The agriculture sector has been allocated only Rwf154.8 billion for the upcoming fiscal year, accounting for a mere 3 percent of the proposed national budget.
The Minister of Agriculture and Animal Resources, Ildephonse Musafiri, along with parliamentarians, expressed their dissatisfaction, stating that this allocation is insufficient to develop the sector and address concerns such as food security and high inflation.
Compared to the previous year, where the agriculture sector received Rwf168.8 billion (3.5 percent of the total national budget), the budget has decreased by 8 percent or Rwf14 billion for the next fiscal year.
These figures were revealed on Tuesday, May 9, during the budget hearing for the 2023/24 spending estimates when the Ministry of Agriculture and Animal Resources (MINAGRI) presented its financial plan to the Lower House's committee on national budget and patrimony.
Under the Comprehensive Africa Agricultural Development Programme (CAADP), African countries committed to allocating at least 10 percent of their national budgets to agricultural development and achieving annual agricultural growth rates of at least 6 percent.
Musafiri emphasized the importance of meeting the recommended 10 percent budget allocation for the agriculture sector. He highlighted the sector's multiplier effects on the economy, such as controlling inflation and ensuring consumer access to affordable food.
What are the implications of limited funding for agriculture?
Crop Intensification Programme Faces Challenges
Minister Musafiri revealed that the crop intensification programme (CIP) was allocated only Rwf31 billion. Additionally, the agriculture sector currently owes Rwf28.8 billion in arrears to fertilizer suppliers due to insufficient funding in the previous period.
He cautioned that reduced subsidies on fertilizers could lead to higher costs for farmers and inadequate fertilizer use. This situation may jeopardize the country's ability to meet the increased food needs of its population, which rose from 10 million in 2012 to 13.2 million in 2022, according to the fifth Population and Housing Census conducted by the National Institute of Statistics of Rwanda.
"We have a financing gap of Rwf74 billion for the crop intensification program, which would enable us to support farmers in obtaining agricultural inputs," Musafiri explained. He stressed the importance of ensuring timely payments to fertilizer suppliers to avoid delays and ensure a stable supply.
Inadequate Vaccination Threatens Livestock Output
Musafiri also highlighted the challenges faced by the Livestock Intensification Programme (LIP) regarding livestock vaccination, particularly for cows. The project was allocated only Rwf3.9 billion, while Rwf12.1 billion was needed.
With limited financing, only 31 percent of the targeted livestock animals can be immunized, leaving the majority (69 percent) at risk of diseases or epidemics that could negatively impact livestock output, including milk production.
Small-Scale Irrigation Technologies at Risk
Musafiri expressed concerns about the insufficient allocation of funds for small-scale irrigation technologies (SSIT). The intended purpose of SSIT was to help small-scale farmers access affordable irrigation equipment, making their farming practices more resilient to drought, with government subsidies.
"With an allocation of only Rwf1.1 billion, we face a funding gap of Rwf9.5 billion for small-scale irrigation technologies," Musafiri revealed. He warned that this shortfall could leave crops vulnerable if drought conditions worsen.
MP Christine Bakundufite said that reducing the budget allocated to agriculture is a concern that has to be addressed.
She said that, on April 19, the Government of Rwanda waived value added tax on maize flour and rice, with a view to tame the high increase in food prices.
"That VAT should be brought into the national treasury, yet we have waived it. For that [high food price] issue to be addressed, food production should increase. Yet, the agriculture budget [to enable that development] is reduced," she said, expressing that this situation implies the food issue might get complex and difficult to get rid of.
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"Agriculture concerns everyone, so I don't understand how its budget has to decline," she said, pointing out that it is impossible to increase food production without fertilisers.
"There is a gap in farm inputs, and irrigation capacity. We are dependent on rain-fed agriculture," he said, adding that the agriculture budget should increase.
According to the 2021/2022 annual report by MINAGRI, over 68,000 ha of farmland were under irrigation, while the target is to increase that irrigated area to 102,000 hectares by the end of 2024.
The Director General of National Budget at the Ministry of Finance and Economic Planning, Rehema Namutebi, said that the "agriculture sector is key to all of us."
She said that the sector is also key to the economy, adding that they are still in discussions with agriculture sector officials on how to address some of the key priorities in terms of funding.
