This paper makes a contribution to this literature by drawing on the framework of actor-centered institutionalism (Scharpf 1997) to empirically examine how political and budget institutions affect the incentives of actors involved in the public agricultural finance process, structures the interactions between them, and ultimately shapes expenditure allocations

Agriculture and Irrigation sectors except for national food security and federal agriculture research have been devolved to the provinces following Eighteenth Constitutional Amendment in 2010. The Government of Sindh has approved and notified its first ever Agriculture and Livestock Policy in April 2018. To achieve objectives outlined in the Policy, it is imperative to increase investment in agriculture sector substantially to unleash the full potential of agriculture both for inclusive growth and economic development in the province. Moving towards this desirable goal of enhancing investment in agriculture and irrigation, it is vital to understand current resource sharing between the federation and federating units in Pakistan, gross resources available to the province in a financial year, dynamics of public expenditure allocations at sub-national level, and interplay of diverse interests during the budget process (Fan, Yu, and Saurkar 2008; Mogues 2015). Similarly, budget institutions, electoral system, and political institutions, apart from population composition, play their role in influencing public spending allocations during budget process and imposing constraints. The evidence suggests that budget process and institutions have substantial influence on budget allocation across different sub-regions and sectors. Despite huge transfer of resources to the provinces following the 7th National Finance Commission Award of 2010, the provinces have been underscoring increasing tight fiscal space. Given these pronounced binding constraint and rigid allocation of resources, it is challenging to enhance allocations to achieve desirable policy objectives. In these environments, insight regarding political and budget institutions will help in structural analysis of the budget, rationalization of existing public spending across sectors, and exploring the possibility of fiscal space through resource allocation restructuring. This paper reviews the interaction of political and administrative institutions, allocation of available resources as well as public spending trends and identify the fiscal space that could possibly be made available for enhanced allocation to agriculture, livestock, fisheries and irrigation in Sindh. Section 2 provides the structure of province of Sindh’s economy and various challenges confronting it. Section 3 reviews resources available, inter-mediation of budget institutions for resource allocation, public investment and structure of spending in Sindh; both recurrent and development. Section 4 highlights the subsidies in agriculture, particularly the subsidies on fertiliser, wheat farmers and millers, and irrigation. Section 5 looks at the taxes related to agricultural land and revenues collected. Section 6 estimates the fiscal space within existing resources that can be made available for enhanced investment in agriculture and irrigation.

In the face of the economic downturn that Nicaragua experienced in 2018 and the need for a recovery, the study provides a comparative analysis of how investments in productive infrastructure in different agri-food sectors would impact growth and poverty. The analysis is based on scenarios generated through an economy-wide model representing the Nicaraguan economy and its sectors. The model includes financing constraints and the study explores different financing options for the new investments.

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This study highlights how, through a series of scenarios, public investments promoting agricultural productivity in Uganda could drive growth in agrifood production, with favourable impacts on the economy, on well-being and on poverty, especially in rural areas. Using a modelling tool to represent the Ugandan economy, with its multiple sectors and current fiscal constraints, the study ranked the subsectors of Uganda’s agriculture that, through the productivity impact of public investments representing 0.25 percent of GDP (on average, about 373 billion 2017 Uganda shillings) during the years 2023–2025, will generate the greatest socio-economic benefits, maximizing the cost-effectiveness of the public investments. Generally, economic growth and the welfare of households, as measured by their consumption, will be positively impacted, but the impacts will ultimately depend on the sector that receives the investment, which is shown in a ranking. The agricultural sectors targeted for government investment will increase their output (and food prices will thus fall), and this will stimulate growth in non-agricultural sectors, both by increasing final demand for non-agricultural products and by lowering input prices and fostering upstream processing. Lower food prices will have a significant impact since food represents a relatively large proportion of the consumption basket of poorest households. Furthermore, labour income for rural households will increase with productivity growth, and this will reduce rural poverty. The findings of this study provide important information about the priorities of Uganda’s National Development Plan (NDP) III and vision for agriculture, as well as new priorities to be considered for enabling economic recovery with increased well-being post-COVID-19.

Investing in farmers through public-private-producer partnerships Rural Empowerment and Agricultural Development Scaling-up Initiative in Indonesia. Investing in farmers – or agriculture human capital – is crucial to addressing challenges in our agri-food systems. A global study carried out by the FAO Investment Centre and the International Food Policy Research Institute, with support from the CGIAR Research Programme on Policies, Institutions and Markets and the FAO Research and Extension Unit, looks at agriculture human capital investments, from trends to promising initiatives. One of the nine featured case studies is the Rural Empowerment and Agricultural Development Scaling-up Initiative in Indonesia. This programme adds perspectives on investing in human capital in agriculture through public-private-producer partnerships, using lead farmers, cocoa doctors and farmer field schools. The case study shows that the training and coaching provided increased knowledge of and practical skills in cocoa farming, including technical skills, soft skills and empowerment, leading to better productivity and cocoa quality. The programme increased farmers’ confidence to take on new activities and sell a quality product. In addition, farmers developed group cooperation and decision-making skills, and group members learned communication, entrepreneurship and marketing skills. This publication is part of the Country Investment Highlights series under the FAO Investment Centre's Knowledge for Investment (K4I) programme.

Mexico's gross domestic product (GDP) contracted unprecedentedly as a result of the COVID-19 crisis. While the primary sector has relatively been the most resilient, the agriculture sector lacks sufficiently strong productive dynamism and has high rates of informal work and low wages. Investing more in the sector's productive infrastructure would help accelerate economic recovery while improving people’s well-being. A public investment policy should be developed on the basis of evidence, such as that provided in this study. In 21 prospective scenarios that simulate the allocation of additional public investment in productive infrastructure across subsectors of agriculture, equivalent to 0.25 percent of GDP (around MXN 50 billion) between 2021 and 2023, there is an improvement in total and agrifood GDP, and in the well-being of the Mexican people, as measured by private consumption and rural poverty reduction. However, it is recommended that new investment be focused on certain subsectors and that it be financed through foreign borrowing. According to a ranking of subsectors that receive new investment, the sugar cane subsector ranks first in three of the four variables considered (private consumption, total GDP, agrifood GDP and rural poverty). Cereals, mainly maize, but also others (rice, sorghum, oats, barley and other cereals), and the more export-oriented crops, such as flowers and coffee, also appear at the top of the ranking.

As Rwanda is expected to return to its rapid growth trajectory following the COVID-19 pandemic, agriculture will continue to play a central role in the structural transformation of the entire economy. To this end, the Government of Rwanda continues to invest in the agricultural sector by building on Strategic Plans for the Transformation of Agriculture (PSTAs) that began in the early 2000s. The challenging question is how to prioritize public expenditures across a broad portfolio of policies and programs. Ambitious plans, whether in the short or long term, require difficult decisions. The prioritization of public investment becomes even more complex as Rwanda’s structural transformation advances and as new investments—beyond the farm—become critically important for the agricultural sector. The structural transformation process itself means that as agriculture becomes more integrated with the rest of the economy, public resource allocations need to address a wider range of issues across the entire food system; these include nutrition-sensitive food production systems, inclusive value chain development, nonfarm rural enterprise development, and climate-resilient sustainable intensification of both crops and livestock. This study provides evidence that is designed to assist the Government of Rwanda in its selection of agricultural policy, investment, and expenditure portfolios that reflect the country’s broad focus on its food system and structural transformation. This process of prioritization will need to incorporate multiple public investments targeting multiple development outcomes and will need to be grounded in the costeffective use of public resources in a largely market-led transformation process. This data-driven and evidence-based approach must critically underpin an informed investment prioritization process that helps achieve ambitious targets in an environment constrained by limited public resources. The study uses the Rural Investment and Policy Analysis (RIAPA) economywide model developed by the International Food Policy Research Institute (IFPRI), with contributions from colleagues at the Ministry of Agriculture and Animal Resources (MINAGRI), the Ministry of Finance and Economic Planning (MINECOFIN) and the National Institute of Statistics of Rwanda (NISR). The study draws on data from multiple sources as well as expert insights to inform the application of RIAPA’s Agricultural Investment for Data Analyzer (AIDA) module as a tool to measure the impacts of alternative public expenditure options on multiple development outcomes. Using this integrated modeling framework, the study links agricultural and rural development spending to four specific outcomes: economic growth, job creation, poverty reduction, and diet quality improvement; at the same time, it considers the synergies and tradeoffs associated with the different investment options in the transformation process. The paper first assesses the contribution of public expenditures to agricultural and rural development under the fourth Strategic Plan for Agriculture Transformation (PSTA 4) that extends between 2018 and 2024. These findings are important, given the fact that since the beginning of PSTA 4, the budget allocated to MINAGRI (measured in constant prices) has stagnated. Our results suggest that increased spending on agriculture is well justified and that such spending is essential if the Government of Rwanda is to achieve its long-term development goals.