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Uganda National Budgets and Agriculture 

In this analysis I rely heavily on national budget analyses that have been done by the Civil Society Budget Advocacy Group (CSBAG 2016) as the source of budget figures. The figures of interest for this paper are presented here below:

 

    FY 2015/16   
 Ushs. billion  
  FY 2014/15
      Ushs. billion
   
National Budget 17,956.45 15,041.87
Agriculture Budget  485.3 436.6
Ministry of Agriculture Animal Industries and Fisheries Budget               142.5 84.075
National Agriculture Research Organisations (NARO) Budget 98.2 154.62


It is often the case that budget figures for the agriculture sector are discussed in comparison to the entire national budget and also in comparison with percentage allocations to other sectors. From the figures above, one notes that during the current financial year (FY 2015/16) the budget for the agriculture sector was 2.7 percent of the national budget; a reduction in comparison to the previous year’s (FY 2014/15) budget allocation which was 2.9 percent of the national budget. On these ground alone, the assertions seem supported of those who claim that Uganda’s agriculture sector is underfunded. CSBAG, for example, is among those who assert that the Government of Uganda (GoU) underfunds the agriculture sector and CSBAG recommends that funding to the agriculture sector should be at least 6.0 percent of the national budget.

Discussing the sufficiency of sector budget allocations in terms of percentages is certainly not enough to unravel how the allocated funds are utilised intra sector. An interesting question not answered by percentage comparisons at national level, for example, is: for what exactly – which type of agriculture – was the allocation of funds made? How are the priorities determined and therefore the allocation of funds? So, for example, what proportion of funds that are allocated to NARO are utilised for such research innovations as Epuripur (sorghum for beer brewing) which impact negatively on food security at homestead level, however unintentional? 

In the current financial year, for example, CSBAG felt that there were areas in the agriculture sector that had been under prioritised. Among the areas underfunded, according to CSBAG, was the promotion and availability of appropriate irrigation technologies that can widely be adopted by smallholder farmers. CSBAG noted that GoU had poor commitment towards implementation of irrigation schemes development – giving the example of the “Irrigation Scheme Development in Central and Eastern Uganda”, whose main proclaimed objective is: to improve national food security and farmer household incomes through increased sustainable irrigated rice production. CSBAG noted that the bulk of funds that were allocated for the building of irrigations schemes, 87 percent, were on general operating expenses. 

CSBAG also noted that among the unfinished projects due to insufficient funding – no GoU counterpart funding - was the “Enhancing National Food Security through increased Rice Production in Eastern Uganda project.” The food system of one of the largest first nations of Eastern Uganda – the Iteso - clearly indicates that rice is not among the major staple foods of the region. Among the other large first nations of Eastern Uganda – Basoga and Karimojong - rice is not their staple food either. Why then is the GoU focusing on the production of rice under the proclamation that it is doing so for enhancing national food security? 

NARO scientists (Imanywoha 2001) have documented that there are six districts – Gulu, Iganga, Tororo, Kitgum, Pallisa, Lira and Kumi - that are the principle areas in which rice is grown in Uganda. Of those districts, four are from Eastern Uganda. Two of the four districts in Eastern Uganda – Pallisa and Kumi – are significantly populated by Iteso; and in both districts the major staple food of preference is atap – once composed of millet, then millet-sorghum-cassava, then sorghum-cassava and now mostly only cassava. 

The nutritional value of rice, according to researchers (Arnarson 2015), is primarily carbohydrates and with small amounts of protein - not too different nutritionally from cassava, and certainly nutritionally inferior to sorghum and to millet. So why is the GoU promoting rice as a national food security crop? 

The real reason the GoU is promoting rice growing is likely because of its commercial value and therefore its contribution to the national GDP. According to NARO scientists (Imanywoha 2001), among all crops grown in Uganda, rice is the best in terms of economic returns to ‘peasant farmers’.

The attitude deduceable from Uganda’s National Budget allocations to agriculture is that GoU promotes the practice of ‘grow to sell then buy to eat’ over that which promotes ‘grow to eat and sell only the surplus’. This seems the tone of GoU agriculture programmes, such as is the case with the latest one (Operation Wealth Creation 2015), which focusses on ‘improving’ incomes first. Consequently, it is likely, therefore, that the kind of agriculture intended to contribute to GDP figures is the kind that is catered for in the National Budgets and not that which primarily produces food for consumption at homestead level.

There seems to be a deliberate effort within Uganda National Budgets to give incentives to those farmers who claim to adopt ‘modern’ farming practices and those who claim to engage in commercial farming. Take for instances, during the recently concluded presidential election campaigs 2016, discussions of funding to agriculture heavily centered on whether the State should support Ugandan farmers through free distribution of hoes or through acquisition of tractors. Often, the discussions categorised hoes as backward and ineffective to bring ‘subsistence farmers’ out of poverty; while tractors were revered as the silver bullet to bring ‘subsistence farmers’ out of poverty.

Whereas a hoe is among the symbols in the emblem of one of Uganda’s older political parties, the Democratic Party (DP) (Wikipedia 2016), during the presidential elections campaigns 2016 the hoe was catapulted into mainstream national political debate by the ruling party, the National Resistance Movement Organisation (NRMO) (Wikipedia 2016). Presidential Candidate and also the President, His Excellency Museveni, pledged and reportedly fulfilled his pledge of distributing 18 million hoes countrywide. He argued that hoes would boost food security and incomes for small land owners and would gradually transform Uganda from an agrarian to an industrial economy by 2040. 

With the retail price of a hoe standing at 10 thousand shillings per piece, 18 million hoes would cost 180 billion shillings, which analysts (Arinaitwe 2016) estimated to be about 30 per cent of Uganda’s MAAIF budget for the current financial year. Other analysts, however, priced a hoe at 25 thousand shillings per piece and therefore estimated NRM’s hoe project to cost 450 billion shillings.

Candidate Museveni’s main challenger in the 2016 elections, Presidential Candidate Dr. Kizza Besigye, the flag bearer for the Forum for Democratic Change (FDC) (FDC 2016) countered the NRM’s hoe strategy and instead promised that if elected he would provide every sub-county with tractors to boost agriculture. He argued that the use of hoes is an outdated method of farming. He drew comparisons by reminding Ugandans that in the 1960’s, the first Uganda People’s Congress (UPC) government provided tractors for farmers at every sub-county. He mocked Candidate Museveni for retrogressively promising and distributing hoes to farmers fifty years later. 

Let us test the feasibility and the viability of FDC’s tractor project. Assuming the hoe project costs 450 billion shillings and assuming that each tractor costs 120 million shillings, then using the same amount of money as the NRM hoe project the FDC tractor project would be able to procure 3,750 tractors. According to Uganda’s National Population and Housing Census 2014, there are over 7.3 million households in Uganda, which means that under the FDC tractor project 1,960 households would share one tractor. 

Add on the challenges of the logistical arrangements during busy farming periods and the costs of maintenance of a tractor that is shared by 1,960 households, the hoe project which provides on average two hoes per household becomes more attractive to voters. And, more so, considering the attitude towards tractors by some of the first nations, such as the Iteso, whose preferred farming tools are hoes first and ox-ploughs second, the NRM hoe project seems the more practical and the closer to the realities of the majority of Ugandan farmers.

NRM’s hoe project, on the one hand and FDC’s and UPC’s tractor projects, on the other hand, certainly provide two very different perspectives to Uganda’s agriculture. The hoe project is more aligned to Uganda’s complex indigenous organic farming methods, such as those of the Iteso; while the tractor project is more aligned to the so-called ‘modern farming’ methods, that characteristically use non-organic farming methods – heavy reliance on artificial fertilizers, pesticides, fuel and more. 

Paradoxically, when one studies agricultural policy and programmes during the 30-year reign of President Museveni, one finds that the policy and programmes are not necessarily always consistent with the kind of agriculture that the hoe project represents. Most of the times, arguably, the policy and programmes are more consistent with the kind of agriculture that the tractor project represents. And this attitude is easily deduced from Uganda’s national budgets. 

Even when the GoU in its budgetary allocations claims provisions that are for the benefit of the smallholder rural farmers, such claims in some cases raise significant questions. For example, the national budget for the financial year 2011/2012, every single incentive in form of the tax cuts that the minister gave in her speech could only be fully enjoyed if one was rich. 

The tax cuts on sugar and the reductions on stamp duty were only meaningful in the context of economies of scale. That is to say, it is he or she who is able to buy a truck load of sugar that would enjoy the benefit of the tax cut, for by the time the sugar goes down through the retailer to the ordinary poor person who buys sugar in grams there would be no significant impact. 

The ordinary poor person, majority who live in the rural, were probably not able to and most likely did not want to borrow in excess of one million shillings, so how did they benefit from the reductions in stamp duty? The removal of taxes on kerosene, without dealing with the costs of fuel to transport the kerosene up-country likely achieved zero impact. Removal of taxes on hoes was for me very comical, because on the conservative side, a hoe lasts multiple years. So for the millions of us who bought hoes the previous year the positive impact of the tax exemption on hoes in our poor rural homesteads is questionable.

The GoU’s tax regime in fact reveals a tendency to exploit the poor. During the financial year 2014/15, many farmers were forced to sell increased volumes of food items in order to meet school fees – including scholastic materials, even for their children who are attending schools supported by the government under Universal Primary Education. They were forced to sell more food items in order to meet medical bills; meaning that their food stocks were quickly used up. 

This status quo was caused by the fact that fees went up for everything – in order to accommodate excise duty, charges on mobile money transfers, and other indirect taxes that were imposed as part of the NRM administration’s strategy to generate revenue for implementing government programmes. It is interesting to note that three years later even the taxes on hoes that had been exempted in the financial year 2011/2012 were reinstated in the financial year 2014/2015.

Background to this analysis: On Thursday, 25th June 2015, at Hotel Kigo in Lweza in Uganda, Kigo Thinkers (KT) held a policy dialogue that discussed the question: “Can the 2015/16 Uganda national budget support ‘smallholder’ farmers to improve agricultural production and to stem the rate of rural-urban migration?” A KT synthesis paper: “Uganda’s National Budgetary Allocations to Agriculture in Support of Smallholder Farmers and Rural-Urban Migration” resulted from that policy dialogue. This analysis is part of Part III of that synthesis paper. Part I, a description of agriculture in the context of Uganda and titled: “Agriculture in Uganda” is published online. Read it here. Part II, a description of what is considered the rural and the urban in relations to agriculture is also published on line. Read it here.

The synthesis paper to which this analysis is a part of, in essence, captures the thought processes that emerged during the KT policy dialogue; a dialogue session that is among such events that KT has organised under the traditions of the Chatham House Rules, which protect the identity of the opinion holder while encouraging the sharing of opinions. It is important, however, to know that the dialogue was attended by active citizens of Uganda and other persons who live and work in Uganda. They included persons in academia; persons working in Government of Uganda (GoU) ministries and departments; persons working with civil society organisations (CSOs); persons that are active in governance politics of Uganda and moreover of varied political persuasions; and persons active in Uganda’s private business sector. 

The KT policy dialogue of 25th June 2015 was sponsored with grant funding from the Open Society Initiative for Eastern Africa (OSIEA) about/offices-foundations/open-society-initiative-eastern-africa and from the Bank of Uganda (BoU). Whereas, Owaraga has authored this analysis on behalf of KT the views herein contained are not necessarily those of KT or of OSIEA or of BoU or of CPAR Uganda Ltd.

About the Author: Norah Owaraga, a cultural anthropologist, authored this analysis on behalf of the KT. She is one of the four founding members of KT and Since April 2012 she is the Managing Director of CPAR Uganda Ltd a not-for-profit development organisation. Read her detailed bio here.

Works Cited

Arinaitwe, Solomon. Museveni gives hoes as promised. February 10, 2016. (accessed June 06, 2016).

Arnarson, Atli. Rice 101: Nutrition facts and health effects. July 2015. (accessed June 06, 2016).

CSBAG. Civil Society Budget Advocacy Group. 2016. (accessed June 04, 2016).

FDC. Forum for Democratic Change. 2016. (accessed June 06, 2016).

Imanywoha, J. B. "Rice." In Agriculture in Uganda - Volume II: Crops, by Joseph K. Mukiibi, 70. Kampala: Fountain Publishers, 2001.

Operation Wealth Creation. About operation wealth creation. 2015. (accessed September 16, 2015).

Wikipedia. Democratic Party Uganda. 2016. (accessed June 06, 2016).

—. National Resistence Movement. 2016. (accessed June 06, 2016).