NIYAZOV HOPES TO FIX THE COTTON FAILURE BY ADMINISTATIVE

UNCLAS SECTION 01 OF 02 ASHGABAT 001104 SIPDIS FOR SCA/CEN (PERRY) ANKARA FOR AGRICULTURE COUNSELOR SENSITIVE SIPDIS E.O. 12958: N/A TAGS: EAGR ECON ETRD PGOV TX SUBJECT: NIYAZOV HOPES TO FIX THE COTTON FAILURE BY ADMINISTATIVE MEASURES Sensitive but Unclassified; not for Internet Distribution Ref: (A) Ashgabat 309 (B) Ashgabat 1055 SUMMARY ¶1. (SBU) Presiding over an October 6 Cabinet of Ministers meeting attended by provincial governors, agricultural officials and defense and law enforcement ministers, President Niyazov criticized this year's poor cotton harvest and set the stage for potential firings of the welayat hakims (provincial governors). While publicizing various shortcomings of the hakims, Niyazov also cited problems in loans for cotton farmers and the marketing of cotton internationally. Niyazov blamed the hakims for decreasing cotton yields, accused the hakims of not exercising proper control of the cotton harvest and ordered an increase in daily production of cotton within 15 days. As a result of changes in the organization of the cotton harvest, this year's cotton harvest is expected to be significantly below target. End Summary. NIYAZOV CRITICIZES THE HAKIMS OVER COTTON ¶2. (SBU) President Niyazov presided over a Cabinet of Ministers meeting on October 6, the National Remembrance Day commemorating the 1948 earthquake, in which he lambasted welayat hakims (provincial governors) over the cotton harvest. He criticized hakims for relying on Soviet work habits and accused them of lack of control over the harvest, which resulted in the decreased daily cotton yields. Niyazov highlighted "compromising" information about various hakims: -- Dashoguz Welayat Hakim Aganiyz Akyev (previously considered a potential heir apparent, see ref B) was cited for not working closely with farmers. Niyazov reflected on Akyev's "old sin" of not reporting the alcohol abuse of the former director of the Turkmenbashy oil refinery, which Akyev "committed" while he was the mayor of the Turkmenbashy two years ago. -- Ahal Welayat Hakim Amandurdy Myratgulyev was accused of using military conscripts to harvest cotton. Niyazov also threatened him with future investigation of his unspecified "wrongdoings." -- Balkan Welayat Hakim Meretguly Gubyev angered Niyazov by suggesting the merger of small farms into larger ones. Niyazov accused Gubyev of trying to return to the Soviet kolkhoz system. While granting other hakims 15 days to improve their cotton outputs, Niyazov only gave Gubyev an unrealistic three days - perhaps signaling the next hakim likely to be let go. -- The Mary and Lebap Welayat hakims escaped specific charges as Niyazov simply accused them of "eating a lot and having gained a lot of weight" since attaining their positions. "NO MIDDLEMEN IN COTTON SALES" ¶3. (SBU) Niyazov strongly criticized the hakims for using middlemen in cotton sales and for excluding farmers from the transactions. This position contradicts his January 18 decree on regulating sale of cotton for the international market (ref A). (Note: In accordance with the decree, special commissions headed by welayat governors were established in each of the five provinces to assist Agricultural Joint Stock Companies (AJSC) and private farmers in selling their cotton. Prior to the decree, the State Cotton Concern was the state middleman, purchasing cotton from farmers at a state-fixed price and selling it in the international marketplace. End Note.) Presently, all cotton produced in the welayats is sold through welayat commissions and the commissions' representatives negotiate with international buyers. During his September 18 visit to Dashoguz Welayat, Niyazov ordered the AJSC to disengage from cotton sales in order to permit farmers to be directly involved in price negotiation and sale of cotton for the international market. However, the president did not suggest any legal mechanism for farmers to do this, thus leaving farmers and hakims confused. INTO THE WEEDS ... NIYAZOV ORDERS FARMERS TO RETURN LOANS ¶4. (U) Niyazov complained that etrap (district) hakims often gave land to their relatives and provided them with loans from the Dayhan Bank (Farmers' Bank) to grow cotton. He rejected this arrangement ASHGABAT 00001104 002 OF 002 when the relatives hired cheap labor, rather than work the land themselves. As a result, Niyazov dismissed Dayhan Bank Deputy Chief Batyr Sahedov for disbursing the bank's money to the wrong people. Niyazov also criticized Central Bank chief Geldimyrat Abylov for lack of oversight of state funds and ordered a review of transactions at Dayhan Bank welayat branches. Niyazov demanded that welayat hakims verify that "real farmers," and not hired hands, were working in the cotton fields. Niyazov ordered farmers who failed to meet their cotton quotas to return loans from the Dayhan Bank. MORE PEOPLE ESCAPE COTTON PICKING BURDEN ¶5. (U) During the Cabinet of Ministers meeting Niyazov once again reiterated his May 2004 ban on child labor for cotton picking and exempted employees of state organizations, including teachers and doctors, from cotton picking duties. However, employees of ministries and organizations which own land and grow cotton for their own use are not exempted. (Comment: During a series of trips to all welayats, embassy officers saw no evidence of widespread use of child labor in the cotton harvest; those children who were in the cotton fields seemed to be part of family, rather than school, groups. End Comment.) ¶6. (U) Niyazov prohibited the use of military conscripts in the cotton fields. He also directed, for this year only, that fields not assigned to tenants be given to military units for them to harvest. These units can keep 70% of the cotton for their own use and remand the remaining 30% to the state cotton reserve. OTHER HOUSEKEEPING ¶7. (U) Niyazov authorized the Chief of the President's Administrative Apparatus, Muhamerberdy Bashiyev, to work on the creation of a new department under the President's Office to oversee the implementation of the president's resolutions and monitor top officials' "executive discipline." He concluded the meeting with an awards ceremony for law enforcement and military chiefs. COMMENT ¶8. (SBU) Disorganization and changing priorities seem to be plaguing Turkmenistan's agricultural sector. Niyazov's experimentation with the AJSC, combined with sudden shifts in policy have contributed to reduced cotton yields this year. Although he acknowledged private sector progress in the livestock, fruit and vegetable sectors, Niyazov does not want to cede control over the cotton sector, which is, along with oil and gas, a major hard currency earning component of the economy. End Comment. Brush UNCLASSIFIED 4 SIPDIS UNCLASSIFIED UNCLASSIFIED