Ministry of Agriculture in Uzbekistan not paying creditors

The Ministry of Agriculture in Uzbekistan
Fourteen enterprises have fallen victim to the Ministry’s delay in payment totaling about two billion soms (1 million USD).

According to the farm equipment suppliers – such enterprises as Taminotchi-xizmatchi, Minitec Invest Leasing, Chirchikselmash as well as others – the ministry has been defaulting on its debts for more than ten years.

This is when companies started to supply farm equipment bought from abroad to its commercial base Keles, a monopoly controlled by the Ministry of Agriculture.

The base used to pay a 15 percent advance but would then delay paying the rest of its debt claiming that the farmers to whom it then re-sold the equipment to were unable to pay their debts.

Equipment suppliers would have liked to have discontinued their relationship with the ministry but that is easier said than done in a country like Uzbekistan.

During harvest time villages have a severe shortage of farm equipment and spare parts.

And at that time authorities are only concerned with fulfilling their harvest supply quotas and pressure companies to supply the equipment.

It is unclear why – either the famers were unable to pay for the equipment or some sort of corruption took place – but the Keles base was deemed bankrupt in late 2009.

Since the Ministry of Agriculture was the founder of the base it is responsible for its debts.

The Cabinet of Ministers adopted a special decision in 2010, in which it ordered the Ministry of Agriculture’s agencies to pay Keles’ debts to Azerbaijan’s Plastik company.

In order to settle with domestic companies the Ministry of Agriculture signed an agreement at the Tashkent administrative court in December 2011 guaranteeing a schedule of repayments, which was supposed to be completed by October 31, 2012.

Were Uzbek suppliers swindled?

“We understood only too late that we were swindled,” say the suppliers.

A gate is all that is left of the Ministry of Agriculture’s Keles base ©
According to them, the Ministry of Agriculture could have simply settled its debts by selling equipment from the Keles base, whose market value is thought be enough to cover all monies owed.

However, all of the assets on the base have disappeared and the the base itself is now covered by wild weeds.

The scheduled re-payment plan remains as it was on the day of the ruling – not a single som has been paid out.

The bureaucrats’ unwillingness to pay was so obvious that even the Retail and Industrial Chamber acting on the behalf of the Taminotchi-xizmatchi farm equipment company filed a lawsuit with the Tashkent city administrative court.

On May 13, 2013 the court made a decision ordering the ministry to pay the company 850 million soms. For some inexplicable reason the same court reversed its decision on October 9 of the same year.

Taminotchi-xizmatchi has filed a complaint to the appellate of the High Administrative court but does not have a strong expectation that the case will be resolved in its favor.

850 million soms which Keles base owes us is a huge sum for our small enterprise.

The Director General of Taminotchi-xizmatchi

The Cabinet of Ministers does not give a d%$& about local companies

In the meantime, the Ministry of Agriculture’s blatant refusal to settle its debts is wreaking havoc on these companies bottom-line.

The “850 million soms which Keles base owes us is a huge sum for our small enterprise,” Abdijalil Abdaliov, director general of Taminotchi-xizmatchi, told According to him, instead of raising the employees’ salaries, awarding them bonuses, and being able to support social causes, the enterprise is forced to downsize on everything and is teetering on the brink of bankruptcy.

Most other companies swindled by the Keles base find themselves in a similar situation.