Comments on Agriculture/Rural Development in the IFAPER
National Workshop
20 October 2003
Issues
Framework for public expenditure
Quantity of public expenditure
Quality of public expenditure – composition
Quality of public expenditure – service delivery
Framework
Overall vision - Contribution of rural-based economy to growth and poverty reduction – agriculture is one important part of thisRole of different actors – public vs. private sector, ministries, levels of government in achieving visionPolicy tools – public expenditure, tax, trade, regulations, etc.Role of public expenditure - support a well-functioning, efficient, rural private sector not dependent on income transfers
Quantity
Need to better define basis for “agricultural” or “rural sector” expendituresAgricultural spending is typically about 6 to 7% in LDCs and about 3% in MDCs compared to almost 2% (?) in Cambodia – but only captures RGCNeed to improve budgetary process to capture different sources of expenditures – RGC, ODA – for strategic alignment, transparency and accountability – MTEF linked to NPRSComposition and quality matter more than quantity
Quality - composition
Focus should be on public goods (infrastructure and research) rather than subsidies – applied to donors & RGC expendituresAgricultural pricing subsidies/SOEs – WTO, “unregulated monopolies”Shift agricultural support services of private goods to the private sector – research, extension, seedsAdequate funding for recurrent costs – declines for salaries and O&M worrisome/ODA impactsConcentration of expenditures – subsectors (forestry and fisheries) and crops (rice)
Quality – service delivery
Incentives – public expenditure reform but what can be done now at ministry level?Decentralization – demand responsive services (administrative autonomy, PAP, commune/sangkat funds)Cost recovery – irrigation, services to groupsResponsibility should be accompanied by resources, flexibility and accountability
Conclusions - priorities
Define “rural economy expenditures” based on vision, institutional roles, instruments
Develop MTEF ministry by ministry and then consolidate – don’t lose accountability
Discipline RGC & donor expenditures towards public goods and recurrent costs – budget support
Align incentives of users (cost recovery) and providers (administrative and fiscal decentralization)
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