Agricultural growth and investment options for poverty reduction in Uganda

Over the past two decades, Uganda has experienced strong economic growth. However, agriculture has not performed as well as the rest of the economy in recent years, and while the incidence of poverty has declined, it is still substantially higher in rural rather than urban areas. The Ugandan government, within the framework of its Plan for the Modernization of Agriculture (PMA) and the Prosperity for All (PFA) initiative, and in support of the upcoming National Development Plan, is in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP), which provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security. This paper analyzes the agricultural growth and investment options that can support the development of a comprehensive rural development component under Uganda's National Development Plan in alignment with the principles and objectives of the CAADP, which include achievement of six percent agricultural growth and allocation of at least ten percent of budgetary resources to the agricultural sector. Our CGE modeling results indicate that it is possible for Uganda to reach the CAADP target of six percent agricultural growth, but this will require additional growth in a number of crops and sub-sectors. Uganda cannot rely on a few crops or sub-sectors to achieve its growth targets. Broader-based agricultural growth, including increases in fisheries and livestock, will be important if this target is to be achieved. So, too, is meeting the Maputo declaration of spending at least ten percent of the government's total budget on agriculture. In fact, even under a more optimistic and efficient spending scenario, the Government of Uganda will have to increase its spending on agriculture in real value terms by about 25.3 percent per year between 2006 and 2015, and account for at least 14 percent of its total expenditure by 2015. While Uganda is currently on track to achieve the first Millennium Development Goal of halving poverty by 2015, achieving the CAADP growth target should remain a high priority, since it will substantially reduce the number of people living below the poverty line and significantly improve the well-being of both rural and urban households.