New Law to Rescue Kazak Cotton Industry
New Law to Rescue Kazak Cotton Industry
Changes to agriculture legislation in Kazakstan will save the industry from decline by giving farmers more freedom to sell their cotton to a range of buyers while controlling product quality, say NBCentralAsia observers.
On June 26, parliamentarians passed a set of amendments to the law governing the cotton sector. All cotton processing enterprises must now hold a license, and when they sign contracts with the growers they must issue them with certificates which will count as valid financial instruments. Farmers must honour the obligations on the contractual certificate, and a new state regulatory body will be set up to monitor this.
State laboratories will be set up to assess the quality of raw cotton using internationally accepted standards.
Agriculture expert Ludmila Kovaleva says that the introduction of the contractual certificates will help free farmers from their dependence on processing enterprises, which currently dictate the price of raw cotton.
The 15 cotton companies in Kazakstan tend to set a low purchase price for the raw product, making it difficult for farmers to afford the fertiliser and seed they need to grow high-quality cotton.
“The new law not only takes the interests of ordinary farmers into account; it is designed for them,” said Kovaleva. “Having a contractual document in their hands gives them the economic freedom to search for buyers, and engage with the banks and textile enterprises to sell their cotton all at once, or in separate consignments.”
Tasbulat Esimov, an expert from the agriculture ministry and a member of the working group which drafted the law, hopes that compulsory licencing for cotton companies and the creation of testing laboratories will help turn the sector around.
Kazakstan’s cotton industry is in decline and according to the agriculture ministry, production has been running at only half of capacity in recent years. Only 10 of the 62 cotton-purchasing centres in the South Kazakstan region are equipped with laboratories.
“This law is not only geared towards supporting farmers, it will also revive the declining sector as a whole,” said Esimov.
“The quality issue is important not only for producers but also for establishing a cotton industry, which needs high quality cotton fibre.”
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
On June 26, parliamentarians passed a set of amendments to the law governing the cotton sector. All cotton processing enterprises must now hold a license, and when they sign contracts with the growers they must issue them with certificates which will count as valid financial instruments. Farmers must honour the obligations on the contractual certificate, and a new state regulatory body will be set up to monitor this.
State laboratories will be set up to assess the quality of raw cotton using internationally accepted standards.
Agriculture expert Ludmila Kovaleva says that the introduction of the contractual certificates will help free farmers from their dependence on processing enterprises, which currently dictate the price of raw cotton.
The 15 cotton companies in Kazakstan tend to set a low purchase price for the raw product, making it difficult for farmers to afford the fertiliser and seed they need to grow high-quality cotton.
“The new law not only takes the interests of ordinary farmers into account; it is designed for them,” said Kovaleva. “Having a contractual document in their hands gives them the economic freedom to search for buyers, and engage with the banks and textile enterprises to sell their cotton all at once, or in separate consignments.”
Tasbulat Esimov, an expert from the agriculture ministry and a member of the working group which drafted the law, hopes that compulsory licencing for cotton companies and the creation of testing laboratories will help turn the sector around.
Kazakstan’s cotton industry is in decline and according to the agriculture ministry, production has been running at only half of capacity in recent years. Only 10 of the 62 cotton-purchasing centres in the South Kazakstan region are equipped with laboratories.
“This law is not only geared towards supporting farmers, it will also revive the declining sector as a whole,” said Esimov.
“The quality issue is important not only for producers but also for establishing a cotton industry, which needs high quality cotton fibre.”
(News Briefing Central Asia draws comment and analysis from a broad range of political observers across the region.)
