EAC states urged to review their agricultural budgetary allocations

Posted on : Tuesday , 28th April 2015

Even though agriculture remains the main economic activity in the East African Community (EAC) partner states, public spending on the sector remain very low as reflected in the 2014/2015 individual national budgets published by Kenya, Tanzania, Uganda and Rwanda.

This is despite the sector contributing about 30 percent of the Gross Domestic Product (GDP) and employing about 80 percent of the total work force of these countries.

The revelation is documented in a report deduced from the EAC partner states budgetary review for 2014/2015 fiscal year conducted recently by the Eastern Africa Farmers Federation (EAFF).

EAFF is an apex regional farmer organisation with member in Kenya, Uganda, Tanzania, Rwanda, Burundi, DRC, Djibouti, Ethiopia, Eritrea and South Sudan, representing more than 20 million smallholder farmers.

The report recommends that there is an urgent need by the EAC partner states to review their budgetary allocations to the sector to ensure that the source of livelihood is safeguarded and improved.

Governments of the EAC partner states should implement the 10 percent budget allocation for agriculture according to the Maputo Declaration.

A detailed comparison of the agricultural sector allocation in the EAC following the Maputo Declaration in 2003 reveals that none of the EAC states has consistently met the 10 percent target pledged by the heads of States.

The report highlights the major challenges faced by small scale farmers, how farmers can take advantage of the budget making process going forward, budgetary allocations to agriculture and recommendations. In this regard, the report analyses agriculture with regards to Comprehensive African Agricultural Development Program (CAADP) and whether its aims have been met.

Overall, Tanzania allocated the biggest chunk of its absolute expenditure to agriculture at 7.2 percent followed by Uganda at 6.5 percent, whereas Rwanda was ranked third with 6.2 percent allocation, and Kenya was fourth with 5.8 percent Further, the report shows that Kenya, presented the biggest budget in the region (Ksh1.77 trillion), with her priorities being food security, increased productivity and commercialisation of Kenyan agriculture amid irrigation.

Notably, Ksh.9.5 billion has been allocated for the on-going irrigation projects in the country. Ksh3 billion for inputs subsidy like fertilizer, Ksh2.7 billion for strategic grain reserves, Ksh1.0 billion for fisheries development and KSh.0.7 billion for reviving the Kenya Meat Commission.

Treasury has also set aside set aside Ksh.0.3 billion for the revival of the pyrethrum industry and the same amount for establishment of Free Disease Zones in the country.

Also Ksh8.2 billion will be used for the construction of water pans and dams, Ksh.4.1 billion for water supply and sanitation and Ksh1.5 billion for the environmental protection conservation and management. Ksh 0.5 billion was provided for the completion of multi-purpose dams that were started under the economic stimulus programme.

In Tanzania, the report shows that agriculture accounts for more than 25 percent of the country’s GDP, provides 85 per cent of exports, and employs 80 percent of the work force. A total of 1, 084.7bn/- is set aside for strengthening irrigation infrastructure in various areas, construction of warehouses and markets, availability of loans for promotion of food and cash crops production.

Excise duty on locally produced fruit juices from was increased from 9/- per litre to 10/- per litre. In the same breadth, Excise duty on imported fruit juices was increased from 110/- per litre to 121/- per litre.

Uganda, according to the report, increased the agriculture sector budget from Ush382.7 billion to Ush440.7 billion. However, the government did not provide adequate budgetary allocation in key agriculture productive sector.

The government has terminated exemption on interest income on agricultural loans. The measure is expected to generate Ush25.1 billion. The list of terminated exemptions include; Supply of feeds for poultry and livestock, supply of agriculture and diary machinery, supply of packaging materials to the diary and milling Industries.

On the other hand, termination of the exemptions on VAT zero-rated supplies include; supply of cereals, grown, milled or produced in Uganda, supply of processed milk and milk products, supply of machinery and tools for agriculture, supply of seeds, fertilizers, pesticides and hoes.

On its part, Rwanda, the government allocated RWF 17.458 billion to economic transformation in the agriculture sector. Rural Development in the agriculture sector was allocated 54.323 billion while productivity and youth employment in the agriculture sector was allocated RWF 331.957 million.

Accountable governance in agriculture was sector allocated RWF 11.950 million; and foundational issues in the agriculture sector were allocated RWF 6 million.

Other special programmes outlined in the budget estimates include; Post-Harvest and Agribusiness Support project (PASP)- RWF 1.8 billion, priority crops intensification (including fertilizer imports), RWF 10 billion, Immediate Action Irrigation project (GFI)- RWF 7.2 billion, and the Livestock Infrastructure Support Programme (LISP)- RWF 2.3 billion.

Though it is clear EAC governments’ are now shifting resources from agriculture to other emerging sectors, agriculture remain a huge contributor to the EAC GDP- accounting for about 30 per annually. Despite efforts to improve agricultural production, some factors continue to wreak havoc into the sector.

It’s unfortunate that EAC economies continue to rely on rain-fed agriculture, much to their detriment. Here, farmers are not able to adequately plan due to the unpredictability of the rainy seasons. To mitigate this, the report recommends that, there is need to adopt a more sustainable approach to food security by shifting to irrigation driven farming as well as more budgetary allocation towards irrigation farming.

Use of outdated technology in agricultural production should be discarded and modern science embraced instead.