5 key budget issues for farmers

Presented at the National CSO Budget Dialogue, 15th April 2015

Budget cut for the sector from UGX 501.58bn to UGX 454.1bn

• We are dismayed that the sector budget has been cut by UGX 56.7bn and still remains at 3% total allocation to the national budget. This unfortunate turn out of events is happening with the full knowledge that agriculture is still the biggest employer in Uganda-66% of country’s working population, agriculture has the biggest direct impact on rural incomes and it still gives Uganda the best comparative advantage over its neighbors in terms of trade.

Limited Access to agriculture credit

• The failure by the Agriculture Credit Facility (ACF) to deliver on its intended purpose (provide affordable credit to farmers) has continuously failed the sector and the small scale farmers at large. This is not any better in the commercial banking sub sector as the farmers are considered very high risk thus attracting a very high interest rate averaging at 22%. The seasonality of the sector production creates a unique need for credit that favors and allows famers invest and mechanize production. Ultimately, access to credit has been side lined by government because they have gone silent about the Agriculture Bank, an institution that we are confident will address this unique challenge.

Poor funding for extension at the LG• We note with concern that the in the FY 2015/16, the LGs have had

the total allocation for Agriculture Advisory Services totally removed to ZERO. This is in contrast to what the NAADS secretariat has been allocated amounting to UGX 203.68bn (50% of total sector budget). This, we reckon, will make the already poor extension service provision at the LGs worse

50% of total budget allocated to NAADS secretariat with no clear targets for expenditure

We are concerned the NAADS has been allocated UGX 203.68bn (50% of total sector budget) without clear targets on how the funds will be utilized. This is amidst concerns with government’s strategy to use the military to deliver extension services, irrespective of their expertise.