2. MFD engagement in horticulture to address the above outlined constraints follows a phased approach. It started
in 2017 with policy dialogue on removing policy constraints for investment and export at scale (Table A5.1). This set of
policy constraints was identified during the preparation of CPSD and a series of DPOs in consultation with the private
sector and the GoU. At the start of the policy dialogue, the export of horticulture products was still under monopoly and
heavily controlled by the state. By the end of 2019, most of the regulatory constraints had been removed. The key reforms
included: (i) abolishment of export monopoly of Uzagroexport, the specialized state foreign trade company; (ii)
abolishment of mandatory sale of 25 percent hard currency earning, and permission to keep 100 percent value of earned
hard currency in exporters’ account; (iii) reduction in time to receive certificate and register the contract at the customs
for horticulture exporters; (iv) elimination of railroad monopoly for export; (v) establishment of “green corridors” at
border crossings; (vi) elimination of minimum export prices; and (vii) removal of full prepayment requirement for export
contracts outside of Uzagroexport.
3. The second phase of the MFD engagement focused on implementation support for the initial reforms to attract private investments in horticulture value chains. After removing the restrictive regulations, the GoU started to work on
programs to improve access to finance that is suitable for the needs of farmers and agribusinesses. Investments in
horticulture value chains usually include long-term investments in greenhouses, intensive orchards, cold storage,
processing, and handling. Yet, products such as a long-term financing for cold storage and greenhouses that requires up
to 7 years and for orchards up to 10 years, do not exist in the domestic banking sector. The longest-term lending product
available to most farmers and agribusinesses from local banks is still a one to two years loans to finance working capital.
The WB-supported HDP has been instrumental to make the long-term finance available suitable for the needs of
horticulture value chain stakeholders. By the time of appraisal for AMP, the HDP had facilitated credit to more than 800
farms and agribusinesses through 13 PFIs. It has mobilized more than US$100 million of additional private funds in the
form of co-investments contributions. The credit line is complemented by HDP investments in public goods and services
and by the IFC’s agri-finance program for the selected HDP’s PFIs.