Uzbekistan has vast arable land and is actively modernising its agricultural sector, making it one of the key players in Central Asia. The transition to sustainable agriculture and the development of fertiliser production offer significant prospects for businesses and investors. However, the success of such initiatives depends on addressing the complex economic and legal factors that govern the industry.
Uzbekistan as a regional agricultural hub
Agriculture accounts for around a quarter of Uzbekistan’s GDP and employs more than 25% of the population. Favourable climatic conditions, fertile soils and a well-developed irrigation system contribute to the cultivation of a wide range of crops, including cotton, cereals, vegetables, fruit and melons.
Legal framework for agribusiness
- The Land Code of Uzbekistan – regulates the provision, use and protection of agricultural land. For foreign investors, the most relevant provisions are those on long-term leases, which minimise legal risks and allow flexible adaptation of land use to strategic objectives.
- The Law on Agriculture – defines the organisational forms, rights and obligations of agricultural enterprises, including family farms and cooperatives.
- Water legislation – pays particular attention to the rational use of water resources, ensuring payment for water use and compliance with environmental standards.
The main challenges, such as soil degradation, low productivity and lack of modern fertilisers, encourage the state to actively implement sustainable technologies and develop fertiliser production, including organic fertilisers.
Fertiliser production. Current capacity and legal aspects
Uzbekistan has significant reserves of natural gas and sulphur, which are necessary for the production of mineral fertilisers such as ammonia and urea. To meet growing domestic demand, programmes are being implemented to modernise enterprises (Navoiazot, Ferganaazot) and attract foreign investment to build new production facilities. Government subsidies and tax breaks encourage producers to increase production volumes.
Key legal aspects
- Licensing – Fertiliser production requires compliance with environmental standards and the acquisition of licences, which are regulated by industry codes.
- Product certification – fertilisers must meet national and international standards, including certification of “eco” products.
- Import of technology – customs benefits and equipment licensing play a key role in the implementation of investment projects.
Legal guarantees for investors
The investment attractiveness of the agricultural sector is enhanced by the country’s geographical location and government support.
- Registration of land rights. Long-term land leases are available to foreign investors. Procedures are regulated by the Land Code and are carried out by government agencies.
- Investment protection. Bilateral treaties and the possibility of international arbitration give investors confidence that their rights will be protected.
- Tax incentives – reduced VAT rates and tax exemptions for certain periods provide additional incentives.
Integration of fertiliser producers and agribusinesses
Agro-clusters involving farmers, processors and suppliers are actively developing in Uzbekistan. The legal framework for such clusters is regulated by government decrees.
- Contract farming – agreements between producers and agribusinesses provide guarantees for the purchase of products and minimise risks.
- Agricultural insurance – a developed insurance system protects farmers against the risks of crop failure and force majeure.
Fertiliser exports
Uzbekistan is a major exporter of fertiliser in Central Asia and is also targeting the EU, China and Turkey. Export products must meet international quality standards (ISO) and environmental requirements. Customs preferences and simplified export procedures encourage supply.
The future of agricultural legislation
Government programmes to develop agriculture include
- Introduction of IoT technologies, drones and GPS systems for monitoring and management.
- Supporting organic farming through improved certification and regulatory frameworks.
- Developing PPPs to modernise infrastructure and processing facilities.
Uzbekistan combines natural resources, a favourable geographical location and an evolving regulatory framework, making it one of the most promising areas for investment in the agricultural sector. A clear regulatory framework, tax incentives and export opportunities offer significant benefits to investors. The introduction of innovative technologies and government support are strengthening Uzbekistan’s position as an important agricultural hub in Central Asia.
*The material was prepared by Nordic Star Managing Partner Andrei Gusev and Cerberus.Legal Managing Partner Vagif Kazimov.