The Economic Recovery and Growth Plan of the current administration served as the basis for the development of the 2019 proposed budget for the agriculture sector and other sectors. According to the ERGP’s strategies for the sector, the Federal Government intends to facilitate access to inputs, set up a one-stop shop for small farmers, fast track the development and execution of irrigation projects, improve access to finance, extend the Anchor Borrowers Programme, recapitalise the Bank of Agriculture, encourage the development of investment vehicles by the private sector, encourage research to support agricultural productivity, and increase crop value.
The Federal Government also intends to encourage crop specialisation at the state level, implement a national agricultural quality assurance programme, enhance agricultural extension services, and expand the use of dams for commercial farming and aquaculture. Since the budget is the most powerful tool through which government achieves its plans, it is expected that the agriculture budget line items in the 2019 proposal should be in synchrony with the strategies of the ERGP.
A careful analysis of the 2019 agriculture budget proposal for the headquarters of the Federal Ministry of Agriculture and the 45 other agencies and parastatals in the ministry reveals that the proposed 2019 budget line items are in synchrony with the ERGP. However, the interests of small holder farmers were not well captured. The ministry should be commended for impressive line items in the proposed budget, but the real challenge will be in the successful implementation of the projects.
The trend of budget allocation for the agriculture sector over the last few years shows that the allocation to agriculture, as a percentage of the overall annual budget to all sectors, increased from 1.25 per cent in 2016 to 1.82 per cent in 2017 and to 2.23 per cent in 2018. However, the allocation to agriculture as a percentage of the overall annual budget to all sectors in the 2019 proposal dropped to 1.56 per cent. At a time the government is planning to diversify the economy away from crude oil and into critical sectors like agriculture, there is no acceptable explanation for a decrease in the percentage allocation to agriculture. Such a decrease suggests that agriculture has dropped in the pecking order of priority sectors of the government for the 2019 budget year and this is unacceptable to concerned stakeholders.
Also, the allocation to capital expenditure for agriculture, as a percentage of the total allocation to the agriculture sector, dropped from 73.5 per cent in 2018 to 58.2 per cent in the 2019 proposal. Commercial and climate smart agriculture, which is the future of the sector, can only become a reality if we strengthen allocation to capital expenditure in the sector. This huge decrease in the capital vote of the sector is highly unacceptable to concerned stakeholders.
The capital budget implementation reports released by the Budget Office of the Federation shows that the utilised votes, as a percentage of the annual capital appropriation, peaked at 67.08 per cent and 66.05 per cent for 2016 and 2017 budget years, respectively. This clearly shows that about one-third of the approved capital allocations to the sector were unused in those years. As at September 30, 2018, the utilised component of the 2018 agriculture capital budget stood at 13.31 per cent.
Stakeholders look forward to a time when the utilised capital votes for the sector will tend towards 95 per cent. The late presentation, approval and utilisation of the budget, which has become the norm, is very detrimental to the agriculture sector. This is because farmers are expected to go to their farms at a particular time of the year and if the budgetary releases to the farmers are not ready at that time, productivity for that year will be decimated.
The executive and the legislature must do their best to ensure that capital votes for the agriculture sector is released to the farmers as and when due. This has led some stakeholders to request that the budget for agriculture
be given special and accelerated attention by government officials. While this is not a bad call, the feasibility of it materialising is in doubt, especially in the context of the fact that other sectors also have reasons why they, too, should be given special and accelerated attention.
In order to promote transparency and accountability, there is a need to ensure that budget line items are clear, unambiguous and free from suspicion. The proposed 2019 budget line item ‘green alternative implementation’ with the budget code ERGP30105281 and an allocation of N155,182,587 is unclear. If all the projects in the proposed budget of the ministry of agriculture are geared towards the implementation of the Green Alternative, which is the agricultural policy document of the current administration, why then do you need another sum for ‘green alternative implementation’?
Also, the budget line item ‘mechanization’ with the budget code ERGP5105155 and an allocation of N1,090,362,665 is not a bad idea but stakeholders will like to know the details and breakdown of the machines to be procured. This will go a long way to encourage individuals and organisations who want to track budget performance. These and other unclear, ambiguous and suspicious line items in the 2019 budget proposal should be clarified before approval.
In conclusion, early preparation and passage of the annual budget, increase in the allocation to the agriculture sector, increase in the capital component of the agriculture budget, improved utilisation of the capital budget, clarity of the budget line items and improved engagement of the sector by civil society organisations is recommended.
Eke is with the Centre for Social Justice in Abuja
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