SOME ASPECTS OF THE RESULTS OF THE PRIVATIZATION OF COLLECTIVE AND STATE FARMS IN THE REPUBLIC OF UZBEKISTAN

INTERNATIONAL SYMPOSIUM “ADVANCED RESEARCH IN ECONOMICS AND BUSINESS MANAGEMENT”, SEPTEMBER 19, 2025 340 SOME ASPECTS OF THE RESULTS OF THE PRIVATIZATION OF COLLECTIVE AND STATE FARMS IN THE REPUBLIC OF UZBEKISTAN Miryakub Tadjievich Khaidarov (Associate Professor, National University of the Republic of Uzbekistan, PhD in Economics) https://doi.org/10.5281/zenodo.17266299 Abstract. As a result of the privatization of agricultural enterprises in the Republic of Uzbekistan, collective and state farms were reorganized into dehkan and farm enterprises, which, for the most part, became small-scale producers. It is argued that their consolidation with the target to become bigger enterprises would allow them to more widely utilize crop rotation, acquire agricultural machinery, and restore damaged irrigation and land reclamation systems. Keywords: agriculture, reforms, machinery availability, irrigation, land reclamation, loss of arable land. Many developing countries, in order to meet the requirements of the International Monetary Fund, begin market reforms with the privatization of existing enterprises. Developing countries are most often agricultural, and accordingly, their reforms primarily involve the privatization of agricultural enterprises. Research shows that privatization improves many financial and economic indicators of privatized enterprises. These indicators include higher profits, improved economic efficiency, greater output, greater investment, higher employment, and higher dividend payments 1 . However, researchers themselves note that the representativeness (reliability) of such studies is not always high. Ambiguous assessments of the results of privatization and the return of land to its former owners are given in Eastern European countries. In specialized literature devoted to the spatial organization of agriculture, the phenomenon of fragmented land use is widely recognized as a serious problem. Excessive fragmentation generates additional costs and time associated with accessing land. At the same time, the use of large-scale equipment is precluded, which complicates field work; While the boundaries between plots are growing in length, border areas remain uncultivated, requiring the development of a dense network of access roads. Land registration is also complicated, and conflicts between landowners are even prone to arise 2 . The experience of investigation the privatization of agricultural enterprises accumulated by researchers from various countries can serve as a sound methodological basis for conducting similar studies in the Republic of Uzbekistan. Reforms to introduce a market economy in Uzbekistan's agriculture, implemented in the 1990s, primarily eliminated socialist enterprises— 1 Naiess Botbakn and Jean-Claude Cosset “Privatization in Developing Countries: An Analysis of the Performance of Newly Privatized Firms” https://openknowledge.worldbank.org/server/api/core/bitstreams/985a80ac-d9d65b2b-8385-70fbb0ddaec1/content 2 Jerzy Bański. “The consequences of changes of ownership for agricultural land use in Central European countries following the collapse of the Eastern Bloc”. https://www.igipz.pan.pl/tl_files/igipz/ZGWiRL/Banski/Ba%C5%84ski%20J.%2C%202017%2C%20The%20consequ ences%20of%20changes%20of%20ownership....pdf?utm_source=chatgpt.com INTERNATIONAL SYMPOSIUM “ADVANCED RESEARCH IN ECONOMICS AND BUSINESS MANAGEMENT”, SEPTEMBER 19, 2025 341 collective and state farms. The reforms were intended to create a class of rural landowners advocating for market reforms. It was believed that private landowners would be more motivated to engage in productive labor. As a result of these reforms, collective and state farms were reorganized into dehkan (peasant) and private farms. The implemented reforms impacted many areas of social and economic life. Thus, large, robust agricultural enterprises were transformed into numerous small agricultural goods producers. This primarily impacted the social sphere in rural areas. While large enterprises could support social services—schools, preschools, clinics, libraries, cultural institutions, and collective farm clubs—which to some extent addressed employment issues in rural areas, small producers could no longer afford to do so. Secondly, this impacted industrial production of the country. While large farms maintained their own machinery fleets, complete with specialized repair shops, small producers could no longer afford the necessary agricultural machinery. Demand for agricultural machinery plummeted. Agricultural machinery products were no longer in demand, ultimately leading to the complete liquidation of the country's agricultural machinery industry. Chemical industry enterprises, which supplied fertilizers to agriculture, also suffered. These processes inevitably impacted employment. At the beginning of the reforms, there were three people employed in non-manufacturing sectors for every person employed at large manufacturing enterprises. Therefore, the liquidation of machinery enterprises led to a significant decline in the incomes of those employed in non-manufacturing sectors. In agricultural production itself, the culture and technology of production have suffered. Small farms cannot afford adequate crop rotation in their fields. Small farms cannot combine livestock and crop production. This has led to a significant reduction in the enrichment of soils with organic fertilizers. The country's irrigation and drainage systems suffered the most. Uzbekistan's agriculture is based on irrigated farming. The irrigation system, also designed for large farms, was divided into maps supplied with irrigation water through concrete channels. With the liquidation of these large farms, this complex, very expensive system was left without actual owners. The collective and state farms through whose territories these concrete channels ran had a vested interest in maintaining them in working order. Without the channels, they would be deprived of water and the ability to manage their farms. With the liquidation of large producers, the irrigation system was left without owners, oversight, and proper maintenance. The multibillion-dollar funds allocated annually from the state budget to funds specially created for these purposes cannot ensure the system's safety and proper maintenance without on-site owners. Furthermore, without owners, many drainage pumps were simply stolen. Gradually, the entire expensive and valuable irrigation and land reclamation system, in which enormous investments had been made over many years, has gradually deteriorated, leading to the loss of a significant portion of arable land. Participants in the 21st international session of the Committee to Review the Implementation of the United Nations Convention to Combat Desertification (CRIC-21), held INTERNATIONAL SYMPOSIUM “ADVANCED RESEARCH IN ECONOMICS AND BUSINESS MANAGEMENT”, SEPTEMBER 19, 2025 342 November 13-17, 2023, in Samarkand, noted that land loss in Central Asian countries reaches 20% 3 . Conclusions The solution to the accumulated problems in this area lies in the restoration of large agricultural enterprises: - capable of carrying out economic activity: - using progressive agricultural technologies; - crop rotation; - capable of acquiring advanced domestic agricultural machinery; - making long-term investments by introducing organic fertilizers into the soil; and - restoring the irrigation and land reclamation system. It is not necessary to recreate collective farms, although they have demonstrated their effectiveness in time. It is possible to create agricultural joint-stock companies, which would allow the use of joint-stock ownership rights in financial and economic transactions, which would stimulate the expansion of the secondary market in stock markets, and also use them as collateral to attract financing to the agricultural sector. References 1. Naiess Botbakn and Jean-Claude Cosset “Privatization in Developing Countries: An Analysis of the Performance of Newly Privatized Firms” https://openknowledge.worldbank.org/server/api/core/bitstreams/985a80ac-d9d6-5b2b8385-70fbb0ddaec1/content 2. Public–private partnerships for agribusiness development. A review of international experiences. FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS Rome, 2016 3. https://openknowledge.fao.org/server/api/core/bitstreams/4f1107a3-9f40-4670-9db72835cefb19d5/content?utm_source=chatgpt.com 4. Jerzy Bański. “The consequences of changes of ownership for agricultural land use in Central European countries following the collapse of the Eastern Bloc”. https://www.igipz.pan.pl/tl_files/igipz/ZGWiRL/Banski/Ba%C5%84ski%20J.%2C%20201 7%2C%20The%20consequences%20of%20changes%20of%20ownership....pdf?utm_sourc e=chatgpt.com 5. Самаркандская конференция имеет историческое значение https://uza.uz/ru/posts/samarkandskaya-konferenciya-imeet-istoricheskoeznachenie_539716 3 Самаркандская конференция имеет историческое значение https://uza.uz/ru/posts/samarkandskaya-konferenciya-imeet-istoricheskoeznachenie_539716