Uganda reviews public spending and price incentives with MAFAP at Mukono workshop

The Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme and FAO in Uganda hosted a two-day workshop in Mukono, bringing together over 30 key stakeholders from various government ministries. The workshop focused on training participants in public expenditure (PE) and price incentives (PI) analyses while facilitating dialogue around key findings emerging from MAFAP’s preliminary results. 

Participants were given a refresher course on the economic theory, computation, and interpretation of PI and PE indicators using the MAFAP methodologies. Working groups then reviewed key trends from the analyses conducted by the MAFAP team, refining expenditure classifications and addressing data gaps, as well as reviewing price incentives for farmers and producers for 7 major value chains (cassava, coffee, cotton, maize, rice, sugar, and tea). Stakeholders’ feedback in determining the drivers behind the trends for these commodities proved to be invaluable insights to help refine the final policy analysis for publication.  

Selected preliminary findings on price incentives (from 2005–2022):

• Cassava farmers were faced mostly with negative price incentives, except in 2017 and 2018 when demand for cassava increased following maize shortages due to a drought in the East Africa region.
• Tea farmers came up against negative price incentives due to low domestic prices for tea leaves.
• Coffee farmers encountered negative price incentives in most of the years driven by a lack of pricing information along the value chain.
• Cotton farmers benefitted from the indicative price mechanism in place and received higher domestic prices than the international reference price, generating positive price incentives during this period.
• Sugar-cane farmers benefited from positive price incentives starting from 2014 when the implementation of the Sugar National Strategy increased the competition in the sugar industry sector and the farmers' bargaining power leading to higher cane prices.
• Maize famers received variable price incentives, mostly driven by the trends demand and supply of maize from the countries importing Uganda's maize.
• Rice farmers gained from positive price incentives during 2005–2021 favoured by the trade policies in place and market dynamics.

Selected preliminary findings on public expenditure on Uganda’s food and agriculture (2011–2022)

• Uganda spends around 4% of total government expenditure on food and agriculture, which is below the Malabo Declaration commitment of 10%.
• Agriculture expenditures increased from around UGX 230 billion in 2011 to over UGX 1.5 trillion in 2022 in nominal terms, representing an average annual growth rate of 21%.
• Uganda financed most of its agriculture budget with national funds over the period, at an average 60%, as the share of donor financing fell by half from over 50% in 2012 to less than 30% in 2016, before increasing again until 2021.
• General sector support, including research and knowledge dissemination, agricultural infrastructure, and market development comprised over half of agricultural spending, while transfers to producers, including fertilizer and seeds, accounted for nearly one-third.
• Transfers to producers increased dramatically however, from just over UGX 28 billion in 2011 to over UGX 300 billion in 2018 and 2021, and more than doubled as a share of total agricultural spending from 20% in 2011 to 40% in 2018, before falling back down to below 15% in 2022.
• The majority of agricultural expenditures target the crops subsector, in particular coffee, tea, cocoa, cotton, and fruit, while livestock, fisheries, and forestry subsectors are potentially underfunded, with only 7%, 3%, and 2% of identifiable agriculture expenditures, respectively.
  

Thirty-seven participants took part in the workshop, which was held in the town of Mukono, and including officials from various government ministries and bodies, including the Ministry of Agriculture, Animal Industry and Fisheries, the Ministry of Finance, Planning and Economic Development, the Ministry of Water and Environment, the Ministry of Trade, Industry, and Cooperatives, National Forestry Authority, and the Ministry of Gender, Labour and Social Development, and the National Forestry Authority.

Next steps

The workshop concluded with actionable next steps, including finalizing analyses, drafting a Policy Monitoring Review (PMR), and appointing ministry focal points to ensure collaboration on policy processes. Stakeholders expressed strong support for presenting the final PMR to high-level policymakers in 2025.

 MAFAP’s Mukono workshop took place a day after two policy dialogues on two agrifood reforms – one on a new agricultural marketing strategy, and one on labour constraints in the agriculture sector –  on which the MAFAP programme is providing support for Government of Uganda.