The State Matters

The agricultural sector plays an integral role in African countries, firstly by producing sufficient food and secondly as a source of livelihoods and incomes across the rural and urban divide, and ultimately contributing to poverty reduction, health, and well-being.

Analysing the different aspects of public spending on agriculture in Tanzania and Zambia, the authors of this report jointly published by the Rosa Luxemburg Foundation, PELUM Tanzania, and PELUM Zambia argue that public expenditure on agriculture matters because the share of national budgets earmarked for the sector, and how tactically and efficiently funds are allocated, have far-reaching implications for both agriculture as a whole and the survival of the millions of small-scale food producers who depend on the sector for their livelihoods and food security.

Key Trends in Government Expenditures

Over the past two to three decades, public expenditure on agriculture declined steadily as the “spending policies” of many African countries underwent massive changes, mainly due to the influence of donor governments and multilateral institutions such as the International Monetary Fund and the World Bank. Whereas states previously intervened in the agricultural sector, such as with active pricing policies and other measures, nowadays the state is expected to provide a more prosperous environment for private sector investment.

In Tanzania, for example, the national budget allocation for agriculture fluctuated significantly between 2010 and 2020, increasing from 3 percent in 2001–2002 and peaking at 7.8 percent in 2010–2011 before hitting a steady decline from 2012–2013 onwards. In Zambia, between 2010 and 2021 the agricultural sector was allocated less than 10 percent of the national budget.

In both countries, under-disbursement — which occurs when government ministries and agencies do not receive the budget allocation stated in the annual state of funds — remains a key challenge. Moreover, an assessment of the budget execution on agriculture in both countries also revealed persistent underspending of allocated state funds for agriculture that the national ministries of agriculture receive.

By delving deeper into the composition of public expenditure, this study highlights key trends and determine funding priorities. The analysis reveals that a large share of government spending in both countries goes into input support programmes concentrated on maize in particular, providing a package of Green Revolution inputs consisting of commercial seeds, synthetic fertilizers, and pesticides, as well as markets for a single crops and displacing other critical food crops that contribute to improved food access and nutrition.

Maize accounted for circa 70 percent of crop output and the largest portion of the planted area in Tanzania, followed by paddy rice covering almost 17 percent. The agricultural budget share towards farmer input subsidies in Zambia between 2015 and 2021 varied between 33 percent and 80 percent.

Meanwhile, the private sector has been the primary beneficiary, with the number of commercial seed and fertilizer companies growing and new local companies competing with established multinational corporations that dominate the sector. In general, farmer input subsidies impact the budget allocations for other agricultural programmes such as extension services, research, and development, which also drive agricultural production and productivity.

Undoubtedly, increased food production and supply for local markets are imperative to counter the barrage of climate, political, financial, and other crises affecting the cost and access to food. However, the current agricultural policies and strategies driving investment flows and public expenditure on agriculture raises much concern about the future of food and agriculture in Africa as a whole and in Tanzania and Zambia in particular

Policy Recommendations

The authors of the study call for purposeful and prudent use of public funds as a pragmatic pathway to transforming food systems in Africa. In order to do so, public funding should be directed to:

• Environmental sustainability by protecting natural resources and the environment and directing public funds allocated for environmental management, including donor funding, to initiatives that promote agro-biodiversity
• The resilience of agricultural systems reducing the use of inorganic fertilizers and pesticides and promoting agroecological alternatives instead
• Targeting small-scale food producers, explicitly women and youth
• Public research and extension services devised to promote and broaden the scope of agricultural research as well as increase the capacity of extension services

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