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Analysis of Uzbekistan’s Planting Industry Growth Based on Shift-Share Method

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International Journal of Management Science and Business Administration

Volume 7, Issue 4, May 2021, Pages 7-13 

Analysis of Uzbekistan’s Planting Industry Growth Based on Shift-Share Method

DOI:10.18775/ijmsba.1849-5664-5419.2014.74.1001
URL: http://dx.doi.org/10.18775/ijmsba.1849-5664-5419.2014.74.1001

Zhang Lingzhi

Tashkent State University of Economics, Uzbekistan

Abstract: Changes in the structure of the planting industry are an important indicator of the level of agricultural development. This paper applies the shift-share analysis method to analyse the growth of Uzbekistan’s planting industry from 2011 to 2018 into three parts: the national share, the industry mix and the regional shift component. The study found that the growth of Uzbekistan’s national planting industry has driven the growth of the planting industry in each state. Although the output of grain and cotton is still the main output of the planting industry, the scale of grain and cotton is relatively shrinking, and the output of vegetables, melons, fruits and berries, and grapes is on the rise. Because of the obvious differences in the impact of the planting industry structure and competitiveness on yield growth in Uzbekistan states, each state should formulate corresponding industrial policies according to the advantages and characteristics of planting industry.

Keywords: Shift-share analysis, Planting industry growth, Planting industry structure, Uzbekistan

Analysis of Uzbekistan’s Planting Industry Growth Based on Shift-Share Method

1. Introduction

In recent years, the scale of Uzbekistan’s planting industry has shown an increasing trend. The output has increased from 21.8 million tons in 2011 to 24.7 million tons in 2018, achieving a growth rate of 13.3%. Among the 12 states, except for Syrdarya and Tashkent, all other states achieved positive growth. 2011-2018 Uzbekistan’s crop production and structure in 12 states are shown in Figure 1.

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Method

Figure 1: 2011-2018 Uzbekistan’s crop production and structure in 12 states

 Source: Uzbekistan Agricultural Statistics Yearbook 2019

As the output of the planting industry has increased, the industry structure has also changed. The changes in the structure of the planting industry are mainly reflected in the decrease in the cultivation of grain and cotton, while the increase in the cultivation of vegetables, melons, fruits and berries, and grapes. Compared with 2011, the production of food crops in 2018 increased by -7.35%, cotton production increased by -34.49%, vegetable production increased by 39.55%, melon production increased by 41.88%, fruit and berry production increased by 44.04%, and grape production increased by 45.83%. The structural changes of Uzbekistan’s planting industry from 2011 to 2018 are shown in Figure 2.

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Method

Figure 2: 2011-2018 Uzbekistan’s planting industry structure comparison chart

Source: Uzbekistan Agricultural Statistics Yearbook 2019

Does the growth of Uzbekistan’s crop production have different performance in each state? How much does the increase in crop production in various states have to do with the increase in crop production in the country? How does the structure of the planting industry in each state differ from that of the whole country? Which crop industries are competitive in each state? Focusing on these issues, this paper applies the shift-share analysis method to conduct an empirical analysis of the structural benefits and industrial distribution of planting in 12 states of Uzbekistan. It demonstrates the role of planting structural adjustment and industrial advantages in accelerating the realisation of agricultural modernisation in Uzbekistan.

2. Literature Review

The shift-share analysis is a growth decomposition method used to enhance the understanding of change in a system by comparing the change in a region of interest with change in a relevant reference region. Its most common use has been in decomposing regional employment Growth, productivity, industry analysis, regional economic analysis into parts: the national share, the industry mix, and the regional shift component. Pirzada K. (2015) probe into the spatial competitiveness of economic sectors in Banyuwangi by applying a shift-share model. The results indicate that agriculture, mining and manufacturing sectors are no longer the backbone of the economy of Banyuwangi. Trade, hotel and restaurant, construction, service and financial sectors are the most robust sectors contributing to net shift with a total more than 25 percent. Goschin Z. (2014) performed the analysis for the post period of Romania’s accession to the EU. The results from the shift-share analysis suggest that the developed regions can recover more easily from the crisis due to their economic potential, and the regional disparities are likely to deepen unless appropriate regional policies are enforced. Li Xiaojun (2004) applied the shift-share analysis method to analyse the changes in China’s agricultural industrial structure. The results show that the growth rate of the planting industry in China’s agricultural production structure has slowed down, while the growth rate of animal husbandry has accelerated. The growth of agricultural output value is related to the comparative advantage of agricultural production. Sun Xinzhang (2010) applied the shift-share method to analyse the characteristics of China’s agricultural development pattern from four aspects: agricultural economy, agricultural product production, animal product production and agricultural versatility. The results show that the rate of decline in the share of agriculture in GDP will slow down. Dong Fengli (2013) applied the shift-share analysis method to comprehensively evaluate the structural benefits of the agricultural industry in the Shenyang Economic Zone of China and put planning suggestions for five typical agricultural industry belts.

This paper applies the shift-share analysis method to study the growth of Uzbekistan’s planting industry. Through the analysis of the planting industry structure and competitiveness of 12 states, it provides a scientific basis for the Uzbekistan states to formulate policies for optimising the planting industry structure and measures to increase production and income of the planting industry.

3. Methodology

The shift-share analysis method applied in this paper was proposed by American economist Daniel B. Kramer in 1942 and was further developed by Dunn and Hoover in its application. According to their method, this paper decomposes the difference between the growth of the planting industry in the states of Uzbekistan and the growth of the national planting industry into two components: one is the structural component, which reflects the impact of the structural difference between the growth of the planting industry in each state and the growth of the national planting industry. The other is the competition component, which reflects the growth caused by the different advantages of the state planting industry and the national planting industry. These two components provide information on the growth advantages of each state’s planting industry and the competitiveness of each state’s planting industry. It can be considered that the growth of the planting industry in Uzbekistan states is related to three factors: the national share, the industry mix, and the regional shift competition. Expressed by the equation as:

Growth of the planting industry in each state = national share + industry mix + regional shift competition (1)

Suppose: rij(T) represents the output value of i industry in j state during T period (j=1, 2, 3…, n). ri(T) represents the output value of i industry in the country during T period. T=t0 is the base period. T=t is the reporting period.

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Method

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Method

is the national component, which represents the increase in the output value of the i industry in j state from t0 to t due to national growth.

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Method

is the structure component, which means from t0 to t period, j state i Increase due to the increase in the output value of the national i industry.

Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share Methodis the competition component, which means that from t0 to t, the i industry in j state Increment generated by having a competitive advantage over the national i industry.

In equation (2), all possible values of i are summed. Obtain the deviation share equation of the planting industry in j state:
Analysis of Uzbekistan's Planting Industry Growth Based on Shift-Share MethodIn equation (3):

B is the industry mix of state j.

is the deviation of i industry output value from the national i industry output value.

The value of

is unchanged for each state. The value of B only depends on rij(t0).

C is the regional shift component of state j. When

the greater the value ofrij(t0), the greater the competitive advantage value of state j.

When

the larger the value of rij(t0), the smaller the competitive advantage value of state j.

Divide both sides of equation (3) by

then the following equation:
Equation (4) is Equation (1) expressed in the form of growth rate. It indicates that the growth rate of the planting industry in state j is equal to the national planting industry growth rate plus the sum of the structural component and the competitive component expressed in the form of growth rate.

B1 is the industry mix. A positive value of B1 indicates a structural advantage, and a negative value of B1 indicates a structural disadvantage.

C1 is the regional shift component. C1 represents the competitiveness information of the planting industry in j state. C1 is all the factors affecting j state except for the industrial structure. C1 is closely related to agricultural development and economic management.

4. Results and Discussion

4.1 Shift-share of Planting Industry in Uzbekistan States

Carry out a Shift-share analysis of Uzbekistan’s planting industry. Take 2011 as the base period and 2018 as the reporting period. The country is based on 12 states. Check Uzbekistan’s Agricultural Statistics Yearbook to get relevant data on crop production in 12 states. The Shift-share analysis method is used for calculation, and the data analysis results are shown in Table 1.

Table 1: Results of the shift-share analysis of Uzbekistan’s planting industry

state A1+B1+C1 A1 B1 C1 B1+C1
Increment Increase

rate

Increment Increase

rate

Increment Increase

rate

Increment Increase

rate

Increment Increase

rate

Andijan 840.90 0.36 314.46 0.13 137.33 0.06 389.11 0.17 526.44 0.22
Bukhara 422.50 0.24 231.03 0.13 -86.58 -0.05 278.04 0.16 191.47 0.11
Jizzak 175.90 0.14 163.34 0.13 -63.81 -0.05 76.37 0.06 12.56 0.01
Kashkadarya 113.20 0.06 246.75 0.13 -197.41 -0.11 63.86 0.03 -133.55 -0.07
Navoi 138.60 0.20 93.60 0.13 -7.03 -0.01 52.03 0.07 45.00 0.06
Namangan 403.70 0.27 198.81 0.13 -7.82 -0.01 212.70 0.14 204.89 0.14
Samarkand 353.30 0.12 387.39 0.13 238.63 0.08 -272.73 -0.09 -34.09 -0.01
Surkhandarya 270.60 0.15 243.27 0.13 -55.05 -0.03 82.39 0.05 27.33 0.01
Syrdarya -36.40 -0.03 156.20 0.13 -92.05 -0.08 -100.55 -0.09 -192.60 -0.16
Tashkent -707.10 -0.26 369.25 0.13 224.60 0.08 -1300.95 -0.47 -1076.35 -0.39
Fergana 407.90 0.21 263.96 0.13 -42.31 -0.02 186.25 0.09 143.94 0.07
Khorezm 317.60 0.27 156.31 0.13 15.41 0.01 145.88 0.12 161.29 0.14

Source: Uzbekistan Agricultural Statistics Yearbook 2019, calculated by the author

From 2011 to 2018, 10 of Uzbekistan’s 12 states had a substantial increase in the gross production value of the planting industry, reflecting the good development trend of the planting industry in the past eight years. In terms of absolute growth, Andijan has increased by 840.90 kilotons, which is the largest increase in all states. The second-largest increase was Bukhara, with an increase of 422.50 kilotons. Tashkent and Syrdarya, which were ranked last in terms of growth, had negative growth, with the growth of -707.10 kilotons and -36.4 kilotons. In terms of growth rate, the highest is Andijan State, with a growth rate of 0.36. The second-highest growth rate is Namangan and Khorezm, both with a growth rate of 0.27. Tashkent and Syrdarya, which ranked last in terms of growth rate, were -0.26 and -0.03.

The national share refers to the increase of each state driven by the growth of the national planting industry. If the growth of a state’s national share is greater than the actual growth, it indicates that the growth of the state’s planting industry is mainly driven by the growth of the national planting industry. The national share is the result of the spreading effect of the development of the national crop industry. Conversely, it shows that the growth of the state’s planting industry is ahead of the national planting industry. As shown in Table 1, the states where the national share increase is greater than the actual increase are Kashkadarya, Samarkand, Syrdarya and Tashkent, which are dominated by industry and service industries.

The industry mix and the regional shift component exclude the influence of the national growth effect on the growth of the planting industry. The industry mix reflects the difference between the planting industry structure of each state and the national planting industry structure. As shown in Table 1, the industry mix of Bukhara, Jizzak, Kashkadarya, Navoi, Namangan, Surkhandarya, Syrdarya and Fergana are less than zero. It shows that compared with the whole country, the fast-growing cropping sector in these eight states is relatively small, while the slow-growing cropping sector is relatively large. The industry mix of Andijan, Samarkand, Tashkent and Khorezm are greater than zero. It shows that the fast-growing plantation sector in the four states is relatively large, while the slow-growing plantation sector is relatively small. The regional shift competition reflects the competitiveness of the state’s planting industry. But it should be noted that the structure of the planting industry is closely related to resources and climate. Therefore, giving full play to the comparative advantages of each state is the key to ensuring a reasonable and sustainable development of the planting industry.

As shown in Table 1, the regional shift components of each state are polarised. On the one hand, the five states of Andijan, Bukhara, Namangan, Fergana and Khorezm have a regional shift competition of more than 100 kilotons, which shows that they have obvious performance in the competitiveness of planting industries and can drive the development of plantation in various states. On the other hand, the planting industry in Samarkand, Syrdarya, Tashkent and other states is not competitive. It may be caused by the unreasonable industrial structure of the planting industry or caused by factors such as the level of productivity, the level of operation and management, the scale of investment and so on.

4.2 Analysis of the Shift-share of the Planting Industry in 12 States of Uzbekistan

The results of the shift-share analysis of the planting industry in 12 states are shown in Table 2:

Table 2: Results of the shift-share analysis of the planting industry in 12 states

State grain cotton vegetable
A B C A B C A B C
Andijan 76.51 -118.67 61.95 42.15 -151.09 9.94 127.06 249.63 241.80
Bukhara 83.06 -128.83 -24.54 47.70 -170.98 62.19 52.19 102.54 142.87
Jizzak 63.79 -98.93 81.74 30.42 -109.05 -2.97 34.45 67.68 34.58
Kashkadarya 111.93 -173.60 23.37 53.81 -192.89 -25.12 48.40 95.09 -10.40
Navoi 33.73 -52.31 -19.62 14.40 -51.61 12.31 22.85 44.90 40.15
Namangan 64.83 -100.54 33.22 32.94 -118.09 -1.05 65.20 128.09 113.01
Samarkand 106.10 -164.56 -104.04 33.58 -120.38 -35.40 153.32 301.22 -164.74
Surkhandarya 81.92 -127.05 -24.77 46.56 -166.92 -89.04 72.07 141.59 160.04
Syrdarya 62.68 -97.21 -4.67 33.39 -119.71 1.12 26.11 51.30 -2.60
Tashkent 90.87 -140.93 -113.24 35.90 -128.70 -49.20 189.21 371.73 -896.93
Fergana 101.43 -157.32 -95.41 40.06 -143.62 8.46 69.39 136.32 282.39
Khorezm 38.45 -59.63 118.38 29.98 -107.47 76.89 53.43 104.98 9.89
UZB 941.10 -1459.60 0.00 466.95 -1673.95 0.00 933.10 1833.20 0.00

Source:Uzbekistan Agricultural Statistics Yearbook 2019,calculated by the author

Table 2: Results of the shift-share analysis of the planting industry in 12 states (Continued table)

State melon Fruits and berries grape
A B C A B C A B C
Andijan 9.50 20.32 38.48 52.95 121.84 34.41 6.28 15.30 2.52
Bukhara 11.67 24.97 24.16 21.81 50.19 44.80 14.60 35.54 28.57
Jizzak 23.21 49.65 -19.86 8.23 18.94 -6.37 3.24 7.89 -10.74
Kashkadarya 13.38 28.62 7.50 10.75 24.74 64.20 8.47 20.63 4.30
Navoi 6.30 13.47 21.23 9.30 21.40 -2.60 7.03 17.12 0.55
Namangan 7.10 15.18 0.62 18.42 42.39 68.68 10.33 25.14 -1.77
Samarkand 10.07 21.54 12.88 33.51 77.11 -27.93 50.80 123.70 46.49
Surkhandarya 16.49 35.27 74.54 13.54 31.16 8.40 12.69 30.89 -46.78
Syrdarya 29.98 64.12 -102.49 2.84 6.54 8.62 1.20 2.92 -0.52
Tashkent 14.52 31.04 -72.76 21.71 49.94 -92.15 17.05 41.52 -76.67
Fergana 6.63 14.18 12.09 36.94 85.00 -74.84 9.50 23.13 53.57
Khorezm 13.71 29.33 -22.55 16.98 39.08 -35.16 3.75 9.13 -1.58
UZB 172.74 369.46 0.00 250.66 576.74 0.00 145.45 354.15 0.00

Source: Uzbekistan Agricultural Statistics Yearbook 2019,calculated by the author

From the perspective of plantation in 12 states, the national share of grain, vegetables and cotton is significantly higher than that of melons, fruits and berries, and grapes. The industry mix of grain and cotton are negative. The industry mix of vegetables, melons, fruits and berries, and grapes are all positive, about twice the national share. It shows that although grain and cotton still occupy the dominant position in Uzbekistan’s planting industry, the development speed has slowed down, and the scale has been relatively shrinking. The growth of vegetables, melons, fruits and berries, and grapes is generally on the rise.

From the industry mix of 12 states, the industry mix of grain and cotton are all negative in each state, while the industry mix of vegetables, melons, fruits and berries, and grapes are all positive. It shows that the structure of the planting industry has changed between 2011 and 2018, which is significantly consistent with the national situation. The planting of grain and cotton has generally decreased, while the planting of vegetables, melons, fruits and berries, and grapes has generally increased. This change optimises the structure of the planting industry, improves the labour productivity and economic benefits of the planting industry.

The regional shift components varies from state to state. You are Judging whether the competitive advantage is obvious by whether the regional shift components is greater than the national share and industry mix. The states with a comparative advantage in grain cultivation are Khorezm and Jizzak. The states with comparative advantages in cotton cultivation are Khorezm and Bukhara. The states with comparative advantages in vegetable cultivation are Bukhara, Surkhandarya and Fergana. The states with comparative advantages in melon cultivation are Andijan, Navoi and Surkhandarya. The states with comparative advantages in fruit and berry cultivation are Kashkadarya, Namangan and Syrdarya. Fergana is the state with a comparative advantage in grape growing.

5. Conclusion

This research attempts to find out how the increase in crop production in each state of Uzbekistan is affected by the increase in crop production in the country, and to find out the characteristics of the crop structure in each state and which crops are competitive.

From the analysis, this research concludes the research findings as below:

  1. On the whole, in the growth of Uzbekistan’s planting industry from 2011 to 2018, the national share is larger than the industry mix, especially the performance of grain and cotton as the main crops of the planting industry. In the increase in crop production in 12 states, the national shares of grain and cotton are all positive, while the industry mix are all negative. The growth of the country’s planting industry is an important factor driving the growth of the planting industry in all states.
  2. Uzbekistan’s planting industry has a large output, but the planting industry structure is still optimising, resulting in little positive deviation of the planting industry structure. Therefore, each state should take the planting industry as the focus of structural adjustment, give play to the advantages of each state, and optimise the structure of the planting industry. Simultaneously, the agricultural product processing industry should be developed, the value chain of agricultural products should be extended, the added value of agricultural products should be increased, and the planting industry should be transformed from a quantitative growth type to a quality growth type.
  3. The development of the planting industry depends on the comparative advantages of each state. Andijan, Bukhara, Namangan, Fergana and Khorezm have obvious advantages in competition. These states have formed the competitive advantage of the planting industry by taking advantage of the comparative advantages of planting resources, promoting good seeds, and increasing labour productivity.

Since the structure and competitiveness of the planting industry have a significant impact on the growth of output value, Uzbekistan should formulate industrial policies based on the development characteristics of the planting industry in each state. At the same time, we cannot ignore the states where the competitiveness of planting industry is inferior. We should cultivate comparative advantages, guide the reasonable distribution of the planting industry, and improve the efficiency of resource allocation of planting industry.

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