The GEF Small Grants Programme

in Uzbekistan

The Most Valuable Investment in Agriculture Gives the Greatest Dividends


Alexey Volkov

Farming, even when it is facing challenges, is only being handled as a business activity aimed at bringing profit. The effectiveness of agribusiness depends, however, on how well a business owner or owners (in this business farmers) manage this kind of business and all associated processes, particularly in the long term.

It is well known that the main factors of agricultural production are labor, land (resources) and capital. And therein lies the main problem that agriculture is currently facing in our country. Nature is commonly viewed as a resource that has to be utilized but not as a capital worth investing in to receive additional products in the future. This perspective has to be changed for agriculture to thrive and develop in a sustainable way.

Soil, water, and biodiversity are at the core of the main agricultural assets. One does not receive natural capital for free. One should constantly invest in it and always maintain its optimal working condition. Only in this way can natural capital work efficiently in order to create additional products. In other words, the farmer has to invest in his own resources to get profit (dividends) from them. But the problem persists in the fact that farmers do not view nature (soil, water and biodiversity) as capital. They see nature as a resource that is mostly free to use. However, one must invest in order to receive.

This concept defines many known problems in using natural resources in agribusiness. As mentioned above, natural resources, including soil, water, and biodiversity, represent capital resources in agribusiness. But they can undergo “depreciation” on the long-term without investing in their maintenance


Let's start with soils. Agricultural activity should be as productive as possible to be considered a lucrative business. Since agriculture is dependent on soil resources, soils should be kept fertile and healthy in a long-term perspective. To harvest sufficient amounts of various crops, soils should have a certain level of fertility without drastic fluctuations in it. In a way, this approach resembles the way of maintaining vehicles and machinery: one should invest in soils so that they stay fertile for generations to come.

Soil fertility and health also depend on many biological processes. Microorganisms that work and live in the soil are needed for these processes. They, in turn, need food. Food for the microorganisms is an organic component in these processes. Without this component, no humus will be formed and soils will lose fertility. It is common knowledge among the farmers but only a few take action to support organic matter content accumulation in the soil. After just one harvest of wheat or cotton from a hectare-sized field, about one ton of humus can be withdrawn. Organic matter is also lost in the form of the harvest itself and plant stems and leaves. One hectare of only crop stalks and leaves can lose up to 22 tons of organic matter within 17-18 months. For soils to remain fertile, it is necessary to replenish the withdrawn organic matter so that it is transformed into humus.

Now let us discuss how to enrich the soils with organic matter. Organic matter content needs to be constantly replenished. Adding one ton of manure produces only 90 kg of humus. In order to make up for one ton lost from soil as a capital resource, the farmer must contribute back into the soil not less than 10 tons of manure per 1 ha. But that this is not always happening. Farmers do not consider proper fertilizing necessary, as the soil is being viewed as a resource that must be used, not as a capital that has to be protected and replenished.

But the farmer should take care of the soil. And we will discuss here other, more useful alternatives for soil conservation and increasing organic matter content for its transformation into humus.

No till farming technology

It is necessary to consider and stop plowing the soil although it might sound illogical at first. No till technology has existed for a long time and it is actively being developed around the world. In Uzbekistan, this technology is developing and spreading very slowly with only the first tentative steps being taken.

To start with, we will discuss why one should restrain from plowing the soil. During the plowing process, the upper fertile layer of the soil becomes exposed to wind and water erosion. The magnitude of these processes is higher under plowing compared to the rates of erosion under natural conditions in each given area. Furthermore, traditional plowing practices cause the loss of soil microorganisms. Soil microorganisms are then literally washed out of the soil and cause further soil microbial diversity depletion. The presence of these microorganisms, however, is essential for soil health since they work on “repairing” it.

Traditional soil processing method of plowing is destroying the fertile layer and microorganisms in the soil

Now we will explain why we should use no till technology. Basically, these are the same reasons as incentives for soil conservation mentioned above. No till technology does not destroy soil and preserves all the different microorganisms in it. An integral part of this technology is mulching plant residues and leaving them on the soil surface. Mulch is the organic matter that is needed as a source of "food" for soil microorganisms that convert it into humus. In addition, soils being managed through no till technology and mulching remain protected from wind and water erosion, maintaining the important fertile layer. Mulching also keeps moisture in the soil, saving large amounts of water for irrigation and creating more favorable conditions for the life of soil microorganisms. Traditional plowing technology leaves the soil bare and exposed to the solar radiation.

Mulching is a way of protecting soil and an important method stimulating humus production by soil microorganisms

We should also note that using no till technology, the farmer spends much less financial and material resources for manufacturing operations.

Table 1. A comparison of benefits for growing wheat on traditional technology and No tillage

Phytomelioration and green manuring

Both of these technologies are intended to serve the same purpose: to enrich the levels of soil organic matter. Green manuring denotes sowing crops with a purpose of leaving them on the ground as fertilizer for the production of organic matter. The farmer does not harvest or sell these crops. Phytomelioration is a broader concept of improving the land by means of plant propagation. We will devote more attention to phytomelioration in the next newsletter.

Green manuring is one of those tools of enriching soil organic matter and improving soil as a natural capital that we have mentioned above. The farmer can invest in soil capital by applying the green manuring technique on his land. Since crops used in the process of green manuring stay on the ground, soil organic matter is returned to the soil. Thus the farmer can invest in soil fertility for the future productive use of his land.

However, investing in the future of this natural capital component is viewed negatively by many farmers. It can be even described as a phantom perspective from the viewpoint of a farmer caring about productivity of his crops at present. It's hard to translate management for sustainable soil fertility in the specific figure of the income for "tomorrow’s" needs in agribusiness. In addition, to invest in fertility, the farmer has to spend money “today” while the income will only be generated in the future. It is very difficult to calculate how much additional yield would be generated from additional content of organic matter in the soil and how much an increase of the humus content, for example, from 0.5% to 0.7%, would bring to the farmer. But it should and it can be evaluated in monetary terms for each farmer.

As in any other business, one needs to figure out which investments will bring the highest benefit. Therefore, affordable ways to return the soil organic matter should be calculated for each individual farmer. Since all farmers have different resources available, figuring out the best option requires taking into account this and other factors. One farmer can have a lot of available manure for soil fertilization while another one might not have access to sufficient water resources and cannot afford to sow the crops purely for the purpose of green manuring. The farmer still has an option of using mulch and winter crops for enriching soil humus content in this case.


The situation with the availability and use of water resources in agriculture is much more complicated. If a farmer receives the land for a long period (49 years for example) he will actively consider it important to maintain fertile soil for his future crops. But generally water resource use can be described as extremely wasteful. Since the natural precipitation amount varies annually, sustainable use of irrigation water tends to be a novelty among farmers.

A possible approach to treating water resources as natural capital through investing in them is preserving the soil moisture. You can see how the moisture retention process occurs in natural conditions: there is no excessive watering. This can only be found for floodplain ecosystems, such as riparian forests. In other cases the soil primarily receives the moisture from precipitation events. Soil moisture can be kept more stable by having a vegetation cover rather than leaving arable land bare. These same methods can and should be borrowed from nature and applied in agriculture. By and large, this has been done in other countries, and continues to be widely implemented. The same should be done in our country.

Drip irrigation

The government has committed itself to the development of this technology. Unfortunately, we are moving in this direction only by farmers who are open for advanced technology or farmers whose lands experience water shortages. Analysis conducted by an NGO «KRASS», within our project on drip irrigation in Namangan region, showed that this technology could lead to significant improvement in many performance indicators. But farmers face difficulties in order to obtain promised loans for purchasing drip irrigation systems due to a large number of administrative barriers. For this reason, adoption of drip irrigation technology is moving forward very slowly.

Cost-benefit analysis of drip irrigation system introduction compared to the traditional irrigation method. All calculations are presented per 10

Table 1

No till technology

Using no till technology and mulching does not only protect soils and retain water. Advantages from practicing this management technology go beyond that. Total savings of water / keeping higher moisture levels can reach up to 2,000 m3 / ha.

There are a number of other technologies for water conservation, including the laser leveling of fields with savings up to 25% of irrigation water, and the separation of irrigation channels in the network from water users associations, with potential savings of up to 50% water used for irrigation, which we described earlier.


Farmers usually don’t consider biodiversity as an important element of natural capital in their agricultural activity. However, pollinators, for example, constitute one of the main biodiversity elements important for increased productivity and plant development processes. If there are no pollinators, productivity will fall steadily. Nature did not create in vain a similar mechanism of plant propagation. It needs the help of insects that carry pollen. A number of studies have assessed the value of pollination services for agriculture. Global yields without pollinators would have decreased in the amount of 190-300 billion euros per year. Farmers in many countries pay beekeepers to have beehives close to the fields during flowering season. We have, unfortunately, only few measures for using pollinators, both wild and domesticated (honeybees).

Table 2

What should be done to support pollinators? First, there is a need to create islands of habitats for wild pollinators and birds. These specially designated areas should not have human interference to limit the growth of wild vegetation. In many western countries, farmers use the following algorithm. For every 100 hectares of arable land they set aside 0.1 to 1 hectare of wilderness, dominated by shrubs and trees. Insects and birds feeding on pests should have a habitat in close proximity to farmers' fields that should be pollinated. One study showed that coffee yields, for example, fall up to 20% if the habitat of pollinators is at a distance greater than 1 km from coffee plantations. For many farmers in our country, it may seem strange and unnecessary. And this lack of understanding again comes from ignoring the need to recognize the importance of natural capital for agribusiness.

Islets of wildlife can be replaced with other habitats, but they should rather be complemented with hedgerows (or shelter belts) that in themselves carry a lot of other useful features, such as prevention of topsoil loss through reducing wind speeds and wind erosion. It would in turn mean increase in soil moisture and better water conservation. Hedgerow vegetation could also be a source of firewood and could be used for other purposes.

Another way to increase natural pollination services is to promote beekeeping and avoiding the use of chemicals that kills insects. We need to move from artificial plant protection methods to more natural, biological ones.

In conclusion, we would like to note that often, despite the efforts that a man can make in a way he manages the land, nature does a better job. That is why it is necessary to observe the processes in nature, carefully study them and try to repeat them. A change of thinking and viewing nature as capital will bring dividends. These dividends will be higher than those that farmers are currently getting. It is necessary to understand that soil, water, and biodiversity are irreplaceable elements of natural capital in agriculture and, as any capital investment, require preservation and sustainable improvement so that they can add value to agricultural products in the long term.