Agriculture financing and sector performance in Uganda, 2013

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To effectively engage the Government of Uganda to and enhance investment in the sector, the Civil Society Budget Advocacy Group [CSBAG] in undertook a study to deepen understanding on how resources are being used within this sector. The study provides an in-depth assessment of how 4 agriculture loans have been applied in Uganda to improve agricultural performance. It further analyzes the spending patterns and service delivery within agriculture and brings out the salient issues for action.

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Agriculture financing and sector performance in Uganda, 2013

  1. 1. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded ProjectsAgriculture Financing and SectorPerfomance in Uganda Case Study of Donor-Funded Projects SBAG C it y Bu qu d g e ti n g f o r e 1
  2. 2. Table of Contents Acronyms and Abbreviation 4 Chapter 3 Performance of Completed Agricultural Loans 27 3.1 Vegetable Oil Development Project 27 SBAG 3.2 Agricultural Improved Rice Production 31 Glossary 5C Acknowledgements 6 Chapter 4 Performance of Ongoing Agricultural Loans 36 it 4.1 Creation of Tsetse and Trypanomiasis Free Areas 36 y Bu d g e ti n g f o r eq u Forum for Women in Democracy 4.2 Farm Income Enhancement Project –Performance of the Agricultural Sector in Uganda is published by the Foreword 7 Irrigation Component 39Civil Society Budget Advocacy Group (CSBAG) supported by Actionaid Uganda Chapter 5 Conclusions and Recommendations 42 Chapter 1 Introduction 10 5.1 Conclusions 42© 2012 c/o 1.1 Overview 10 5.2 Recommendations 47Forum for Women in Democracy (FOWODE) 1.2 Study Objectives 11 References 50P.O. Box 7176, Kampala 1.3 Methodology 12Tel: +256-41-286063 1.4 Report Structure 14E-mail: fowode@fowode.orgWeb www.fowode.org Chapter 2 Agriculture Sector Performance 15 2.1 Introduction 15All rights reserved. No part of this publication may be reproduced, or 2.2 Growth trends 16reprinted in any form by any means without the prior permission of the 2.3 Financing and expenditure trends 17copyright holder. Nevertheless, CSBAG and Actionaid Uganda encourage 2.4 Delivery of key agricultural services 19its use and will be happy if excerpts are copied and used. When doing so,however please acknowledge CSBAG and Actionaid 3
  3. 3. Acronyms & Abbreviation Glossary Budget Support Mode of financing that involves transfer of financial resources of a development partner to theACF Agricultural Credit Facility MTEF Medium Term Expenditure Framework consolidated fund following the fulfillment of agreed conditions for disbursement. The funds areAg HH Agricultural Household NAADS National Agricultural Advisory Services part of the national resource and are appropriated by Parliament. They are used in accordanceADF Agricultural Development Fund NAP National Agricultural Policy with the public financial management system of UgandaATAAS Agricultural Technology and Agricultural Advisory NARI National Agricultural Research Institute Services NARO National Agricultural Research OrganizationCAADP Comprehensive Africa Agricultural Development Program Food Security Farmer Any farmer who is 18 years and above, a practicing subsistence farmer NARS National Agricultural Research SystemCDO Cotton Development Organization NDP National Development PlanCSBAG Civil Society Budget Advocacy Group NEPAD New Partnership for Africa’s Development Off-Budget funds Resource flows that are managed outside the Government systems of planning, appropriation,CSO Civil Society Organization PEAP Poverty Eradication Action Plan budgeting and procurement. Government procedures are generally not used in full in managingDDA Dairy Development Authority PMA Plan for Modernization of Agriculture these funds. Includes off budget project aid.DSIP Development Strategy and Investment Plan SACCO Savings and Credit Cooperative SocietyFIEFOC Farm Income Enhancement Project STATFA Creation of Tsetse & Trypanosomiasis Free Areas On-budget funds Resource flows that are managed through the country’s public financial management systemsFOWODE Forum for Women in Democracy UA Unit of Account within the MTEF and approved by Parliament. Includes on budget project aid.FSF Food Security Farmer UBOS Uganda Bureau of StatisticsGDP Gross Domestic Product UCA Uganda Census of Agriculture Project Support Aid modality that entails agreement between the development partner or donor andGOAR Government Outlays Analysis Report UCE Uganda Commodity Exchange Government on a set of inputs, activities and outputs to reach specific outcomes within a definedGoU Government of Uganda UCDA Uganda Coffee Development Authority time frame, area and budget. This approach allows use of the donor accounting systems.KCCA Kampala City Council Authority UNHS Uganda National Household SurveyKOPGT Kalangala Oil Palm Growers Trust VODP Vegetable Oil Development Project Technical Assistance Involves the transfer of ideas, knowledge, practices, technologies or skills to foster economicMAAIF Ministry of Agriculture, Animal Industry and Fisheries WRS Warehouse Receipt System development. Usually for policy development, institutional development, capacity building andMDG Millennium Development Goal ZARDI Zonal Agricultural Research and Development Institute. project or programme support.MFPED Ministry of Finance, Planning and Economic DevelopmentMOF Market Oriented Farmer 4 5
  4. 4. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded ProjectsAcknowledgementsThis report is a joint undertaking of the members of the Civil ForewordSociety Budget Advocacy Group (CSBAG) which since 2004has advocated for pro poor and gender sensitive policies andbudgets. Several individuals and organizations have helpedshape the outcome of this report and these include ActionaidUganda, Forum for Women in Democracy (FOWODE), DanielLukwago, Frederick Kawooya, Francis Akorikin, Sophie Kyagulanyi,and Dr. Bbaale Edward who reviewed this report and providedtechnical feedback.This report was produced under supervision of Julius Mukundawhose technical insight guided the research team at differentstages which greatly enriched this report. Although agriculture contributes greatly to the economy and a significant proportion of the poor depend on it, Public expenditureSpecial thanks go to Actionaid Uganda whose financial andtechnical support enabled the successful production of this in this sector has declined significantly over the past financialreport. years; with the share of the sector ranging from between 3-4% of the national budget causing a decline in Uganda’s agricultural output and productivity. Uganda’s agricultural growth rate is still below the 6 percent annual growth target of the African Union’s Comprehensive Africa Agricultural Development Program (CAADP). To effectively engage the Government of Uganda Irrigation Component, The study provides an in‐ into concrete actions in improving agricultural to reverse the trend, and enhance investment depth assessment of how agricultural loans have financing and that different actors including in the sector, the Civil Society Budget Advocacy been applied in Uganda to improve agricultural the Civil Society, Government, Donors and the Group [CSBAG] in 2012 deemed it necessary to performance. It further analyzes the spending famers will work collectively towards promoting undertake a study that will facilitate a deepened patterns and service delivery within agriculture the CAADP agenda of reaching a higher path understanding on how resources are being and brings out the salient issues for action. of economic growth through agriculture-led used within this sector. Using case studies of development in Africa . four donor funded projects -the Vegetable Oil There are significant factors affecting the sector’s Development Project, Agricultural Improved Rice, performance that are highlighted in this study Julius Mukunda Production Creation of Tsetse and Trypanomiasis that need redress and, it is our hope that Coordinator-Civil Society Budget Advocacy Group Free Areas, Farm Income Enhancement Project – recommendations made in this study will result6 7
  5. 5. Executive Summary Key RecommendationsStudy Context policy and institutional development yet the low implementation/institutional capacity in 1) The budget allocation to the agricultural and accountability systems so that donors 7) Value for money in donor funded projectsExternal assistance flows to Uganda have aver- MAAIF continues to lack sufficient implemen- the Ministry of Agriculture, Animal Industry sector needs to be stepped to at least 10% of have a high level of trust in them and can use should be encouraged. Expenditures shouldaged about US$ 760 million annually between tation capacity. and Fisheries. Although funds absorption the national budgetary resources to expand them instead of the lengthy donor systems. be on critical areas that address the project2001 and 2010. The agricultural sector attracts was high, it was for the wrong reasons, with delivery of agricultural services in Uganda. objectives and give results. Poor allocativepart of the donor funding for enhancing various 3) A major challenge is the slow disbursements 87% of the resources being spent on general This could include deepening of delivery of 4) The Government should take lead in the efficiency whereby the bulk of resourcesservices to farmers. Of concern, however is the of donor funds in the sector in turn leading operating expenses without any tangible out- extension and research services to ensure planning, designing and implementation of are spent on consumptive or recurrentslow disbursement of donor funds in the sector to slow implementation of donor funded come. that farmers access and use improved inputs donor funded projects to enhance ownership unproductive expenditures should bewhich has led to slow implementation of donor interventions. In FY 2011/2012, 74% of the and technologies to bridge the production and proper supervision of the projects. The discouraged.funded projects. total loan portfolio equivalent to US$ 341.55 7) Whereas planning and project design is usu- and productivity gap at farm level. Sufficient Government should have an active role in remained undisbursed. ally done jointly between MAAIF and donor counterpart funding should be provided in budgeting and utilization of the donor funds. 8) There is a need for the Government toThe overall aim of this study was to assess the agencies, there are instances where the do- adequate and a timely manner for marching encourage and support the development ofperformance status of agricultural services in nor takes lead which leads to low ownership with the donor funds. 5) Gender planning, budgeting and monitoring public private partnerships in the delivery of 4) The four case study loans bring out manyUganda and utilization of resources to implement of interventions by the beneficiaries and less should be core to all donor projects. Gender agricultural services in Uganda as a means to factors that singularly or in combination slowprogrammes and policies. The study involved project impact. 2) The way donor funded projects in the and equity budgeting should go beyond fill the gap. For example, Government could implementation of donor funded projects.analyzing the performance of four loans (donor agricultural sector are packaged should seeking involvement of women and other partner or support farmer associations, For example, the poor design of the FIEFOCfunded projects) in terms of planning, budgeting 8) Generally, gender mainstreaming is not pri- be reviewed to enhance reach, impact and marginalized groups to promoting equitable NGOs and private sector players to scale up irrigation project slowed funds disbursementand implementation. The extent to which gender oritized in agricultural loans. sustainability. Rather than soliciting for access and use of agricultural services good models of extension that are littered in and project implementation. ADB Fundedissues were addressed in these projects was as- small discrete projects that have limited and monitoring progress made thereafter. different parts of the country. projects generally have long bureaucraticsessed. The study used secondary data sources 9) Delivery of agricultural services such as exten- impact, the Government should focus on Clear gender mainstreaming strategies procurement processes that delay disburse-complemented by primary information collected sion, credit and research is ongoing although encouraging donor funded projects that are should form part and parcel of the project ment of funds. The Government of Japan and 9) District and Sub-county officials of theby the Ministry of Finance, Planning and Econom- reach to majority of farmers remains low. Ac- larger and impactful with adequate reach implementation plan. FAO took lead in the implementation of the respective Local Governments that areic Development. cess to extension services remains low, with geographically and in terms of number of Agriculture improved Rice Production proj- to be involved in implementation of a 80% of the agricultural households having beneficiaries targeted and quantity of inputs 6) The institutional and implementation ect which led to distribution of poor quality donor funded project should be involved not been visited by an extension worker in and technologies provided. capacity of the agency that is to implement inputs, the bulk of funds being used in recur- early in the project design, planning andKey conclusions the recent agricultural survey of 2008/2009. the donor funded projects should be rent expenditures indicative of poor alloca- execution of the project. This will enhance 3) Some level of flexibility in the prior properly scrutinized at planning stage and1) The budget allocation to agriculture as a tive efficiency and low project sustenance. project ownership by the beneficiaries 10) Whereas the bulk of agricultural service deliv- conditions and minimal conditionalities beefed up before project commencement. share of the national budget remains low, at and sustenance of the interventions and ery is undertaken at local government level, imposed by donors for project trigger Where possible, the implementing agency 3.2% in FY 2012/2013. Most funds are dis- outcomes. 5) The VODP case study illustrates that they are the district and sub-county officials are not should be espoused as a means of avoiding can partner with other Government and bursed as small discrete projects whose con- adequately involved in the project design, unjustifiable low absorption of funds. It is non-Government agencies to scale up loans in the agricultural sector that perform tribution is not impactful and nor sustainable. planning and budgeting stages. Often, they critical that the prior conditions are well the implementation capacity to march the well with regard to absorption of allocated re- sources, timely implementation and achieve- brought late into the implementation stage negotiated and are easily implementable. project requirements.2) The agricultural sector attracts less than which lessens ownership, supervision and Government should improve its procurement ment of the intended outcomes. 10% of the donor assistance in Uganda that sustainability of the donor funded projects. is channeled to the development budget. A 6) The FIEFOC case study illustrates that some substantial part of external support to the projects are complete failures because of sector is in form of Technical Assistance8 9
  6. 6. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded Projects Figure 1.1: Allocation of Donor Assistance to the Figure 1.2: Disbursed and undisbursed loan commitments across sectors Introduction Development Budget for FY 2011/2012 Chapter 1 1.1 Overview Agriculture loans in this report refer to funds1 that are received There are also substantial official resource flows that are delivered addition and enhancing compliance with food safety requirements in the by Government of Uganda (GoU) to projects but managed outside export markets. A substantial part This is a report of a from external donors to finance the Government systems. The bulk of external support to agriculture key interventions within the sector. of donor funds in agriculture are comes in form of technical research commissioned The report analyzes the spending on-budget. For example, during assistance for policy and institutional by the Civil Society patterns and service delivery within FY 2010/2011, the sector received development and capacity Budget Advocacy agriculture and uses selected case US$ 58.30 million on budget and enhancement. The Government Group on agricultural studies of donor financed projects to US$ 16.07 million off budget. The still faces a challenge of capturing sector performance in bring out the salient issues for action. off budget funds were provided by all donor and technical assistance USAID, UK, Norway and FAO4. The as some of the funds are handled Uganda. The motivation The agricultural sector in Uganda study focused on donor funds that directly by the donors. for the study is rooted primarily encompasses crops, are on-budget. in the need to get a livestock, fisheries and forestry. Of concern, however, is the slow Source: MFPED, 2012b. Source: MFPED, 2012b. clearer picture of how Donor funds that are channeled The agriculture sector attracts disbursement of donor funds in During FY 2011/2012, the agriculture sector had • New loans commitments that are contracted resources to implement programmes and in the sector are either under the less than 10% of the total donor the sector which has led to slow a total loan portfolio equivalent to US$ 466.80 agricultural loans have budget or project support aid assistance for the development implementation of donor funded million; of this amount, US$ 119 million (or 26%) but take long to become effective. • Some funds not directly controlled by policies. been applied in Uganda modality. In recent years, external budget. In FY 2011/2012, the sector interventions. Agriculture is one of had been disbursed and US$ 341.55 million Government; expenditure is by the The study had 7 objectives: remained undisbursed. Joint reviews between to improve agricultural financing from donors accounts for attracted 8% of the donor assistance the sectors with large undisbursed MFPED and Development partners suggest a development partners. 1) Provide an overview of the sector performance. about 25% of the budget and 6% (Figure 1.1). The donor funding is loan commitments (Figure 1.2). number of explanatory factors for this scenario5: This study used the case studies to draw out performance, highlighting key priority issues. of Gross Domestic Product (GDP)2. aimed to complimenting Government Note that loan disbursements to lessons on the key constraints to utilization of 2) Identify four Government loans – two External assistance flows to Uganda efforts in number of areas including: agriculture are channeled mainly • Inadequate and untimely release of donor finances in the agricultural sector. that had ended and another two whose have averaged about US$ 760 million improving control and mitigation to MAAIF and its agencies but also Government counterpart funding implementation was still ongoing under the • Complex procurement procedures that are agricultural sector. 1.2 Study Objectives annually between 2001 and 20103. capacity of crop pests and livestock a significant fraction is earmarked required by donors 3) Review the performance of the completed 1 These may be loans , grants or technical diseases; deepening access to to agricultural programmes under • Capacity constraints with institutions relating agricultural loans in terms of budgeting, assistance. markets; capacity for research and Ministry of Local Government (MOLG) to personnel, systems and procedures The main purpose of the study was to assess planning and implementation. 2 MFPED, 2012b. generating new technologies, value and districts. • Poor design of projects the performance status of agricultural services 4) Identify key pertinent gender issues and 3 MFPED, 2012d. 4 MFPED, 2012c. (extension, research, credit, finance, markets, how they were addressed in the completed food security) in Uganda and utilization of projects.10 5 MFPED, 2012b. 11
  7. 7. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded Projects5) Make recommendations on how the projects performed and improvements for future projects. 1.3 Methodology Identification of case study Table 1.2: Case Study donor funded projects No. Project Status of Implementation Key selection criteria6) For the ongoing projects, analyze how the projects are performing based on set benchmarks. projects The study relied on secondary data sources, including primary information The first step involved listing all donor 1 Vegetable Oil First phase completed; • PPP implementation arrangement7) Make recommendations for the ongoing projects regarding how to that had been collected by MFPED on the selected donor projects. Table 1.1 funded projects in Uganda (Annex 1) Development Second phase recently • Funded by IFAD-GoU address gender issues. summarizes the approach used in addressing each of the study objectives. from which the case study projects could Project started. • Reported to be performing well. be selected. The following criteria guided • Implemented in Kalangala district and project selection: The focus will be on the Northern Uganda. Focus will be on theTable 1.1: Methodological approach to study objectives concluded phase. Kalangala Component Objective Approach • Projects must have benefitted from • Has both a completed and an ongoing donor loans; all projects that are phase. 1. Provide an overview of the sector In addition to macro level trend data in the agricultural sector, the areas that were highlighted in solely Government funded were not • Implemented directly by MAAIF performance, highlighting key priority the overall purpose of the study were analyzed, namely: extension, research, credit, finance, markets considered. • Focus is on promoting oil palm plantation issues. and food security. Desk review of secondary data sources at Uganda Bureau of Statistics (UBOS), MAAIF, MFPED, NAADS Secretariat, PMA Secretariat, FOWODE, VEDCO, Action Aid, Oxfam, DRT, World Bank. • Implemented by MAAIF or its agriculture. associated agencies for policy • Information easily accessible 2. Identify four Government loans – Reviewed secondary data in MFPED loans and grants reports; Approved Estimates; Public influence. 2 Creation of Ongoing • ADB-GoU funded two that had ended and another Investment Plans and MAAIF Output Oriented Budgeting Tool (OBT); Ministerial Policy Statements. • Easily accessible data and tsetse and • Countrywide two whose implementation was still Other details are below. information; frequently monitored trypanosomiasis • Directly implemented by MAAIF ongoing under the agricultural sector programmes. areas • Reported to be poorly performing 3. Review the performance of the Reviewed primary data that was collected by the Budget Monitoring and Accountability Unit (BMAU) • Projects that are reported to be • Focus on control of trypanosomiasis and completed agricultural loans in and budget monitoring reports. Also reviewed project documents, including evaluation reports. performing well as well as those that tsetse fly infestation. terms of budgeting, planning and are seen to be performing poorly. • Information may not be easily accessible. implementation • A mix of donors that funded the 4. Identify key pertinent gender issues chosen projects 3. Agricultural First phase completed • Japan-GoU funded and how they were addressed in the Authors’ analysis of all available primary and secondary data and information. The gender issues • Different enterprise focus. Improved rice and second phase is near • MAAIF implemented completed projects. were identified within the context of the analysis and not as a separate section. • Projects that have public-private production completion • Focus on promoting growing of improved partnership (PPP) investment (NERICA project) rice varieties, the NERICA types. components. • Both good and poor performance 5. Make recommendations on how the reported. projects performed and improvements Authors’ analysis of all available primary and secondary data. • Information easily accessible for future projects. On the basis of the above criteria, the four case study projects that were 4 Farm Income Ongoing • ADB-GoU funded 6. For the ongoing projects, analyze how Reviewed primary data that was collected by the Budget Monitoring and Accountability Unit (BMAU) selected for analysis were: Vegetable Oil Enhancement • Focus on rehabilitating four large the projects are performing based on and budget monitoring reports. Also reviewed project documents, including evaluation reports. Development Project (VODP); Creation Project – the irrigation schemes. set benchmarks. of tsetse and trypanosomiasis areas; Agricultural • MAAIF implemented and recently Agricultural Improved rice production Component transferred to MWE due to reported poor 7. Make recommendations for the and Farm Income Enhancement Project performance ongoing projects regarding how to Authors’ analysis of all available primary and secondary data. (FIEFOC) – Agricultural Component (Table • Information fairly accessible address gender issues. 1.2).12 13
  8. 8. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded Projects 1.5 Report Structure The report is structured in five chapters: Chapter 2 Agriculture Sector Performance • Chapter 1: Introduction • Chapter 2: Agricultural Sector Performance • Chapter 3: Performance of Completed 2.1 Introduction Agriculture is categorized as a primary growth sector. At the sector level, two key through coordinated interventions that focus on enhancing productivity and Agricultural Loans policy documents guide implementation: value addition, providing employment opportunities, and promoting • Chapter 4: Performance of Ongoing A key objective of the study was to provide an the National Agricultural Policy (NAP) which is still under development and domestic and international trade. The Agricultural Loans • Chapter 5: Conclusions and overview of agricultural sector performance to the MAAIF Development Strategy and Development Strategy and Investment Recommendations contextualize the study findings. At the macro level, Investment Plan (DSIP) 2010/11 – Plan (DSIP) is the medium term strategic plan for MAAIF. The DSIP has two high agricultural sector interventions are guided by the 2014/15. level objectives or intended outcomes: (1) National Development Plan (NDP) that aims to enhance The overall policy objective of the Rural incomes and livelihoods increased; agricultural production and productivity as a means of NAP is to promote food and nutrition (2) Household food and nutrition security improved. increasing household incomes and promoting equity. security and household incomes The Civil Society Budget Advocacy Figure 2.1: Distribution of working population in Uganda in Uganda by sector (%) Group (CSBAG) has since 2004 brought together CSOs at national and local level to advocate for budgets that address the needs of poor women and men. The largest proportion of the working population in Uganda (66%) derives its livelihood from agriculture (Figure 2.1). Of policy concern however is why such a large population engaged in agriculture contributes only 14% to the national output, indicative of low factor productivity. This issue is further explored in section 2.4 below. Source: UNHS 2009/1014 15
  9. 9. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded ProjectsThe Uganda Census of Agriculture (UCA) The rest of this chapter discusses sector performance from three key dimensions: (1) high inflation levels2. Although agriculture Table 2.1: Sectoral Growth Rates and Shares in GDP 2003/04 – 2011/122008/091 estimated that the number of remains very critical for spurring national Growth trends (2) Financing and expenditure Sector 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12agricultural households in Uganda are 3,945,753. growth, the share of agriculture in total GDPOut of these, the Western Region had the trends and (3) Delivery of key services. has declined over the years from 23.8 percent Sector Growth Rateshighest (28.5%), closely followed by the Eastern in FY 2003/04 to 13.9 percent in FY 2010/11. Agriculture 1.6 2.0 0.5 0.1 1.3 2.9 2.4 0.7 3.0Region (28.1%), Northern Region (22.9%) and Whereas the industrial and services sectorsCentral Region (20.5%). Of the 3,575,065agricultural households that responded to the 2.2 Growth trends have in some years hit a 10% growth rate, the growth in the agricultural sector has consistently Industry Services 8.0 7.9 11.6 6.2 14.7 12.2 9.6 8.0 8.8 9.7 5.8 8.8 6.5 8.2 7.9 8.4 1.1 3.1census, 2,821,070 or 78.9% were male headed Uganda’s economy grew at an average GDP remained dismal at 3% (Table 2.1)3. Sector Shares in Total GDP at Current Priceshouseholds and 753,994 or 21.1% were female growth of 7.8 percent between FY 2005/06 and FY 2010/11, and slowed down to 3.2 Agriculture 23.8 25.1 18.3 16.9 15.8 15.1 14.7 13.9headed households (Figure 2.2). The growth of the agricultural sector is still below percent in FY 2011/2012 as a result of high the National Development Plan (NDP) annual Industry 22.9 23.5 24.8 25.1 25.1 24.8 25.0 25.3 global oil and commodity prices, drought, growth target of 5.6 percent and the 6 percent Services 47.4 45.4 49.6 49.6 49.9 50.7 51.6 52.41 UBOS, 2010. power shortages, exchange rate volatility and growth rate that is required for effective poverty Source: UBOS Statistical Abstracts for various years; MFPED, 2012; MFPED, 2011; GoU, 2010. reduction. Research by IFPRI4 demonstratedFigure 2.2: Percent distribution of Agriculture Household Heads by Sex and Region that if agriculture in Uganda grew at 6 percent per annum, the national poverty headcount level would decline from 31.1 percent in 2005 to 19.9 percent in 2015, below the 28 percent 2.3 Financing and expenditure trends Millennium Development Goal (MDG) target. The Ministry of Agriculture, Animal Industry and 3 grants: (i) District Agricultural Extension (ii) Uganda’s agricultural growth rate is also below the 6 percent annual growth target of the African Fisheries (MAAIF) is the lead agency coordinating NAADS (Districts) (iii) Production and Marketing Union’s Comprehensive Africa Agricultural agricultural financing both at the Central and Grant. Public funds include GoU and donor Development Program (CAADP)5. Local Government level. At Central Government financing. level, financing is handled through 7 Votes namely: (i) MAAIF (ii) NAADS Secretariat (iii) The budget allocation to agriculture as a share to Cotton Development Organization (CDO) (iv) the national budget remains low (Table 2.2) and Uganda Coffee Development Authority (UCDA) stands at 3.2% in FY 2012/2013 which constrains (v) National Agricultural Research Organization agricultural spending6. (NARO) (vi) Dairy Development Authority (DDA) and (vii) Kampala City Council Authority (KCCA) 2 MFPED, 2012. Grant. At the Local Government level, spending 3 MFPED, 2012. for agriculture is majorly channeled through 4 Benin, 2007. 5 The CAADP is an initiative of the New Partnership 6 At the African Union Assembly in Maputo in July 2003, for Africa’s Development (NEPAD) aimed at helping African Heads of State including the Ugandan President, committed countries reach a higher path of economic growth through to allocating at least 10% of national budgetary resources to agriculture-led development. agriculture within 5 years of the meeting date.Source: UBOS, 2010.16 17
  10. 10. Performance of the Agricultural Sector in Uganda - Case Study of Donor-Funded ProjectsTable 2.2: Sectoral Budget Allocations – FY 2009/10 – FY 2011/12 Figure 2.3: Budget allocations within the Table 2.3: On-budget and Off-budget Project Aid to Agriculture (US$ millions) Sector 2009/10 Approved 2010/11 Approved 2011/12 Approved Agricultural Sector FY 2011/12 On-budget Off-budget Allocation % Share Allocation % Share Allocation % Share Sector Actual Projections Actual Projections USh bn of Budget USh bn of Budget USh bn of Budget 2009/10 2010/11 2011/12 2012/2013 2009/10 2010/11 2011/12 2012/2013 Agriculture 310.7 4.7% 366 5.0% 434.0 4.5% Agriculture 68.07 58.30 94.47 100.01 9.51 16.07 23.89 37.20 Lands, Housing & Urban Development 20.3 0.3% 24 0.3% 32.4 0.3% Total all 641.59 515.62 867.36 687.66 399.55 397.30 451.55 402.06 Energy & Mineral Development 698.9 10.5% 391 5.3% 1,320.0 13.7% Sectors Works & Transport 1,214.8 18.2% 1,038 14.1% 1,290.8 13.4% Agric Share Information & Communications Technology 9.5 0.1% 12 0.2% 12.1 0.1% % Source: MFPED, 2012c – Information Tourism, Trade & Industry 47.8 0.7% 49 0.7% 53.2 0.6% The programme is implemented in all submitted by Development partners by districts and sub-counties of Uganda, Education 1,079.6 16.2% 1,243 16.8% 1,416.3 14.7% February 2012. involving provision of advisory services and Health 737.7 11.0% 660 8.9% 799.1 8.3% inputs to various categories of farmers Water & Environment Social Development 172.2 32.5 2.6% 0.5% 250 32 3.4% 0.4% 271.3 50.4 2.8% 0.5% 2.4 Delivery of key and setting up of technology development sites and research trials. The first phase of Security 487.7 7.3% 649 8.8% 974.9 10.1% agricultural services the project ended in 2010 and the second phase commenced in FY 2010/11 under the Justice, Law & Order 359.7 5.4% 532 7.2% 531.6 5.5% Agricultural Technology and Agri-business Advisory Services Project (ATAAS). The ATAAS Public Sector Management 705.0 10.6% 835 11.3% 986.2 10.2% 2.4.1 Extension aims to strengthen the linkages between Accountability 462.9 6.9% 492 6.7% 543.6 5.6% The Government is offering agricultural NAADS and the National Agricultural extension and advisory services to farmers Research Organization (NARO) and increase Legislature 121.8 1.8% 163 2.2% 162.7 1.7% Source: MFPED, 2012a. mainly through the National Agricultural agricultural productivity and farmer access to Public Administration 217.0 3.2% 302 4.1% 231.8 2.4% technology, advice and information. Advisory Services (NAADS) programme, Interest payments due - - 340 4.6% 519.6 5.4% complemented by general extension services by the District and Sub-county Production The NAADS program has enabled farmers Grand Total 6,678.3 100.0% 7,377 100.0% 9,630.0 100.0% Offices. Other farmers pay to access private to access inputs and technologies: in FYSource: MFPED, 2010a; MFPED, 2011a; MFPED, 2012; DRT, 2011. 2010/11, the programme targeted 100 sector service providers, especially in the Close to a half of agricultural spending (42.4%) comes in discrete projects whose contribution livestock sector. The main objective of the Food Security Farmers (FSF) and 8 Market to the overall sector outc omes cannot be easily NAADS programme that has been under Oriented Farmers (MOFs) per Parish; this is earmarked to the NAADS programme that implementation since 2001 is to “ensure that number has gradually come down due to offers advisory services to farmers, followed by ascertained or measured. A significant amount of farmers move from subsistence to market resource constraints to 30 FSF per parish, policy and institutional development by MAAIF aid also comes off budget and its magnitude and oriented and eventually commercial farming”. 4 MOF per parish and 2 commercializing and research and technology development by use is not well captured in Government systems. farmers per Sub-county. The FSF are NARO (Figure 2.3). Most of the donor financing Table 2.3 provides a snapshot of project aid to agriculture in recent years.18 19

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