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Countries and Regions Country Assistance Plans Document
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Country Assistance Plans - Tajikistan : III. Sector Strategies
A. Agriculture33. Agriculture is a key sector in Tajikistan's economy, contributing 20-27 percent of GDP and one third of export earnings. With over 70 percent of the population living in rural areas, agriculture accounts for 60 percent of employment. Tajikistan has fertile soil and a favorable climate, which make the country suitable for a wide range of farming systems. Because mountains cover 93 percent of the territory, arable land is scarce--only 0.14 hectares per capita. However, irrigation systems cover 85 percent of the arable land, taking advantage of the country's abundant water resources. The rehabilitation of deteriorated rural infrastructures is an urgent need for accelerating agricultural recovery and improving rural life. Cotton is Tajikistan's most important cash crop. Exports of cotton accounted for 20-30 percent of total exports, and the sales tax on cotton exports amounted to as much as 30 percent of total tax revenue from 1994 to 1997. Agriculture production grew by 6.5 percent in 1998 and 3.8 percent in 1999, following an initial rebound of 0.2 percent in 1997. This increase, after years of decline since independence, was largely due to recovery in the cotton and potatoes sectors and growth in grain production. However, 2000 grain production dropped to less than half that of the previous year. The Government estimates that the value of required additional grain imports is about $20 million in 2000, and has appealed for international support to alleviate the effects of the drought. 34. Agriculture and agro-processing are expected to play a major role in economic recovery and poverty reduction in Tajikistan given the evident comparative advantages and scope for productivity improvements. Exploitation of these opportunities requires elimination of widespread distortions and disincentives that prevailed under central planning. The Government has boosted land reform since mid-1998 and the total share of arable land in private hands rose to 44 percent by October 1999. Also, the State Statistical Agency estimates that 90 percent of the animal husbandry sector is now in private hands. There are no formal restrictions on price and trade in agriculture. 35. The principal objectives of ADB's agriculture sector intervention are to support the Government's efforts to reduce poverty in rural areas and accelerate sector reforms and postconflict agricultural rehabilitation. An ADB-financed agriculture sector study is being undertaken to examine the critical sector issues and to lay the basis for ADB's medium-term involvement. ADB will also assist the Government in implementing major sector reforms that include (i) facilitating land reform and farm restructuring to improve incentive structures and farm management, (ii) encouraging competition in agricultural marketing, and (iii) developing a framework for providing necessary financial services. The focus of ADB's short-term assistance will be on agricultural rehabilitation, which will promote employment generation, increase food security, and improve living standards of the rural population. Support for developing rural financial systems will also be provided. Close coordination with WB has been undertaken for developing ADB's sector strategy and projects since WB has provided assistance in the agricultural sector in addressing sector reforms, including privatization, land reform, and post conflict infrastructure rehabilitation.
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