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For Exploited Uzbek Farmers, High Cotton Prices Only Enrich Overlords

It's not always such fun for cotton pickers like these two, outside Ashgabat.
It's not always such fun for cotton pickers like these two, outside Ashgabat.

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By Ron Synovitz
Mamurjon Azimov and his family have worked as cotton farmers for years in Uzbekistan's Jizzakh region. But last year, Azimov was kicked off the land he was renting from the state because of his heavy debts.

Now unemployed and trying to feed his family of five, Azimov blames an almost feudal agricultural system in Uzbekistan that enriches only a handful of the political elite who have ties to President Islam Karimov. It is a system that effectively turns farmers into bonded slaves who are trapped into working for little pay in order to repay their debts.

"The price of cotton is defined at the beginning of every year [by the state]. The wages paid for picking cotton are set [by the state] just before the harvest begins. That's it," Azimov says. "What happens on the international market doesn't matter to farmers. No one will pay [the farmers] extra if the price of cotton goes up. If the international market price rises, [it is the officials who] reap all the benefits."

Other cotton farmers in Uzbekistan interviewed by RFE/RL agree that they will not see any benefit from international cotton prices that soared this week to more than $1.20 per pound -- the highest level ever on the global market.

Under Uzbekistan's compulsory system of state procurement, farmers are legally required to deliver the crop they harvest to a local cotton gin -- one of more than 120 district collection points where cotton fibers are mechanically separated from the seeds and made ready for export.

What's Good For The President...

By law, Uzbekistan's farmers must then sell their cotton to the state-controlled company that operates all of Uzbekistan's cotton gins -- Uzkhlopkoprom -- at a price set by the government.

Officially, the price offered is about one-third of the international market price. In practice, many farmers receive even less -- as little as one-tenth the global price -- because their high-grade cotton often is judged as "low grade" when it is collected by Uzkhlopkoprom.

Uzbekistan's government owns 51 percent of Uzkhlopkoprom. Information has never been released publicly about who owns the remaining 49 percent of the state cotton monopoly. But investigative reports by journalists and human rights groups suggest the privately held shares are controlled by Karimov's political allies and their relatives.

"The problem is that Uzbekistan still has a Soviet-style command economy," says Julliet Williams, director of Environmental Justice Foundation, a British-based nongovernmental organization that monitors environmental damage, child labor, and human rights abuses linked Uzbekistan's exploitative cotton sector. "So cotton is something that is strategically important to the government. It makes about $1 billion every year out of the sale of cotton and it gets farmers to produce [cotton] at its whim. Because farmers have no choice in what they are producing, they are part of an economy that is benefitting President Karimov and a small elite. Because it is such an opaque trade, anyone at the top of that elite is able to benefit."

Indeed, high international market prices for cotton are helping Karimov's regime consolidate its control over Uzbekistan's population. Instead of helping farmers who grow the crop, the record prices enrich powerful elites with ties to President Karimov's regime -- a regime that bankrolls itself through totalitarian control over cotton production.

Cotton Barons

Williams says the powers of the country's cotton barons are becoming entrenched as a result, ensuring that farmers remain trapped as bonded slaves in a system best described as postcommunist nomenklatura feudalism.

"It is entirely state-controlled right from the point where [a farmer] puts the seed in the ground," Williams says. "He has to buy it from government agencies. He is told when to plant it, how to plant it, how much to plant. He has to pay a certain amount [to the state] for fuel for his tractors or fertilizers. Any of the [agricultural] inputs are completely state-controlled. When it comes to the harvest, the farmer has no choice as to who they can sell it to. They cannot sell it on the free market. They cannot sell it directly to international buyers or to traders. Everything is done through government agencies in a very murky, opaque world."

Uzbekistan's state-controlled system makes Uzkhlopkoprom the sole buyer and distributor of Uzbek cotton. The firm transfers about 70 percent of the country's cotton harvest to three state trading organizations for export -- Uzprommashimpeks, Uzmarkazimpeks, and Uzinterimpeks.

The precise ownership structure of those state-controlled export firms is kept secret along with the names of the individuals who run the companies.

However, it is known that the cotton-trading firms are overseen by Elyor Ganiyev, the minister of foreign economic relations, investments and trade. Ganiyev is responsible for setting prices, choosing buyers and monitoring the hard-currency funds brought into Uzbekistan from cotton exports.

First Deputy Prime Minister and Finance Minister Rustam Azimov -- who previously over saw the state's cotton exporting monopoly as minister of foreign economic relations -- also is alleged to have amassed a private fortune from the nontransparent links in Uzbekistan's cotton-export chain.

The responsibility for enforcing the government's cotton-harvest quotas is held by 13 regional governors appointed by President Karimov.

'Strategic' Interest

It is Prime Minister Shavkat Mirziyaev who oversees the 13 governors on the cotton-harvest quotas. Human rights groups say as long as these regional appointees meet their quotas, the government in Tashkent turns a blind idea to violence, intimidation, and other human rights abuses aimed at keeping farmers and workers in the fields.

In order to meet those quotas, millions of Uzbeks are conscripted each year to work in the cotton fields during the harvest -- including university students, teachers, doctors, and urban professionals as well as hundreds of thousands of Uzbek children.

The Uzbek government justifies conscripted labor by calling cotton a strategic commodity.

In fact, cotton brings in about 60 percent of Uzbekistan's hard-currency export earnings. But authorities who run the exploitative system have failed to reinvest profits for infrastructure needed to sustain the cotton sector in the future.

Soviet-era irrigation systems have crumbled to the extent that more than half of the water Uzbekistan drains from the Aral Sea for irrigation leeches into the earth before it reaches the cotton fields. Meanwhile, the Aral Sea is down to 15 percent of its original size -- one of the world's worst man-made environmental disasters -- and agricultural land is being poisoned by salt in the water.

There also is virtually no downstream industry in Uzbekistan for the country's cotton -- such as textile plants where more jobs could be created from the processing of raw cotton into finished product.

Prime Minister Mirziyaev recently announced plans to reinvest some cotton profits in a new textile plant. But critics conclude such a move would likely result in another murky, quasi-state enterprise that enriches Karimov's political allies and their relatives by exploiting poor laborers.

RFE/RL's Uzbek Service contributed to this report
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by: Hugo McKissic Jr from: Philadelphia
November 01, 2010 02:34
Cotton is a viable resource; Billionaires pay good wages

by: Senjo
November 04, 2010 12:03
Does this really surprise anyone? These mini kingdoms are run solely for the benefit of the people in charge, their families and friends. Don't expect anything to change, we've already witnessed the way the Uzbek govt reacts to any form of dissent.

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