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. Last Updated: 07/27/2016

Uzbeks Slow to Face Cotton Concerns

ANDIZHAN, Uzbekistan -- Murtoz, an Uzbek policeman-turned-farmer, cheerfully predicts an even bigger crop this year from his small cotton farm in the crowded Ferghana Valley.

But others say that the outlook for the cotton industry, one of the economic pillars of this former Soviet country, is far from bright and could spin into terminal decline unless an autocratic and insular government hurries up with reforms.

The "white gold" was introduced to the landlocked Central Asian state -- along the ancient Silk Road -- during the Soviet era, when Moscow planners were seduced by its vast plains, despite their arid unsuitability for the water-hungry plant.

To get round the water shortage, they built a giant irrigation network, fed by Central Asia's two main rivers.

In the process, western Uzbekistan has been turned into a poisoned and parched wasteland.

But here in the greener Ferghana Valley, ringed by the snow-dusted Tien Shan mountains and the foothills of the Pamir range, it is crammed with cotton plants, dotted with fluffy white pods as the harvest season gets into full swing.

"Last year, my yield was 4.2 tons [per hectare]. I expect five tons this year. The weather has been good," Murtoz said as he jotted down the weight of yet another freshly plucked bale of cotton outside the town of Andizhan, half an hour by plane from the capital Tashkent.

Murtoz rents his 13-hectare plot from a collective farm -- a still powerful relic of the communist past -- and, he says, makes a good living.

But he added: "The state should pay more [for the cotton]."

And that is the chief problem: a government reluctant to cast off old Soviet ways and give up its grip on $1 billion a year in export revenue.

"Everything is centrally managed," said a foreign economist in the capital.

In the water-starved country, he reckoned that half the water pumped into poorly-maintained irrigation channels is lost before it even reaches the fields.

If investment was opened up and farmers given better prices, yields could double.

The government forecasts a slightly bigger crop this year -- 3.5 million tons of raw cotton up from last year's 3.28 million.

But agricultural analysts say there was too much rain in major areas this year, which delayed planting.

The U.S. Department of Agriculture forecasts that the crop will yield 1 million tons of processed cotton, just below 1.015 million last year.

The amount is far less than at the industry's peak during the Soviet era, around 1980.

It was also around then that the local Soviet leader, Sharaf Rashidov, pulled off one of the biggest scams of the 20th century by falsifying production figures.

One historian estimates Rashidov and his cronies earned about $2 billion through the fraud, which was discovered only when satellite pictures revealed that areas supposedly planted with cotton were not planted.

The deceit has been turned by the post-independence government of Uzbekistan into a heroic snub to its former Moscow rulers.

Concerns over cotton reflect wider fears for the plight of the Uzbek economy, riddled with inefficiency and corruption. The government has been stalling on reforms demanded by the International Monetary Fund.

One Western diplomat said that declining living standards and a generally weakening economy posed a serious longer term threat to security in the country, which borders Afghanistan.

"I don't know if the government is deluding us or themselves. Unemployment is massive," he said.

"Life is fairly basic, there is a growing young population and with no major job generation there may be limits even the long-suffering Uzbeks can't put up with," he said.

But he and others said that arguments for change continually run up against vested interests which may be stronger than long-serving President Islam Karimov.

For example, Karimov's government has failed repeatedly to live up to pledges to reform its currency regime, which has an official rate about 40 percent of that on the black market.

"The only plausible reason is that he has changed his mind or other forces have proved too strong," the economist said.

"The next three to four months will be crucial to see whether the government will move ahead."