Agriculture and the 2019 budget

The Economic Recovery and Growth Plan (ERGP) 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 agriculture sectoral strategies of the ERGP, 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, recapitalize 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 specialization 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 the 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. Concerned stakeholders are advocating for the implementation to be backed by strong political will.

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% in 2016 to 1.82% in 2017 and to 2.23% 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%.

At a time the government is professing its intensions 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% in 2018 to 58.2% 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. Also, the capital budget implementation reports released by the Budget Office of the Federation shows that the utilized votes as a percentage of the annual capital appropriation peaked at 67.08% and 66.05% for 2016 and 2017 budget years respectively. This clearly shows that about one-third (1/3) of the approved capital allocations to the sector were unused in those years. As at 30th September 2018, the utilized component of the 2018 agriculture capital budget stood at 13.31%. Stakeholders look forward to a time when the utilized capital votes for the sector will tend towards 95%. The late presentation, approval and utilization of the budget which has become a new norm are very detrimental to the agriculture sector.

This is because farmers are expected to go to the farm at a particular time of the year and if the budgetary releases to the farmers are not ready at that particular time of the year, productivity for that year is decimated.

The executives and the legislature must do their best to ensure that capital votes for the agriculture sector is released to the farmers as at when due. This has led some stakeholders to call for the budget of agriculture to be given special and accelerated attention by government officials. While this is not a bad call, the feasibility of it materializing 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 need to ensure that budget line items are clear, unambiguous and free from suspicion. The proposed 2019 budget line item ‘green alternative implementation’with budget code ERGP30105281 and an allocation of ₦155,182,587is 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 budget code ERGP5105155 and an allocation of ₦1,090,362,665 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 organizations 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 utilization of the capital budget, clarity of the budget line items and improved engagement of the sector by civil society organizations is recommended.

Eke writes from Centre for Social Justice, Abuja