Evaluation of effects of cotton policy changes on land and water use in Uzbekistan: Application of a bio-economic farm model at the level of a water users association

Various agricultural policies have been implemented in post-Soviet countries as they move from centrally planned to market economies. In the agriculture sector of Uzbekistan, Central Asia, several reforms have been implemented to increase the operational autonomy of agricultural producers. However, land and water use in agriculture remains directly linked to the centrally regulated cotton production. Still partly resembling the design of the state orders imposed during the planned economy, cotton production policy is used to ensure the stability of national export revenues at the expense of farm incomes. In this paper we argue that modifying the cotton policy may improve the situation with farm incomes and food production, and reduce pressure on water resources, the availability of which in Central Asia is expected to decrease. To conduct an ex ante analysis of cotton policy modifications intended to improve rural incomes, a bio-economic optimization model was developed at the level of a water users association in the Khorezm region of Uzbekistan. Policy simulations showed that abolishing the current cotton policy would be a more economically attractive option for farmers and also increase grain production rather than various forms of this policy modification. However, abolishing the current cotton policy can present pressure on irrigation water resources as farmers would opt to cultivate water-intensive crops, thus requiring supplemental policies and institutions for sustainable resources use.

► We analyzed the effects of cotton policy changes using an integrated farm model.
► The model reveals policy-driven shifts in values and patterns of land and water use.
► Cotton policy modifications can maintain cotton output by improving cotton yields.
► When cotton policy modified the pressure on cropland and water resources can increase.