The Bank reporter PROSPER MAKENE wanted to know from MAGAWA ABDALLAH, an economist in Community Development, as to why EAC government budgets always fall short of honouring the Maputo Declaration on Agriculture. Read on...
QUESTION: As Tanzania and other EA countries table their budgets today why do they always fail to honour the Maputo Declaration on Agriculture?
ANSWER: As to why EAC budgets are always not honouring the Maputo Declaration on Agriculture, the answer is simple - that there are so many priorities by the governments in every year. As such while governments acknowledge the importance of the sector, yet when it comes to resource allocation there are so many competing priorities including health, education and rural-urban infrastructure development just to mention a few.
For example, up to 2012, about nine years after the Maputo Declaration was initiated, Tanzania was able to allocate only 6.8 per cent of its total budget to the agricultural sector with a promise that in the forthcoming years it will commit inself to reach the goal of allocating 10 per cent of its annual budget for the sector in line with the AU Maputo Declaration on Agriculture and Food Security on the continent.
Indeed, if budgetary constraints are not addressed for the agricultural sector to prosper, they will continue to be the underlying factor to slow down efforts towards combating hunger and poverty reduction, particularly in rural areas where Tanzania’s poor majority (about 80 per cent) live.
However, todate it is about 13 years since the Maputo Declaration on Agriculture and Food Security in Africa was initiated and we have seen most of the African countries not reaching their budget commitments on the Declaration.
As we all know, one of the cardinal components of the Declaration is that African countries will allocate and implement increased spending on agriculture by at least 10 per cent of their annual budgets by 2008.
According to the Declaration such increases in budgetary allocations to agriculture was to give life to the Comprehensive Africa Agriculture Development Programme (CAADP) with the goal to help African countries reach a higher path of economic growth through agriculture-led development, which eliminates hunger, reduces poverty, food and nutrition insecurity and enables the expansion of exports.
Since 1990, there has been a general decline in poverty in Tanzania but it remains widespread, particularly in rural areas where most of the dwellers depend on agriculture. Indeed, the essence of Maputo Declaration was a 6 percent growth rate expected on the economies targeted at ultimately leading Africa from a food deficit region to a self-sufficient one.
In Tanzania, agriculture remains the largest sector in the economy and hence its performance has a significant effect on output and corresponding income and poverty levels.
The sector accounts for about half of the GDP and exports, and its importance is amplified through backward and forward linkage effects. Sale of agricultural products accounts for about 70 per cent of the rural household incomes.
Why is there a need for these countries to honour the declaration on enhancing investment in agriculture and accelerating its transformation?
As I said earlier, the purpose of the Declaration is to help African countries reach a higher path of economic growth through agriculture-led development, which eliminates hunger, reduces poverty, food and nutrition insecurity and enables the expansion of exports.
For example, in Tanzania about 80 per cent of the poor live in rural areas and agriculture accounts for 75 per cent of the rural household incomes, hence significant reductions in overall poverty levels, particularly rural poverty, will require raising agricultural incomes.
Therefore, increasing growth, reducing food insecurity, and accelerating poverty reduction, particularly in rural areas, requires an increase in agricultural productivity, higher added value, and improved producer price incentives.
These increases also require a consolidation and continuation of long-term reforms, particularly with respect to markets, institutions and investments. Greater emphasis is needed to improve institutional functioning and service delivery, technology adoption, infrastructure development and create greater commercialisation among smallholders.
The facts remain that in countries such as Tanzania, agriculture stimulates economic growth indirectly through larger consumption linkages with the rest of the economy than other sectors. Food insecurity and malnutrition both reduce productivity and the ability of individuals to contribute to growth.
How should Tanzania strategically address issues of agricultural finance, particularly the financing of smallholder farmers as a way of transforming the sector?
My thinking is that the government must continue to implement the General Budget Support Annual Review Report of 2008 and other policy documents which among others emphasised on the need to strategically address issues of agricultural finance, particularly financing of smallholder farmers as a way of transforming the sector.
It must continue to put in place measures to strengthen management, supervision and regulation of Savings and Credit cooperatives (SACCOS).
It must also improve the investment climate in agriculture to facilitate private sector activities including the regulatory framework and the structure of local taxes, implement private sector friendly schemes for seed, fertilisers and extension services, the improvement of the Land registry and land registration services. It must enable the investment climate with a special focus on agriculture, equity and efficiency in service delivery, and tackling of challenges in combating corruption.
What should be done in the coming budget concerning schemes for seeds, fertilisers and extension services to the sector?
If I happened to be the Agriculture, Food Security and Cooperatives minister, I would indeed support the model implemented by TAP - Tanzania Agricultural Partnership - the programme that started out as the Tanzania Fertiliser Partnership aimed to make most effective use of fertiliser for the growth of the Tanzanian agricultural sector as a whole.
This programme was launched in October 2005 by Tanzania’s former Prime Minister Mizengo Pinda where a national rollout plan took place throughout 2011, initially covering 25 districts, then expanded to 56 districts, and with the eventual goal of covering the entire country.
This is the kind of agricultural programme designed and developed as a successful fast track initiative to reduce poverty by improving the use of agricultural inputs like seeds and fertilisers throughout the value chain. TAP is an innovative PPP and is in line with the agenda of Nepad’s CAADP, the Africa Green Revolution and the Government of Tanzania’s Kilimo Kwanza (Agriculture First) Initiative.
TAP included the Farm Inputs Promotion (FIPs) initiative that is helping to stimulate the demand for inputs by farmers and it is aligning the work of FIPs with the CNFA/AGRA-led Farm Inputs Retailer training programme and is coordinating value chain support work to develop and sustain the demand for major food crops.
We have to recognize that access to reasonably priced fertiliser is vital, other inputs - like quality seeds - are crucial to stimulate the sustainable growth of commodity markets.
Whoch therefore are the sectors that need to be given priority and why?
It has been always my opinion that we need to choose where we give priority as a country. The long shopping list of priorities always has made us not focusing on important sectors that would foster economic growth of our people because it has necessitated us over the years to spread the budget across the sectors.
If you ask me today what are the sectors that need to be given priority, I would rather choose the three key ones which are Agriculture because it is through agriculture we can stimulate our economy, Health because poor health resulting from malnutrition reduces productivity and the ability of individuals to contribute to growth and Education since illiteracy and lack of awareness have an impact to farmers adoption to new farming technologies and remain poor as they fail to adopt or improve agricultural practices and continue to be reluctant and use old agricultural practices.