



































International Journal of Biological Engineering and Agriculture


American Journal of Science and  

Learning for Development 
 

Volume 1 | No 2 | Dec-2022 

 

 

 
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The Need for Diversification and Factors Affecting Economic 

Efficiency in Farms Specializing in Fruit Growing 

 
 

Olimjonova Gavkharoy 
1
, Tursunov Jasurbek 

2 

 

 
1 

Assistant of the Department of "Agricultural Economics" at the Andijan Institute of Agriculture and 

Agrotechnologies 

2 
A student of "Fruit-growing" field of study 

  
  
 

Abstract: In our country, great attention is paid to the development of agriculture, especially the 

fruit and viticulture sector, which depends on food supply. Horticulture, fruit growing is considered 

an important branch of agriculture that grows fruit, grapes and berries, and this branch serves to 

satisfy the needs of the population for fruit and fruit products, as well as fruit raw materials for 

industry. 
 
Keywords: Agriculture, industry, raw materials, efficiency, optimization, farm, agrarian economy. 

 
  
Enter. On January 28, 2022, the Decree No. PF-60 of the President of the Republic of Uzbekistan 

"On the Development Strategy of the New Uzbekistan for 2022-2026" was signed and the new 

Development Strategy of Uzbekistan was adopted with this decree. In the 30th goal of the 3rd 

section of the strategy entitled "Rapid development of the national economy and ensuring high 

growth rates":The tasks "to increase the income of peasants and farmers by at least 2 times through 

the intensive development of agriculture on a scientific basis, to reach the annual growth of 

agriculture by at least 5%", and in the course of the implementation of these tasks, "Cultivation of 

exportable products and fruit the issue of developing vegetable growing, increasing the area of 

intensive gardens by 3 times and greenhouses by 2 times and increasing the export potential to 1 

billion US dollars. For the successful implementation of these tasks, the issues of diversification of 

the sector in order to develop the fruit industry and increase its economic efficiency are of great 

importance. 

The agrarian economy of the country was completely reorganized as a result of the economic 

reforms carried out during the years of independence. The forms of management and ownership have 

changed. The production of agricultural products was fully entrusted to the non-state sector. During 

the reforms implemented in the agrarian sector, stable growth of production and provision of food 

products to the population is ensured. Among the forms of economic management that have proven 

themselves to be viable in world practice, farms have shown advantages in every way, and they have 

become the main form of economic management today. Now the main burden of agriculture falls on 

farmers. 

A well-thought-out agrarian policy is being carried out in our country regarding the optimization of 

arable land and the placement of agricultural crops. allowed to multiply several times. The basis for 

fully supplying the country's population with food products has been created, and a literal basis for 

exporting them abroad has been created. 

In our country, systematic work on diversification of agriculture, more rational use of land and water 

resources, increasing the income of farmers through the production of exportable products is 



 

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gradually bearing fruit. 132 thousand tons of agricultural products were processed and finished 

products worth 100 million dollars were exported. 724,000 tons of wet fruits were sold abroad, 

which brought 856 million dollars in foreign exchange. 

As noted by the President, "First of all, the fact that we established farming as the main form of 

organizing agricultural production and opened wide opportunities for its development played a 

decisive role in achieving high results in the life of our villages." Today, farms are large farms that 

have sufficient leased arable land at their disposal, are equipped with highly efficient modern 

equipment, and have mastered advanced technologies for efficient operation. Today, they are the 

pillars of our villages. 

Today, the farm has rightfully become the leading link of agricultural production, the main form of 

its organization. Currently, the farming movement unites many farms in its structure. More than 85 

percent of the total arable land in our country is at the disposal of farms, and the main part of the 

cultivated agricultural products falls on the farmers. 

Over the past period, gradual reforms have been implemented in agriculture to introduce market 

relations, develop production, form a class of owners and ensure their independence. At the initial 

stage of the reforms, a solid legal framework and necessary conditions were created for organizing 

the activities of farmers and peasant farms, turning them into a leading force in the production of 

agricultural products. 

In particular, the Land Code, the Law "On Farming" and other normative legal documents were 

adopted, which create strong legal bases and guarantees for the development of farming, economic 

and financial independence of farms. Over the past 30 years, as a result of the further improvement 

of legislation in the field of development of farming and ensuring reliable protection of their property 

relations, farms have rightfully become the leading link in the village, the main force producing 

agricultural products. 

Now, a fundamental change in the activities of farms will be implemented, i.e., work will be carried 

out to gradually introduce multi-food activities in farms. According to him, our farmers-

entrepreneurs, who are engaged only in the production of agricultural products, introduce additional 

directions based on market demands. 

From January 1, 2022, the entities that do not meet this requirement and have not established multi-

disciplinary activities, who strive for innovation and renewal, are capable of working on the basis of 

new ideas, entrepreneurship, not only their own, but also the table of our nation make room for 

people who are ready to contribute to its abundance, especially young people. 

This, in turn, puts the task of diversifying the activities of farms. Large-scale agrarian reforms 

carried out in our republic are aimed at diversification of production activities on farms, that is, the 

formation and development of modern multi-sectoral farms. is considered as a priority direction. 

First of all, we need to know the concept of diversification, its essence. Diversification - Latin 

Diversification means change, diverse development, it means the expansion and renewal of the fields 

of activity of enterprises and the type of products they produce. 

Diversification is carried out to achieve higher efficiency in production, obtain economic benefits, 

eliminate bankruptcy and other purposes. The penetration of farms that previously specialized in one 

field (industry, agriculture, transport, finance, etc.) into other production sectors, service sectors, first 

of all, into high-profit sectors, increases the scope and opportunities of their economic activity. 

expands. 

Diversification has recently become more important. In the activity of a company with a large 

amount of capital accumulated in the main areas of business, with very limited future opportunities, 

diversification creates the necessary conditions for capital investment and reducing the level of risk. 

The necessity of rational diversification is clearly felt in the conditions of choosing a clear direction 

for the enterprise and gradually eliminating its shortcomings. An enterprise that offers a complete set 

of products and services can reduce the risk and increase its competitiveness due to diversification. 



 

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Such situations motivate the enterprise to expand its scope of activity as a result of acquiring other 

firms and establishing new types of business. Banking, stock exchange and brokerage services are 

embodied in a single financial services complex. Various services are combined within the tourist 

business. Companies dealing with shipping begin to recommend such services as life and property 

insurance, correspondence delivery, and tourism. Enterprises in the field of production try to control 

the consumption channels of the product, the sources of raw materials, attract funds to the 

advertising business, and operate in the financial market. 

Diversification is carried out in order to achieve higher efficiency in production, obtain economic 

benefits, eliminate bankruptcy and a number of other purposes. The penetration of firms that 

previously specialized in one field (industry, agriculture, sports, finance, etc.) into other production 

sectors, service sectors, first of all, into high-profit sectors, expands their areas of economic activity 

and opportunities. 

There are two main strategies for growth in a corporate environment: concentration in one field, and 

diversification into other fields. Diversification is related to the advantage of large enterprises as the 

"benefit of diversity" and in today's modern conditions puts the production of one type of product in 

second place. It is somewhat more efficient to produce many different products under one large 

enterprise than to produce the same type of products in small, specialized enterprises.But this law is 

not universal. It should be said that the diversified activity of the enterprise is considered a form of 

implementation of the corporate strategy. The main commercial goal of diversification is to increase 

profits and create competitive advantages through the use of market opportunities. 

Using the production capacity of the enterprise in a multi-purpose partnership can lead to significant 

savings. Activation of the product consumption system reduces costs (Products and services are sold 

through a single system). Another available reserve of the economy includes intra-firm information, 

knowledge transfer, technical and managerial skills in production. The results obtained on the basis 

of the various training of workers and the variety of information obtained by them are also added to 

this. Diversification, including synergism, is considered necessary to bring the company's tangible 

and intangible resources to full use. This, in turn, reduces the risk due to the fact that the enterprise 

eliminates its dependence on a certain type of product or market, and on the other hand, there is an 

increase in the risk due to diversification. 

There are 3 types of diversification in the diversification of farm activities: 

In horizontal diversification, the company engages in activities related to the main activity. For 

example, horticulture produces several types of plants, that is, agricultural products. 

In vertical diversification, it can be understood that farms are engaged in activities related to the 

production of some kind of agricultural products, that is, the production, storage and processing of 

products. 

Diversification of a conglomerate means that it engages in activities that are completely unrelated to 

the main business activity. For example, farms whose main activity is crop production are engaged in 

retail trade, production of construction products or other similar activities. 

No matter what form of diversification is used, it provides an opportunity to effectively organize the 

activities of agricultural enterprises, ensure their high profitability, and their sustainable 

development. It is known that labor and product production in agriculture are seasonal in nature and 

depend on natural and climatic conditions, so the income of farms is more or less directly dependent 

on the favorable or unfavorable coming of the year. 

When the weather is unfavorable, there is a high probability that the income of farms will decrease 

sharply, and the year will end with a loss. Also, the spread of various diseases and pests of plants and 

livestock, low prices of agricultural products as a result of changes in market demand, increases in 

the prices of fuel, lubricants, mineral fertilizers, some The high prices charged by service providers 

for these types of work and services will reduce the income of farms and make them insolvent. In 



 

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such conditions, farms should develop different directions of diversification in their farms along with 

the production of agricultural products. 

Diversification of agricultural production requires, in addition to the above measures, effective use of 

cultivated products, expansion of the processing industry, and expansion of the production of various 

types of consumer goods in terms of market innovation. This increases the production efficiency of 

agricultural products, and also increases the competitiveness of all products in the domestic market 

as well as in the foreign market to a certain extent. The main directions of diversification of 

production in farms, increase of competitive products: 

 improvement of economic relations; 

 modernization of production; 

 attraction of production innovative technologies; 

 correct placement of crop varieties, increase product quality and crop productivity, 

 improving the breed of livestock and increasing the competitiveness of the livestock sector; 

 increase the competitiveness of processing and processing entities, 

 providing service to agriculture and increasing the competitiveness of service enterprises; 

 sustainable supply of food products to the population in the conditions of global climate change 

and water shortage. 

Diversification of agricultural production, by its essence, is, on the one hand, a necessary component 

of modernization, and on the other hand, it is a reason for its necessity. In this respect, these two 

processes are interrelated. Diversification is also meaningful and exciting and it can be applied to 

many areas and processes of the farm. Diversification of agricultural production means, first of all, 

expansion of its field of activity. Usually, the field of activity of a farm is determined by the 

production of the sector to which it belongs. 

Diversification of agricultural activities also implies an increase in the range of products or services 

provided. In this place, the farm does not have to deal with different fields of activity. Usually, the 

stability of a farm specializing in the production of a single type of product in the conditions of a 

market economy is characterized by a high level of risk. Because a negative change in the situation 

in the market of this product can have a serious impact on the activity of the farm. Accordingly, the 

farm is producing in a traditional way it is desirable to expand the range of products due to the 

production of products for which a new demand has formed and is consistently growing in the 

market. 

In this case, losses caused by a decrease in demand or a price decrease for one or another product in 

the market are compensated by the demand for other products or an increase in price.To ensure rapid 

growth of macroeconomic stability in the country, modernization of all leading sectors of the 

economy, including the agricultural sector, wide application of new techniques and cost-effective 

technologies, as well as radical renewal of the structure of production in agriculture, its change and 

requires diversification. 

It is known that by diversifying the activities of farms, ensuring the need for continuous growth of 

production in the conditions of limited land and water resources in agriculture, by fully and 

effectively using the potential of the agrarian sector and economic resources, the country's food 

security supply, providing raw materials to other industrial and processing sectors, attracting labor 

forces to other sectors and further increasing the standard of living and well-being of the population 

will expand by optimally ensuring employment in agriculture. In this regard, it is necessary to 

improve the existing system of specialization of farming activities, taking into account the specific 

characteristics of the regions of our republic, in order to diversify the activities of farms. 



 

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Large-scale agrarian reforms carried out in our republic are aimed at diversification of production 

activities on farms, that is, the formation and development of modern multi-sectoral farms. is 

considered as a priority direction. 

As a result of the ongoing economic reforms, positive progress is being made in agriculture every 

year. In this regard, it will help to increase the production volume and improve the quality of 

agricultural products, increase competitiveness in foreign and domestic markets, solve economic and 

social problems, as well as ensure stable growth of production in all sectors of the economy. 

Today, our government pays special attention to the development of the agricultural sector in our 

country, in this regard, in the Strategy of Actions on the five priority directions of the development 

of the Republic of Uzbekistan in 2017-2021, specific tasks are set for the modernization and rapid 

development of agriculture given. 

To further deepen the reforms in agriculture, to strengthen the material and technical base of the 

sector, and most importantly, to further improve the agricultural economy, to further increase the 

living standards of the population in rural areas, to make it necessary to diversify the activities of 

farms in terms of the development of small business and private entrepreneurship. is eating In recent 

years, as a result of the diversification of farm activities, the attitude towards private property in 

farms has fundamentally changed, and the practice of organizing and managing production based on 

market requirements is developing in them based on modern management principles. 

In the process of approval, farms must provide themselves with the necessary equipment, working 

capital, have credit capacity, and most importantly - cover their expenses and work at a profit, 

making increasing the income of the farm a reliable basis. special attention was paid. 

As a result of increasing the potential of farms, ensuring their financial and economic stability, their 

opportunities to increase the productivity of agricultural crops, increase productivity in livestock 

breeding, improve product quality and increase their assortment are increasing. In particular, the 

introduction of intensive technologies by farms in the fields of fruit and vegetable growing and 

viticulture, as well as animal husbandry, further expands their capabilities. 

At the current stage of further deepening of economic reforms and structural changes, special 

attention is being paid to the processes of modernization and diversification of farms in our country, 

along with further strengthening of the material and technical base. In recent years, the term 

"diversification" has been widely used in world practice and is interpreted in different ways. 

Sustainable development of agriculture today is directly related to diversification of farms. After all, 

the goal of diversification is to timely adapt to changes in the market conditions of farmers and to 

stabilize the economic activity of the farm. 

First of all, in order to reduce the risk in farms, it expands the possibilities of directing investments 

or other funds in several areas, thereby increasing the types of production of products and ensuring 

their interests. It is necessary to pay attention to the following as important tasks to be carried out in 

order to diversify the activities of farms: 

 improvement and renewal of the material and technical base in farms based on the introduction 

of new techniques and technologies; 

 improvement of production technology and transition to narrow specialization in the production 

of agricultural products; 

 scientific management of every process in the farm by a person with leadership skills and the 

ability to correctly select personnel; 

 attraction of various agro-innovations to the farm and its implementation; 

 ability to withstand strong competition and production of competitive products, taking into 

account market conditions, demand and supply elasticity; 



 

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 every economic entity should develop a prospective diversification strategy based on its 

capabilities. 

The distinctive features of diversification of farm activities are as follows: 

 first of all, as a result of the correct selection of intermediate and repeated crops, the introduction 

of crop rotation, the structure and productivity of the land will be high; 

 in cases where profits are reduced as a result of the decrease in productivity due to unfavorable 

natural conditions, it is possible to cover them from another sector; 

 permanent employment is ensured among the population, especially in rural areas throughout the 

year; 

 the financial stability of the economy is ensured, that is, the possibility of not depending on the 

income from only one branch; 

 the availability of on-site processing of products grown on the farm leads to cost reduction and 

high economic efficiency; 

 effective use of free local fertilizers to increase soil fertility and productivity; 

 the population's need for food is satisfied to a certain extent, especially it serves to a certain 

extent to satisfy their needs for meat, milk, and eggs from livestock products. 

List of used literature 

I. Normative-legal documents and publications of methodological importance. 

1. Law of the Republic of Uzbekistan "On Farming". New edition. August 26, 2004. 

2. Decree No. PF-60 of the President of the Republic of Uzbekistan on January 28, 2022 "On the 

development strategy of the new Uzbekistan for 2022-2026". Goal 30. 

3. Presidential Decree on measures to develop agricultural cooperation in the field of fruit and 

vegetable growing (PQ-4239, 14.03.2019y). 

4. Decision PQ-4246 (20.03.2019) of the President of the Republic of Uzbekistan "On measures to 

further develop horticulture and greenhouse farming in the Republic of Uzbekistan". 

II. Other used literature 

1. Joraev F. Organization of production in agricultural enterprises: Textbook. - T.: Istiklal, 2004. 

2. Umrzakov O'.P., Toshboyev A.J., Rashidov J., Toshboyev A.A. Agricultural economics and 

management. Study guide. - T.: "Economy - finance", 2008. - 268 p. 

3. Umurzakov O'.P., Toshboyev A.J, Toshboyev A.A. "Agricultural Economy". - T.: "Economy-

finance", 2007 

4. Agricultural economy and management. Textbook/ G'.A.Samatov, I.B.Rustamova, 

U.A.Sheripbaeva. - T.: 2012. - 346 p. 

Internet sites 

1. http://www.tsuye.uz/- Tashkent State University of Economics. 

2. http://www.gov.uz/ - Government portal of the Republic of Uzbekistan 

3. http://www.agro.uz/- Ministry of Agriculture of the Republic of Uzbekistan 


