The role of institutions and water variability in food security in Uzbekistan: The case of rice markets in the Khorezm region

During the last three decades, water scarcity in Uzbekistan has seriously affected agricultural production and rural income. The allocation of water resources is heavily influenced by natural factors but also by the institutional rigidity of agricultural policy making in Uzbekistan, which represents a core pillar of the agricultural policy inherited from the former socialist system. The objective of this paper is to explore the effect of water competition between the state promoted cotton and farmer desired rice crops on the domestic price of rice, and evaluate how possible changes in these settings would influence the rice prices. Under more flexible institutional conditions, the price path of rice would be smoothed as the farmers can improve its production. Moreover, the impact of a more flexible state procurement for cotton will be more favorable not only for farmers, but also for consumers as it might protect the latter from extreme price fluctuations in markets as a result of changes in domestic rice supply.