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RESOLUTION OF THE PRESIDENT OF THE REPUBLIC OF UZBEKISTAN

of November 10, 2021 No. PP-2

About measures for enhancement of system of financing of expenses on cultivation and collection of cotton raw

For the purpose of enhancement of system of financing of expenses on cultivation and collection of cotton raw, increases in interest of producers of cotton raw and creating favorable conditions for deep conversion of products:

1. Implement since harvest of 2022 procedure for financing of cultivation of cotton raw and collection of cotton by fund of the state support of agricultural industry (further - Fund) according to which:

a) preferential financing of cultivation of cotton raw and collection of cotton is performed through cotton and textile clusters and elite seed-growing farms as a part of the Center of development of seed farming;

b) commercial banks at the expense of resources of Fund allocate soft credits:

to cotton and textile clusters on cotton cultivation - at the rate to 60 percent of cost of cotton raw on rate of 10 annual interest rates (including margin of bank - 2 percent) for the term of the 24th month, including grace period of 18 months, since 19th month - with return condition within the next 6 months in equal shares;

to elite seed-growing farms as a part of the Center of development of seed farming on cotton raw cultivation - at the rate to 60 percent of cost of cotton raw on rate of 10 annual interest rates (including margin of bank - 2 percent) for the term of 14 months;

to cotton and textile clusters and elite seed-growing farms as a part of the Center of development of seed farming on cotton collection financing - at the rate to 20 percent of cost of cotton raw on rate of 10 annual interest rates (including margin of bank - 2 percent) for the term of 12 months, including grace period 3 months.

2. Establish procedure according to which compensation on covering of part of interest rate for the commercial credits allocated in the national currency for a period of up to 12 months for final settlement on purchases of cotton raw exceeding the main rate of the Central bank, but no more than 10 percent points is paid to cotton and textile clusters at the expense of Fund. At the same time expenses on compensation on the commercial credits allocated for final settlement are financed from the republican budget of the Republic of Uzbekistan.

3. Determine that:

since harvest of 2023 financing of expenses on cotton cultivation by cotton and textile clusters and elite seed-growing farms as a part of the Center of development of seed farming begins since October 1 the year preceding the corresponding year of harvest;

the soft credits allocated to cotton and textile clusters for the purpose of cotton raw cultivation go to farms for financing of the agrotechnical actions connected with cotton raw cultivation, except for the credits allocated to cotton and textile clusters for cultivation of cotton raw on the farmlands leased by them;

the advance payment to farms for cultivation of cotton raw is made by cotton and textile clusters in cash. At the same time the advance payment is not allowed by nature;

the questions connected with mineral fertilizers, fuels and lubricants, the equipment and technical services (except for chemical remedies of plants), including their import, are solved agricultural producers independently, intervention in the solution of these questions in any form is forbidden.

4. For the purpose of the organization of continuous monitoring of efficiency of use of the funds allocated by Fund and financial condition of clusters to create in structure of Fund department from 5 established posts due to reducing the operating established posts of Head department of the state financial control of the Ministry of Finance and its territorial administrations.

Grant to Fund the right to carrying out audit of efficiency of use of the money allocated by it with involvement of the auditing and business and consulting organizations on contractual basis.

5. To Central Bank, the Ministry of Agriculture, the Ministry of Justice, the Ministry of Economic Development and reducings poverty together with the interested ministries and departments in three-months time to bring the packet of regulatory legal acts providing in the Cabinet of Ministers:

requirements imposed to warehouses, procedure for ensuring execution by the parties of obligations on the organization of activities of warehouses and the property transferred to storage and also requirements imposed to the warehouse certificate of the strict reporting;

creation of the Unified register of the warehouse certificate displaying quantity, type, storage duration and other data on the property transferred to storage to warehouse, and also establishing electronic data exchange between subjects of entrepreneurship, commercial banks and state bodies of management.

Recommend to commercial banks before adoption of the acts of the legislation provided by paragraph one of this Item, accept as a deposit reserve of yarn of cotton and textile clusters for their crediting if this reserve is free from debt obligations and pledge. At the same time the order is performed by the yarn reserve accepted on the security on the basis of the consent of commercial bank pawnbroker.

6. To provide to the deputy prime minister D. A. Kuchkarov and the Minister of Finance T. A. Ishmetov for the purpose of uninterrupted financing of the actions connected with cultivation of agricultural products allocation Fonda in 2022 from the republican budget of the Republic of Uzbekistan of free financial aid in the amount of 5 trillion sum, by reasonable calculations of Fund - budget advance in the amount up to 7,5 of one trillion sum.

7. Determine that the soft credits on cultivation of cotton raw on the harvest eve of 2021 allocated to the cotton and textile clusters having capacities on conversion of cotton fiber since September, 2022 are subject to return within 6 months equal shares.

At the same time return of the resources allocated to commercial banks for these purposes by fund is prolonged in proportion to the term of return of soft credits.

8. Make changes and addition to some decisions of the President of the Republic of Uzbekistan and the Government of the Republic of Uzbekistan according to appendix.

9. To the agency of information and mass communications, to National broadcasting company of Uzbekistan and National news agency of Uzbekistan to provide extended coverage in mass media of essence and content, and also the purposes and tasks of this resolution.

10. To the Ministry of Finance together with the Ministry of Agriculture in three-months time to make in the Cabinet of Ministers offers on the changes and amendments in acts of the legislation following from this resolution.

11. Assign to the Minister of Agriculture Zh. A. Hodzhayev and the Minister of Finance T. A. Ishmetov the personal responsibility for ensuring execution of this resolution.

Quarterly discussion of course of execution of this resolution, implementation of coordination and control of activities of the departments responsible for its execution to assign to the deputy prime minister of the Republic of Uzbekistan Sh. M. Ganiyev.

To inform the President of the Republic of Uzbekistan following the results of every quarter on effectiveness of the performed measures.

President of the Republic of Uzbekistan

Sh. Mirziyoev

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