181
with no agricultural experience to become individual farmers (Weinthal 2006 ,
pp. 19–22; Abdullaev and Atabaeva 2012 , p. 109). These farmers have gained partial access to production inputs, but water access has still been dominated by the
former collective decision makers and/or the newly emerging water users associations (see below). The individual farmers apply different means (power, money,
infl uence, good connections, etc.) to gain access to water to irrigate their crops (for
a case study in the Fergana Valley, see Abdullaev and Mollinga 2010 , p. 93). Thus,
in times of increasing scarcity, water allocation became subject to bargaining and
“good relationships”. It was not the water price, however, that controlled the distribution of water among users but rather other factors that determined the outcome of
these socio-economic processes. “The infl uence and control of the water management processes have been considerably reduced due to individualisation of the agricultural processes. The water professional’s role has been replaced by set of water
control strategies of newly emerging water users: large, small, subsistence farmers,
fi sheries and constructors, etc., who started to compete for water for their purposes.
The water management became more socio-technical process not only technical”
(Abdullaev and Atabaeva 2012 , p. 109).
Choices about land use – which crops to plant on given areas of land – are defi ned
by state quotas. “Even if farmers fulfi l their cotton production quota, they can still
be penalised if the area they plant with cotton is less than the requirement”
(Abdullaev et al. 2007 , p. 116). Farmers’ decisions are therefore mainly characterised by restricted property rights or the absence of property rights for resource use.
The term “property rights” refers to the rights to use a resource or a good independently, i.e. to buy, rent or sell a resource or a good (Alchian 1965 ; Eggertsson 1990 ).
Defi ned property rights are a prerequisite for using goods and resources effi ciently.
They are the basis for independent and effi cient decisions in a market economy. It is
only when individual decision makers face the full consequences of their behaviour
that they will take all the consequences of their decision into account. Furthermore –
and this is crucial in the present context – property rights are also a prerequisite for
the proper functioning of pricing mechanisms.
Market prices only make sense if there are clearly defi ned property rights. Prices
deliver information that forms the basis for individuals’ choices. They set incentives
to react economically to changing supply and demand conditions and thus to changing conditions of scarcity. Following this line of argument, water prices set by politicians make sense only if there is a clear defi nition of such property rights and if
property rights are allocated to individual decision makers. Farmers can only follow
price incentives if they have the freedom to choose among several alternatives.
Therefore, if water prices are to incentivise resource users, this can only be accomplished if the resource users have freedom of choice. Clearly defi ned property rights
where decisions about goods and resources are connected with private property are
indispensable for the use of water prices as a policy instrument.
These considerations can be traced back to the early proponents of the idea of a
market economy such as Walter Eucken (1890–1950). Eucken stated that systemic
12 Theory, the Market and the State: Agricultural Reforms in Uzbekistan…
with no agricultural experience to become individual farmers (Weinthal 2006 ,
pp. 19–22; Abdullaev and Atabaeva 2012 , p. 109). These farmers have gained partial access to production inputs, but water access has still been dominated by the
former collective decision makers and/or the newly emerging water users associations (see below). The individual farmers apply different means (power, money,
infl uence, good connections, etc.) to gain access to water to irrigate their crops (for
a case study in the Fergana Valley, see Abdullaev and Mollinga 2010 , p. 93). Thus,
in times of increasing scarcity, water allocation became subject to bargaining and
“good relationships”. It was not the water price, however, that controlled the distribution of water among users but rather other factors that determined the outcome of
these socio-economic processes. “The infl uence and control of the water management processes have been considerably reduced due to individualisation of the agricultural processes. The water professional’s role has been replaced by set of water
control strategies of newly emerging water users: large, small, subsistence farmers,
fi sheries and constructors, etc., who started to compete for water for their purposes.
The water management became more socio-technical process not only technical”
(Abdullaev and Atabaeva 2012 , p. 109).
Choices about land use – which crops to plant on given areas of land – are defi ned
by state quotas. “Even if farmers fulfi l their cotton production quota, they can still
be penalised if the area they plant with cotton is less than the requirement”
(Abdullaev et al. 2007 , p. 116). Farmers’ decisions are therefore mainly characterised by restricted property rights or the absence of property rights for resource use.
The term “property rights” refers to the rights to use a resource or a good independently, i.e. to buy, rent or sell a resource or a good (Alchian 1965 ; Eggertsson 1990 ).
Defi ned property rights are a prerequisite for using goods and resources effi ciently.
They are the basis for independent and effi cient decisions in a market economy. It is
only when individual decision makers face the full consequences of their behaviour
that they will take all the consequences of their decision into account. Furthermore –
and this is crucial in the present context – property rights are also a prerequisite for
the proper functioning of pricing mechanisms.
Market prices only make sense if there are clearly defi ned property rights. Prices
deliver information that forms the basis for individuals’ choices. They set incentives
to react economically to changing supply and demand conditions and thus to changing conditions of scarcity. Following this line of argument, water prices set by politicians make sense only if there is a clear defi nition of such property rights and if
property rights are allocated to individual decision makers. Farmers can only follow
price incentives if they have the freedom to choose among several alternatives.
Therefore, if water prices are to incentivise resource users, this can only be accomplished if the resource users have freedom of choice. Clearly defi ned property rights
where decisions about goods and resources are connected with private property are
indispensable for the use of water prices as a policy instrument.
These considerations can be traced back to the early proponents of the idea of a
market economy such as Walter Eucken (1890–1950). Eucken stated that systemic
12 Theory, the Market and the State: Agricultural Reforms in Uzbekistan…