President of Uzbekistan signed a new decree on March 13, 2024, aimed at significantly enhancing the technological capabilities of the nation's agricultural sector. The primary objective of this initiative is to modernize farming practices by increasing the level of mechanization across the country. A key target set by the government is to ensure that by 2026, at least 70 percent of cotton harvesting is performed using specialized machinery, reducing reliance on manual labor and improving overall efficiency.
To support these ambitious goals, the government has authorized the allocation of up to 400 million US dollars. These funds will be sourced through foreign credit lines backed by state guarantees and distributed via commercial banks. This financial injection is specifically designated for the procurement of modern agricultural machinery and equipment, ensuring that farmers have access to the tools necessary for large-scale production.
The decree also outlines favorable financing terms for agricultural producers. Commercial banks are instructed to provide loans in national currency for the purchase of all types of agricultural equipment. These loans will be issued for a period of 10 years, featuring a two-year grace period. The interest rate for these loans is set at the Central Bank's base rate plus a 4 percent bank margin, making the investment more accessible for local farmers.
Furthermore, the government has streamlined the repayment schedule for those acquiring cotton and grain harvesters through preferential loans and leasing agreements. Starting in 2026, borrowers will be required to make payments twice a year, specifically on January 31 and July 31. This structured approach is designed to align with the seasonal nature of agricultural income, providing farmers with greater financial stability as they transition to more advanced, machine-driven farming methods.
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