103.7       123.4        49.4%        10.7%
Tashkent                  121.9      132.5     144.8        150.1       162.3        33.1%         7.4%
Source: State Statistics Committee of the Republic of Uzbekistan.

                 Source: State Statistics Committee of the Republic of Uzbekistan.

                                                         18
63.    In 2016, the production of fruits was assessed at 634,400 tons in Andijan, 413,300 tons
in Samarkand, and 223,000 tons in Tashkent scoring annual average rates of increase of 9.6%,
10.9%, and 8.3%, respectively. At the same date, production of vegetables was up to 1,596,200
tons in Andijan, 1,767,900 tons in Samarkand, and to 2,244,300 tons in Tashkent with
corresponding annual average increase of 10.4%, 9%, and 9.3%, respectively. Still in 2016,
harvesting of potatoes attained 316,800 tons in Andijan, 619,200 tons in Samarkand, and
437,600 tons in Tashkent with corresponding average growth rates of 12.1%, 8.3%, and 8.2%,
respectively. Still in 2016, grapes were produced in the amounts of 76,700 tons in Andijan,
607,100 tons in Samarkand, and 174,100 tons in Tashkent with relevant annual average
growths of 10%, 9.6%, and 6.2%, respectively. The production of melons reached 117,900 tons
in Andijan, 123,400 tons in Samarkand, and 162,300 tons in Tashkent with average growing
rates assessed at 10.4%, 10.7%, and 7.4%, respectively.

              Source: State Statistics Committee of the Republic of Uzbekistan.

   C. Consumption

64.     Overall consumption of horticulture products within the republic in 2015 amounted to 80%
or 15.2 million tons out of the total volume of the production (19.0 million tons). Around 2.5
million tons (13.2%), were processed; 589,000 tons (3.1%) exported; and 628,100 tons (3.3%)
used for seeds.

65.     Per capita consumption of fruits over the republic has augmented by some 2.1%
annually, from an average 139.9 kg/yr in 2013 to 148.8 kg/yr in 2016, with similar scores in
Samarkand (2.2%) and Tashkent 2.0%), whereas in Andijan the annual average consumption
growth is significantly lower, at 0.5%. Conversely, the unit consumption of vegetables and
melons has scored a tiny annual average growth rate of 0.1% with unit average consumption of
276.2 kg/yr in 2013 to 277.2 kg/yr in 2016. In the three provinces included in the HVCIP the per
capita consumption of vegetables and melons has scored a growth of 0.4% per annum in
Tashkent, while in Andijan and in Samarkand we observe negative trends with annual unit
consumption growths averaging -0.6% in Andijan and -0.4% in Samarkand. The unit
consumption of potatoes over the country was relatively stable with a recorded 56.4 kg/yr per
person, unchanged from 2014 to 2016, slightly up from the 55.3/kg/yr in 2013, thereby indicating
an annual average growth rate of 0.6% over the 4-year period. Higher amounts of per capita
consumption of potatoes were recorded in Tashkent, with 58.0 kg/yr in 2013 increasing to 64.8
kg/yr in 2016, thus scoring also the highest annual average growth (3.8% annually) among the

                                                     19
three provinces, whereas both Andijan and Samarkand are characterized by a negative annual
consumption growth at -0.5%.

                  Table 5-3 Per Capita Consumption of Horticulture Products (kg/yr)
    Administrative                                                  % Increase on   Annual average growth
                              2013    2014     2015     2016
      territory                                                         period               (%)
                                  Potatoes
Republic of Uzbekistan     55.3    56.4    56.4     56.4                   1.9%               0.6%
Andijan                    54.9    56.4    54.0     54.0                  -1.6%              -0.5%
Samarkand                  56.1    56.4    55.2     55.2                  -1.6%              -0.5%
Tashkent                   58.0    58.8    62.4     64.8                  11.7%               3.8%
                        Vegetables and melons
Republic of Uzbekistan    276.2 277.2 276.0 277.2                          0.4%               0.1%
Andijan                   277.1 276.0 272.4 272.4                         -1.7%              -0.6%
Samarkand                 271.8 277.2 272.4 268.8                         -1.1%              -0.4%
Tashkent                  273.6 276.0 277.2 277.2                          1.3%               0.4%
         Fruits and berries, including dried (in terms of fresh)
Republic of Uzbekistan    139.9 145.2 145.2 148.8                          6.4%               2.1%
Andijan                   146.6 146.4 147.6 148.8                          1.5%               0.5%
Samarkand                 137.5 146.4 147.6 146.4                          6.5%               2.2%
Tashkent                  140.4 147.6 148.8 148.8                          6.0%               2.0%
Source: State Statistics Committee of the Republic of Uzbekistan.

    D. Horticulture Share in the Agro-industry

66.    The number of agro-enterprises involved in horticulture products processing has steadily
increased in latest years, after an inflexion in 2013. In 2013, there were 92 enterprises
nationwide who were involved in processing of vegetables, 38 fruits, and 50 grapes. These
arose to 130, 74, and 63, respectively in 2016. Vegetable processing counts the largest number
of manufactures in the subsector. Within the project provinces is noticeable that vegetable agro-
enterprises have steadily increased from 20 in 2014 to 35 in 2016, while the number of such
enterprises remained rather stable (18 to 22) throughout the period in Samarkand and
constantly declined from 6 to 1 during the same period in Andijan. Samarkand endorses an
important role in grape processing with the number processing units growing from 14 in 2014 to
25 in 2016. It was observed that between 2014 and 2016 fruit processing industries have
decreased in all project districts: 11 to 3 in Andijan, 20 to 14 in Samarkand, and stable around
11 in Tashkent with however, a decline to 6 in 2014 and 2015.

                                                         20
Table 5-4 Processing of Horticulture Products
                                                                                                  Average
                                                                                       Increase
Administrative                                                                                     annual
                       2012          2013          2014             2015      2016     over the
  Territory                                                                                       growth
                                                                                       period %
                                                                                                    (%)
                                                   Vegetable
Uzbekistan           112,725.3      71,901.9    114,396.5 154,233.9        435,786.6      287%        60%
Andijan                1,128.0         666.0        815.2    1,478.2        11,123.0      886%       179%
Samarkand             39,143.2      25,644.8     39,063.9   27,855.0        75,648.2       93%        40%
Tashkent              18,829.0       7,864.9     10,238.6   17,349.1        74,085.0      293%        92%
                      59,100.2      34,175.7     50,117.7   46,682.4       160,856.1      172%        61%
3 Provinces
                        52.4%         47.5%        43.8%      30.3%           36.9%
                                                     Grape
Uzbekistan           125,555.8      78,102.2     83,984.5 137,223.3        113,345.1      -10%         4%
Andijan                1,177.0         947.9      1,556.6    1,455.5         3,780.8      221%        50%
Samarkand             29,949.3      30,555.7     29,924.6   44,104.1        35,179.7       17%         7%
Tashkent              36,401.2       3,635.1      7,341.3   11,978.3        11,438.8      -69%        18%
                      67,527.5      35,138.8     38,822.5   57,537.8        50,399.3      -25%         0%
3 Provinces
                        53.8%         45.0%        46.2%      41.9%           44.5%
                                                      Fruit
Uzbekistan           201,553.4    132,201.1     111,968.0   99,348.9       554,696.9       175%       99%
Andijan                1,783.2     20,445.3      21,385.0   22,386.5        33,838.0     1,798%      277%
Samarkand            114,885.9     41,072.4      34,440.0   42,046.5       106,860.1        -7%       24%
Tashkent              25,494.1     23,418.7      13,357.5    4,302.6        64,213.4       152%      318%
                     142,163.2     84,936.4      69,182.5   68,735.6       204,911.6        44%       35%
3 Provinces
                        70.5%        64.2%         61.8%      69.2%           36.9%
Source: State Statistics Committee of the Republic of Uzbekistan.

67.    Nationwide, the agro-alimentary production particularly related to vegetable and fruit
processing, has substantially increased during latest years. Production of processed vegetables
and fruits in 2016 has jumped from 154,233 tons to 435,786 tons and from 99,349 tons to
554,670 tons, respectively in comparison with the preceding year. In 2016, a total of 113,345
tons of grapes was processed in Uzbekistan, substantially unchanged in comparison with the
106,216 tons representing the average amount of grapes processed annually during the
preceding 4-year period 2012–2015.

                 Source: State Statistics Committee of the Republic of Uzbekistan.

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