Gov’t to allocate subsidies for farms producing cotton with their own funds

Starting from the 2025 harvest, farms that produce cotton using their own funds and commercial loans, and then sell it on the exchange, will receive a subsidy amounting to 10% of the invoice value for the cotton sold, with the subsidy calculated based on the value of cotton raw materials sold on the exchange.

Photo: Kun.uz

Farms that repay preferential loans taken for cotton production by the end of the harvest year (by December 31 of the respective year) will be entitled to receive a subsidy equal to 4 percentage points of the interest payments made on those loans.

These measures were outlined in the presidential decree titled “Measures for the Consistent Implementation of Market Mechanisms in Cotton Production and Sales.”

According to the decree, cotton transactions on the exchange will proceed as follows:

-Futures contracts will be freely formed between farms and processors on the exchange from November 1 of the calendar year to June 1 of the following year, at a price not lower than the announced starting price;

-Forward contracts will be concluded between farms and processors at mutually agreed prices from November 1 of the calendar year to March 1 of the following year;

-Spot contracts will be concluded in real-time between farms and processors at mutually agreed prices, based on the amount of cotton stored in warehouses;

-Farms without storage facilities or rental contracts will formalize forward contracts for the cotton they produce by March 1 of each harvest year or futures contracts by June 1.

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