By Yuliy Yusupov

In March 2023, I published an article “Sericulture in Uzbekistan: ineffective practices of bureaucratic management persist”. The article focused on the key problems of the industry and was based in part on the findings of independent monitoring conducted by the Berlin-based organization Uzbek Forum for Human Rights.

The presence of a rich tradition of silk production in Uzbekistan, a favorable climate, high population density, and excess labor resources in rural areas should have made sericulture a promising industry for generating employment and income for rural residents. However, homeworkers (those who grow cocoons) and farmers interviewed by Uzbek Forum do not believe that growing cocoons is a profitable business for them, and many farmers engage in this type of activity involuntarily.

The key reason is the management methods of the sericulture industry, which do not correspond to the principles of a market economy:

  • The prices at which the harvest of cocoons must be sold are set by officials and not determined on the market. Artificially low non-market prices prevent homeworkers from receiving adequate payment for hard work, and farmers from receiving payment for organizational work. Moreover, for farmers, the obligation to grow cocoons in most cases brings material losses.
  • Mandatory planned targets for farmers to hand over the harvest of cocoons to silkworm clusters remain. Farmers are often forced to grow cocoons without any legal grounds, since most of them do not have a mandatory requirement for this type of activity in their land lease agreements.
  • Administrative levers of pressure are used on farmers who are forced to agree, despite the lack of benefits. Otherwise, they are threatened with seizure of land (in violation of the law and concluded lease agreements, but farmers do not have effective legal leverage to assert their rights), other sanctions related to inspections and other forms of interference in their activities.
  • Formal grounds for sanctions of farmers may include “violations” associated with forcing them to grow cotton and wheat. These crops do not bring income to many of them, and they are forced to grow other more profitable crops on land intended for cotton and wheat.
  • Planned production targets are often arbitrary and do not take into account the viability of growing cocoons, such as the provision of mulberry leaves, availability of appropriate premises or supply of labor, which result in additional costs.
  • Homeworkers and farmers do not have the choice over which purchasing organization or cluster they can sell to, which puts them in a dependent position on the buyer, limits their ability to choose the best operating conditions such as timeliness of payments, agronomist consultations, quality of grain, etc. and defend their rights in cases of late payment for supplied cocoons.

All this limits freedom of entrepreneurship and does not allow market mechanisms of competition and pricing to work. The market is being replaced by arbitrary decisions of officials, which in itself is ineffective and, in addition, gives rise to corruption and expands the scale of the informal economy. In particular, corruption occurs when farmers are forced to pay bribes in order to reduce the amount of the planned target, “close the issue” of an unfulfilled target, or simply buy off the obligation to grow cocoons. The current system has created an informal market for cocoons where cocoon suppliers are forced to buy them from others in order to meet the target.

The management structure of the industry is ineffective, non-transparent, and there is duplication of functions between the Committee for the Development of Sericulture and Wool Industry and the Uzbekipaksanoat Association (Uzbek Silk Association). Moreover, the Association performs incompatible functions: simultaneously it is an economic entity, an industry association representing the interests of its members, and a state regulator of the industry, which represents an obvious conflict of interests.

Another conflict of interest is that silk processors known as clusters – commercial non-governmental organizations – are involved in placing mandatory cocoon production tasks on farmers. This gives them a competitive advantage through artificially low prices for raw materials and the use of forced labor. Moreover, government officials at all levels of government, as well as quasi-state “public organizations” and local governments, help provide competitive advantages to private companies.

Unfortunately, the practice of coercing farmers continues in the current year, 2024. The Internet is full of posts made mainly by farmers:

  • Farmers of the Akaltyn district of the Syrdarya region are forced to sign an empty contract (without specifying supply obligations) for growing cocoons in 2024. “They are threatening to close our farms if we don’t do what they say. If we sign a blank sheet of paper, they will probably write tons of cocoons there and lure us into a trap.” (, message dated January 31, 2024).
  • “We are writing from the Tuprakkala district of the Khorezm region. Farms in all areas of the region are forced to enter into agreements for the cultivation of silkworm cocoons. Farmers who oppose this risk having their land confiscated.” (, message dated February 1, 2024).
  • “In the Kamashi district of the Kashkadarya region, farms specialized in growing wheat and cotton were required to accept 13 boxes of silkworm eggs (i.e., 13 x 60 kg = 780 kg of cocoons must be handed over). This incredible decision of the district hokim is being implemented through the prosecutor and the head of the Ministry of Internal Affairs. In fact, to grow 1 box, that is, 60 kg of cocoons, you need 2 rooms of 7 sq. m. 13 boxes (780 kg) require 26 rooms. Okay, let them give you 2-3 boxes, we will feed them for free, but 780 kg is unreasonable… Growing cocoons is a pain. If the plan is not fulfilled, they charge 50-60,000 UZS for each kilogram not fulfilled.” (, message dated April 29, 2024).
  • “We are writing from the Kattakurgan district of the Samarkand region. Farmers are forced to grow cocoons. On the instructions of the district hokim, the head of the Ministry of Internal Affairs is putting pressure on those who refused to receive boxes of silkworm eggs.” (, message dated April 30, 2024).
  • In a message dated May 22, 2024, ( Rasul Kusherbayev talks about the situation when a room in the building of the water management and meliorative college of the Kamashi district of the Kashkadarya region was converted for the cultivation of silkworm cocoons. The college is thus implementing a “cocoon delivery plan.” Kusherbaev quite reasonably asks: “Who established this kind of plan for an educational institution?”

My article, published in March last year, also proposed reforms that were supposed to change the situation in the industry for the better and ensure the introduction and operation of market mechanisms.

In July 2024, the Uzbekipaksanoat Association filed a lawsuit against me, accusing me of distorting information. The court of first instance ruled that I had damaged the business reputation of the Association. In particular, it was “established” that there is no dependence of Uzbekipaksanoat on the state and there is no state support for this absolutely “independent” organization, that silk clusters are also not associated with the state, there is no coercion of farmers to grow cocoons, and monitoring findings of Uzbek Forum for Human Rights are not legitimate since the organization is not registered in Uzbekistan. However, in November, the second hearing overturned the decision of the first instance, concluding that the Association’s claims against me were absurd.

The publications of Uzbek Forum for Human Rights, my article, the trial and the associated resonance exposed the problems of the sericulture sector and made the demand for reform obvious. In August 2024, prior to the decision of the court of first instance, its in fact sovereign “owner” Bakhrom Sharipov, who simultaneously headed the Committee for the Development of Sericulture and Wool Industry and the “independent” association “Uzbekipaksanoat”, was removed from managing the industry. Although he resigned from the post of head of the Association only in 2023, he continues to manage it. Sharipov is also the de facto owner of several silk clusters. Nonetheless the “owner” quite sincerely did not see any conflict of interest in this state of affairs. The new leadership of the Committee, together with the Administration of the President of the country, began to develop plans for the necessary changes in the industry. The first step is the subordination of the Committee for the Development of Sericulture and Wool Industry to the Ministry of Agriculture which was previously directly subordinate to the Presidential Administration.

In February 2024, President Mirziyoyev announced plans for upcoming reforms to transform the industry according to market principles in two stages. At the first stage (in 2024), it was planned to increase the purchase price for silkworm cocoons by 25%, as well as introduce tax breaks for homeworkers. At the second stage (from 2025), the practice of setting prices by the state and assigning cocoon suppliers to clusters will be abolished. Cocoons will be sold on a contract basis or through an exchange.

On May 3, 2024, the President signed Decree UP-72 “On additional measures to accelerate the implementation of market mechanisms in the field of growing cocoons and sericulture”. The document’s stated aimed is “further improving the investment climate in the field of silkworm cultivation and sericulture in the country, expanding the raw material base…, increasing employment…, as well as accelerating work on the introduction of market mechanisms.” According to the decree, the priority areas for modernization of the sector include:

  • “Creating conditions for the development of market relations and fair competition in the field of silkworm cultivation and sericulture, establishing a system of equal opportunities and benefits for all participants in the production chain.”
  • “Creating equal opportunities and a beneficial system for all participants in the production chain by applying open rules for a free business environment, entering the field and conducting activities of entrepreneurs in the field of silkworm farming and sericulture.”
  • “Involving farmers, individual entrepreneurs and self-employed people in silkworm farming by organizing an open market for cocoons in the republic and selling cocoons at market prices.”

To achieve the set goals, during 2024-2027 it is planned to significantly increase the area of ​​mulberry fields by 160,000 hectares and by increasing the number of mulberry trees planted in one row along the edges of the fields to 500 million units. The goal is also to improve the quality of raw silk produced in the country and increase the degree of its processing to 75%.

Land for mulberry orchards will be leased primarily through electronic auctions, which is undoubtedly an important sign that the state plans to make land distribution processes transparent and independent of local authorities.

For the period of 2024, the purchase price of cocoons is to be increased by 25% with mandatory financial settlement with cocoon suppliers by September.

The decree provides for additional measures to increase seasonal employment in the cocoon growing sector, including the organization of training courses, exemption from income tax for individuals involved in growing cocoons at home, and exemption from social tax for funds allocated to pay home workers (tax breaks are valid until the end 2025). Until the end of 2025, a reduced land tax rate will be introduced on plots used for growing fodder, i.e., mulberry trees, in the sericulture industry.

New seed stations will be created in Fergana and Khorezm regions. To finance “investment projects for the creation of pedigree seed production stations, the production of silk fabrics and finished products from them, as well as non-traditional finished products from silk products such as medicines and cosmetics,” Fund for Reconstruction and Development of Uzbekistan is opening a credit line of $30 million, from which loans will be issued for a period of 10 years with a three-year grace period at an annual interest rate of 6%.

Finally, according to the decree, a working group, headed by Deputy Prime Minister Jamshid Khojaev, was created to develop specific mechanisms for the development of the sector based on market principles. The reforms to be proposed by the group will start to be implemented in 2025.

Let’s hope that the reform plan will be developed and adopted and the long-awaited reforms will finally take place. Moreover, reforming the sericulture industry should become part of overall agrarian reform, which should incorporate:

  1. A categorical rejection of mandatory state orders, including the practice of “allocation of agricultural crops”, standardization of yield indicators and forced contracting of farmers with clusters, as contrary to the principles of a market economy, to eliminate corruption and the irrational use of land.
  2. The formation of free markets for agricultural crops, which are now grown in accordance with state orders and prices also determined by the state.
  3. Formation of free and competitive markets for resources and services for agricultural producers, as well as improvement of the agricultural financing system.
  4. Strengthening and expanding the rights of ownership of agricultural land, including limiting the rights of local authorities in the distribution and redistribution of land.

In relation to the sericulture industry, the objectives of the reform are to:

  • end forced orders for the cultivation of silkworm cocoons;
  • establish a free market for silkworm cocoons and abandon centralized pricing for cocoons.

Silk processors will have to buy cocoons on the free market at free prices. They will also be able to enter into long-term contracts with cocoon producers on mutually beneficial terms.

It is also important to develop and implement clear and transparent rules for the distribution and redistribution of land for mulberry plantations. Land lease rights must be purchased through open auctions, in which silk clusters, farmers and homeworkers or their associations (cooperatives) can freely participate. If the land is leased by silk clusters, then they will be able to sublease mulberry plantations to homeworkers based on a long-term supply agreement for the supply of cocoons grown on those lands.

The sericulture industry also needs administrative reform aimed at separating the functions of state policy, state regulator, industry association and economic activity. The Uzbekipaksanoat Association, which combines all of these functions, must be restructured.

The policy functions are the functions of the Ministry of Agriculture. The functions of the regulator are the functions of the Committee for the Development of Sericulture and Wool Industry. The functions of the Uzbekipaksanoat Association should be performed by an organization created by industry producers, and not by a quasi-state structure. Finally, membership in the Association must be voluntary and its members should not enjoy any benefits or privileges provided for by the state.

This article was written by Uzbek economist Yuliy Yusupov and was first published by on May 24, 2024.