TURKMENISTAN: DASHOGUZ FARMER EXPERIMENTS WITH

C O N F I D E N T I A L SECTION 01 OF 03 ASHGABAT 000851

SIPDIS

STATE FOR SCA/CEN, EEB
STATE PLEASE PASS TO USTDA DAN STEIN
TREASURY FOR BAKER/LANIER
AGRICULTURE FOR GERARD/FREITA

E.O. 12958: DECL: 07/07/2018
TAGS: PREL ECON EAGR EAID SOCI TX
SUBJECT: TURKMENISTAN: DASHOGUZ FARMER EXPERIMENTS WITH
NEW AGRICULTURAL MODEL

Classified By: CDA RICHARD E. HOAGLAND: 1.4 (B),(D)


1. (SBU) SUMMARY: In a creative marketing approach, IPC
Group has been placing free loaner agricultural equipment in
farms managed by an influential farmer, Sadulla Rozmetov, in
Dashoguz Province for the last 18 months. While working with
private influencers like Rozmetov is good for business, it
also helps to provide possible new agricultural models that
might eventually help Turkmenistan emerge from the
agricultural morass it is in. Rozmetov, who is a big fan of
IPC's John Deere and Case New Holland machinery, carries
weight with the government, and his opinion is bound to
spread. Finding allies like Rozmetov is vital for IPC in
light of the stultifying bureaucratic sclerosis in the
Ministry of Agriculture, where the staff lack initiative and
willingness to try anything new. IPC is getting more and
more concerned about competition from companies such as Klaas
and Kamaz -- and is therefore willing to strategically
provide whatever technical assistance necessary to build
loyalty. END SUMMARY.

USE OF TECHNOLOGY LEADS TO GREATER YIELDS


2. (C) IPC Group General Manager Jason Hunt told emboff
during a July 7 meeting that IPC Group has sent
$100,000-150,000 in free loaner equipment and
$500,000-600,000 in parts to a respected Dashoguz farmer,
Sadulla Rozmetov, who has been for the past 18 months IPC's
first private customer in Turkmenistan. Rozmetov tests
loaner equipment, much of which is new to Turkmenistan, which
is why his fields produce high yields. Hunt noted that the
company's relationship with Rozmetov has accelerated over the
past eight months. IPC, the official distributor of John
Deere and Case New Holland equipment in Turkmenistan, knows
that the Government of Turkmenistan still isn't utilizing all
of the technology that it has purchased over the years, such
as laser land levelers sold in 2001 that conserve water in
irrigation projects. This is why Turkmenistan's farming
yields have not improved even after many years of using U.S.
technology.

STRONG -- AND POWERFUL -- ALLY IN DASHOGUZ...


3. (C) IPC feels Dashoguz may be particularly open to
Western equipment since the governor, Saparmurat Ashirov,
worked as John Deere's local representative in the
mid-1990's. IPC's experiment with Rozmetov is going well.
There have been times when IPC has informed Rozmetov that it
is time to send the loaner equipment elsewhere, and Rozmetov
asks for an additional period of time to gather the necessary
funds to purchase that equipment. Hunt said that Rozmetov
"doesn't ask anybody for permission." Rozmetov works
directly through the Central Bank and has a letter of credit
confirmed by Deutsche Bank. In Rozmetov, IPC has found a
valuable advocate. According to Hunt, President
Berdimuhamedov always meets with Rozmetov when he goes to
Dashoguz. As Hunt said, "Rozmetov gets what he needs -- and
his opinion is bound to spread to other regions (of
Turkmenistan)."

...WHO IS NOT AFRAID TO TAKE INITIATIVE


4. (C) IPC is also encouraging Rozmetov to test equipment
which is simply sitting around because no one else in
Turkmenistan's agriculture sector is willing to take the
initiative to see what the results of using something new
would be. Rozmetov, who is responsible for 10,000-15,000
hectares, has access to hard currency because he always goes
above the plan with his cotton farms. Rozmetov has bought

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about $5,000-6,000 in parts from Case New Holland over this
past year. In addition to the laser leveler, Rozmetov is
trying out cotton seeders, grain seeders, and precision
planters. According to Hunt, Rozmetov is pleased with the
results from the equipment. For example, the wheat seeder
has cut nine passes of the field into one, saving Rozmetov's
team substantial time. Testing of precision planters also
went well, and Rozmetov wants to buy eight. Hunt said that
Rozmetov has significant influence in the Government of
Turkmenistan and that "there are never any problems when he
is involved." Rozmetov also recognizes the potential of
increased sales from improved packaging, so Hunt's team is
helping him to find a mobile cotton-seed oil bottling plant.
IPC is "willing to help him with anything" if it builds
loyalty.

BUT AGRICULTURE SECTOR STILL MIRED IN BUREAUCRACY


5. (C) However, even Rozmetov's authority has limits. Last
year, Rozmetov could not get anyone to sign off on planting
seed corn that IPC brought into the country. The seed has
expired and must be thrown away. Similarly, the Government
of Turkmenistan insisted on obtaining analysis of delinted
cotton seeds that, according to Hunt, are sown all over the
world. Because the government could not perform the analysis
locally, it sent the seeds to St. Petersburg -- and hence,
the farmers missed the season for planting those seeds as
well.


6. (C) Despite these problems, Hunt wants to bring over $1
million in a whole range of John Deere equipment for testing
by Rozmetov, in an attempt to steer Turkmenistan away from a
hunt-and-peck approach to agricultural technology -- as well
as away from competitors such as Klaas (Germany) and Kamaz
(Russia). Case New Holland is willing to supply specialists,
trainers, fertilizer, chemicals, seeds, equipment, and parts
to increase the capacity of Turkmenistan's agricultural
sector.

BUSINESS IS A FAMILY AFFAIR


7. (C) Hunt indicated that Rozmetov's sons are also involved
in the business. This is important in light of Rozmetov's
advanced age which falls somewhere above 80. One of the sons
is an agronomist, and one is involved in purchasing
machinery. Case New Holland will bring one son to one of its
small tractor manufacturing plants in the United Kingdom,
since he is interested in purchasing eight cotton seeders.


8. (C) An EMBASSY FSN from Dashoguz and Post's agricultural
specialist indicated that Rozmetov, an ethnic Uzbek, is known
and respected locally in Dashoguz Province as a top-notch
farmer and entrepreneur. Rozmetov's influence dates back to
the Soviet era when he operated one of a few model farms in
the republic. When Turkmenistan became independent in 1991
and the kolkhoz system was eliminated, Rozmetov was given
"ownership" of an entire kolkhoz because of his proven
agricultural ability. Rozmetov was especially close to
former President Niyazov, who visited the farmer on his
birthday and, late in 2006, fired a Dashoguz provincial
governor who had been tasked with cleaning up corruption
along the border because he "did not get along with Rozmetov"
-- suggesting that Rozmetov's entrepreneurial activities
might have extended to gasoline smuggling across the Uzbek
border.


9. (C) COMMENT: Turkmenistan's agricultural sector is still
deteriorating -- the just-concluded wheat harvest reportedly
has been one of the worst in years. In such an environment,

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private initiatives such as IPC's both make smart business
sense and offer an alternative model that agricultural
officials could one day agree to implement in an effort to
bring Turkmenistan's agricultural sector back from the morass
it has fallen into. While unimaginative agricultural
officials continue to work off a broken model dependent
largely on a combination of directed planting,
state-determined prices and subsidies, Rozmetov's success
helps to prove that personal interest is paramount to success
in agriculture. While Rozmetov has the freedom and power to
experiment, agricultural officials remain bound by old
thinking and tradition. There is still a lot of room for
improvement in Turkmenistan's agriculture sector -- and
within its agricultural bureaucracy. END COMMENT.
HOAGLAND