Small-scale Farmers’ Perspectives on the Agro-industrialization Program in the National Budget Framework Paper FY 2023/24
Every year, Small-scale Farmers (SSFs) under the Umbrella Movement Eastern and Southern Africa Small-scale Farmers’ Forum (ESAFF) Uganda, join the rest of the budget actors under the leadership of Civil Society Budget Advocacy Group (CSBAG) to engage the Government in influencing the budget processes to ensure that both the local and national budgets address their needs and aspirations. From the 8th to 11th of January 2023, SSFs participated in the CSO retreat that analyzed the agro-industrialization program performance FY 2021/22 and the National Budget Framework Paper (NBFP) for FY 2023/24 at Rider Hotel in Mukono district.
It is remembered that in 2013, the government of Uganda began the transition from output-based budgeting (OBB) to program-based budgeting (PBB) in a bid to improve the link between budgeting and national strategic objectives . The drawbacks of the OBB system included unclear alignment with national development plans, inadequate data access and security controls, and incompatibility with other government budgeting systems. Hence, the PBB system led to the birth of 20 programs of which the Agro-industrialisation program is part. Mr. Hakim Baliraine, a small-scale farmer from Mayuge district, and ESAFF Uganda Chairperson Board of directors- commended the government for the shift, however, concerned that PBB is only working at the national level, but not at Local Governments (LG). He contests that LGs haven’t yet embraced the PBB system because they haven’t understood it well. “When budgets are sent from the center to local governments, their discussion is which sector got that much and so, hence the need for awareness among the decentralized system structures”. Mr. Epidu Paul, LCIII Chairperson, Akeriau Sub-county, also a SSF from Amuria district explained that PBB is supposed to be linked to resource allocation and service delivery by setting performance targets upon which resources are allocated. He adduced that even when that was the plan, at the sub-county level, very small improvements have been realized in budget preparation, execution, or reporting using a PBB structure.
During the NBFP FY2023/24 meeting, ESAFF Uganda worked with SEATINI-Uganda, CARITAS, COGE, CONSENT, World Vision Uganda, The Hunger Project Uganda, FRA, and PELUM Uganda to analyze the Agro-industrialization program with an interest to amplify farmers’ voices towards increased commercialization and competitiveness of agricultural production and agro-processing. SSFs acknowledge that agriculture which is entirely their mainstay is a critical sector accounting for 45% of the national exports, employing 64% of Ugandans and 72% of youths, thus is important to be critically financed as it influences SSFs’ household incomes, vision 2040 and the Sustainable Development Goals 2030, especially ending hunger and poverty.
Mr. Hakim Baliraine pointed out that according to the Comprehensive Africa Agricultural Development Programme (CAADP) report 2022, Uganda is not on track to implement the Malabo Declaration on Agriculture transformation in Africa where countries Uganda inclusive committed to investing 10% of their national budget to the agriculture sector so as a 6% growth is realized. Uganda scored only 5.89 against a benchmark of 7.28 he affirmed. The FY 2023/24 is the third year of implementing the National Development Plan (NDP) III and, therefore, the performance of the agro-industrialization program and budget allocations are of significant importance if the country is to achieve the goal of increasing commercialization and competitiveness of production and agro-processing.
From the analysis of the agro-industrialization program performance against budget releases, it was realized that in FY 2021/22, the approved budget for the program was UGX 1,668 billion, of which 1.221 billion (73.2 %) was funded by the Government of Uganda (GoU) and UGX 392.461 billion (26.8%) as funded by development partners. By the end of the year, under review UGX 1,070.379 billion was spent, which is 91.4% of the total approved budget of 1,306.754 billion, and only 89.7% of the approved budget was released (ABPR 2021/22). This resulted in the cumulative Water for Production storage capacity increasing from UGX 52.165 Million cubic meters (CM) in FY 2020/2021 to UGX 52.48 Million CM in FY 2021/22, increased value addition from UGX 35,144bn in FY 2020/21 to 39,028bn in the FY 2021/22 exceeding the target for the FY of UGX 35,238bn representing an 11% increment, increased value of Agricultural export growth of 24% from USD 1,678 million in FY 2020/21 to USD 2,085 million in FY 2021/22.
The analysis also indicated a reduction in the post-harvest losses for priority commodities of about 18.2 % compared to the target of 20.8% while storage capacity exceeded the target by about 180,000 MT up from 1,050,000 MT in FY 2021/22. The increase in storage capacity is attributed to support through the Matching grant scheme where farmer groups were supported to establish storage facilities in 57 districts of Uganda as well as the Government partnering with the Grain Council of Uganda to further increase storage capacity. Further, the budget allocation for availing finances to SSFs through loans increased from UGX 1,127 billion in FY 2020/21 to UGX 1,454 billion in FY 2021/22. As such, agricultural financing registered the second-highest increase of 29% (ABPR 2021/22).
Whereas good performance in FY 2021/22 was noticed, strategic gaps and challenges existed i.e. the total merchandise exports declined by 30% in the same period due to the devastating impact of COVID-19 on the domestic economy and global demand for non-agricultural products. Total merchandise export values declined by 24% from USD 5,106 billion in FY 2020/21 to USD 3,891 billion in FY 2021/22 mainly due to the devastating impact of COVID-19 on the domestic and global economies as well as the slow pace in the establishment of agro-industrial parks, farm service centers, and processing plants.
Farmers stressed that there is inadequate funding allocated to water for production in the NBFP FY 2023/24 i.e. recruitment of water Engineers (ratio of 1:3) in 146 districts yet with no allocation to the finalization of the National Irrigation Master Plan risking the NDP III target of 76.82 million by 2025. SSFs stressed that their access to agricultural extension services is still low standing at 1: 1,800 against the recommended target of 1:500. The NSDS Report 2021 indicates that 47% of extension workers reported inadequate funding (84%), lack of equipment (69%), inadequate staff (67.2%), and lack of transport and equipment (57.3%) with 5%t of extension workers stating that they are job insecure. Yet in FY 2021/2022, MAAIF didn’t recruit new extension workers. The Annual Agricultural Survey 2018 indicate that only 742,000 (10%) out of 7,414,000 HHs received credit from any source. This has a severe implication for the realization of the Parish Development Model (PDM) particularly Pillar one on Production and productivity.
The team called on the government through MAAIF, to fast-track the completion, financing, and implementation of the National Irrigation Master Plan and operationalize all zonal irrigation centers to increase production and productivity, prioritize public investment in the agroecological system to help in adapting to the effects of climate change, consider phased recruitment of more water engineers to support the implementation of water for production interventions. The government was called to prioritize the recruitment, and retooling of the Extension workers as well as expedite the finalization of the new extension strategy.
ESAFF Uganda commits to continue mobilizing and providing space for small-scale farmers across the country to add their voice to agriculture financing especially MPS FY2023/24 and the national budget reading and listening in platforms for equitable sector financing and service delivery.