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PRESIDENTIAL DECREE OF THE REPUBLIC OF UZBEKISTAN

of February 26, 2021 No. UP-6179

About cardinal enhancement of activities of Fund of the state support of agricultural industry under the Ministry of Finance of the Republic of Uzbekistan

For the purpose of development of agricultural industry in the country, financings of all directions of the agrarian sphere, ensuring price stability in the domestic market, creations of chain of high value added, mechanization of the agrarian sphere, and also widespread introduction of the market principles in production, purchase and product sales:

1. Approve the offer of the Ministry of Economic Development and reducing poverty, the Ministry of Finance and Ministry of Agriculture on raising on the new activity level of Fund of the state support of agricultural industry under the Ministry of Finance (further - Fund) for the purpose of expansion of implementation of additional mechanisms and financial resources of financing of agricultural industry.

2. Determine that:

a) for the purpose of timely ensuring holding agrotechnical actions, including raising of ploughland and introduction of fertilizers on acreage, financing of expenses on cultivation of seed cotton begins with harvest of 2022 since November 1 the year preceding the corresponding financial year;

b) payment of compensation on covering of part of loan interest rate, allocated with commercial banks for cotton cleaning, is made at the expense of Fund.

At the same time compensation is paid for the first 9 months of the credit for the purpose of covering:

parts of interest rate for the commercial credits allocated in the national currency exceeding the main rate of the Central bank, but no more than 10 percent points;

parts to 30 percent of the interest rate established by commercial banks on the credits allocated in foreign currency, but no more than 3 percent points.

To the Ministry of Agriculture together with the Ministry of Finance and the Central bank to submit for approval in the Cabinet of Ministers procedure of the measures of the state support provided by this Item in a month.

3. For the purpose of support of activities for cultivation of vegetables to establish procedure according to which in 2021:

commercial banks allocate the credits to vegerable-growing clusters, farms and other producers of vegetables for the term of 9 months at the rate to 40 percent of cost of the grown-up vegetables with annual interest rate at the main rate of the Central bank (taking into account margin of bank - 2 percent);

for crediting of expenses on cultivation of vegetables the Fund places money in commercial banks for the term of 9 months with annual interest rate on two percent points below the main rate of the Central bank;

in case of not return of the credits allocated by commercial banks to the terms established in the agreement, percent on not returned part of the credits are calculated with addition of 6 percent points to the main rate of the Central bank.

On the commercial credits allocated for cultivation of vegetables on the main squares since harvest of 2022 compensation payment system on the part of interest rate exceeding the main rate of the Central bank takes root.

4. Allocate since 2021 to Fund funds from the republican budget of the Republic of Uzbekistan for financing:

losses owing to change of course of currency exchange on the attracted foreign loans;

compensations paid on covering of part of interest rate for the commercial credits allocated to agricultural enterprises for cotton cleaning;

negative difference between interest rates of the funds raised for elimination of financial deficit including budget advance, and the resources placed in commercial banks for financing of expenses on production of agricultural products.

To the Ministry of Finance to finance the funds allocated for the purposes provided in this Item, in 2021 at the expense of additional sources of the republican budget of the Republic of Uzbekistan since 2022 - to provide in parameters of the Government budget.

5. Determine the main objectives of Fund:

financing of expenses on cultivation of seed cotton and grain;

financial support of cultivation of vegetable products on the main squares;

purchase at the market price and exposure to the exchange biddings of wheat in the amount necessary for ensuring price stability on grain and grain products in the domestic market;

state support of delivery to farms and other agricultural organizations of modern highly effective agricultural machinery;

implementation of modern information and communication technologies in system of financing of agricultural industry and calculation;

studying and implementation in the republic of experience of financing of the agrarian sphere of the developed states.

6. Determine that:

a) the main sources of forming of fund are:

receipts from return of the credit resources placed in commercial banks in target procedure and for financing of delivery of agricultural machinery to the leasing organizations on the terms of leasing, and also borrowed funds and interest payments added on them;

the positive difference formed between the purchase price (including expenses on purchase, storage, transportation and realization) and sales price of wheat acquired by Fund;

the funds allocated from the republican budget of the Republic of Uzbekistan for covering of losses owing to change of course of currency exchange on the attracted foreign loans;

the attracted loans, including the foreign credits and investments, grants of the international financial institutions and means of the donor organizations;

the income arriving from investment of funds of Fund on deposits in commercial banks;

interest expenses when purchasing agricultural machinery on the terms of leasing or the credit, and also the funds allocated from the republican budget of the Republic of Uzbekistan for payment of subsidies for acquisition of agricultural machinery and compensation of transportation expenses for transportation of combines for rendering services abroad (export of services);

the funds allocated from the republican budget of the Republic of Uzbekistan for payment of compensations for covering of part of interest rate for the commercial credits allocated for cotton cleaning;

the funds allocated from the republican budget of the Republic of Uzbekistan for covering of negative difference between interest rates of the funds raised for elimination of financial deficit including budget advance and the resources placed in commercial banks for financing of expenses on production of agricultural products;

the funds raised from budgets of budget system;

other sources which are not prohibited by the legislation;

b) fund is spent for the following purposes:

placement in commercial banks of resources for financing of production of seed cotton, wheat and cultivation of vegetable products on the main squares;

purchase together with the commercial representative of wheat from the foreign states for ensuring price stability in the domestic market based on the offer of Republican council on coordination of widespread introduction of the market principles in production, purchase and realization of grain;

return of the attracted budget advance, the credits and percent added on them;

covering of all expenses on the attracted foreign loans in foreign and national currency, and also losses owing to change in the exchange rate of currencies and interest payments;

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