What You need to know about Ministry of Agriculture budget estimates for the FY 2018/19
The Ministry of Agriculture, Animal Industry andFisheries in Financial Year 20l7/18 was allocated Shs. 866.757 billion out of which Shs. 74.471bi11ion was for wage recurrent, Shs. I49.425 billion was for non-wage recurrent while Shs.624.535 billion was for capital development, Shs. 1.556 billion was for arrears and Shs.36,687 billion was Non-TaxRevenue (NTR).
The Agriculture Committee in this report observed among others that there were inadequate extension services across the country mainly attributed to the low extension to farmer ratio of 1:1800 1:500.
This has undermined the role of extension in Agriculture leading to poor/ low yields and hence making Agriculture less productive. Besides the recruited extension workers have not been well facilitated to enable them to performtheir roles effectively.
The Committee recommended that Government allocates more funds to support recruitment and facilitation of extension workers in FY 2Ol8/19 for effective extension service delivery.
The following estimates for the Ministry of Agriculture, Animal Industry and Fisheries for the Financial Year 2018/ l9 await Parliament’s approval;
|VOTE 010: MINISTRY OF
AGRICULTURE, ANIMAL ANDFISHERIES
|Vote 121: Diary Development
|Vote 125: National Agricultural Research
Centre and Databank(NAGRC&DB)
|Vote l42:National Agricultural Research
|Vote L52 NAADS
|Vote 155: Uganda Cotton Development
|Vote 16O: Uganda Coffee Development Authority
|Vote 501-85O: LG Agric and Comm Svcs||122, 967,000,000
|Vote 122: KCCA Agric Grant
CRITICAL UNFUNDED PRIORITIES AND SPENDING PRESSURES, FY
- Pest, vector and disease control.
It should be noted that annual loss in priority crops due to pest and diseases is estimated at USD 35-200 million (bananas), USD 60-80 (FOR CASSAVA), USD 10 million for cotton and USDS million for coffee according to the agricultural risk assessment study by PARM/IFAD.
Ministry of Agriculture, Animal Industry and Fisheries (MAAIF) will invest in controlled research especially to develop biological coping mechanisms for the Fall Army Worm and other pests and diseases.
The Ministry will ensure that appropriate pesticides are available in the market at affordable prices, through, among others, partnershipwith the private sector. The ministry will require UGX 12.5 billion to sustain the fight against the Fall Army Worm. Currently, the Ministry only has UGX 2.5 billion creating a spending pressure of UGX 1O billion.
For livestock disease control, MAAIF will continue testing the various tick resistance cleansing acaricides in the different application zones and through NARO support the ongoing research in developing acaricides that are suitable for Uganda’s conditions.
MAAIF will require UGX 1O billion to sustain these activities in FY 2018119. The Ministry only has an allocation of UGX 4 billion creating a funding gap of UGX 6 billion.
To fight against the spread of livestock diseases (especially FMD), partnerships will continue to be established with the private sector who can produce f import and market animal drugs at affordable prices to our farmers. The Ministry will require at least UGX 12 billion for assorted animal vaccines to control the spread of livestock diseases. The Ministry has an allocation of UGX 5 billion creating a funding gap of UGX 7 billion.
For effective control against pests, vectors and disease control, MAAIF, therefore, needs UGX 34.5 billion but only UGX 1 1.5 billion is available in the MTEF leaving a funding gap of UGX 23 billion.
Small-scaleIrrigation for coffee and horticulture
MAAIF plans to increase the capacity of households to have enough water at farm level MAAIF plans to through continued subsidizing of digging of valley dams in water stricken areas. Beginning FY 2ol8l19 to 2O2O121, the Ministry wants to give more focus on increasing water for irrigation for coffee and horticulture. The small-scaleirrigation support to smallholder coffee and horticulture farmers will cost UGX 28 billion. This is a spending pressure as we have no budget allocation for it in the FY 20181 19 MTEF.
- Agriculture research and development. The Ministry, through
National Agriculture Research Organization (NARO) continues to respond to the various needs identified along the various crop and animal value chains. This is being done alongside various challenges, with the main ones being underfundingfor agriculture research and development; and weak promotion of research findings. In FY 2018119, NARO plans to among others relocate the Livestock Research Institute from Sukulu hills to Maruzi; and invest in the development of anti-tick vaccines for the control of Brown Ear, Blue and Bont legged ticks in Uganda, which cost the country over UGX 18.6 billion a year. The vaccine production unit will enable Uganda to commercially produce vaccines for ticks, Foot and Mouth Disease and other vectors/ diseases which might come on board.
The target is to start production of enough vaccines for the local, regional and international market.
MAAIF plans to establish regional mechanization centers which will work in close partnership with the MAAIF Mechanization department and will be responsible for the constructionof water for agriculture production infrastructure in the different regions. In the FY 2018/19MAAIF will require UGX 76.44 billion to set up the two regional centers in Western and Northern Uganda regions. The Ministry only has UGX 3.15 billion in its MTEF creating a spending pressure of UGX 13.514 billion.
OBSERVATIONS AND RECOMMENDATIONS
Agriculture Sector Budget Allocation
The Committee commends Government for the increased allocation to the Agriculture sector in terms of volume from FY20l6/17 (UGX 735.839bn, FY2017/18(UGX 865.2O2bn) and the FY2018/19 (UGX 862.92bn1 projection. However, the allocations are still below the
Government’s reaffirmed Malabo (AU) commitment to allocate 10% of the national budget to agriculture. The allocation is also lower thanthe NDP2 costing of Shs. 1.080trillion. The Committee noted that despite the allocations still falling below our CAADP commitments, the releases are even lower.
The committee recommends that Ministry of Finance, Planning and Economic Development should address the constraints that affect releases falling below the amounts appropriated and look for strategies of increasing funding to the agriculture sector, a sector where the country has an enormouscomparative advantage. The Committee further recommends that the agriculture budgetary allocation should not fall below the costing of NDP2 in the subsequent Financial Years.
Distribution of Tractors
The Committee noted that the first batch of tractors (40) that were procured went to one sub-region i.e. Ankole in the districts of Mitooma,Sheema, Sembabule, Lyantonde, Mbarara, Ntungamo, andKiruhura. The Committee notes that this is unfair to other parts of the country whose land is suitable for mechanized too. The committee was further informed that the Agriculture Mechanization Policy, Strategy, andTractor Hire guidelines have been developed by MAAIF.
The Committee recommended that the second batch of tractors be equitably distributed among the remaining regions i.e. Northern, Eastern and Central Region in an equitable manner.
Kampala Capital City Authority (KCCA) Budget
The Committee notes that KCCA has been allocated U6.65bns for FY 2Ol8l19.However, during the Committee interaction with KCCA officials, it noted that the funds being allocated to KCCA for Agriculturehave been diverted for instance in FY 2Ol7 lL8 Ul2bns was used to purchase USAFI market and those funds have no impact on Agriculture and therefore are not value for money. The Committee also noted that KCCA is duplicating mandates of other Agricultural Institutions and hence allocations are being put to waste.
The Committee recommended that the Ushs.5.00 bnsfor KCCA for Agriculture be re-allocated to critical needs of the Agricultural Sector.
The Committee further recommends that the U1.65bns for KCCA be retained to improve Urban farming but with better modalities of managing it.
NAGRIC & DB
The Committee noted that NAGRC & DB land has been encroached upon by different squatters across the country. In addition, the Committee notes that NAGRIC has no capacity to optimally: utilize the land that they own.
The state of the ranches like Aswa, Maruzi, and Nshaara, is appalling. The Committee notes that there should be Public PrivatePartnerships engaged in order to ensure proper management of this Land.
The Committee recommends that the Ministry of Agriculture, Animal Industry andFisheries adopts a Public PrivatePartnership approach in the management utilization of the ranches.
The Committee further recommends that Ministry of Agriculture, Animal Industry andFisheries sorts out the issue of land ownership with Local Governments to enable NAGRC & DBcarry out its mandate effectively and efficiently.
National Agricultural Research Organization (NARO)
The Committee observed that NARO has remained underfunded and is operating using donor funds even for paying salaries. This may lead to these partners either influencing research carried out by the Organization.
The Committee observed that a lot of NARO land is being grabbed across the country. This has affected the activities of NARO.
The Committee also notes that there are a lot of technologies developed by NARO that are not being utilized by farmers.
The Committee recommends that Ministry of Finance, Planning andEconomic Development funds the research component in NARO and provided funds required to equip and facilitate the gene bank.
The Committee recommends that Government takes interest onthe land grabbers and they be penalized. The Committee also recommends that NARO surveys all its land.
The Committee recommends that Government should fas-trackthe formation and operationalization of NARO Holdings Company Limited to ensure that the Technology developed reaches the farmers.
Agricultural Extension Workers
The Committee noted that there areinadequate Agricultural Extension services across the country mainly attributed to the low extension to farmer ratio of 1:1800 yet the recommended ratio is 1:500. This has undermined the role of extension in Agriculture leading to poor/ low yields and hence making Agriculture less productive. Besides the recruited extension hasnot beenwell facilitated to enable them to performtheir roles effectively
The Committee recommends that Government allocates more funds amounting to UGX 25.75 billion to support recruitment and facilitation of extension workers in FY 2018/l9 for effective extension service delivery.
The Committee notes that there are still a lot of legislationin MAAIF that remain undeveloped or in draft form, for example, Organic Agriculture Policy, seed policy, coffee Bill, NAADS amendment Act, Meat Production Bill, Regulations for Plant Variety Protection Act, 2Ol4
Regulations for Plant Protection and Health Act, 2015 Phytosanitary Policy, National Fisheries Bill and Livestock policy.
The Committee recommends that MAAIF fast tracks all the pending legislationsin order to enhance the performanceof the Agriculture sector.
The Committee notes that whereas Government continues to plan and allocate funds for Agriculture, the actual numbers of farmers, types of the cropby output, actual surpluses of crop etc are not known which leaves gaps in effective planning.The Committee recommends that MAAIF expedites the process of acquiring good and reliable Agricultural statistics for the country in order to ensure effective planning for the Agricultural sector.
District Farm Institutes
The Committee was informed that some of the District Farm Institutes have been converted into Zond Agricultural Institutes.The Committee recommends that these regional Zonal Agricultural Institutes be made fully functional in order to play their role of farmer training and knowledge transfer.
Water for Agriculture
The Committee was informed that the National Irrigation Policy was adopted by Cabinet while the National Irrigation r Plan is still developed.The committee recommends that MAAIF in collaboration with Ministry of water and Environment expedites the finalization of the National IrrigationMaster Plan.
Revival of Cooperative societies
The Committee observed that in the 1960s and 1970s, the cooperatives were the collective bargaining voices of the peasants. Cooperatives are important because they ensure provisions of farm inputs, bargained favorable prices and assured market opportunities and channels for farmers, produce with price-stabilization factors catered forto avoid destabilizing fluctuations. Consequently, agricultural contribution to the economy has continued to decline due to chronic exploitation by middlemen and reduction in profitability.
The Committee reiterates its recommendation that the Ministry of Agriculture, Animal IndustryandFisheries should work with the Ministry of Trade, Industry and cooperatives sector players like Uganda cooperative Alliance to ensure that activities for cooperative Development are harmonized to enable farmers to havebetter bargaining power for credit, markets, prices of inputs and agricultural products among others.
Governance and coordination in the sector
The Committee observed that the agriculture sector continues to suffer from more than two decades of poor governance and lack of coordination. The spending priorities of the sector are spread across numerous votes with no clear coordination mechanism. For example, NAADS, Cotton Development organization, andUganda coffee Development Authority are all in one way or the other involved in the distributionof inputs. The Ministry is also silent about the operations of Operation Wealth Creation, how it is linked to the different Votes and what it has achieved to date. The lack of coordination and the resultant potential duplication potentially explains the current failures within the sector’
The Committee recommends that governance of the agricultural sector be reformed focusing on strengthening the role of Local Governments in implementing agricultural development programmes while strengthening the policy, coordination, oversight, standards-settingand regulation role of central government agencies.
Agriculture sector financing
The committee noted that mobilization of affordable financing for agriculture has remained a consistent problem stated in every relevant policy statement of government. Numerous schemes (both public and private) have been initiated and implemented over the last 5 years particularly in the FY20 16l/17. However,these schemes have not had a positive impact on the Agriculture sector.
The committee further noted that the agriculture sector like any other business requires insurance against risks.
The committee reiterates its recommendation that Government establishes an Agricultural Bank so that the Agricultural credit facility currently held in Bank of Uganda and other Commercial Banks is extended to farmers in order to solve one of the critical bottlenecks to enhancing agricultural transformation in the country by developing and deploying appropriate agricultural finance delivery instruments.
The Committee further recommends that Agricultural insurance should also be provided to protect farmers against effects of agricultural risks.
The committee further amendment of regulations governing the agriculture credit facility scheme from the current one which tends to benefit large-scaleagricultural processors as opposed to smallholder agriculturalists
The Committee observed that farmers in Uganda are prone to postharvest losses due to inadequate handling and storage practices at household, level. Farmers lose more than 30% of their crops every year to insects, pests, mold andmoisture. Farmers rely on sun-drying to ensure that crops are well-dried before storage as a preservation method. There are no refrigeration facilities and silos to ensure safe storage. If unfavorable weather conditions occur, particularly lack of adequate sunlight then losses are heightened. These losses adversely affect household incomes and food security.
The Committee recommends that Ministry of Agriculture, Animal Industry andFisheries works together with Ministry of Trade, Industry and Cooperatives to ensure that silos are built both at household and parish levels so as to enable farmers storetheir produce properly and reduce on losses.
The Committee further recommends that Ministry of Agriculture, Animal Industry andFisheries sensitizes and trains farmers so as to equip them with good post-harvest handling skills to enable them maximizeprofits from their produce.
NAADS/ Operation Wealth Creation Programme
The Committee observed that Government acquired a loan to finance the e-voucher card system or co-funding for the distribution of inputs to farmers whereby allocation to farmers will be made through an online system. Farmers will use tokens to pick inputs from logistical hubs or approved suppliers within their regions and will be required to contribute a percentage of the price of the inputs. This will reduce wastage of resources.
The Committee observed that a lot of money continues to be wasted in purchasing inputs distributed under a top- downapproach with so many District Local Governments having no say in the inputs to be distributed in their respective districts. There has also been movementof inputs across regions which has compromised their quality and acclimatization and indeed high mortality rates have been registered in livestock distributed under OWC.
The Committee recommends that the system of providing free inputs should be phased out gradually and be replaced by the e-voucher card system and original NAADS co-funding system to ensure sustainability and increased participation of beneficiaries.
The Committee further recommends that the NAADS Act, 2OO1 should be amended to streamline operations of Operation Wealth Creation.
The Committee further recommends that NAADS partners with regional suppliers of the respective inputs toimprove the quality and ensure acclimatization of the inputs distributed.
The Committee further recommends that NAADS should desist from supplying inputs using a top-down approach as opposed to a bottom-upapproach i.e. Local Governments should take a lead in deciding which inputs should be procured for their respective Districts.
- Coffee Development
The Committee noted that Coffee is one of the major cash crops and exports of the country and contributes a lot to the country’s GDP. For examplecoffee exports increased from 3.6 million (60 kg) bags in FY 2015/16 valued at USD 3S2million to 4.2 million (60 kg) bags in FY 2016/17 valued at USD 478mil1ion. Besides, the Ministry has a target of exporting 20 million bags of coffee per year by 2025.
However, the coffee sub-sector still remains underfunded which will not enable Uganda Coffee Development Authority to achieve its target.
The Committee further observed that H.E The President gave a directive to give coffee seedlings to farmers above the budgetary allocation. Many nursery operators who supplied the seedlings have not been paid and the money has accumulated to shs.57, 084,188,200.
The Committee recommends that Ministry of Finance, Planning andEconomic Development provides the shs.57, 084,188,200 to the coffee sub-sector to enable it to paythe outstanding arrears to nursery operators and achieve its target of exporting 20 million bags of coffee per year by 2o25 and contribute to the country’s economy.
The Fisheries sub-sector
The Committee was concerned that despite the potential already exhibited by the Fisheries sub-sector, the sector has remained inadequately financed. The MPS FY 2Ol8l19 proposes a total allocation of 1l.S3billion. However, only 5 billion has been allocated. Other than the deployment of the Uganda People’s Defense Forces (UPDF) to curb illegal fishing, not much has been done by Government to support those involved in fishing.
The Committee further observed that Government acquired a loan from African Development Bank in 2006 to construct nine fish landing sites in Kalanagala, Mayuge, Busia, Namayingo, Buikwe, Buyende, Bullisa and Nakasongola. However, only five of them were fully completed leaving four namely Rwampanga in Nkasongola, Kiyindi in Buikwe, Butyaba in
Bullisa and Bukungu in Buyende incomplete.
The Committee recommends that Government provides resources for completion of the four landing sites and full operationalization of the five which werecompleted.
The Committee further recommends that that Government stops the importationof illegal fishing gear and streamlines operations between UPDF and MAAIF to enable the fisheries sub-sector to performeffectively and efficiently.
The Committee recommends that fishing inputs should be included under the NAADS Programme to enable those involved in fishing to access appropriate fishing gear.
Though Agriculture remains a key economic growth, it still hasmany critical yet underfunded areas as stated above which need to be addressed if the sector is to achieve its goals in FY 2018/19