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Agriculture sector plays crucial role in the economy of Uzbekistan. However, the reduction of the share of agriculture sector in national GDP can be explained by increasing the share of other sectors in national economy. There is growth in gross production of agriculture but, agricultural sector is still characterized by unsustainable production patterns and agricultural institutions of the country are controlled to a large extent through government intervention. Two crops have strategic significance for Uzbekistan: wheat for domestic consumption and cotton for export. The Government decides to grow cotton and wheat as well as fix the output prices. Uzbekistan Farmers receive lower prices for the main crops than world prices, but they also receive inputs such as fertilizers or fuel at cheaper prices. The partial implementation of reforms such as privatization and liberalization of agricultural markets affect the development of agriculture and agricultural trade in Uzbekistan (UZB). This paper highlights the major effects of market and price liberalization (50% and 100%) on agricultural trade using the partial equilibrium model AGRISIM which is based on the "Static World Policy Simulation Model" (SWOPSIM) of the United States Department of Agriculture (USDA). With the help of this model, changes in general economic conditions, policy intervention in agricultural markets and foreign trade are simulated. This study suggests that the issues of sustainable agriculture development and food security in Uzbekistan can be achieved through, liberalization of agricultural markets and trade specially wheat and cotton.


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