The president has signed an important decision on the cultivation and sale of wheat

Local 21492

The decision of the president of the Republic of Uzbekistan "On additional measures to introduce market principles in the cultivation and sale of grain" has been adopted.

The decision approved the following proposals of the Ministry of Agriculture, the Council of Ministers of the Republic of Karakalpakstan, and regional administrations:

• Procurement of a total of 1,783.5 thousand tons of wheat out of an average of 2,550,000 tons of wheat from the 2022 harvest, as a state resource of commercial wheat and 266.5 thousand tons for seed at the expense of the Fund for State Support of Agriculture under the Ministry of Finance (hereinafter - the Fund);

 • Acceptance of 500 thousand tons of wheat by farms and other grain growers (hereinafter - wheat growers) for temporary storage in the commercial representative of the Fund for further sale on the stock exchange.

It is noted that for the harvest of 2022:

a) The enterprises of the system of JSC "O’zdonmahsulot" (“Uzbekistan grain product”) are the commercial representatives for the purchase, storage, as well as the delivery of commercial wheat from wheat growers on behalf of the Fund to buyers;

b) Payments for commodity wheat purchased for state resources shall be made by the commercial representative to the wheat growers at the expense of the Fund in the following stages:

• at the initial stage - at prices set by the Cabinet of Ministers;

• in the next stage - a full recalculation with wheat growers will be carried out based on the average price (average quotation) formed on the stock exchange;

c) commodity wheat received from wheat growers for temporary storage in a commercial representative will be sold through exchange trades in July-August 2022.

According to this:

• the costs of transportation (including domestic transportation), reception, storage, and delivery of wheat to customers will be covered by the Fund, subject to the terms of the contract between the commercial representative and wheat growers;

• the amount of natural reduction in the process of receiving, storing, and sending wheat to buyers is written off in accordance with the procedure approved by the Cabinet of Ministers;

• control over the quality and storage of wheat is carried out by the Inspectorate for Control over the Agro-Industrial Complex under the Cabinet of Ministers.

Wheat purchased at the expense of the Fund and received from wheat growers for temporary storage is sold without restrictions in the following order:

• wheat of class 3 and above - to entrepreneurs with flour production capacity, who are obliged to sell at least 75% of the flour of the wheat purchased on the stock exchange through exchange trades

• 4th and 5th class wheat - to all entrepreneurs through exchange trades according to the schedule approved by the Cabinet of Ministers

The Council of Ministers of the Republic of Karakalpakstan and regional governments cover no more than 50% of transportation costs for the supply of flour and flour products to remote, inaccessible, and mountainous areas as additional sources of local budgets.

The Ministry of Finance will provide up to 800 billion soms from the Fund to commercial banks at the basic rate of the Central Bank to finance revolving loans for the purchase of wheat from the stock exchange to enterprises of “O’zdonmahsulot” JSC.

In addition, it was noted that in order to ensure that the process of receiving and removing grain from the warehouses, as well as the financial settlements between the Fund, the commercial representative, and the wheat growers, is carried out quickly and transparently, the Ministry of Agriculture and “O’zdonmahsulot JSC, together with the relevant ministries and departments, would launch the information system within three months.

Sunnatilla Abdullayev Shaxzod Nusratulloyev
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