CONCEPT NOTE FOR THE MEETING OF THE STANDING COMMITTEE ON FOOD, AGRICULTURE AND NATURAL RESOURCES SUNDAY, 1ST MAY, 2022 9.00 AM TO 17.00PM CAT
THEME: PARTICIPATION OF PARLIAMENTS TOWARDS BUILDING RESILIENT AGRICULTURAL SYSTEMS IN THE SADC REGION THROUGH ENHANCED PUBLIC FINANCE MANAGEMENT
1.0 INTRODUCTION
Agriculture is both a source of food security and a core economic activity across all SADC Member States. The agriculture sector has significant social and economic importance in the SADC region, contributing between 4 percent and 27 percent of Gross Domestic Product among the different SADC countries, and approximately 13 percent of export earnings overall. Furthermore, about 70 percent of the region’s population depends on agriculture for food, income, and employment.
Public Financial Management (PFM) relates to how governments raise public resources and manage these public resources and the immediate and medium to long term effect of these sources on the economy and citizens.2 Parliamentarians, as elected officials representing their constituencies, play a critical role throughout the PFM cycle. PFM policies vary by country and can cover issues related to tax law, budget management, debt management, subsidies, and state-owned enterprises. A well-functioning PFM system is critical to ensuring accountability and efficiency in the use of public financial resources, while a weak PFM system can result in significant wastage of scarce resources.
SADC countries have committed to several continental and regional aspirations on agriculture some of which include, the Maputo Declaration, which calls for
- https://www.sadc.int/themes/agriculture-food-security/
- https://www.cabri-sbo.org/uploads/files/Documents/Cabri_Module-1-ENG.pdf
- https://www.fpfinancingroadmap.org/learning/specific-topics/public-financial-management
Member States to increase agricultural budget allocations to 10 percent and pursue agricultural growth of 6 percent in addition to setting up the Comprehensive Africa Agriculture Development Programme (CAADP). Other instruments include the Regional Agricultural Policy (RAP) of 2013 and Regional Agricultural Investment Plan (RAIP) for the period 2017-2022, among others. Despite such efforts, progress in agriculture in the region remains static, partly due to lack of accountability and transparency in the use ofpublic resources in implementing agricultural programmes. Many countries in the world face challenges related to financial mismanagement such as poor financial reporting practice, weak internal control systems, weak financial
administration, unethical relationships with vendors of agriculture suppliesand rush spending of budget at the end of the budget year.5 This, coupled with corruption in government contracts or licenses for agricultural supplies, make it difficult for agriculture to thrive.
Further, poor quality, undelivered goods and high prices are typical outcomes from collusion between government officials and private sector firms. In some instances, government agencies connive with private companies in purchasing fertiliser at exorbitant prices and in turn receive a share of the profit. Without a doubt, this has increased the cost of agricultural production and eliminated
competition in the fertiliser industry as small agro dealers have little chance of obtaining government contracts. This eventually affects some farmers who receive low quality planting materials, unhealthy farm animals and are victims of undelivered farm equipment from the state.6 In addition, fraudulent schemes involving other agricultural inputs such as seed and fertilisers are common. Corruption in the allocation of government subsidies, bribery in government contracts or licences for agricultural supplies are also rampant.7 Given the vastness of the agricultural sector, from small scale subsistence farming to large commercial plantations, understanding the sector's value chain to map appropriate corruption risks and anti-corruption measures can be a helpful exercise.
The agricultural sector has long been identified as fundamental to transforming
livelihoods and opportunities on the African continent and has the potential to
do a lot to address this imbalance. 80 percent of farmers in sub-Saharan Africa
are smallholders, typically with less than two hectares of land.8 Poverty is
- For the Maputo Declaration, see: https://bit.ly/2PQ4EhX
- TRANSTEC, Public Governance: Public Finance Management Research Park, Last update January 2017, Belgium www.transtec.be
- https://openknowledge.worldbank.org/bitstream/handle/10986/34085/Main-Report.pdf?sequence=4
- Zúñiga, N. 2018. Land corruption: Topic guide. Transparency International.
- The Role of Smallholder Farms in a Changing World. The Role of Smallholder Farms in Food and Nutrition Security, 2020 ISBN : 978-3-030-42147-2Shenggen Fan, Christopher Rue
pervasive amongst them, with millions living below the poverty line. Farmers have little power to fight corrupt institutions. However, transparent management of the agricultural sector that empowers farmers through robust PFM could be one of the best tools the region has to fight poverty at scale. A healthy and prosperous agricultural sector which is regularly overseen by Parliament could be the engine for economic growth on the continent. The World Bank projects that agriculture and agribusiness in Africa have the potential to make up a US$1 trillion industry by 2030, but this will only happen if embezzlement, fraud and bribery are addressed. Transparency is a potent weapon in fighting corruption. The public sector should prioritise efforts to create and enforce legal frameworks that promote transparency and root out corruption.
2.0 LEVERAGING THE PFM MODEL LAW TO ELEVATE AGRICULTURAL PRODUCTION
Oversight of PFM frameworks by Parliament can become a powerful tool to heighten the strength and resilience of agricultural systems. Members of Parliament can interrogate Governmental measures relating to agriculture in the budget and demand explanations on the fulfilment of the Sustainable Development Goals (SDGs), including SDG 2 on food security and sustainable agriculture. The pathway to query the alignment with the SDGs is provided for in the Model Law on PFM which is under development at the Forum. This would occur in the form of an SDG Statement and other statements which compare the level of agricultural development with standards set out in international treaties and conventions signed by the Member States. The scrutiny of budget measures with respect to the SDGs and other commitments taken will augment the stimulus for the Executive to promote pro-agricultural measures with a view of harmonising national and regional agendas, thus ultimately benefiting food security and agriculture in the SADC region.
In addition, the Public Accounts Committee (PAC), which is the main parliamentary body exercising oversight on Government accounts, will haveenhanced powers under the Model Law to scrutinise reports from decentralised agricultural bodies and departments. Currently, the PAC usually has the power to only review the report of the Auditor General. With the advent of the Model Law, the PAC will be empowered to look at all accounting and financial reports of agricultural bodies and organisations which are funded by the State. Under the Model Law, Parliament will also exercise control over the debt ceiling of the State, and hence more domestic funding would be available in the long term to finance programmes for food security and agro-business.
3.0 OBJECTIVES OF THE MEETING
- https://www.worldbank.org/en/news/press-release/2013/03/04/africas-food-markets-could-create-one-trilliondollar-opportunity-2030
The aim of the meeting of the Standing Committee on Food, Agriculture and
Natural Resources is to explore how effective public finance management can
be utilised as a tool to build resilient agricultural systems in the region.
The specific objectives are to:
- assess how the Model Law can contribute to improved utilisation of public financial resources and enhance the performance of the agriculture sector in the SADC region;
- establish the challenges inhibiting effective public finance management in the agriculture sector, and assess how the Model Law can be utilised to develop a turnaround strategy;
- make recommendations on how legislatures can use their oversight role to foster effective public finance management in the agriculture sector; and
- reflect on a theme for the 51st Plenary Assembly of the Forum in line with current regional and world affairs, such as the energy crisis i.e the upward escalation of oil, natural gas and diesel prices due to speculations on the energy market, and the need for the SADC region to be more energy efficient and attain SDG 7 on affordable and clean energy.
4.0 PARTICIPANTS
The meeting is designed for Honourable Members of the SADC PF Standing Committee on Food, Agriculture and Natural Resources.
5.0 METHODOLOGY
This meeting will be held Johannesburg, South Africa. A panel of experienced resource persons will make presentations, followed by an interactive session to explore ways in which Parliaments can utilise their oversight function to enhance public finance management in the agriculture sector in the SADC region. Therefore, the Session will be delivered through presentations. Further, Hon Members will be provided an opportunity to engage the resource persons during the plenary session.
6.0 EXPECTED OUTCOMES
It is expected that Hon Members will gain a deeper understanding on what is required to build resilient agriculture systems through enhanced social accountability and effectivje public finance management.
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