Farmers Still Exploited Despite Higher Pay
Farmers Still Exploited Despite Higher Pay
The low value of the manat means Turkmen cotton farmers will not receive much more for this year’s crop despite a tenfold rise in the purchase price, say NBCentralAsia analysts.
On August 20, the authorities announced that they will pay farmers ten times more for this year’s cotton harvest at 5 million manats a tonne, or around 250 US dollars, according to the official state exchange rate.
The State Bank of Turkmenistan official rate of 5200 manats to the dollar has not changed in over nine years, but the actual rate currently stands at around 22,000 manats to the dollar.
The cotton harvest season began last week and most farmers pick the buds by hand. President Gurbanguly Berdymuhammedov hopes that the extra cash will coax villagers into collecting the “maximum possible” yield this year.
But NBCentralAsia analysts say that the government is exploiting farmers and most will be no better off.
All farmers in Turkmenistan must sell half of their harvest to the state at the official rate and are only paid once it has been processed and sold on to a third party.
An NBCentralAsia economic expert on Turkmenistan says what farmers receive is incomparable to the amount of profit the state makes from selling it on.
Turkmenistan exports lint cotton which costs more than 2,000 US dollars per tonne international currency exchange rate.
“The government order should be cancelled and purchase prices set which take real expenses, inflation, world lint cotton prices and market conditions into account,” said the economic expert.
Although the best deal for farmers would be free access to buyers on an independent cotton market, the government will not change its policy, added an observer in Ashgabat.
As well as dictating when and how much farmers are paid, the state also has total financial control over all of the country’s agricultural cooperatives, cotton cleaning and processing companies.
“The government has proved its economic inefficiency, but it is not going to give up its income from the difference between the domestic prices it dictates and world prices,” said another NBCentralAsia observer in Turkmenistan.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On August 20, the authorities announced that they will pay farmers ten times more for this year’s cotton harvest at 5 million manats a tonne, or around 250 US dollars, according to the official state exchange rate.
The State Bank of Turkmenistan official rate of 5200 manats to the dollar has not changed in over nine years, but the actual rate currently stands at around 22,000 manats to the dollar.
The cotton harvest season began last week and most farmers pick the buds by hand. President Gurbanguly Berdymuhammedov hopes that the extra cash will coax villagers into collecting the “maximum possible” yield this year.
But NBCentralAsia analysts say that the government is exploiting farmers and most will be no better off.
All farmers in Turkmenistan must sell half of their harvest to the state at the official rate and are only paid once it has been processed and sold on to a third party.
An NBCentralAsia economic expert on Turkmenistan says what farmers receive is incomparable to the amount of profit the state makes from selling it on.
Turkmenistan exports lint cotton which costs more than 2,000 US dollars per tonne international currency exchange rate.
“The government order should be cancelled and purchase prices set which take real expenses, inflation, world lint cotton prices and market conditions into account,” said the economic expert.
Although the best deal for farmers would be free access to buyers on an independent cotton market, the government will not change its policy, added an observer in Ashgabat.
As well as dictating when and how much farmers are paid, the state also has total financial control over all of the country’s agricultural cooperatives, cotton cleaning and processing companies.
“The government has proved its economic inefficiency, but it is not going to give up its income from the difference between the domestic prices it dictates and world prices,” said another NBCentralAsia observer in Turkmenistan.
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
