BURKINA FASO Burkina Faso Agro-Silvo-Pastoral Sector Public Expenditure Review JUNE 2023 Agro-Silvo-Pastoral Sector Public Expenditure Review © 2023 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Phone: 202-473-1000 Website: www.worldbank.org This work is a product of the staff of the World Bank Group and external participants. The findings, interpretations, and conclusions expressed in this publication do not necessarily reflect the views of the World Bank, the Executive Directors of the World Bank, or the governments they represent. The World Bank Group does not guarantee the accuracy, reliability, or completeness of the content included in this work, or the conclusions or judgments described herein, and accepts no responsibility for any omissions or errors (including, without limitation, typographical and technical errors) in the content whatsoever or for reliance thereon. 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Permission obtained from the copyright holder. Additional permission required to re-use it. Cover page graphic design: Will Kemp, Global Corporate Solutions, The World Bank Group Table of Contents Acknowledgments vii Acronyms and Abbreviations ix Executive Summary xiii Introduction 1 Methodological Aspects 3 1. Political, Institutional, and Socio-Economic Context 5 2. Level of Public Expenditures on Agriculture 9 Evolution of Budgetary Allocations for the Agricultural Sector 9 Trend in Public Expenditures on Agriculture  10 Sources and Methods for securing External Financing for Agriculture 11 Status of Maputo Commitment Implementation and International Comparison 13 3. Efficiency of Agriculture Allocations 15 Analysis of Public Expenditures on Agriculture According to their Economic Nature 15 Functional Analysis of Public Expenditures on Agriculture 16 Analysis of the Allocation of Depreciation Allowances between Public and Private Goods 24 Breakdown of PEA by Sub-sector 25 4. Technical Efficiency of the Programming, Execution, and Monitoring- Evaluation of Public Expenditures on Agriculture 29 Status of Implementation of the Program Budgeting 29 Efficiency of Budget Execution 31 Coordination, Monitoring-Evaluation, Capitalization and Appropriation of Public Expenditures on Agriculture 38 5. Incidence, Impact, and Sustainability of Public Expenditures on Agriculture: Four Cases - Input Subsidies, Irrigation, Agricultural Finance, and Expenditures allocated to Forestry 41 Analysis of Input Subsidies 41 Irrigation  54 Analysis of Agricultural Financing 74 Analysis of Expenditures Allocated to Forestry 86 Conclusion 101 Bibliographic References 104 Boxes Box 1: Agricultural Extension and Advisory Support  18 Box 2: Agricultural Research 21 Box 3: The Livestock Subsector 26 Box 4: The Fishing and Aquaculture Subsector 28 Box 5: Evaluation of the Implementation of PNSR II 35 Box 6: Summary of Former Mechanisms Criteria for Targeting Beneficiaries  46 Box 7: Performance of the Di Perimeter 62 Box 8: Performance of the Bagré Growth Pole (2011–2020)  63 Box 9: Environmental Intervention Fund (FIE) and Forest Fund (FF) 95 Figures Figure 1: Evolution of Budget Forecasts (in billions of CFA Francs) for Ministries in Charge of Agriculture 9 Figure 2: Changes in Budget Forecasts for Internal Resources (in billions of CFA Francs) 10 Figure 3: Evolution of Public expenditures on agriculture in nominal value and real terms 11 Figure 4: Evolution of Public Expenditures on Agriculture by Funding Sources (in billions of CFA Francs) 12 Figure 5: Method of Financing Aid to the Agricultural Sector 12 Figure 6: Sources of Financing Aid to the Agricultural Sector for the 2016–2020 period  13 Figure 7: Share of Agriculture in Total Public Expenditure 14 Figure 8: Breakdown of Public Expenditures on Agriculture by Economic Use 16 Figure 9: Functional Breakdown of Public Expenditure on Agriculture over the 2016–2020 period  17 Figure 10: Rate of Support to Agricultural Producers 20 Figure 11: Total Expenditure Allocated to Agricultural Research by Type of Funding in billions of CFA Francs 22 Figure 12: Breakdown of Expenditures by Nature of Goods 25 Figure 13: Breakdown of PEA by Sub-Sector, Average 2016–2020 25 Figure 14: Share of credits delegated to decentralized services to cover operating expenses over the 2017–2020 period 30 Figure 15: Budget Execution Rate of Budgets Based on Internal Resources 32 Figure 16: Budget Execution Rate of Investments on External Resources 33 Figure 17: Change in subsidized quantities and the rate of coverage of mineral fertilizer needs 44 Figure 18: Comparison Between the Calculated Reference Price and the State’s Purchase Price of Urea 49 Figure 19: Budgets and Expenditures Allocated to HAFs, in billions of CFA Francs 56 Figure 20: Yield of Corn and Rainfed Rice Farming Based on the Production System  64 Figure 21: Evolution of Budget Allocations to the MEEA (in billions of CFA Francs) 89 iv BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Figure 22: Budget Execution Rate by Category of Expenditure and Funding Source 90 Figure 23: Breakdown of MEEA Expenditures by Category, in billions of CFA Francs 91 Figure 24: Evolution of Public Expenditures Allocated to Forestry 93 Figure 25: Total Revenue of the Six Main NTFPs, in millions of CFA Francs, 2016 98 Map Map 1: National piezometric monitoring network 73 Tables Table 1: Matrix of Suggestions of Actions for Improving the Efficiency of Public Investments in the Agriculture Sector xxvii Table 2: Matrix of Proposed Reforms for Enhancing the Efficiency of Public Agricultural Investments xxxii Table 3: International Comparison of Budgetary Transfers to the Agricultural Sector 14 Table 4: Budget Forecasts for PNSR II Implementation 36 Table 5: Budget Execution for PNSR II Implementation 36 Table 6: Status of Implementation of Structural Investments under PNDES I in the HAFs 57 Table 7: Comparative Overview of the Efficiency of the Used Irrigation Techniques 59 Table 8: Volume of Loans Provided by Various Funds to Agriculture (excluding FODEL and FDA) 76 Table 9: Breakdown of Expenditures by Budgetary Program (including off-budget aid), in billions of CFA Francs 92 Table 10: Main Off-Budget Projects 94 Table 11: Summary of Revenues from Updated Environmental Taxes, 2014–2019 (in millions of CFA Francs) 96 Table 12: Evolution of Firewood Production in Forest Management Sites (FDP), cubic meters  98 Table 13: Evolution of the Number of Tourists in Wildlife Protection Areas 99 TABLE OF CONTENTS v vi BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Acknowledgments This agro-silvo-pastoral sector public expenditure review was prepared by Maurice Zowendbeime Taondyandé (Economic Statistician, Consultant) and Stephen Mink (Agricultural Economist, Consultant). This report was drafted under the supervision of Ernest Ruzindaza (Senior Agricultural Economist), and assisted by Gwladys Kinda (Program Assistant), both based at the World Bank Office in Ouagadougou. The consultants would like to thank Mirko Ivo Serkovic (Senior Specialist in Natural Resource Management, World Bank Office in Ouagadougou), and Nathalie Abu-Ata (Natural Resource Management Specialist, World Bank) for their valuable contributions to the chapter on forestry. Particular thanks are also extended to Elisée Ouédraogo (Agriculture Specialist), Idriss Serme (Senior Agricultural Economist), and Aicha Lucie Sanou, all based at the World Bank Office in Ouagadougou. This review was conducted by using a participatory approach and benefited from contribu- tions from the Permanent Secretariat for the Coordination of Agricultural Sector Policies, the General Directorate of Sectoral Studies and Statistics from the Ministry of Agriculture, Animal Resources and Fisheries, and the Ministry of Environment, Water, and Sanitation. It also benefited from contributions from the General Directorate of Agro-pastoral Productions, the General Directorate for the Promotion of Rural Economy, the General Directorate of Agro-pastoral Developments and Irrigation, and the Central Supply Unit for Agricultural Inputs and Equipment. The consultants are particularly grateful to the General Directorate of the Budget and the General Directorate of the Economy and Planning for facilitating access to budgetary data. The World Bank Group team would also like to thank colleagues who provided valuable input and guidance, Chakib Jenane (Regional Director), Abel Lufafa (Practice Manager), Maimouna Mbow Fam (Country Manager), Md Mansur Ahmed (Economist) and Kodzovi Abalo Senu (Senior Economist). The team extends its special appreciation to Katia Oneissi, Editor and Translator, and Will Kemp, Graphic Designer. This agro-silvo-pastoral public expenditures review will be referred to in the report as “Agriculture Public Expenditure Review” to comply with the current budgetary nomenclature of the Government of Burkina Faso. The completion of this review was made possible thanks to the PROGREEN initiative, a trust fund of the World Bank, aimed at intensifying countries’ efforts to curb land degradation. ACKNOWLEDGMENTS vii Photo credits: Page vi. © Ollivier Girard / CIFOR Page xxxvi. © Ollivier Girard / CIFOR Page 1. © Thierry Ouedraogo / PGPC / REDD+ Project Page 3. © Ollivier Girard / CIFOR Page 5. © mtcurado / iStock Page 7. © Thierry Ouedraogo / PGPC / REDD+ Project Page 9. © Ollivier Girard / CIFOR Page 15. © Ollivier Girard / CIFOR Page 29. © Ollivier Girard / CIFOR Page 40. © Ollivier Girard / CIFOR Page 41. © Yempabou Ouoba / iStock Page 55. © Ollivier Girard / CIFOR Page 96. © officek_ki / iStock Page 101. © Ollivier Girard / CIFOR viii BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Acronyms and Abbreviations Acronym Description AEAS Agricultural Extension and Advisory Services AGRA Alliance for a Green Revolution in Africa AGREF Agriculture Research Foundation AGRODIA Association of wholesalers and retailers of agricultural inputs AHA Hydro-Agricultural Facilities ANESBF National Association of Seed Companies of Burkina Faso AU African Union AWUAs Agricutural Water Users Associations BAdF Agricultural Bank of Faso BER Budget Execution Rate BUNASOL National Soil Office CAADP Detailed African Agricultural Development Program CAIMA Supply center for inputs and agricultural materials CES/DRS Conservation of Water and Soil / Defense and Restoration of Soils CFA Franc Franc of the Financial Community of Africa CID Computerized Expenditure Circuit CIFE Integrated External Funding Circuit CIPAM Industrial Company of Agricultural and Tradable Productions CMAP National Center for the Multiplication of High-Performance Animals CNRST National Center for Scientific and Technological Research CNSF National Forest Seed Center COFOG Classification of Functions of Government CRA Regional Chamber of Agriculture CREERs Rural Entrepreneurship Resource Centers CSD Civil Society Dialogue CSE Consumer Subsidy Equivalent DANIDA Danish International Development Agency DGAD General Directorate for the Promotion of Agricultural Development DGAHDI General Directorate for Hydraulic Development and Irrigation Development DGB Directorate General Budget DGCOOP Directorate General for Cooperation DGEP General Directorate of the Economy and Planning DGESS General Directorate for Sector Studies and Statistics ACRONYMS AND ABBREVIATIONS ix Acronym Description DGPER General Directorate for the Promotion of Rural Economy DGPV General Directorate of Plant Production DGRE General Directorate of Water Resources EBA-GEF Ecosystem-Based Adaptation Project-Global Environment Fund ECOWAS Economic Community of West African States ERR Economic Rates of Return FAARF Support Fund for Women’s Income-Generating Activities FAO Food and Agriculture Organization of the United Nations FDA Agricultural Development Fund FDP Forestry Development Projects FF Forestry Fund FIE Intervention Fund for the Environment FODEL Livestock Development Fund FONRID National Fund for Research and Innovation for Development GDP Gross Domestic Product GGF Forest management groups GIZ German Society for International Cooperation GPI Large irrigated areas IFAD International Fund for Agricultural Development IFDC International Fertilizer Development Center INERA Institute of Environment and Agricultural Research IRAT Institute of Tropical Agronomic Research and Food Crops M&E Monitoring and Evaluation MAAH Regional Directorate of Agriculture and Hydro-agricultural Development MAAHM Ministry of Agriculture and Hydro-Agricultural Facilities and Mechanization MAFAP Monitoring and Analysis of Food and Agricultural Policies MAHRH Ministry of Agriculture, Hydraulics and Fisheries Resources MATDS Ministry of Territorial Administration, Decentralization and Security MDA Ministry of Agrarian Development MDR Ministries of Rural Development MEA Ministry of Water and Sanitation MEEVCC Ministry of the Environment, Green Economy and Climate Change MEF Ministry of Economy and Finance MEFP Ministry of Economy, Finance and Foresight MESRSI Ministry of Higher Education, Scientific Research and Innovation MFI Microfinance Institutions MFI/FI Microfinance Institutions/Financial Institutions MINEFID Ministry of Economy, Finance and Development MPI Ministry for Primary Industries MRAH Ministry of Animals and Fisheries Resources MRAH Ministry of Animal and Fisheries Resources x BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Acronym Description NEPAD New Partnership for Africa’s Development NGO Non-governmental organization NPK Nitrate, Phosphate and Potassium Fertilizer NWFP Non-wood forest products NWIS National Water Information System PADAB Support Program for Agricultural Development in Burkina Faso PAFA-4R Support Project in the Southwest, Hauts-Bassins, Cascades and Boucle du Mouhoun Regions PAFASP Support program for agro-sylvo-pastoral sectors PAIF-PME Support Project for Financial Inclusion and Access to Finance for Small and Medium Enterprises PAPSA Agricultural Productivity and Food Security Project PASA Agricultural Sector Adjustment Program PCESA Economic Growth Program in the Agricultural Sector PDCA Agricultural Development and Competitiveness Project PEA Public Expenditures on Agriculture PEM Power Entry Modules PERA Public Expenditure Review for Agriculture PIF Forest Investment Program PNDES National Economic and Social Development plan PNDSA National Agricultural Services Development Project PNGIRE National Program for Integrated Water Resources Management PNIASP National Strategic Agro-Sylvo-Pastoral Investment Plan PNSR National Rural Sector Program PO Farmer Organization PPI Small Irrigated Areas PPP Public Private Partnership PReCA Agricultural Resilience and Competitiveness Project PROFOR Program on Forests PTF Proprietary Trading Firm R&D Research and Development RD Regional Director REDD+ Reduce Emissions from Deforestation and Forest Degradation RGPH The General Population and Housing Census SMEs Small and Midsize Enterprises SNDDAI National Strategy for Sustainable Development of Irrigated Agriculture SNVA National System of Agricultural Extension SNVACA National Agricultural Extension and Advisory Support System SOFITEX Textile Fiber Company of Burkina SP-CPSA Permanent Secretariat for the Coordination of Agricultural Sectoral Policies SPA Strategic Plan of Action ACRONYMS AND ABBREVIATIONS xi Acronym Description SPFOMR Provincial Directorate for Land Tenure, Training and Organization of Rural Populations UAT User Acceptance Testing UEMOA West African Economic and Monetary Union UNPCB National Union of Cotton Producers of Burkina UNPS-B National Union of Seed Producers of Burkina USSD Unstructured Supplementary Service Data WUA Water Users Association xii BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Executive Summary Introduction In Burkina Faso, agriculture is the primary source of employment for the population, but it faces challenges due to low productivity and poor water management, exacerbated by the adverse effects of climate change. Increases in grain production have been achieved through the expansion of cultivated areas, thereby putting significant pressure on natural resources. This has led to ongoing vegetation degradation, soil depletion, and depletion of water resources. Furthermore, the once favorable macroeconomic situation has deteriorated in recent years due to the combined effects of the COVID-19 pandemic, unfavorable international conditions, and worsening internal security issues. As a result, over 1.7 million rural residents have been displaced, and more than 400,000 hectares of cultivated land have been lost. At the policy level, agriculture has been identified as a priority sector for the transformation of Burkina Faso’s economic structure as outlined in the Second National Plan for Economic and Social Development (PNDES II). Since 2011, the agricultural sector has been guided by five-year investment plans. The National Strategic Plan for Agro-Silvo-Pastoral Investment (PNIASP), which is the third planning cycle for interventions in the agricultural and rural sector covering the period 2021–2025, has been elaborated and is currently being adopted by the Government. It is structured around four main pillars: (i) sustainable productivity and production, (ii) competitiveness of agro-silvo-pastoral, fisheries, and wildlife sectors, (iii) sustainable management of natural resources, and (iv) governance of the sector. At the institutional and organizational level, the implementation of the Program Budgeting since 2017, shifting from funds-based budgeting to outcome-based budgeting, aims at enhancing the efficiency of public expenditure by focusing on outcomes. To this end, in the State’s resource allocation process, special emphasis is placed on investments. However, the implementation of the Program Budgeting remains partial and is marked by a centralization of budget planning and execution at the central level. Moreover, the structure of the Program Budgeting was modeled after the existing institutional architecture of the budget, which is already complex, with four ministerial departments until 2022, now reduced to two. As a result, the structure of the Program Budgeting includes more than EXECUTIVE SUMMARY xiii twenty distinct budget programs. This large number of budget programs poses challenges in terms of coordination, optimization, and capitalization of public action in favor of the agricultural sector. In this context, the World Bank undertakes this third agriculture public expenditure review to help the Government of Burkina Faso produce evidence on the structure of public expenditures. In addition to the classic analysis of the efficiency of expenditure allocation, the efficiency of budget execution, as well as coordination, monitoring/evaluation, and accountability mechanisms in the sector, we will examine the incidence and impact of public expenditures by analysing four specific cases: (i) input subsidies, (ii) hydrro-agricultural facilities and irrigation; (iii) agricultral finance, and (iv) expenditures allocated to forestry and natural resources. 1. Level of Public Expenditures on Agriculture (PEA) INCREASED PUBLIC EXPENDITURES IN AGRICULTURE DESPITE UNFAVORABLE CONDITIONS Public support to the agricultural sector during the 2016–2021 period was marked by significant budget constraints due to the reallocation of State resources to the defense ­ and security sector as a result of the deterioration of the security situation. Budget cuts implemented at the ministries in charge of Agriculture (MA) resulted in a loss of approximately 180 billion CFA Francs in funds over the period covered by the analysis. However, the annual average of public expenditures on agriculture (PEA) executed by the MAs and other ministries amounted to 213 billion CFA Francs, representing an average annual increase of 17% in nominal value and 13% in real terms compared to the period covered by the first National Rural Sector Program (PNSR I 2011–2015). Analysis by funding source of the PEA reveals that the State is the main contributor, its share representing an average of 63% of the funding sources during the 2016–2020 period, compared to 41% during the 2011–2015 period; the remainder of the funding comes from external partners. This significant State contribution reflects a strong political will to invest in agricultural sector despite the current circumstances. the ­ The agriculture’s sector contribution of around 13% to the GDP, places Burkina Faso in the group of emerging countries (Ukraine, Turkey, Russia, China, Brazil) in terms of public support to the agricultural sector relative to its size. However, the agriculture sector’s share of total public expenditure dropped from 11.5% in 2011–2015 to 9.8% in 2016–2020, thus indicating a non-compliance with Maputo/Malabo commitments, which called for allocating at least 10% of the national budget to agriculture. xiv BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW 2. Efficiency in the Allocation of Public Expenditures on Agriculture AN EFFICIENT ALLOCATION OF PEA BETWEEN INVESTMENTS AND CURRENT EXPENSES, AND BETWEEN PUBLIC GOODS AND PRIVATE GOODS According to the budgetary classification, during the 2016–2020 period, on average 82% of PEA was allocated to investments, 12% to staff salaries, 5% to the transfer of resources to autonomous public institutions and other services, and 1% to operational expenses. However, a more detailed classification of expenditures revealed that 15% of investment expenditures in the agricultural sector were operational expenses related to these investments. Thus, the actual investments allocated to farmers amounted to no more than 70% of the total PEA. This result seems to indicate an efficient allocation of public resources. However, this result must be qualified given the data limitations. Indeed, project aid conceals operational expenses that are difficult to evaluate due to the lack of detailed financial data. Moreover, the funding of opera- tional expenses through projects leads to interruptions in the provision of public services. The existing literature suggests that, when resources are equal, reallocating investments from private goods to public goods yields greater benefits for agricultural growth. Analysis of PEA during the 2016–2020 period shows that 64.5% of expenditures were allocated to public goods, while 25% were directed to private goods, and administrative costs repre- sented 10.5% of the total. Expenditures allocated to public goods include hydro-agricultural facilities (40.3%), sustainable management of natural resources (5.8%), land security and rural organization (5.1%), rural roads (4.7%), security and sustainable management of pastoral resources (3.2%), agricultural research, agricultural and animal advisory services, storage and conservation infrastructures, vaccination parks, and livestock markets (5.4%). Expenditures allocated to private goods include subsidies for agricultural inputs, equipment for farming and animal husbandry, subsidizing equipment for processing agricultural products, subsidy funds provided to micro-projects and agricultural entrepreneurs, and credit facilitation (interest rate subsidies, credit lines, and guarantee funds). LOW PRIORITY GIVEN TO RESEARCH AND AGRICULTURAL ADVISORY SERVICES Agricultural extension and advisory services, as well as agricultural research, receive insuf- ficient support from the Government. During the 2016–2020 period, the National Program for Agricultural Extension and Advisory Services+, which implemented the National System for Agricultural Extension and Advisory Services, received only 30% of the required funding, or 600 million CFA Francs per year. As a result of this underfunding, the access rate of agricul- tural producers to agricultural advisory services, remains low at around 15%. State resources allocated to research institutes are mainly used to cover salary payments. As for FONRID, established to address this gap, its resources are very limited, amounting EXECUTIVE SUMMARY xv to 500 million CFA Francs per year. Agricultural research is financed through several small external grants, posing significant challenges in terms of coordination and synergy among the different initiatives. Moreover, collaboration between research institutes and the Ministry in charge of Agriculture remains limited, hindering the alignment of the research agendas with the actual needs of the sector as well as the utilization of the research findings. UNDERFUNDING OF EXPENDITURES ON LIVESTOCK AND FISHERIES SUB-SECTORS In Burkina Faso, livestock farming sub-sector has a significant potential, but is character- ized by traditional extensive production systems and low productivity of the raised animal breeds. Out of a financing need of 345 billion CFA Francs identified in PNSR II, public fund- ing allocated to livestock farming amounted to 104 billion CFA Francs, covering only 30% of the actual needs. This public underfunding of the livestock sub-sector does not allow for the provision of the public services needed to improve animal productivity, including the genetic improvement of livestock breeds, veterinary services, certification of forage seeds, quality control, research, and the promotion of low-cost animal feed, as well as the development of infrastructure and sustainable management of pastoral resources. To address the substantial deficit in fish production, a National Strategy for Sustainable Development of Fishery and Aquaculture National Sustainable Development Strategy for Fisheries and Aquaculture (SNDDPA) was developped but was poorly funded by public resources. Indeed, the fisheries and aquaculture sub-sector received funding amounting to 2.6 billion CFA Francs during the 2016–2020 period, while the financing need had been estimated at 15.5 billion CFA Francs under PNSR II. This underfunding has hindered the establishment of the advisory support system and the necessary investments to ensure access to quality brood stock and feed, essential for the development of the aquaculture industry. 3. Technical Efficiency in Programming, Execution, and Monitoring-Evaluation of Public Expenditures on Agriculture A DECLINE IN THE PERFORMANCE OF BUDGET EXECUTION The performance of budget execution of internal resources has significantly deteriorated over the past few years. The Budget Execution Rate (BER) of the Ministry in charge of Agriculture and Water averaged 93% during the 2011–2015 period but dropped to 78% during the 2016–2020 period. The same applies to the Ministry of Animal Resources, where the BER fell from 102% to 64%. The Ministry of Water and Sanitation recorded a BER of 67%. Only the Ministry in charge of the Environment showed a slight improvement, with an average BER of 87% in 2016–2020 compared to 85% in 2011–2015. The BER of external resources is lower, averaging around 60%. It is important to improve the budget execution of projects funded by external resources by promoting the creation of xvi BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW common funding baskets and ensuring more effective management of the issuance of no objection notices for procurement and disbursements. Furthermore, the Budget Execution Rate of the second PNSR reached only 37% compared to 82% for the first PNSR. This means that out of a total budget of 1,343 billion CFA Francs, only 37% of the expenditures were executed. Several factors explain this poor performance, including unrealistic program planning, the budgetary constraints listed below, and the inaccessibility of certain areas due to the prevailing security conditions. It is also worth mentioning poor appro- priation of the PNSR II by the stakeholders and poor operationalization of its steering the bodies. Apart from the security conditions, the decline in the efficiency of budget execution may be attributed to various factors, including: (i) the limited control over programming costs; (ii) the lack of communication between financial chain actors, their poor anticipation and respon- siveness, and the delayed disbursement of funds, resulting in significant delays in project execution and increased frequency of unsuccessful files (FUF); (iii) the persistence of prior control authorization mechanisms, which has burdened procedures while it should have been replaced by a modulated control within the scope of the Program Budgeting; (iv) a shortage of financial staff in the decentralized services; and (v) poor capacities of companies, causing delays in works delivery schedules, and poor quality of hydro-agricultural construction. PARTIAL IMPLEMENTATION OF THE PROGRAM BUDGETING (PPB), CHARACTERIZED BY A CONCENTRATION OF BUDGET EXECUTION The implementation of the Program Budgeting aimed at improving the efficiency of PEA has made significant progress, in particular with the appointment of program managers, the allocation of projects to various budget programs, the establishment of review committees since 2018, the development of Annual Performance Projects accompanying the initial finance bill, as well as the preparation of Annual Performance Reports (RAP) accompanying the settlement act. However, the Heads of Program Operational Budgets (HPOB), the Heads of Program Operational Units of (HPOU), and the Heads of finances and procurement have not yet been appointed in accordance with the provisions of the Program Budgeting. As a result, budget decentralization at the regional level has still not been achieved. Only operating expenses have been delegated to decentralized services and have averaged 30 million CFA Francs per year per region. This does not give them the autonomous operational capacities needed to fulfill their sovereign missions of advisory support, monitoring, coordination, and capitalization of interventions in the sector. Besides the high administrative costs of such centralized management due to the high number of missions of the central services in the decentralized services, this centralized management does not sufficiently hold decentralized services and local authorities accountable and does not encourage appropriation of the investments made, while this is essential for ensuring the sustainability of these investments. Finally, several structures of MRAH and development projects/programs are characterized by their inappropriate allocation to budget programs. Projects are tools in the service of public policies, therefore, the MRAH must improve the design of future projects, especially those with external fund- ing to better align them with budget programs and achieve operationalization of budget programs. EXECUTIVE SUMMARY xvii There are difficulties in monitoring/evaluation and capitalization of interventions in the agricultural sector. The aid to the agricultural sector is dominated by many large- and medium-sized projects with no common fund, and by Non-Governmental Organizations acting as executing agencies for a large number of small projects. Indeed, projects allow for a more integrated approach to the challenges faced at all levels of the agricultural supply chains, in contrast to State services, which are fragmented and characterized by a lack of synergy between interventions. However, the limited resources allocated to monitoring/evaluation services do not allow for the tracking, coordination, capitalization, appropriation, and sustainability of the interventions executed by this large number of actors. Moreover, the multiplicity of actors leads to high administrative costs, estimated at over 25 billion CFA Francs per year. 4. Analysis of the Input Subsidies CASE OF FERTILIZERS The agricultural input subsidies are the result of the political will to guarantee food security following the surge in food prices in 2007/2008. However, the subsidized quantities of fertil- izers have stagnated at around 17,000 tons per year since 2009, covering only about 2% of the needs of food crops. With a subsidy rate of approximately 35%, public expenditures on fertilizer subsidies have averaged 2.4 billion per year during the period 2016–2021, while the input subsidies in the cotton sector amounted to 12 billion CFA Francs, or 5.6% of the Public Expenditures on Agriculture. Subsidies provided to agricultural inputs and equipment were implemented by the decen- tralized services with poor participation from private sector distributors in 2013 and 2014, the association of local communities and non-State actors (Chambers of agriculture and the Peasant Confederation of Faso) during the 2018/2019 and 2019/2020 campaigns. The purchase and sale of fertilizers by the State to producers at subsidized prices, through State agents or private distributors led to embezzlements of funds, which, however, have not been assessed. The broad eligibility criteria, and the near-universal subsidy despite the limited quantities of available inputs, led to a situation where the selection of beneficiaries was left to the sole discretion of State agents and local power players. To address these challenges, the Agri-Voucher program was adopted and implemented over the last two agricultural seasons thanks to an electronic system set up in partnership with a mobile phone operator contracted for this purpose. This system covers the subsidy of fertiliz- ers and cereal seeds (corn, rice, sorghum, millet) and legumes and oilseeds (peanut, cow- pea, soybean, and sesame). This system allows for the continuation of the advisory support and elimnates cash handling by State agents. Furthermore, it focuses on equity in targeting small producers (less than 5 ha) selected randomly from the database of producers, created during the General Census of Population and Housing. However, this database contains errors and will need to be updated. The program has also faced other challenges, such as the insolvency of certain beneficiaries, network coverage with the selected operator, and the reluctance of some mobile money operators due to the risk associated with handling large sums of cash. These challenges require appropriate solutions. The implementation cost of the Agri-Voucher program represents about 5% of the cost of subsidized fertilizers and could xviii BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW be higher with the required update of the farmer registry. However, integrating the E-advisory ­ ffectiveness of the service into the existing platform will improve its efficiency as well as the e subsidy. Regarding the cost-efficiency of fertilizer purchases by the State, the near-monopoly of fertilizer imports has not allowed for better prices. The breakdown of the urea price delivered to Bobo-Dioulasso via the port of Abidjan and imported from Russia reveals that the average purchase price exceeded the calculated cost price by 18%. This has led to average annual overruns of about 1 billion CFA Francs for the State. Moreover, the market selling price of the fertilizer is also 20% higher than the reference price, which takes into account the inefficiencies of the supply chain and the costs of bank financing. Improving the efficiency of the fertilizer market could therefore lead to a 25 to 30% decrease in fertilizer prices. The creation of the supply center for inputs and agricultural materials (CAIMA) aims to address these inefficiencies. With a non-profit status, CAIMA stakeholder platform that allows for group orders of inputs with the objective of is a multi-­ ­ reducing fertilizer prices. However, private fertilizer importers have expressed their concerns about their potential exclusion and would have preferred the creation of a structured platform for discussion and initiatives to address these inefficiencies. Finally, the quality control mechanism for fertilizers has gaps due to limited human and financial resources of the operational budget and poor operational capacities of BUNASOL, which is the only laboratory responsible for analyses. Thus, the guarantee of fertilizer quality is insufficient with such a control mechanism. CASE OF IMPROVED SEEDS The seed sector in Burkina Faso is regulated at the supranational level by the CILSS, UEMOA, and ECOWAS rules, and at the national level by Law no. 010-2006/AN. Both aim to create the necessary conditions for the production, marketing, and use of quality seeds to improve agricultural productivity. The total annual volume of subsidized improved seeds amounted to 7,130 tons during the 2016–2020 period, with a cost of 3.3 billion CFA Francs to the State budget, and a subsidy rate of about 90%. Contrary to fertilizers, the subsidized quantities of seeds have covered a significant portion of the areas planted with corn (24%) and rice (22%). However, millet and sorghum and cash crops (cowpea, peanut, sesame, and soy) were insufficiently covered, with respective cover- age rates of 2% and 1%. Regarding the efficiency of this operation, the late release of budgetary credits for the purchase of seeds sometimes results in their delayed availability to producers. Additionally, the financial and human resources, staff, and equipment of the laboratories for seed certification are limited, and the quality of certified seeds is sometimes questioned by farmers. The National Seed Service created to address these difficulties is still not operational. EXECUTIVE SUMMARY xix As for the development of the market for the distribution of improved seeds, it is worth mentioning that, aside from the State and its partners, the few parallel sales are negli- gible. Moreover, the high purchase prices granted by the State to UNPS-B and ANESBF do not encourage private sector operators to invest in the distribution of improved seeds. Furthermore, while State intervention allows vulnerable producers to access improved seeds almost for free, the State’s domination of the seed market masks the problems of the sector. Therefore, it is recommended to gradually reduce the subsidy rate. 5. Analysis of Hydro-Agricultural Facilities (HAF) The emphasis on irrigation in agricultural policies, following the droughts of the early 1970s, highlights its critical role as a strategy to mitigate the impacts of climate change on agriculture. Public resources allocated to Hydro-Agricultural Facilities (HAF), including water mobilization infrastructure, amounted to 430 billion CFA Francs during the 2016–2020 period, with an annual average of 86 billion CFA Francs. However, even with these limited resources, their allocation could be enhanced by reducing administrative costs, which accounted for a third of the expenditures of Program 075 on hydro-agricultural facilities and irrigation. Moreover, the management of HAFs, crucial for their sustainability, received less than one billion CFA Francs per year, representing only 2% of the program’s total expenditures. This inefficiency in allocation and limited resources have not allowed for the completion of the planned HAF projects. Indeed, except for the new developed lowlands, which were 65% completed (22,728 out of 35,000 ha), and the restoration of the Sourou plain, executed at 90% (3,398 out of 3,818 ha), other structural facilities planned in the PNDES I (9,312 ha for new facilities and 1,260 ha for the restoration of old HAFs) have not been completed. Most planned investments are still at the project formulation stage and are seeking external fund- ing. Regarding water resource mobilization for irrigation, only 8 dams have been built and 10 restored, with a physical execution rate of 57% and 56%, respectively. Besides the structural investments under PNDES I, it is worth mentioning that around 7,500 ha were managed during the 2016–2020 period within the scope of various projects funded by the State and by donors. Vegetable-growing areas were managed on an area covering 1,083 ha during this period. ­ The limited completion of HAF projects can be attributed to the insufficient donors’ support to the construction of dams, deficiencies in the procurement system, and to the poor capacities of service providers. Economic performance assessments of HAFs reveal unsatisfactory results for gravity and Californian irrigation systems on large and medium-sized perimeters. Economic profitability, evaluated on the Di perimeter in the Sourou Valley and on the Bagré growth pole project, was found to be lower than the ex-ante Rates of Return that had justified the investments. An evaluation carried out on the Bagré perimeter (Bazin et al. [2017]) showed that the small areas allocated to farmers do not allow them to escape poverty. This reveals that land issues play a decisive role in the performance of farms on the managed sites. xx BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW At the national level, the average yields of corn and rice in rainfed culture on large and medium-sized managed perimeters range from 3.3 to 3.5 tons per hectare, which is just double the yields achieved by traditional systems. Also, the share of irrigation in cereal production is less than 5%. These figures clearly show the underperformance of HAFs in improving agricultural production and achieving security objectives in the Burkina Faso context, characterized by high rainfall variability. However, it is worth mentioning that small individual or private perimeters show relatively good performance, thus creating rural employment opportunities during the dry season. Furthermore, the drip irrigation system adapted to vegetable and fruit tree crops is also profitable but is unsuitable for cereal crops. However, its adoption rate remains limited beyond the incentives offered by projects, despite the emergence of a private sector of professional technicians and equipment suppliers. The modest agricultural performances observed in the HAFs are primarily attributed to the poor management of these facilities, due to: • the insufficient collection of water fees for the maintenance of infrastructure and equip- ment, and the poor performance of agricultural professional organizations responsible for managing hydro-agricultural facilities; • the limited advisory support to water management and HAF maintenance; • the poor water management, as the physical efficiency rate sometimes falls between 30 and 40%, significantly reducing the mobilized water, despite the frequent water stress due to climate change; • the high land pressure exerted on these facilities, resulting in small-scale, economically unsustainable farms; • the isolation of certain perimeters; • the accelerated siltation of dams due to easement encroachment. In such a context, promoting private investments in irrigation through a public-private partnership (PPP) approach is a viable pathway to improve outcomes in the agriculture sector. The Bagré growth pole and the Presidential Initiative on Rice (launched in 2020) are two public-private partnership initiatives initiated in this direction. The evaluation of the support project to the Bagré growth pole (2011–2020) revealed the satisfactory effect of public investment on the development of private enterprises in the area. However, the land reserve designated for entrepreneurs increases the pressure on the land, adversely affecting small- scale farmers. Besides these two initiatives, the Government promotes private investments in irrigation through a support project for the establishment of 300 ­ private farm models each ranging from 3 to 5 hectares and utilizing groundwater sources. The promotion of private investments in groundwater-based irrigation is facilitated by the establishment of appropriate public monitoring services for the management of groundwa- ter resources. However, the current density of the piezometer network remains insufficient. Expanding the piezometer network and implementing participatory groundwater management mechanisms are vital steps toward ensuring the sustainable use of groundwater resources. In conclusion, apart from Di and Bagré perimeters, the absence of land tenure security for HAFs especially outside established perimeters like Di and Bagré, poses constitutes a challenge to EXECUTIVE SUMMARY xxi farms performance and sustainability of public investments. Secure land tenure is a fundamen- tal prerequisite for attracting private investments to the irrigation sector. New facilities projects should help establishing and strengthening rural land services to address this issue. 6. Agricultural Finance The financing mechanisms set up through major projects in the agro-silvo-pastoral sectors over the last fifteen years have revealed some critical insights: 1. Despite contributing to overcoming the low productivity of stakeholders in the agro-sylvo- pastoral sectors who are typically excluded from the financial system, the shared-cost finance subsidy mechanisms have proven to be inefficient. i. During the pre-selection stage of beneficiaries, in projects with high demand like those in agro-silvo-pastoral sectors, presents a notable risk of unfair and adverse selection1 despite the established access criteria and selection procedures. Failure to leverage and disseminate best practices from various experiences gathered from several projects (Food and Nutrition Security Policy, Agricultural Sector Support Project, PADAB, PAFASP…), to the organizations in charge of the selection process, limits the efficiency of the beneficiary selection stage, which is critical for the success of the subsequent process. ii. The technical and managerial assistance provided to beneficiaries is a prerequisite to the success of funded microprojects. However, hiring service providers (consulting firms) at the national level, at high costs and sometimes unqualified service provid- ers to assist beneficiaries, results in inefficiency with cost-benefit ratios close to 1, as observed during the evaluation of certain projects. Utilizing local/foreign providers at lower cost would be more efficient. In this regard, promoting local Enterprise Resource Centers for Rural Enterprises (CREER) by the Enterprise House to support small and medium enterprises operating in agricultural sectors could yield better results. iii. The inadequate structuring of agro-silvo-pastoral sectors partly explains the unsatis- factory performance of funded micro-projects. Challenges in supply of inputs, limited mastery of production techniques, and product marketing issues are significant obstacles that limit the efficiency of the matching-grant subsidy. iv. The high subsidy rate, which can lead to a lack of responsibility among beneficiaries, along with a lack of entrepreneurial spirit, significantly limit the performance of funded projects. 2. When the funding of micro-projects through matching grants is coupled with invest- ments addressing technological, organizational, and infrastructural constraints at various stages of the targeted value chains, the expected objectives can be achieved and even exceeded. The PAFASP experience illustrates this success. 3. Given the reluctance of financial institutions to finance innovative equipment, cost-sharing grants are necessary for promoting technological innovation in the agri-food value chains. The successful experience of PAFASP in utilizing cost-sharing grants to promote techno- logical innovation serves as a model for future actions. 1 Market malfunction resulting from information asymmetry, leading to unintended outcomes. In our case, the beneficiary selection procedures fail to identify opportunistic actors, sometimes repeat offenders. xxii BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW 4. Credit lines and guarantee funds established by financial institutions for stakeholders in the agricultural value chains can have a significant multiplier effect on access to credit. However, certain conditions must be met to ensure the efficiency of these instruments: (i) upstream, it is recommended to select financial institutions (FIs) that have experience in financing agricultural value chains and to strengthen their technical capacities in implementing financial instruments adapted to the agricultural sector; (ii) long-term, permanent credit lines ensure that FIs can meet the financing needs of stakeholders in the agricultural value chains; (iii) binding clauses regarding the use of the guarantee fund in the case of toxic claims can act as a deterrent for FIs; and (iv) the assistance and strengthening of technical and managerial capacities of project promoters are essential for the success of these initiatives. 7. Public Expenditures in Support of Forestry The forestry sector plays an important role in the Burkinabé economy. In addition to its direct contribution to economic activity (9.6% of GDP), its environmental functions (carbon sequestration, biodiversity preservation, protection of water bodies against siltation, mitigation of land erosion...) are essential for agricultural activity and for a better quality of life. More than 40% of households derive part of their income from forestry activities2. Exports of almonds and shea butter are among the main agricultural exports and amounted to 57 billion CFA Francs in 20193. However, the excessive exploitation of forest resources poses a threat to forests sustainability. The country has lost nearly half of its forest cover between the early 1990s and the second half of the 2010s, primarily due to extensive agriculture and livestock farming, and firewood energy, which unsustainably produces more than 96% of the energy consumed by households. This is partly attributed to an unsuitable eco-taxation system, which fails to recognize the value of these natural resources and therefore promotes their overexploitation. In addition, the emergence of the mining sector has direct and indirect impacts on forests. Despite the critical importance of forest resources, public support to their sustainable man- agement remains insufficient. Sixty percent of the State resources allocated to the Ministry responsible for forests cover salary payments. Technical departments lack sufficient funds for operational costs, hindering their ability to execute their sovereign missions. Investments in forest management are mainly funded by external aid, a large part of which is not included in the State budget. Despite the relatively substantial foreign aid (53% of committed expen- ditures), forestry’s share of total public expenditure was only 1.2% during the 2016–2020 period, well below its contribution of nearly 9.6% to the GDP. The total annual expenditure allocated to forestry is estimated at 33 billion CFA Francs. These public investments have led to significant results. The quantities of improved forest seeds produced by the CNSF have enabled the production of more than 50 million plants, 55% of these have been planted. However, the survival rate of these plantations remains low, even though it has increased from 25 to 45% between 2016 and 2019. The proportion of forests under sustainable management increased from 38.6% in 2016 to 44.7% in 2020. 2 World Bank, Burkina Faso Rural Income Diagnostic, December 13, 2019. 3 Calculation by authors based on data from the INSD EXECUTIVE SUMMARY xxiii However, the production of firewood from Forest Management Projects (Chantiers d’Aménagement Forestier (CAF)) covers just over 15% of urban demand and is very insufficient to halt deforestation. Apart from sporadic support to specific projects through foreign funding and funds mobilized as part of the sectoral strategy implemented by the first phase of the Forest Investment Program (FIP), the Forest Management Projects (FMPs) do not receive support from the State. This lack of State support is attributed to the currently low taxation on forest exploitation for firewood production, which limits the revenue available for State investments in forest management. In addition, the land tenure security for classified forests, crucial for their sustainable management, remains very insufficient. About 90,000 ha are registered or in the process of being registered in the Hauts Bassins and Boucle du Mouhoun regions, thanks to the PIF and the AGREF projects, out of nearly 4 million ha of classified areas (or 2% of classified areas). As for the restoration of degraded lands in forest and agro-forest ecosystems, the total restored lands during the 2016–2020 period amounted to 26,731 ha and is below the target set at 50,000 ha under the structural investments provided in PNDES I. The main reason for this underperformance lies in the persistent insecurity in the areas targeted for restoration projects areas and the limited financial resources allocated for land restoration. Finally, limited capacities in planning, monitoring/evaluation, coordination, and the poor decentralization of natural resource management constitute obstacles to the sustainable management of forests. Conclusion Public support to the agricultural sector during the 2016–2020 period was marked by strong budgetary constraints due to the security conditions prevailing in the country. However, public expenditures on agriculture (PEA) increased compared to the 2011–2015 period. This progress would have been greater without the budget execution related challenges. The PEA was primarily directed towards productive investments for the provision of public goods, and mainly towards hydro-agricultural facilities. However, agricultural research and advisory ser- vices, crucial for enhancing agricultural productivity, remain underfunded. The same applies to the livestock and fisheries sub-sectors despite their high growth potential. Therefore, in addition to the need to increase resources allocated to agricultural research, extension and advisory services, and to reform the system by focusing on local stakeholders and the promotion of online extension services to account for the prevailing security condi- tions in the country, it is important to increase the resources allocated to livestock, fisheries, and aquaculture sectors for the enhancement of: (i) genetic improvement of animal breeds and the production and certification of quality forage and aquaculture seeds; (ii) the veteri- nary services; (iii) the sustainable management of fishery resources; and (iv) the establish- ment of an aquaculture support and advisory system. Also, in order to guarantee efficient mobilization and use of resources allocated to the agricultural sector, it is recommended: (i) to accelerate the Program Budgeting implementation by establishing consultation and coordination bodies both within and across budgetary programs; (ii) to improve the provision and continuity of public agricultural xxiv BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW services by allocating the necessary resources for the continuous functioning of services, instead of investment project-based financing; and (iii) to undertake a series of actions and reforms in budgetary execution, such as strengthening the capacities of fiscal process actors, particularly at the decentralized services level, the establishment of an intranet workspace dedicated to the personnel in charge of the public procurement and management system, the development of a software for monitoring and managing procurement contracts, the establishment of a financial regime for hydro-agricultural facilities contracts and input purchases in the year n−1, the effective application of penalties for defaulting companies and service providers, advocacy with Technical and Financial Partners (PTFs) to reduce the time required to obtain no objection notices, and conduct diagnostic thematic studies on the modalities of State, project, and NGO interventions in the agricultural sector. SPECIFIC STUDIES HAVE BEEN CONDUCTED ON AGRICULTURAL INPUTS, IRRIGATION, AND FINANCING OF FARMERS AND FORESTRY Concerning inputs, in addition to the small, subsidized quantities, the traditional purchase and sale of fertilizers by the State have been sources of inefficiency. Continuing the transfer of subsidy implementation to the Agri-Voucher program is crucial while fully entrusting the subsidy implementation to private sector distributors. Moreover, establishing a collaborative platform between the State and private importers/distributors can help reducing fertilizer costs by addressing the inefficiencies in the import and distribution process. Furthermore, the development of the seed market will necessitate a gradual reduction in the subsidy rate. In this regard, it is recommended to implement the Support Fund for the Seed Sector (FASS) for strengthening the technical capacities of existing seed laboratories and building new regional laboratories. Regarding fertilizers, it is necessary to take structural measures within the CAIMA framework, encouraging private stakeholders to enter the fertilizer market to reduce fertilizer prices by stimulating competition and addressing inefficiencies in the trans- port, storage, and distribution chain. Finally, the promotion of the private sector in the produc- tion of basic seeds, the certification of multiplied seeds, and the quality control of fertilizers can compensate for the State’s limited capacities. Regarding irrigation, the poor quality of infrastructure and challenges in managing hydro- agricultural facilities (HAF), despite the significant resources allocated (over 80 billion CFA Francs on average per year), limit the efficiency of this water management policy. Indeed, crop yields in irrigated areas are only twice as high as those in rain-fed systems. Alongside current policies aimed at promoting private sector participation in irrigation, it is important to restructure HAF management by strengthening Water Users Associations (WUA). Additionally, it is recommended to encourage private sector participation in water management and infrastructure maintenance through lease contracts to support these WUAs. To enhance the efficiency of investments in hydro-agricultural facilities, which is crucial in the context of climate change and the growing vulnerability in the Sahel, the following actions are recommended: (i) elaborate and disseminate technical guides for the construction of hydro-agricultural infrastructures; (ii) further the implementation of WUAs; (iii) allocate budget lines for major infrastructure maintenance, and condition access to these funds on tripartite performance contracts involving the State, management company, and WUAs, or bipartite EXECUTIVE SUMMARY xxv contracts involving the State and WUAs; (iv) systematically register managed lands, including lands reserved for future extensions; (v) grant land titles or lease contracts to beneficiaries in old and new perimeters in line with defined policies, to secure their rights; (vi) develop and adopt a mechanism for the allocation of agricultural lands on the managed perimeters to guarantee the economic sustainability of farms and efficient exploitation of HAFs; (vii) elaborate new training programs focused on maintenance, economic and financial management of developed perimeters, to be integrated into vocational training schools; and finally (viii) increase investments in piezometers to improve the monitoring and sustainable management of groundwater, which in turn can guide private investments in irrigation. Experiences of financing mechanisms for stakeholders in agro-silvo-pastoral sectors. The experiences over the last fifteen years have highlighted the limited efficiency of shared- cost subsidies. This modest performance is mainly due to a high subsidy rate, leading to a biased selection of beneficiaries, and high costs of technical assistance and management to beneficiaries for the development of agro-silvo-pastoral sectors. However, subsidies are efficient when paired with investments addressing technological, organizational, and infra- structure constraints at different levels of the targeted value chains. Also, credit lines and agricultural insurance guarantee funds developped by financial institutions for stakehold- ers in the agricultural value chains, compensate for the farmers lack of guarantees and the financial institutions limited long-term resources, and can have a significant multiplier effect on access to credit. It is, however, necessary to continue developing other financial products (warrantage, agricultural insurance...) and to identify and direct funds and credit lines from projects to an agricultural development fund, to avoid their loss at the end of these projects. Therefore, it is recommended to: (i) reduce the subsidy rate in initiatives that make financing more accessible to project developers; (ii) improve the cost-efficiency of technical assistance to beneficiaries of agricultural financing funds (subsidy, credit line, matching funds) by promoting local providers; (iii) encourage the combination of credit lines and guarantee funds in agricul- tural financing; (iv) plan necessary actions to eliminate obstacles along the value chains in agri- cultural financing initiatives; and (v) establish a comprehensive directory of agricultural financing initiatives, including intervention methods, best practices, their successes, and failures. Finally, the forestry sector plays an important role in Burkina Faso’s economy. However, nearly half of the forest cover has been lost due to improper exploitation. Public support to sustainable forest management is insufficient. Sixty percent of the State resources allocated to the ministry in charge of forests are intended for salary payments. Technical services do not have sufficient funds to cover the necessary operating expenses to execute their sover- eign missions. Moreover, the transfer of State resources to local communities for local forest management has not yet been realized. This is partly due to outdated eco-taxation, which not only fails to recognize the value of forest resources but also generates insufficient revenue for the State to invest in proper forest management. The recommended actions for enhancing the sustainable management of forest resources are as follows: (i) mobilize internal and external resources for financing Phase 2 of the Forest Investment Program, which plans to implement actions to reduce emissions and enhance carbon sequestration to raise resources from climate financing; (ii) strengthen skills and transfer forest management to local communities; and (iii) adequately finance the operational current expenses of the Forest Intervention Fund (FIF). xxvi BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The Tables 1 and 2 below outline recommended actions and suggested reforms to improve the efficiency of Public Expenditures on Agriculture. TABLE 1: Matrix of Suggestions of Actions for Improving the Efficiency of Public Investments in the Agriculture Sector AXIS 1 OF PNIASP: PRODUCTIVITY AND SUSTAINABLE PRODUCTION OF THE PASP SECTOR EXECUTIVE SUMMARY Responsible N° Measure/Action Objective/Justification Structure Deadline OS 1.1 A1.1 Operationalizing the Support Fund for the Seed Sector (FASS) Strengthening the production and certification DGPA Sustainably of plant seeds increase the productivity of A1.2 Strengthening the technical capacities of existing laboratories, and build new Strengthening capacities DGPA the PASP sector: regional laboratories Inputs, Research and Agricultural, A1.3 Undertaking structural actions within the scope of CAIMA in favor of private These inefficiencies lead to a price increase of MRAH-MDCA/ Animal, and stakeholders to reduce fertilizer prices through increased competition, fertilizers by more than 20%. PME Fisheries addressing inefficiencies in the transport, storage, and distribution chain for all Advisory Support stakeholders in input supply. A1.4 Increasing the resources allocated to the sub-sectors of livestock and fishing Enhancing the growth potential of livestock MARAH-MEFP and aquaculture, and focus on strengthening: and seizing the opportunity of the growing i. the genetic improvement of animal breeds, and the production and demand for fish, by boosting fish production. certification of quality forage and aquaculture seeds; ii. veterinary services; iii. sustainable management of fishery resources; iv. the establishment of advisory support mechanisms for aquaculture. A1.5 Increasing the resources allocated to agricultural research, extension, and Enhancing the access of agricultural DGPA agricultural advisory services, and reform the system by promoting local producers to agricultural advisory services facilitators and online extension service. within a context of increasing insecurity. A1.6 Financing the consultation framework between research institutes, ANVAR, Promoting agricultural research and the use MEFP-MRAH- and MRAH. of research results by bolstering synergies MESRSI between research institutes and agricultural extension services. xxvii xxviii Responsible N° Measure/Action Objective/Justification Structure Deadline OS 1.1. A1.7 Elaborating and disseminating technical guides for the establishment of hydro- Proactively addressing the poor quality of DGADI Sustainably agricultural infrastructures. built infrastructures that undermines their enhance the sustainability. productivity of the PASP A1.8 Allocating budget lines for the maintenance of major infrastructures and Enhancing the management and economic DGADI sector: Hydro- conditioning their access through tripartite (Government-Management performance of HAFs. Agricultural Company-Basin Organizations) or bipartite (Government-Basin Organizations) Facilities. performance contracts. A1.9 Systematically registering managed lands, including reserve lands, to facilitate Ensuring the security of HAFs and facilitating DGADI, DGFOMR future expansions. future expansions. A1.10 Securing the rights of beneficiaries over both existing and new areas by Securing rights to encourage producers’ DGADI, DGFOMR issuing land titles or lease agreements, in accordance with the defined policy investment and sustainable management of for the area. HAFs. A1.11 Creating and adopting a mechanism for allocating agricultural lands within the Current allocation mechanisms lead to the DGADI, DGFOMR managed areas, with the objective of guaranteeing the economic sustainability establishment of economically unsustainable of farms and efficient utilization of Hydro-Agricultural Facilities (HAFs). small-scale farms. A1.12 Elaborating new programs for maintenance, economic and financial This aims to address the current shortcomings DGADI, DGFOMR management of the managed areas in vocational training schools. of the advisory support system related to HAFs. A1.13 Increasing investments in piezometers to enhance monitoring and sustainable Promoting the use of groundwater DGRE/MEEA management of groundwater. for agricultural purposes requires the strengthening of the resource monitoring system. BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW AXIS 2 OF PNIASP: COMPETITIVENESS OF AGRICULTURAL, SILVO-PASTORAL, HALIEUTIC, AND FAUNAL SECTORS Responsible N° Measure/Action Objective/Justification Structure Deadline OS 2.2: Enhance A2.1 Reducing the rate of subsidy for initiatives aimed at making financing more Substantial financial participation from DGPER access of accessible to project developers project developers is necessary to prevent EXECUTIVE SUMMARY stakeholders opportunistic behaviors and guarantee the in the ASPHF success of funded projects. sectors to financial A2.2 Enhancing the cost efficiency of technical assistance to beneficiaries of Sometimes high support costs hinder the DGPER services, carbon agricultural financing funds (subsidy, credit line, counterpart funds) through the profitability of the investments made. finance, and promotion of local service providers agricultural risk management A2.3 Promoting the combination of credit lines and guarantee funds in agricultural It helps to address both the challenges in DGPER tools. financing mobilizing collaterals by project promoters and the limited long-term resources of financial institutions. A2.4 Setting up a directory of agricultural financing initiatives, including intervention Capitalizing on agriculture financing initiatives. DGPER modalities, best practices, successes, and failures. A2.5 Including measures necessary to alleviate bottlenecks along value chains in This holistic approach is necessary to achieve DGPER agricultural financing initiatives. the expected outcomes. xxix xxx AXIS 3 OF THE PNIAPS: SUSTAINABLE MANAGEMENT OF NATURAL RESOURCES Responsible N° Measure/Action Objective/Justification Structure Deadline A3.1 Strengthening skills and transferring forest management to local communities. The decentralization of forest management is MEEA-CT essential to achieve the expected outcomes. Leveraging the knowledge from past experiences for the implementation of the reform. A3.2 Supporting the implementation of actions to reduce emissions and carbon Existence of a potential for carbon emission MEEA sequestration to generate resources from climate financing. reduction A3.3 Adequately fund the operational recurrent expenses of the Forest Intervention Enhancing natural resource management MEEA Fund for the Environment (FIE). A3.4 Supporting the participation of private financial institutions in the Non-Timber Increasing the added value of Non-Timber MEEA-Maison de Forest Products (NWFP) sector. Forest Products (NTFP) value chain, a l’Entreprise significant source of income, particularly for women A3.5 Persisting with land tenure security measures for protected areas and Contributing to securing protected areas MEEA classified forests by using appropriate tools (management plans, etc.). and classified forests in connection with the National Plan for Economic and Social Development (NPESD-II) (2021–2025) BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW AXIS 4 OF THE NATIONAL IRRIGATION AND WATER MANAGEMENT SUPPORT PROGRAM (PNIASP): GOVERNANCE OF THE PASP SECTOR Responsible N° Measure/Action Objective/Justification Structure Deadline Objective 4.2: A4.1 Accelerating the implementation of the PPB by setting up consultative and Improving the planning of actions/investments SG et RPs Ensure efficient coordination entities within and across budget programs. and creating synergies between interventions. EXECUTIVE SUMMARY mobilization and management A4.2 Improving the provision and continuity of public agricultural services by The agriculture public expenditures review of PASP sector allocating the necessary resources for the operation of the services, rather has revealed that budgeted operating resources than financing them through investment projects. expenses are highly constrained and funded through investment projects. This hinders the consistent provision of services. A4.3 Undertaking a series of actions and reforms concerning budget execution: Enhancing the efficiency of budget execution. DGF • Strengthening the capacities of stakeholders in the financial chain, particularly at the decentralized level; • Setting up an intranet workspace for stakeholders in the procurement and management of public procurement processes; • Developing a software application for monitoring and managing public procurement processes; • Setting up a financial division for the procurement of hydro-agricultural facilities and the purchase of inputs in year n−1; • Advocating with development partners to shorten the timeframes for obtaining no-objection notices; • Implementing sanctions to defaulting companies and service providers. A4.4 Conducting diagnostic thematic studies on the Government, projects, and Capitalizing on successful practices to DGESS NGOs intervention methods in the agricultural sector. encourage their broader adoption. xxxi xxxii TABLE 2: Matrix of Proposed Reforms for Enhancing the Efficiency of Public Agricultural Investments AXIS 1 OF PNIASP: PRODUCTIVITY AND SUSTAINABLE PRODUCTION IN THE PASP SECTOR Responsible N° Measure/Action Objective/Justification Structure Deadline OS 1.1 R1.1 Accelerating the review of the law on plant seeds to extend the production of This reform aims to address the limited DGPA Sustainably basic and pre-basic seeds to the private sector capacities of INERA in producing high-quality Increase the basic seeds. Productivity of the PASP R1.2 Adopting texts to encourage the participation of private laboratories in the Addressing the limited capacities of public DGPA Sector: Inputs, quality control of seeds and fertilizers laboratories. Research, and Agricultural, R1.3 Reforming the subsidy for inputs: Halting the State’s purchasing of inputs DGPA Livestock, • By entrusting the purchase and distribution tasks to private sector entities will significantly increase the volumes of and Fisheries while strengthening AgriVoucher; subsidized inputs (from an average of 17,000 Advisory Support tons to 55,000 tons), given the financial • By gradually decreasing the subsidy rate on plant seeds to foster the growth resources currently allocated to the subsidy. of the seed market R1.4 Setting up a certification system for forage seeds and monitoring the quality of Capitalizing on the growth potential of DGPA livestock, poultry, and fish feed; livestock and seizing the opportunity arising from the growing demand for fish to enhance fishery production. BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Responsible N° Measure/Action Objective/Justification Structure Deadline OS 1.1 R1.6 Issuing a decree on Agricultural Water Users Organizations (AWUO) at the Such a management model, successfully DGADI Sustainably national level for the regulation of maintenance and service issues linked to tested on the Di/Sourou perimeter, which increase the irrigation networks and water supply. separates the production function from water productivity management and maintenance, will enhance EXECUTIVE SUMMARY of the PASP the management of HAFs. sector: Hydro- agricultural R1.7 Signing leasing contracts for water management and infrastructure The model has been successfully tested on DGADI facilities maintenance with experts from the private sector in medium-sized and large- the Di perimeter for helping WUAs in efficient scale perimeters. and sustainable management of HAFs. R1.8 Setting up and adopting a mechanism for the allocation of agricultural lands Current allocation mechanisms lead to the DGADI, DGFOMR within the managed areas, to guarantee the economic sustainability of farms creation of small-scale farms that are not and the efficient use of HAFs. economically sustainable. R1.9 Elaborating new programs centered on the maintenance and economic This aims to address the current shortcomings DGADI, DGFOMR and financial management of the managed areas, intended for vocational of the advisory support system for HAFs. education institutions. xxxiii xxxiv AXIS 2 OF PNIASP: COMPETITIVENESS OF AGRICULTURAL, FORESTRY, FISHERIES, AND WILDLIFE VALUE CHAINS Responsible N° Measure/Action Objective/Justification Structure Deadline OS 2.2 Improve R2.1 Including claw back clauses in the FDA for credit lines and guarantee funds set Avoiding the loss of these funds and DGPER access for up within the scope of projects and programs guaranteeing the continuity of agricultural stakeholders financing. in the ASPHF sectors to R2.2 Continuing with the regulation of warrantage and development of agricultural Guaranteeing agricultural investment and DGPER financial insurance making agriculture more attractive to financial services, carbon institutions. finance, and agricultural risk management tools AXIS 3 OF THE PNIASP: SUSTAINABLE MANAGEMENT OF NATURAL RESOURCES Responsible N° Measure/Action Objective/Justification Structure Deadline R3.1 Reforming the forest tax code to: Suboptimal tax policy, favoring the DGESS/MEEA • Address the undervaluation of forest products that leads to their overexploitation of resources and generating overexploitation, and promote the adoption of environmentally responsible tax revenues that are not sufficient to behaviors; increase public investment in the sustainable management of forest resources. • Increase eco-tax revenues to boost investments in the protection and sustainable management of forest resources. BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW AXIS 4 OF PNIASP: GOVERNANCE OF THE PASP SECTOR Responsible N° Measure/Action Objective/Justification Structure Deadline OS 4.2 Ensure R4.1 Decentralizing planning and budget execution in accordance with the Strengthening the operational capacities of DGESS efficient provisions of the Program Budgeting (PPB) decentralized services EXECUTIVE SUMMARY mobilization and management R4.2 Easing ex-ante control by adopting modular control in line with the provisions Enhancing the efficiency of budget execution DGF-MEFP of PASP sector of the PPB resources R4.3 Formulating charters for the participation of non-State entities (NGOs and Enhancing the coordination of interventions in DGESS POs) in the agricultural sector, based on diagnostic studies focusing on their the agricultural sector intervention methods in the sector xxxv xxxvi BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Introduction Agriculture in Burkina Faso provides employment anticipated that agricultural activities will extend to over 70% of the population and represents to increasingly marginal and limited ecosystems. around 30% of the GDP, while the forestry sec- While cereal production has increased, this growth tor constitutes 9.6% of the GDP in recent years. results primarily from the expansion of cultivated Affected by the Sudan-Sahel climate, the agricul- areas. Yields have remained unchanged due to tural sector’s yield varies annually due to its high the insufficient use of modern inputs and poor vulnerability to changes in rainfall. Despite the water management. In fact, the average annual policy emphasis on irrigation, the proportion of yield for cereals, which remains very low, regis- irrigated production compared to total agricultural tered a slight rise from 1.04 to 1.15 t/ha between production remains relatively small. 2008–2010 and 2011–2015 and remained steady at 1.15 t/ha from 2016 to 20204. This extensive Despite some success in agricultural diversifica- farming intensifies stress on natural resources, tion, no structural change is observable in the resulting in ongoing degradation of vegetation main activities of the sub-sectors of plant produc- cover and soils, and depletion of water resources. tion, livestock, and forestry. Annual crops mainly consist of cereals (sorghum, millet, corn), along Agriculture is mainly household-oriented, with legumes (cowpea), oilseeds (sesame, pea- ­ conducted on a small scale, with a lesser focus nuts), and cotton, which holds a significant position on trade, relying heavily on rainfall. In recent in the crop composition. Livestock, which accounts years, there has been a notable shift in the labor for around 40% of the agricultural added value, is force, particularly among men, moving away from characterized by beef and small ruminant produc- agricultural activities towards mining. As a result, ­ tion, as well as dairy and poultry products. The women have assumed a greater role in agricultural forestry sector contributes to the GDP through decision-making, while the agricultural sector faces firewood production (5.3%), the sale of raw and an ever-increasing labor shortage. Concurrently, processed non-timber forest products (NTFP) the sector is grappling with the challenges posed (3.9%), and sectors like hunting, tourism, and other by climate change, including rising temperatures areas related to biodiversity conservation (0.5%). and variable rainfall patterns, which amplify the uncertainties faced by agriculture that is With an annual population growth rate close to predominantly dependent on rain. 3%, the national population of over 20 million inhabitants (2020) is expected to reach nearly However, in this subsistence-focused agriculture, 42 million inhabitants by 2043 with a significant there has been an increase in public initiatives. portion expected to remain in rural areas. This is These initiatives are aimed at fostering the rise of closely linked to an agricultural production base that remains largely extensive. In other words, it is 4 Calculation based on data from DGESS/MARAH INTRODUCTION 1 easing agricultural entrepreneurs, especially by ­ as a framework for public initiatives supporting the access to financing, developing agricultural agro-sylvo-pastoral and fisheries sectors. value chains, and encouraging private irrigation initiatives. In addition to the traditional analysis of the efficiency of expenditure allocation, the ­ It is in this context that the World Bank is under- effectiveness of budget execution, and the taking this third review of Public Expenditures on mechanisms of coordination, monitoring/evaluation, ­ Agriculture to assist the Government of Burkina and accountability in the sector, this review Faso in making informed public investments, and will examine the impact of public expenditures to guarantee efficiency, effectiveness and equity through four specific analyses: (i) the subsidies in public expenditures on agriculture. This review for agricultural inputs; (ii) investments in hydro- will cover the period 2016–2021, which generally agricultural facilities and irrigation; (iii) agricultural corresponds to the second phase of the National financing; and finally (iv) public spending on forestry Program on the Rural Sector. This program serves and natural resources. 2 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Methodological Aspects The Public Expenditures on Agriculture (PEA) natural resources that impact agriculture. In line assessed in this review were selected in accor- with the AU guidance, the accounting of these dance with the methodological guidelines of the expenditures is based on the proportion allocated ­ African Union and NEPAD for monitoring PEA in for agriculture. Additionally, an estimation has Africa. The methodology proposed to countries is been conducted for each expenditure type to an augmented version of the Classification of the determine the share specifically directed to the Functions of Government (COFOG) nomenclature agricultural sector. As part of this analysis, some of by the International Monetary Fund, as set out in the transfers to local governments for the imple- the African Union guidelines for the monitoring mentation of the water and sanitation sector policy and evaluation of the amount and quality of Public have also been included in the calculation. Expenditures on Agriculture (AU/NEPAD, 2015). However, non-agricultural expenditures incurred In line with these guidelines, agricultural expendi- by the Ministries in charge of Agriculture are tures incurred by non-agricultural sector ministries not included in the calculation. These include have been accounted for. This includes expen- expenditures allocated for sanitation, for drinking ditures on agricultural research managed by the water in urban areas, and for the improvement Ministry of Higher Education, Scientific Research, of the quality of life in urban settings. Similarly, and Innovation; agricultural expenditures incurred investments in social infrastructures (education by the Bagré growth pole project executed under and health), and other activities not related the auspices of the Prime Minister Cabinet; as well to agriculture, carried out by integrated rural as expenditures to support the cotton, sesame, development projects, such as the National Land shea, cashew, and corn sectors, which fall under Management Program, have been excluded. activities for economic transformation and job creation managed by the Ministry in charge of Regarding data sources, data on domestic Commerce and Industry. resources spent on agriculture were collected from the Directorate General of Budget, using its Furthermore, the applied “COFOG plus” methodol- Computerized Expenditure Circuit (CEC). Data ogy augments direct agricultural expenditures with on external resources were obtained from the some non-agricultural expenditures that indirectly Directorate of Coordination and Evaluation of benefit the agricultural sector. These include Public Investments, a branch of the Directorate investments in village water supply systems, General of the Economy and Planning (DGEP), in the infrastructure for storing and preserving which monitors all public investments, including agricultural produce, in rural roads, in land tenure those funded by external sources. The security in rural areas, and in the management of Directorates General of Sectoral Studies and METHODOLOGICAL ASPECTS 3 Statistics were also consulted for certain projects This method of data aggregation has allowed when budget execution data were not available. for a more comprehensive view of the total Finally, data on off-budget expenditures, directly expenditure in the agricultural sector compared to incurred in the field by some donors, were the BOOST database, which does not adequately sourced from the aid management platform of the capture expenditures financed by external Directorate General of Cooperation (DGCOOP). sources. 4 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW C H A P TE R 1 Political, Institutional, and Socio-Economic Context Given its crucial role in Burkina Faso’s economy limited women farmers’ access to land and capital. and importance in achieving food and nutritional However, assisting farmers in capitalizing on security objectives, the agricultural sector has value chain enhancement and risk management always been at the center of national policies. strategies, ensuring public support for investment The sector is considered a priority sector in the in irrigation and the availability of formal insur- National Economic and Social Development Plan ance products, still face challenges in achieving (PNDES). PNDES has targeted a growth rate of progress. 5.3% for the agricultural sector and an objective to increase agricultural productivity by 50% by 2020. Since the 1990 liberalization, the agricultural The intent behind these targets is to increase the sector has witnessed a proliferation of guiding pol- ­ supply of agricultural products for trade to meet icies that have addressed several sector-related the needs of the agri-food industry. issues. However, there has been poor synergy amongst these policies and their implementation At the sectoral level, the Government continues sometimes fell short. Initiated in the early 2010s to focus on accelerating improvements across within the scope of implementation of ECOWAP/ various levels. This includes enhancing the liveli- PDDAA and the Strategy for Accelerated Growth hoods of farming households, boosting produc- and Sustainable Development, the first National tivity and income in the agricultural sector and Program for the Rural Sector (PNSR) was revised ensuring national food security and contributions and adopted in 2018. This program stands as the to the GDP. To achieve these objectives, the focus benchmark for rural sector interventions for the has been placed on increasing and stabilizing period 2016–2020. Drawing upon the principles of food production, as well as ensuring competitive the Rural Development Strategy (SDR), the PNSR exports. Policy initiatives and public expenditures integrated various policies and action plans. It also are aimed at improving the financial inclusion of addressed deficiencies observed in programs by rural populations, broadening access to markets, focusing on important aspects such as water and and improving the price of agricultural inputs. They sanitation, access to credit, research and sector also address the labor shortage in the agricultural development, and agricultural entrepreneurship, sector, promote mechanization to alleviate the as well as climate change and the resilience of physical demands of farming, and address other agricultural households. gender-based challenges that have traditionally POLITICAL, INSTITUTIONAL, AND SOCIO-ECONOMIC CONTEXT 5 The implementation of PNSR II was supported standing at 50.7% against 40.1% in 2014 (EMC by the adoption of Law No. 017-2018/AN in 2018. 2014) and extreme poverty at 8.2% in 2018. These This law serves as a framework for promoting social indicators may further deteriorate due to private investment in the agricultural sector. the escalating security conditions, resulting in the Drawing upon the sectoral policy for interventions displacement of 1.7 million individuals and the loss in the agricultural and rural sector for the period of more than 400,000 hectares of arable land. 2021–2025, the Agro-Silvo-Pastoral Investment (PNIASP), part of the National Program for Agro-Silvo-Pastoral Production (PS-PASP) was A COMPLEX AND UNSTABLE developped. The three expected outcomes of INSTITUTIONAL FRAMEWORK PNIASP are as follows: (i) increased productivity in PASP sector; (ii) improved living standards for At the institutional level, public support to the rural communities; and (iii) enhanced food and agricultural sector was managed by four ministe- nutritional security. To achieve these milestones, rial departments between 2016 and 2021: The PNIASP’s strategies are structured around the Ministry of Agriculture, Hydraulic Developments, following four pillars (with a total budget of and Mechanization5 (MAAHM), the Ministry of 1,571 billion CFA Francs): (i) sustainable productivity Animal Resources and Fisheries (MRAH), the and production in the PASP sector (60%); Ministry of Environment, Green Economy, and (ii) fostering competitiveness in agro-silvo-pastoral, Climate Change (MEEVCC), and the Ministry of fisheries, and wildlife sectors (7%); (iii) sustainable Water and Sanitation (MEA). It is worth mention- management of natural resources (32%); and ing that MAAHM and MEA initially operated as a (iv) governance of the PASP sector (1%). single entity. They were separated in 2013, then merged again during the political transition of THE MACROECONOMIC AND SOCIAL 2015, only to be separated again in 2016. The purpose behind separating the “water and sanita- CONTEXT WAS SUPPORTIVE BUT tion” component from the agriculture ministry RECENTLY DETERIORATED was to streamline its responsibilities to effectively address challenges related to potable water and The period between 2016 and 2019 witnessed a sanitation. robust economic growth but 2020 brought about a decline, largely attributed to ongoing terrorist In the wake of the transitional government in attacks to the COVID-19 pandemic. Indeed, March 2022, the Ministry in charge of Agriculture between 2016 and 2019, the Gross Domestic and the Ministry in charge of Livestock were Product (GDP) registered an average growth of merged to become the Ministry of Agriculture, 6.2%, before dropping to 1.9% in 2020 (PNDES-II, Animal Resources, and Fisheries. Also, the Ministry 2021). While the estimated growth in 2021 was of Water and Sanitation was unified with the of 6.9% due to the strong performance of the Ministry of the Environment. secondary (8.2%) and tertiary (12.6%) sectors, the agricultural sector registered a drop of 6.4%. This Each of the two Ministries of Rural Development decrease in agricultural yield in 2021, coupled (MDR) comprises a variety of central departments, with a global scenario of escalating energy and which include affiliated entities and decentral- food prices, led to unprecedented inflation in ized services. This decentralization aligns with Burkina Faso. The inflation rate surged to 18.1% in the country’s administrative subdivisions. Thus, August 2022, in comparison to August 2021. At each ministry, at the decentralized level, includes the social level, poverty remains a concern, and 13 regional directorates, 45 provincial directorates, was estimated at 41.4% in an harmonized survey and a number of departmental and village services on households living conditions conducted in 2018. The same survey indicated food poverty 5 The importance of mechanization was emphasized in 2019. 6 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW depending on the specific ministry. Aside from the the Ministry for Scientific Research. This surge in resources delegated to local communities by the budget programs creates challenges in terms of Ministry of Water as part of the sectoral policy on coordination, capitalization, and rationalization water and sanitation, the decentralization of public of public initiatives in support of the agricultural initiatives for the agricultural sector has not yet sector. been achieved. The cotton ­ sector and development of other A BUDGETARY FRAMEWORK export-oriented sectors like sesame, shea, CHARACTERIZED BY A PARTIAL cashew, and mango falls under the responsibility of the Ministry of Trade and Industry. Agricultural IMPLEMENTATION OF THE PROGRAM research is attached to the Ministry of Higher BUDGETING Education, Scientific Research, and Innovation. Furthermore, depending on the year, rural sector The reforms undertaken in 2011, with the support initiatives are sometimes integrated into transition from the Public Finance Strengthening projects falling under the responsibility of other Strategy (PFSS) to the Economic and Financial ministries (Prime Minister’s Office, Ministry of Sectoral Policy (EFSP) have yielded significant Economy, Finance and Development, Ministry improvements in budget execution. A notable for Women’s Promotion, Ministry for Youth and change was the adoption of the Program Employment, etc.). Budgeting, introduced by Directive 2009 No. 06/2009/CM/UEMOA of the West African The Program Budgeting adopted in 2017 has Economic and Monetary Union (UEMOA) and its been implemented at the MDR level l with implementation since 2017. This shift transitioned seventeen operational budget programs, and the focus from resource-based budgeting to four additional steering and support programs. outcome-based budgeting. This reform aims at Additionally, two budget programs for agricultural improving the efficiency of public expenditure research, are placed under the responsibility of by focusing on outcomes. To this end, particular POLITICAL, INSTITUTIONAL, AND SOCIO-ECONOMIC CONTEXT 7 attention is directed to optimizing investments in framework (MTEF), i.e. a three-year projection the State’s resource allocation process. that sets spending limits based on three potential scenarios: pessimistic, baseline and optimistic. The However, the implementation of the Program MTEF, set up during the first four months of the Budgeting is partial, characterized by centralized year, is derived from a macroeconomic framework planning and budget execution. Moreover, the cur- using tools such as the Automated Forecasting rent multifaceted projects further complicate the Instrument (API) and the Revenue Forecasting management of budgetary programs. Moreover, Model (RFM). Subsequently, a budget circular Commitment Authorizations (CAs), a significant prepared by the Ministry of Economy and Finance innovation of the PPB that enable the State and its and endorsed by the Council of Ministers, is sent partners to make a single commitment in a fiscal to sectoral ministries. This circular sets out the year for a multi-year investment project, are not priorities and strategic choices for the upcoming respected due to budgetary constraints and poor year as defined by the Government, as well as the cost control of certain investments. spending limits informed from the MTEF. Furthermore, the Program Budgeting used across The sectoral ministries subsequently draft their the MDRs includes seventeen operational budget preliminary three-year rolling program ­budgets. schemes and four steering and support pro- These drafts undergo an internal review in grams, as well as two budget programs focused close collaboration with the Ministry of Finance. on agricultural research overseen by the Ministry Following this review, the preliminary proposals for Scientific Research. This extensive array of are consolidated and submitted to the Council of budgetary programs poses challenges in terms Ministers for approval. In the budget process final of coordination, capitalization, and rationalization phase, the National Assembly (NA) grants final of public initiatives in support of the agricultural approval. The Program Budgeting draft is submit- sector. ted to Parliament within the constitutional time- lines, at the opening of its second regular session The budget preparation process consists of in September. After the deliberations, the National three distinct phases. The first phase involves Assembly ratifies the budget. the drafting of the medium-term expenditure 8 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW C H A P TE R 2 Level of Public Expenditures on Agriculture Evolution of Budgetary FIGURE 1: Evolution of Budget Forecasts (in billions of CFA Francs) for Ministries in Charge Allocations for the of Agriculture Agricultural Sector 400 350 300 Public resources allocated to Ministries in charge 250 of Agriculture (MAAHM6, MRAH7, MEEVCC8, and 200 MEA9) increased from 136 billion CFA Francs in 150 2010 to 219 billion CFA Francs in 2015, then 100 dropped to 203 billion in 2016. These budgetary 50 allocations witnessed a 62% and 9% increase in 0 2017 and 2018, reaching 330 and 360 billion CFA 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Francs respectively. In 2019, these allocations Source: The authors based on data from DGB/MINEFID registered a drop of 35% to stand at 235 billion CFA Francs. A modest increase was observed in the allocations in 2020–2021, standing at and 2020, financing shortfalls resulting from 250 ­billion CFA Francs. these domestic resources budgetary adjustments This trend in budget plans can be attributed to totaled 180 ­billion CFA Francs, including 168 billion projections linked to domestic resources. As CFA Francs in 2017 and 2018 alone. Starting from shown in Figure 2 below, downward budgetary 2016, the strong political commitment by the newly adjustments based on domestic resources for elected officials towards the rural sector quickly the Ministries in charge of Agriculture stood at lost momentum due to an escalating security cri- −26% in 2017 and −40% in 2018. Between 2016 sis. As a result, State resources were reallocated to the defense and security sector. 6 Ministry of Agriculture, Hydro-agricultural Development and The most significant budgetary adjustments were Mechanization (MAAHM). 7 Ministry of Animal Resources and Fisheries observed at the Ministry of Animal Resources and 8 Ministry of the Environment, Green Economy and Climate Change Fisheries (−35%) and at the Ministry of Agriculture 9 Ministry of Water and Sanitation (−25%). The budgetary adjustment rate for the LEVEL OF PUBLIC EXPENDITURES ON AGRICULTURE 9 FIGURE 2: Changes in Budget Forecasts for Internal Resources (in billions of CFA Francs) 300 250 200 150 100 50 0 2016 2017 2018 2019 2020 2021 Initial allocations Revised allocations Source: The authors based on data from the DGB/MINEFID Ministry of Water and Sanitation was at −12%, However, Public Expenditures on Agriculture (PEA) below the average (−16%), while the Ministry of the have decreased in both nominal terms and real Environment budgetary adjustment was at −8%. terms by −4.7% and −4.2% respectively in 2021. This drop is attributable to the concurrent decline in both external and internal resources designated Trend in Public Expenditures to the sector (Figure 3). on Agriculture This contraction in agriculture public expenditures in 2021 led to a significant fall in the provision Total Public Expenditures on Agriculture (PEA) was of agricultural and animal inputs and equipment estimated by using the methodological guidelines (−48%), and to a sharp drop in investments in laid down by the African Union and NEPAD for animal value chains (−82%). Moreover, productive monitoring PEA in Africa (refer to the appendix for investments in structurally deficient areas by some the methodology used). Off-budget expenditures development aid partners have been redirected were not included in this estimation due to a lack towards the humanitarian sector due to the state of comprehensive data. of insecurity in these areas. The decrease in the State support to the agricultural sector, coupled Total Public Expenditures on Agriculture (PEA) of with poor rainfall in 2021, led to a 10% decrease in all ministries in charge of Agricultural Development cereal production between 2020 and 2021. and of other ministries executing PEA, reached 1,065 billion CFA Francs over the five-year imple- This downward trend in public agricultural mentation period of PNSR II, specifically between investments could potentially deteriorate with the 2016 and 2020, with an annual average of 213 bil- worsening of the security conditions, leading to lion CFA Francs. Compared to the period of the first loss of human lives, displacement of populations, PNSR (2011–2015), this shows an annual increase abandonment of production means, destruction of 17% in nominal value and 13% in real terms. of production and processing infrastructure, preventing marketing of agricultural products. Thus, despite the unfavorable security conditions The inaccessibility of certain designated areas for and the increasing budgetary constraints, public agricultural development projects, the budgetary support to agriculture is clearly on the rise. strains due to the significant security sector 10 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 3: Evolution of Public expenditures on agriculture in nominal value and real terms 300 250 200 150 100 50 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Agricultural expenditure in nominal value Agricultural expenditure in real terms (2010 prices) Source: Authors using data from the DGB, the DGEP, and the DGESS needs and the decline in tax revenues due Sources and Methods for to the economic crisis will have an adverse effect on the execution of agricultural securing External Financing investments. for Agriculture It is essential to implement mitigation measures An analysis segmented by funding sources reveals given the deterioration of the security situation. that the State is the main contributor, with its Formulating strategies to ensure access to contribution averaging 63% over the 2016–2020 and monitor agricultural production areas, period, an increase from 41% in 2011–2015. This while fostering stronger collaboration between reveals a strong political will towards support- stakeholders agricultural and security forces ing the agricultural sector despite the economic is crucial. Moreover, efforts should be directed conditions. Public Expenditure on Agriculture (PEA) towards increasing initiatives that facilitate the reached an unprecedented level of 184 billion CFA integration of the displaced population into host Francs in 2017, then fell to 155 billion in 2018, and communities, to encourage their return to their to 116 billion in both 2019 and 2020. It reached villages, and support their recovery. To this end, 113 billion CFA Francs in 2021, representing a 3% agricultural sector initiatives should be geared decrease relative to 2020 (Figure 4). towards providing the displaced population access to agricultural lands and inputs. Employing The annual average aid to the agricultural sector local Non-Governmental Organizations for the amounted to 75 billion CFA Francs, except in 2018 implementation of agricultural development when it rose to around 100 billion CFA Francs. The projects in areas facing high security challenges modest donors contributions may be attributed to would contribute to ensuring the continuity of difficulties in monitoring the budget execution of public initiatives in these areas. projects and to the significant level of off-budget aid. LEVEL OF PUBLIC EXPENDITURES ON AGRICULTURE 11 FIGURE 4: Evolution of Public Expenditures on Agriculture by Funding Sources (in billions of CFA Francs) 200 180 160 140 120 100 80 60 40 20 0 2016 2017 2018 2019 2020 2021 Average Average 2016–20 2011–15 State Donors Source: The authors using data from the DGB, DGEP, and DGESS FIGURE 5: Method of Financing Aid to the Agricultural Sector 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2016 2017 2018 2019 2020 2021 2016–20 GRANT LOAN Source: The authors using data from DGB, DGEP, and DGESS 12 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW External funding for agriculture relies primarily on Status of Maputo10 grants, which constitute 66% of the Public Development Aid (PDA) over the 2016–2020 Commitment period (Figure 5). The share of grants during the 2016 to 2018 period ranged between 72 and 76% Implementation and before witnessing a drop to 53 and 51% in 2019 and 2020, respectively. In numerical terms, grants International Comparison decreased from 75 billion CFA Francs in 2018 to The commitment of African leaders in Maputo in billion in 2019 and further to 38 billion in 2020. 41 ­ 2003 to allocate at least 10% of public resources Conversely, loans increased during the same to the agricultural sector, reconfirmed in Malabo period, rising from 24 billion in 2018 to an average in 2014, is one of the key commitments of of 36 billion over 2019–2020, prior to a decline to African countries for the implementation of the 26 billion CFA Francs in 2021. Comprehensive Africa Agriculture Development Program (CAADP). The analysis segmented by funding sources reveals that over the 2016–-2020 period, out of Burkina Faso reached this commitment level only the identified thirty-five donors, seven have in 2017 (Figure 7), where agriculture constituted contributed to more than 75% of the Public Aid for 13.7% of the total public expenditure. However, Development directed towards the agricultural the lowest levels of allocation to agriculture were sector (Figure 6). The leading donors in agricul- registered in 2016 and 2020, with 8.1% and 8.6% tural aid, ranked by their contribution share are the respectively. The average share of agriculture in World Bank with a share of 29.3%, followed by the total public expenditure decreased from 11.5% in Islamic Development Bank (9.5%), the International the 2011–2015 period to 9.8% in the 2016–2020 Fund for Agricultural Development (8.5%), period. Thus, despite the increase in public the Danish cooperation (8.3%), the African resources allocated to agriculture, this increase Development Bank (8.2%), the West African has been less significant than the overall surge in Development Bank (7.2%), and the public expenditure. French Development Agency (4.7%). The average investment of 12.8% of the agricultural added value over the 2016–2020 FIGURE 6: Sources of Financing Aid to the period, positions Burkina Faso as one of the Agricultural Sector for the 2016–2020 period leading supporters of agriculture in the Sub- Saharan African region. As illustrated in Table 3 24.3% below, the level of public support for agriculture in 29.26% Burkina Faso, when measured as a percentage of agricultural GDP, is similar to emerging countries such as Ukraine, Turkey, and Russia and surpasses others like China and Brazil. 4.70% 7.21% 9.52% 8.19% 8.50% 8.28% 10 The data used to evaluate compliance with the Maputo commitment comes from the third biennial review report for the Malabo World Bank BID FIDA DANIDA Declaration, since the budgetary data collected in this PER BAD BOAD AFD Other review are very incomplete regarding the total amount of public aid, although essential to achieve a better estimation of public Source: The authors using data from DGB, DGEP, and DGESS expenditures. LEVEL OF PUBLIC EXPENDITURES ON AGRICULTURE 13 FIGURE 7: Share of Agriculture in Total Public Expenditure 16.0% 14.0% 13.7% 12.0% 10.0% 9.4% 9.5% 8.6% 8.1% 8.0% 6.0% 4.0% 2.0% 0.0% 2016 2017 2018 2019 2020 Source: The authors, using data from the third biennial report TABLE 3: International Comparison of Budgetary Transfers to the Agricultural Sector Share of agriculture Share of agriculture Share of agriculture Region/Country in GDP in GDP in GDP High-income countries Canada 2.3% 0.5% 22% (2002–2011) UE 2.3% 0.7% 28% USA 1.6% 0.7% 46% Middle-income countries Turkey 13.0% 2.0% 15% (2002–2011) Mexico 4.0% 0.7% 18% China 15.0% 1.2% 8% Brazil 9.3% 0.7% 8% Russia 6.0% 1.0% 16% Ukraine 11.6% 1.3% 11% Low-income countries Mali 37% 2.6% 6.7% Burkina Faso  26.7% 3.4% 12.8% Uganda 32% 1.5% 5% Tanzania 45% 1.2% 3% Ethiopia 44% 2.7% 6% Kenya 29% 1.3% 4% Senegal 15% 2.1% 12.7% Togo 20% 1.7% 7.3% Source: World Bank and calculations by the authors, based on databases from DGB/MINEFID and the Regional System for Strategic Analysis and Knowledge Management. 14 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW C H A P TE R 3 Efficiency of Agriculture Allocations Analysis of Public budgets, it appears that between 2017 and 2020, around 15%11 of the expenses earmarked for agri- Expenditures on Agriculture cultural sector investments are in reality, operating expenses related to these investments. This ratio According to their Economic is true for both nationally funded projects and Nature those funded by external sources. Therefore, Up to 70%12 of the PEA (Figure 8) is According to the State’s budgetary classification, effectively directed towards farmers. This could during the 2016–2020 period, an average of 82% of be seen as an efficient use of public resources. the Publix Expenditures on Agriculture (PEA) were However, there are significant concerns regarding directed towards investments, while 12% of the PEA the reliability of these estimates. This unreliability were allocated to personnel expenditures, 5% of stems from the difficulty in accurately assessing the allocations were directed towards the transfer operating expenses due to the lack of detailed of resources to autonomous public institutions and financial data. The annual current expenses other services, and 1% to operating expenses. reported amount to 64 billion CFA Francs, which is substantially higher than the budgeted amount The allocation of a significant portion of the PEA of 38 billion CFA Francs as per the budgetary towards investments reflects an efficient allocation nomenclature. This significant difference in of the PEA. However, it is important to note a expenses is attributed to the mismanagement or discrepancy between the State’s accounting mischaracterization of financial items. Specifically, expense classification and the analytical it points to routine operating costs being classification. The State accounting expense incorrectly labeled as project costs. classification categorizes all public projects under a general investment category (Title 5), while the analytical classification distinguishes between productive agricultural investments and administrative costs linked to the management 11 The reliability of this estimation depends on the system used of the units responsible for these projects’ for budgetary classification. However, it cannot be guaranteed for project aid which is executed outside of the Computerized implementation. Expenditure Circuit (CEC) and partially captured by the External Funding Computerized Circuit (EFCC) 12 These 70% (0.82x0.85x100) are the product of the share of Based on the detailed economic classifica- investments in the PEA (82%) and the adjustment of this share by tion (article, paragraph, and section) of program deducting hidden operating costs (100−15=85%). EFFICIENCY OF AGRICULTURE ALLOCATIONS 15 FIGURE 8: Breakdown of Public Expenditures on Agriculture by Economic Use 120% 100% 80% 60% 40% 20% 35% 34% 28% 33% 30% 20% 0% 2016 2017 2018 2019 2020 2016–2020 Current expenses Investments Source: The authors using data from the DGB, DGEP, and DGESS Functional Analysis of Public 10.8 billion CFA Francs respectively, representing 5.8% and 5.1% of the PEA. Expenditures on Agriculture Expenditures dedicated to the livestock and The functional classification of public fishing sector (including the development of expenditures on agriculture (PEA) shows a animal industries, sustainable management of significant investment in hydro-agricultural pastoral resources, enhancement of fishery facilities (HAF) and in irrigation, which and aquaculture production, animal health, and constituted 40.3% of the total PEA over the veterinary services) amounted to 18.2 billion CFA 2016–2020 period. This represents an average Francs per year, or 8.2% of the PEA, even though annual expenditure of 86 billion CFA Francs. livestock and fishery contributed to 31% of the Expenditures allocated to the administrative agricultural value added. This underinvestment in overheads for the sector and to the prevention public support to animal sectors remains an issue and management of food crises, accounted despite their important potential. for 10.5% and 9.5% of the PEA respectively, summing up to 22.5 and 20.2 billion CFA Francs The allocation of investments has undergone a per year. Around 17.4 billion CFA Francs per year significant re-prioritization across various were earmarked for fostering entrepreneurship functions, diverging from the strategies outlined in and enhancing agricultural value chains, the first National Strategy for Rural Sector for the representing up to 8.2% of the PEA. The annual period 2011-2015. While the annual average of expenditure dedicated to agricultural inputs PEA increased by 17.2% between 2011–2015 and equipment was estimated at 15 billion CFA and 2016–2020, the expenditures dedicated to Francs, or 7% of the PEA. The annual expenditure HAF and the irrigation sector surged by nearly for the management of natural resources, land half (47%), rising from 58 to 86 billion CFA security, and rural organization stood at 12.4 and Francs between the two periods. 16 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 9: Functional Breakdown of Public Expenditure on Agriculture over the 2016–2020 period 0.2% Hydro-agricultural facilities and irrigation 3.2% 0.2% Sector administration 4.3% 4.7% Prevention and management of food and nutritional crises Entrepreneurship and development of agricultural 5.1% value chains 40.3% Agricultural inputs and equipment 5.8% Sustainable management of natural resources Land security and organization of the rural population 7.3% Rural pathways Development of animal sectors Securing resources and sustainable management of 8.2% pastoral resources Development of fisheries and aquaculture production 9.5% 10.5% Animal health and veterinary advisory services Source: The authors using data from DGB, DGEP, and DGESS This reflects a strong focus on irrigation due to the expense of the funds previously allocated for agri- increasingly recurrent effects of climate change cultural inputs and equipment, which saw a sub- (Figure 9). The expenditures for fostering stantial decrease of 63%. This decrease is evident entrepreneurship and enhancing agricultural value when comparing the annual average expenditure, chains also witnessed an increase, rising from which dropped from 42 billion CFA Francs in the 13 to 17.4 billion CFA Francs annually. The livestock 2011–2015 period to just 15 billion CFA Francs in sectors have also benefited from an increase in the 2016–2020 period. However, this shift requires expenditures, particularly for securing and a nuanced understanding, as irrigation develop- sustainably managing pastoral resources. In fact, ment projects, which have seen increased funding, the average annual expenditures have increased also encompass expenditures for the purchase of more than twelvefold, from 0.5 to 6.8 billion inputs and equipment necessary for the develop- CFA Francs, as a result of the investments made ment of managed areas. by the National Land Management Program 2 and 3, as well as the Regional Project for Pastoralism The extension services and advisory support, and Support in the Sahel. agricultural research, which are crucial for enhanc- ing agricultural productivity, will be discussed in Although there has been a notable increase in Box 1 below. overall agricultural expenditure, it has come at the EFFICIENCY OF AGRICULTURE ALLOCATIONS 17 BOX 1: Agricultural Extension and Advisory Support  Review of Agricultural Extension and Advisory Support Policies Agricultural Extension and Advisory Services (AEAS) are essential for advancing agriculture. They offer advisory support to various value chain actors, helping to increase farm productivity and income. Initially, AEAS were exclusively provided by State services, employing top-down approaches such as large-scale Training and Visiting. However, new stakeholders (e.g. NGOs, projects, associations, consulting firms) emerged in the 1990s, following the adoption of the Agricultural Sector Adjustment Program (ASAP), which implemented various structural and economic reforms aimed at reducing State interference in competitive arenas. These reforms led to the reorganization of agricultural services and impacted both the organizational framework and content of agricultural extension services. The National Agricultural Extension System (NAES) was adopted and was mainly funded by the Project for Strengthening Agricultural Producers and the NAES. The NAES was designed to assimilate both mass extension methodologies and the individualized to technology transfer approaches. However, the end of the National Development Program for the Agricultural Sector (PNDSA) posed significant challenges in terms of human resources and equipment necessary for the effective implementation of the NAES structure, as these needs were incompatible with the expenditure rationalization under the Agricultural Sector Adjustment Program (ASAP). The Agricultural Extension and Advisory Services National System (NAEAS) was adopted in 2010 to address the shortcomings of the NAES. The guiding principle of NAEAS relies on the empowering of non-State actors (such as Producer Organizations, NGOs, associations, consulting firms, techni- cal and financial partners). The NAEAS is based on the following principles: (i) incorporating local expertise into the agricultural information system; (ii) empowering stakeholders; (iii) contracting agricultural services; (iv) strengthening the link between research and development; (v) addressing gender issues; (vi) recognizing regional specificities; and (vii) refocusing the role of the State on its core functions. The NAEAS were implemented by the Extension and Advisory Services National Program (EASNP) from 2010 to 2020. Insufficient Funding for Extension and Advisory Support The Extension and Advisory Services National Program (EASNP) experienced significant under- performance in terms of financial execution during the 2016–2020 period. While the forecasted expenditure for the EASNP was 10 billion CFA Francs for this period, the actual expenditure amounted to only 2.95 billion CFA Francs. This represents a mere 30% execution rate of the planned budget. The shortfall in expenditure reflects a lower prioritization given to Agricultural Extension and Advisory Services (AEAS) by the Ministry in charge of Agriculture. This diminished focus became particularly evident during budget amendments. This insufficient public support for the AEAS, coupled with delayed fund disbursements, hampered the efficiency of the Directorate of Extension and Research Development. At the local level, challenges were encountered in coordi- nating AEAS-related actions and in training agents. However, the deficiency in State support for the AEAS has been somewhat compensated for by the assistance of technical and financial partners (FAO, AGRA, etc.) who support the AEAS through projects and programs funded by external resources, and non-governmental organizations. Despite 18 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW this external support, there is a challenge in accurately quantifying these resources. This difficulty arises from the absence of detailed analytical activity reports that provide insight into the support extended by these partners. Finally, it is worth mentioning that expenditures allocated specifically for extension services are often underestimated. This underestimation is due to the cross-cutting nature of AEAS, as it plays a vital role in most initiatives aimed at supporting the rural sector. EASNP Achievements and Shortcomings The main achievements of the Agricultural Extension and Advisory Services National System, 2021 (EASNP) include: (i) the establishment of a centralized coordinating and managing structure for agricultural extension, specifically through the Directorate of Extension and Development; (ii) the emergence of private sector providers (consulting firms, NGOs) and the establishment of a directory of non-State providers; (iii) the development of platforms that bring together various stakeholders; (iv) the design and testing of a new approach, known as demand-driven advisory support; (v) the dissemination of new technology packages aimed at enhancing production and mitigating the effects of climate change; and (vi) the provision of digital services for the distribution of inputs and provision of advice to farmers through platforms such as Agri-Voucher, agritube, and online extension services. Shortcomings: 1. The EASNP neglected the emergence of new stakeholders in the agricultural sector, namely agricultural entrepreneurs, professional associations, and overarching organizations. Moreover, it failed to anticipate the gradual specialization of agricultural production, and the processing of agricultural products. 2. The insufficient allocation of resources hindered the planned contracting of agricultural extension and advisory services. 3. The inadequate resources earmarked for implementing the management advisory approach for agricultural operations and Farmer Field Schools, coupled with the limited participation of producers in the development of these tools led to an insufficient adoption of the recommended techniques and technologies. 4. Establishing linkage between research, extension, and producers faced challenges. During the implementation phase of EASNP, the envisioned consultative frameworks intended to foster a robust interaction between researchers, extension service providers, and agricultural produc- ers were not effectively operationalized. Moreover, the establishment of centers dedicated to experimentation and technological innovation was hindered by a lack of financial resources. Moreover, some research institutes included the extension service in their activities without using the AEAS services, as a result of the structure of their externally funded projects. This scenario disrupted the research-dissemination mechanism. This disruption led to challenges in effectively assimilating and promoting new technologies among the agricultural community. 5. The monitoring, coordination, and capitalization of AEAS activities have not been adequately carried out by both decentralized and centralized services due to the limited allocated resources and delayed disbursement of these resources. This situation has been exacerbated by certain NGOs practices, which involved employing State AEAS agents as service providers. However, these arrangements were often made without formalizing a collaboration protocol with the relevant AEAS services. EFFICIENCY OF AGRICULTURE ALLOCATIONS 19 6. Limited access to agricultural extension and advisory services. An analysis of the extension and advisory system, based on data from the 2018/2019 continuous agricultural survey, provides significant insights into the reach and distribution of agricultural advice among producers: out of a total of 5,200,000 estimated producers at the time of the survey, 744,000 producers, or only 14.3%, received agricultural advice support. The Southwest benefited the most of the support with 27.3%, followed by the Cascades (24.6%), Sahel (22.7%), East (20.7%), and Hauts-Bassins (19.4%) (Figure 10). It is worth noting that the governmental infrastructure played the most significant role in providing advisory services, catering to 40.7% of the beneficiaries. It is followed by NGOs and projects (28.7%) and cotton companies (24.1%). Advisory support is primarily provided by cotton companies in the cotton production areas (Boucle du Mouhoun, the Cascades, and Hauts-Bassins). The advisory support system is dominated by NGOs and projects in the Centre Nord region (63.7%). The governmental infrastructure remained the primary source of advisory support in the remaining regions (Centre (98.5%), Centre-East (55.4%), Centre-West (59.8%), Centre-South (58.5%), North (67.1%), and Plateau-Central (56.4%)). FIGURE 10: Rate of Support to Agricultural Producers 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% t lls p l st s er th t l l t l he ra tra ra es es as in o Ea or nt fa nt nt lo ss l-E W w Sa en er Ce N Ce Ce id a un ra h -C at -B M ut h- nt ho u W th ts So ea ut Ce or au ou So at N H M Pl Source: The authors, using data from the 2018/2019 continuous agricultural survey Guidelines for Enhancing advisory support services amid fiscal constraints and insecurity The short-term budget outlook for agricultural initiatives appears challenging due to the prevail- ing security and political situation. The innovative national projects launched by the Ministry of Agriculture in 2021 have shifted focus away from personnel recycling and training activities, which are essential for effective Value Chain Analysis in AEAS. Given the limited resources for maintaining and increasing current staff, there is a need to reorient State efforts towards monitoring, coordination, capitalization, and regulation of initiatives launched 20 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW by private sector entities and externally funded projects and programs. Furthermore, the AEAS service is distributed across various operational technical directorates (DGPV, DGAHDI, DGAD, DGPER). Aligning AEAS more closely with the Minister of Agriculture’s office could potentially enhance coordination and capitalization. Moreover, in addition to the existing AEAS training programs, the development and promotion of new training programs aimed at experts, with more flexible entry requirements—akin the professional certification system overseen by the Ministry in charge of Youth—will facilitate the training of a larger pool of AEAS experts. These experts could be employed by consulting firms, professional agricultural organizations, and non-governmental organizations. This initiative not only may improve employment prospects for young people, but also prepare a generation of future agricultural entrepreneurs. In light of the security crisis, the risks associated to the mobility of AEAS agents call for the adop- tion of new approaches. In the short to medium term, especially insecurity-compromised regions, particularly in regions where insecurity is a major issue. It is advisable to leverage ICT solutions. Technologies such as service 321, micro-videos, and agritube can be effective tools for remotely delivering agricultural advice and information. Moreover, acknowledging and utilizing relay produc- ers as local experts can be a pivotal strategy. BOX 2: Agricultural Research A well-developed National Agricultural Research System, supported by significant investments and competent human resources, is essential for fostering agricultural growth, ensuring food security and reducing poverty. Persistent underinvestment could curtail long-term improvements in agricultural productivity. The Environment and Agricultural Research Institute (INERA) is the primary institution for agricultural research. Moreover, the Applied Science and Technology Research Institute (IRSAT) is committed to the development and dissemination of appropriate technologies in energy, mechanization, and food technologies. Both institutes operate under the umbrella of the National Center for Scientific and Technological Research (CNRST). The system also includes the University of Ouagadougou (UO) and other governmental agencies, such as the National Forest Seeds Center (CNSF), the National Bureau of Soils (Bureau National des Sols, BUNASOL), the National Laboratory for Livestock Systems, the Center for Multiplication of High- Performing Livestock (CMAP), and the Center for the Promotion of Village Poultry Production. Furthermore, two non-profits, the Association for the Promotion of Livestock in the Sahel and Savanna, and the Albert Schweitzer Ecological Center Association (CEAS), also contribute to agricultural R&D, though their involvement is more ad-hoc. Private sector research for profit remains limited, except for SOFITEX, which plays an important role in cotton research. EFFICIENCY OF AGRICULTURE ALLOCATIONS 21 State of Public Support for Agricultural Research The allocation of funds to agricultural research witnessed an increase, rising from 7.5 to 14.1 billion CFA Francs between 2016 and 2017, representing a growth of 88%. However, this upward trend was followed by a consistent decline to 7.5 billion CFA Francs in 2020. Government aid has remained relatively steady, standing roughly at 4 billion CFA Francs per year. However, the majority of this aid is earmarked for salary payments, while investments are primarily carried out by projects funded by external sources, ranging between 128 and 413 million CFA Francs over the 2016–2020 period. In comparison to the 2011–2015 period, the Government’s support to agricultural research has increased, averaging around 2.6 billion CFA Francs. This rise is attributed to the recruitment of researchers for INERA and to an increase in the salary scale to reduce wage disparities. Despite this performance, it appears that agricultural research still lacks adequate funding for its research activities and infrastructure, relying heavily on donors who typically finance small-scale, one-off projects (Figure 11). Since the completion of the PNDAS-II in 2004, which was executed with a loan from the World Bank, INERA has not received any public funds for the maintenance and modernization of its research laboratories and equipment. FIGURE 11: Total Expenditure Allocated to Agricultural Research by Type of Funding in billions of CFA Francs 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2016 2017 2018 2019 2020 State Donor Source : The authors using data from from DGESS/MERSI 22 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW To address the shortfall in budgetary funds dedicated to scientific research, the National Fund for Research and Innovation for Development (FONRID) was established in 2011 with a mandate to finance research and innovation and conduct evaluation and monitoring activities to improve the production systems. To fulfill its mandate, FONRID rolls out a plan to mobilize both domestic and foreign resources to sustainably support the sector, with competitive access conditions for funding. However, the funds allocated to this Fund remain limited, averaging 500 million CFA Francs during the 2017–2020 period. This limited funding is partly attributed to the challenges in complying with the supporting document nomenclature and the annual budgeting principle, which are not well- suited to the nature of research activities. Moreover, there is a lack of coordination and an inappropriate system for monitoring/evaluating research initiatives. For instance, development aid contributions are often directly disbursed to INERA’s various centers, bypassing the central office and the Finance Department. Channeling these external funds through FONRID or similar mechanisms could improve aid efficiency and ensure alignment of resource allocation with policy priorities in the research and innovation sector. Finally, the Government’s role should not be limited to the payment of salaries but should fund research programs, to avoid misaligned initiatives in the agricultural research agenda. The presence of the agricultural research institute within the Ministry of Higher Education, Scientific Research, and Innovation (MESRSI), coupled with the lack of consultation between the ministry in charge of Agriculture and MESRSI, results in an absence of synergy between exten- sion services and agricultural research. This misalignment prevents the agricultural research agenda from meeting the needs of the agro-pastoral and fisheries sector. Furthermore, it hinders the valorization of agricultural research results. To address these issues, it is suggested to estab- lish a permanent consultation framework involving, on one side the Environment and Agricultural Research Institute (INERA), the Applied Sciences and Technology Research Institute (IRSAT), and the National Agency for the Valorization of Research Results and Innovations, and the Ministry for Animal Resources and Fisheries (MRAH). Status of the Agricultural Research Intensity Ratio The New Partnership for Africa’s Development (NEPAD) under the African Union (AU), for instance, stipulates that public expenditure on agricultural R&D should constitute at least 1% of the agricultural GDP. This target aligns with the African Union Assembly’s 2007 pledge to allocate a minimum of 1% of the aggregate GDP to R&D. The average Agricultural research intensity ratio in Africa was 0.5% during the period 2016–2020, registering a slight increase from the 0.4% registered over the 2011–2015 period. The expenditures allocated to R&D amounted to 14 billion CFA Francs in 2017, representing a research intensity ratio of 0.83%. Despite this poor performance, Burkina Faso is among 12 countries out of 44 African countries that have reached a research intensity ratio of at least 0.5% as specified by the African Union in 2021. EFFICIENCY OF AGRICULTURE ALLOCATIONS 23 Analysis of the Allocation livestock and agricultural markets, agricultural technologies, and advisory services. These of Depreciation Allowances investments benefit the agricultural sector more broadly and are not limited to individual farmers or between Public and Private groups. Investments aimed at supporting farmers Goods do not meet these criteria and are classified as club goods since their access is limited and regulated. The allocation of Public Expenditure on Agriculture (PEA) between public goods and private goods In reality, these investments are structural has a significant impact on agricultural growth. investments as they help to increase the Not only the amount but also the structure of attractiveness of regions and have multiplier public expenditure in agriculture plays a vital role effects that stimulate other activities. Hence, these in determining its impact on growth. Empirical structural investments are classified as public studies suggest that, with a steady state of public goods in a broader sense. resources, a 10-percentage point reduction in expenditures directed towards subsidies is The functional analysis conducted above reveals associated with a 2.3 point increase in per capita a prevalence of public goods in agricultural agricultural income (World Bank (2009), Valdès expenditures. Irrigation systems represent 40.3% and Esteban (2008), Lopez and Galimato (2007)). of PEA, sustainable natural resource management (5.8%), land security and rural organization (5.1%), Investing public resources in private goods can rural roads (4.7%), sustainable management have a multiplier effect. For instance, providing of pastoral resources (3.2%), and agricultural producers with access to private goods such as fer- research (0.6%) are classified as public goods, tilizers and quality seeds can lead to an increase in accounting for about 60% of Public Expenditures short-term agricultural production. This is particularly on Agriculture during the 2016–2020 period. If we beneficial for those who previously lacked these include storage and preservation infrastructure, resources. However, a continuous and heavy sup- vaccination centers, and livestock markets, as well port to private goods could be detrimental to rural as initiatives to strengthen agricultural actors and development. This is because in a context of limited allocations to agricultural advisories and veterinary and equitable resources, allocating more to private services, which represented 4.6% of PEA, the total goods inevitably means less investment in public share of public goods rises to 64.5% of PEA. goods, which can only be produced by the State. For instance, public investments in roads, research The category of strictly private goods and development, and natural resource preserva- encompasses subsidies for agricultural inputs tion are crucial for sustainable agricultural growth and animals, as well as equipment for agriculture and cannot be left merely to market dynamics. and food processing. It also includes support in Given these trade-offs, it is crucial to closely exam- the form of inputs and productive assets such ine how Public Expenditure on Agriculture (PEA) is as livestock and small agricultural tools for the distributed between private and public goods. This prevention and management of food crises, analysis is key to assessing the effectiveness and as well as subsidy funds for micro-projects, quality of agricultural public expenditures. agricultural entrepreneurs, and credit lines (interest rate subsidies, credit lines, and guarantee According to the economic definition, public funds). Private goods were projected to represent goods are characterized by their non-rivalrous 25% of PEA. Thus, during the 2016–2020 period, and non-excludable nature. In agriculture, public PEAs were distributed as follows: 64.5% were goods include rural roads, public infrastructures allocated to public goods, 25% to private goods, like irrigation systems, wells, storage and and 10.5% to administrative expenses (Figure 12). preservation facilities, vaccination centers, 24 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 12: Breakdown of Expenditures by Nature FIGURE 13: Breakdown of PEA by Sub-Sector, of Goods Average 2016–2020 10.5% 0.2% 9.8% 7.0% 4.7% 25.0% 64.5% 77.6% Public goods Private goods Breeding Forestry Rural pathways Administrative expenses Vegetable production Fishing Source: The authors, using data from the DGB, the DGEP, and the DGESS Source: The authors, using data from the DGB, DGEP, and DGESS Optimizing the efficiency of investment allocation in The analysis of Public Expenditures on Agriculture the agricultural sector can be significantly (PEA) and their allocation across different sub- enhanced by involving local communities and sectors reveals a more complex picture than beneficiaries in the conception, financing, initially apparent, especially in relation to the execution, and maintenance of public goods. This perceived overinvestment in crop production. approach would foster greater social endorsement The significant investment in the crop production of the projects and stimulate local job opportunities. sub-sector includes the construction of dams and Users participation in the development and other hydraulic infrastructures. These investments, maintenance of infrastructure could also decelerate though categorized under crop production, also the deterioration of infrastructure by fostering a provide substantial benefits to other sub-sectors, sense of local appropriation. notably livestock14. Also, a considerable portion of the funding for Breakdown of PEA by forestry comes from external sources and is executed off-budget. This means these funds Sub-sector are managed directly by agencies of the United Nations and non-governmental organizations. This The crop production sub-sector constitutes the leads to an underestimation of these expenditures. lion’s share of Public Expenditures on Agriculture (PEA), with an annual average of 77.5% of PEA over The underfunding of the livestock and fishing the 2016–2020 period (Figure 13). The allocations ­ sector is analyzed in detail in Boxes 3 and 4 below, toward livestock, forestry, and fishing (including while public expenditures allocated to forestry are aquaculture) represented 9.8%, 7%, and 0.2% of examined in a later section of this review. PEA, respectively. It is worth mentioning that 4.7% of PEA was earmarked for rural roads13. 13 Allocations of funds for rural pathways are included in the PEA as 14 The comparison between the allocation of Public Expenditure on outlined by the guidelines set by African Union’s for monitoring PEA, Agriculture (PEA) across various sub-sectors and their respective with a projection of the portion of these pathways that are used for contributions to the agricultural Gross Domestic Product (GDP) could agricultural purposes. In the case of Burkina Faso, this portion has not be performed because of the absence of coherent data on the been estimated at 60% based on the 2012 PERA report. added values of these sub-sectors. EFFICIENCY OF AGRICULTURE ALLOCATIONS 25 BOX 3: The Livestock Subsector Despite its significant potential, livestock farming sector in Burkina Faso continues to be dominated by traditional extensive production systems and the productivity of the breeds remains ­ low. In response, the Government of Burkina Faso has initiated discussions that have led to the formulation and adoption of sector-specific policies, in particular the National Policy for Sustainable Development of Livestock in Burkina Faso (PNDEL) and the Action Plan and Investment Program for the Livestock Sector (PAPISE). The evaluation of public expenditures directed towards livestock reveals an increase from 10.7 billion CFA Francs in 2016 to 27 billion in 2018, followed by a stabilization at around 24.5 bil- lion per year in 2019 and 2020. During the 2016–2020 period, public support to livestock totaled 104 billion CFA Francs while the funding needed was estimated at 345 billion CFA Francs under the PNSR II, indicating in a financial execution rate of 30%. This underinvestment in the livestock public sector hinders the provision of the necessary public services that could enhance animal productivity. The following sections of this review will examine three key factors for the development of livestock, namely animal inputs, veterinary services, and genetic improvement of animal breeds. Animal Inputs The Government has made efforts to provide livestock feed and nutritional blocks at subsidized prices for breeders. However, the extent of this support is relatively limited compared to the actual needs. In fact, the average annual public expenditure allocated for the purchase of livestock feed was 1.6 billion CFA Francs during the 2016–2020 period, subsidizing an average of 25,000 tons of agro-industrial by-products (SPAI) per year. Considering the cattle population, estimated at around 10 million in 2020, the State’s support covered less than 1% of the SPAI needs for seasonal intensive farming systems. Prices of livestock and poultry feed remain high, and the State’s aid to this sector remains insufficient. The production capacities of the food unit of the Directorate for the Promotion of Village Poultry are also inadequate. Moreover, the feed manufacturing sector suffers from insufficient oversight, raising concerns about the quality of feed produced. To reduce feed costs, there is a need to enhance the productivity of basic inputs like corn, cotton, among others. The State and its partners must promote the search for low-cost alternatives like maggots and termites for poultry to address the limited productivity of current feed production inputs. In addition, the promotion of forage crops is hindered by the lack of experts and infrastructure dedicated to the certification of forage seeds. The annual expenditures allocated to infrastructure and the sustainable management of pastoral resources stood at 6 billion CFA Francs while the need was estimated at over 20 billion CFA Francs per year in the PNSR II. 26 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Veterinary Services The fight against diseases and improvement of animal health in general are fundamental aspects of an effective livestock policy. The annual budgetary expenditures allocated to the Directorate General of Veterinary Services (DGSV) by internal resource mobilization, amounted to 47 million CFA Francs over the 2017–2020 period. Out of this, 30 million were transferred to international institutions for animal health. This significant underfunding of veterinary services had led to the following: • Limited financial and material resources hindering the execution of veterinary activities; • Lack of technical and vehicle equipment at both central and decentralized levels; • A recurrent shortage of reagents in laboratories; • Absence of a reliable mechanism for transporting animal samples to laboratories; • An insufficient number of veterinary posts (totaling 106), which are also poorly equipped; • Challenges in carrying out emergency investigation missions due to budgetary constraints; • Outdated electrical setups leading to damage to laboratory equipment, and lack of generators to offset power outages; • Notable scarcity of specialists in various animal pathologies. • The State’s annual allocation of 200 million CFA Francs for animal vaccination is inadequate for the large livestock population, which includes over 30 million ruminants and 36 million poultry as of 2021 (DGESS, 2022). Genetic Improvement of Animal Breeds Livestock farming sector in Burkina Faso is characterized by the low productivity of the breeds. In response, the Government established the National Center for the Multiplication of High- Performing Animals (CMAP) in 2006. However, the CMAP, receives an annual subsidy of 130 million CFA Francs, which proves to be insufficient, and faces the following challenges: • The unsustainable nature of project-based initiatives; • The absence of a sustainable financing plan for genetic improvement initiatives; • The lack of coordination/management of the scheme by public services leads to anarchic genetic crossbreeding practices, significantly increasing the risk of loss of national genetic heritage. EFFICIENCY OF AGRICULTURE ALLOCATIONS 27 BOX 4: The Fishing and Aquaculture Subsector The demand for fish is estimated at nearly 200,000 tons per year, yet the production stands at only about 30,000 tons per year, primarily sourced from capture fisheries. This gap highlights a signifi- cant potential for growth and job creation in the fishing and aquaculture sub-sector. However, efforts towards increasing and sustainably managing fishery resources remained insuffi- cient. The lack of organization among fishermen to promote more effective resource management, along with the limited capacities of State services to monitor compliance with fishing regulations, are key obstacles. The scarcity of fingerlings and efficient feed has been identified as a major obstacle to the devel- opment of aquaculture. To bolster this sector, the Government has endorsed the National Policy on Fisheries and Aquaculture (PNPA) as well as the National Strategy for Sustainable Development of Fisheries and Aquaculture (SNDAGRA). Furthermore, aquaculture stations were established to facilitate access to quality seeds. Despite these initiatives, the necessary investments are still missing, and the availability of breed- ing stock and efficient feed to support the growth of the aquaculture sector are still lacking. As a result of the high price of fish food, the price aquaculturally bred fish is less competitive compared to imported fish. The Bagre pôle fish farming center, set up as part of Taiwanese cooperation to produce fish food, remains non-functional, partly due to institutional instability. Moreover, it is worth noting the shortfall in qualified personnel in aquaculture stations and regional directorates. Private sector entities involved in the production of seeds and aquaculture inputs operate without regula- tion, and there is no seed certification laboratory. Addressing these challenges requires the establishment of an aquaculture advisory support mechanism. On the budgetary side, the expenditures allocated to the fishing and aquaculture sub-sector were of 2.6 billion CFA Francs during the 2016–2020 period, contrasting with the need of 15.5 billion CFA Francs under PNSR II. 28 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW C H A P TE R 4 Technical Efficiency of the Programming, Execution, and Monitoring-Evaluation of Public Expenditures on Agriculture Status of Implementation of Operational Budgets of Programs (HBOP)15, Heads of Operational Units of Programs (HUOP)16 and the Program Budgeting Heads of the Financial Function (HFFin) responsible for finances and procurement. Moreover, the com- The implementation of the Program Budgeting, prehensive budget strategies that should guide the aimed at enhancing the efficiency of Public programming and allocation of resources have not Expenditures on Agriculture (PEA) through been fully developed. Ministries need to establish outcome-based management, has seen significant clear internal regulations that delineate the respon- advancements. Significant advancements include sibilities of HBOP, HUOP, and HFFin, as well as the appointment of program managers, aligning their positions within the budgeting process. projects with various budget programs, and the efficiency of review committees since 2018. The The envisioned decentralization of budget execu- criteria for accountability, transparency, and sincerity tion is still in progress, at the central level and of the Program Budgeting are also evidenced in within the decentralized services of the ­ ministry. the formulation of Annual Performance Reports At the central level, the prerogatives of fund accompanying the initial finance bill, and the Annual Performance Reports (RAP) accompanying the 15 The Operational Budget Program (OBP) groups together the portion settlement act of the finance law. of a program’s funds made available to an identified manager for a specific range of activities (part of the program’s actions, for example) or for a territory (a region, a province, etc.). It is the Nonetheless, certain appointments as outlined breakdown of the program’s objectives and expected outcomes in the Program Budgeting are yet to be final- based on functional and geographical criteria. ized. This include the appointment of the Head of 16 The Operational Program Unit (OPU) is a detailed breakdown of the budget program. It is the forum for expressing needs and implementing the activities planned in the OBP. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 29 FIGURE 14: Share of credits delegated to decentralized services to cover operating expenses over the 2017–2020 period 30% 25% 25% 20% 17% 15% 14% 13% 10% 9% 5% 0% MAAHM MEA MRAH MEEVCC Total Source: The authors, based on data from the DGB commitment and proposal for liquidation of expenses with a delegation of 25% of the cred- budgetary credits remain centralized within the its, followed by the ministry of water and sanita- Directorate of Financial Management (DGF) and tion (14%) and the ministry of animal and aquatic the Directorate in charge of public procurement. resources (13%). The ministry in charge of the envi- However, regulatory provisions in Program ronment has delegated less than 10% of its operat- Budgeting stipulate that the principal authorizing ing expenses. In nominal terms, this amounts to an officer (the minister) should delegate the authoriz- annual average of 24 million CFA Francs in operat- ing officer role to the program manager. This ing expenses per region for the agriculture ministry, centralized approach is responsible for the and nearly 6 million for each of the other ministries. sluggish pace of budget execution. Although, resources are transferred to regional services by central services through protocols, for Furthermore, decentralized services only handle the execution of some operational activities, most delegations made under the operating budget; regional directorates report that the resources the execution of expenditure earmarked for invest- received from the State barely cover 25 to 50% of ments remains centralized17. However, these del- their needs19. They also receive resources through egated operating credits are limited. In fact, out of ­ protocols signed with externally funded projects for the 13 billion CFA Francs designated for operating execution and monitoring. expenses over the 2017–2020 period18 covering all ministries in charge of agriculture, only 2 billion CFA Decentralized services suffer from unpredictability Francs were executed by decentralized services, in budgeting, which hinders their ability to reflecting a decentralization rate of 17% (Figure 14). plan actions autonomously at the local level The ministry in charge of agriculture shows a lower based on specific needs and circumstances. degree of centralization in managing operating Furthermore, the use of service agreements between ­ agricultural development projects 17 Only the Ministry of Water and Sanitation has allocated 6.6 billion and decentralized technical services might CFA Francs to regional offices over the period 2017–2020 for compromise their impartiality in external the implementation of the water and sanitation sector policy, monitoring efforts, coordination, and capitalization representing 4% of the investment executed expenditures. 18 The year 2016 was not included due to the different codification of types of services that existed before the transition to the Planning 19 Study for the Development of an Institutional Capacity Strengthening Program Budgeting in 2017. Plan for the Agricultural Sector (MARAH, 2022). 30 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW of actions within these projects. Moreover, Rate (BER) of the Ministry of Agriculture and Water the absence of a mechanism for tracking and averaged at 93% during the 2011–2015 period coordinating these agreements, prevents a compared to 78% during the 2016–2020 period. more efficient allocation of public resources. A similar trend is observed in the Ministry of Furthermore, this concentration of powers at Animal Resources, where the BER dropped from the central level for the execution of investment 92% to 64%. The Ministry of Water and Sanitation expenditures poses various drawbacks. recorded a BER of 67%. Only the Ministry in charge These include: (i) the limited responsibility of of the Environment saw a slight performance decentralized services and oversight over improvement with an average BER of 87% during investment execution as project management the 2016–2020 period, compared to 85% for the is centrally controlled; (ii) the elevated 2011–2015 period. Given that the planned budget administrative overheads associated with the is not fully disbursed due to significant budgetary tracking of execution, and receipt of goods and restrictions (see previous section), these budget achievements, especially the travel expenses execution rates are calculated based on the initial for central agents; (iii) the low appropriation of allocations to reflect the efficiency in executing the investments by base-level services, which is approved budgets. crucial for the sustainability of the investments. This underperformance in budget execution is Based on an evaluation (Dalberg, 2020), nearly attributable to the execution of investments since 40% of projects/programs are either improperly current expenditures had BERs between 98 and placed or could be attached to multiple budget- 117% depending on the ministries during the 2016– ary programs. Some may even belong to entirely 2020 period. In 2021, the BER for expenditures different planning sectors. This misalignment in the Ministry of Environmental Affairs (MEA) was indicates a lack of coherence between the proj- 93%, compared to a BER of 100% for the Ministry ects/programs and the strategic objectives of of Environment, Green Economy, and Climate the budgetary programs. This situation arises Change (MEEVCC). because some projects/programs and structures were designed outside of budgetary programs The limited efficiency in executing investments is framework and were only integrated into these linked to strong budgetary constraints impacting programs at a later stage. Given that administra- investments these ministries from 2017 onwards. tive structures and projects are crucial vehicles for This fiscal tightening is due to the shift of public implementing public policies, MRAH will need to resources towards the defense and security sector change its organizational structure and rethink the as a result of the deteriorating security situation. design of future projects, including those funded It is worth mentioning that the BERs exceed- by external sources, to ensure better alignment ing 100% in 2019 for the Ministry of Agriculture, with budgetary program objectives. Animal Resources, and Fisheries (MAAHM) and the Ministry of Animals and Fisheries Resources (MRAH) create an illusion of performance since Efficiency of Budget their initial allocations had drastically decreased due to budgetary constraints in 2017 and 2018 and Execution were adjusted upwards during budget revisions. In addition to this limited BER, technical services INTERNAL RESOURCES across the consulted ministries have unanimously reported that fund disbursements are often The efficiency of budget execution on internal delayed, adversely affecting the planned activities resources has significantly deteriorated over the since the agricultural sector is highly dependent past few years (Figure 15). The Budget Execution on seasonality. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 31 FIGURE 15: Budget Execution Rate of Budgets Based on Internal Resources 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MAAH MRAH MEEVCC MEA 2016–2020 2021 2022 Source: The authors, using data from the DGB Furthermore, contracts related to hydro-agricultural has remained consistent since 2000s with BERs development projects often face difficulties in at around 60%. The Ministry of Agriculture had achieving completion within the fiscal year. This the highest BER for external resources at 67%, leads to additional costs. The delayed disburse- followed by the Ministry of Animal Resources and ment of funds is a major contributing factor to Fisheries at 50%. The BER was below 50% for the the inability to complete projects within the Ministry of Environment (37%) and the Ministry of stipulated timeframe. Inefficiencies in the Water and Sanitation (45%). commitment of expenses by financial services exacerbate the issue, impacting the overall The low BER in the Ministry of Environment may efficiency of budget execution. Moreover, be attributable to difficulties in tracking projects uncommitted budget lines within the stipulated funded by external resources. Despite a budget deadlines often face budget restrictions. projection of 50 billion CFA Francs for the 2016– Therefore, it is important to secure the allocated 2020 period, only a third of the projected budget resources by ensuring timely commitment of was executed. Furthermore, the low BER for the expenditures. participatory forest management project under the REDD+ initiative stood at about 34%, as compared to nearly 20% in the projected budget. EXTERNAL RESOURCES Regarding the Ministry of Water and Sanitation The BER (Budget Execution Rate) for external (MEA), challenges in implementing the integrated funded projects averaged 60% over the 2016– development project of the Samandeni Valley 2020 period across all Ministries in charge of and the dam restoration and development Agriculture (Figure 16). This nearly structural trend project of Boulkiemd’-Ziro, which together 32 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 16: Budget Execution Rate of Investments on External Resources 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% MAAH MRAH MEEVCC MEA Total 2016–2020 2021 Source: Authors based on data from DGB, DGEP, and DGESS constitute nearly half of the MEA’s budget, explain this poor performance. The average BER CHALLENGES IN BUDGET EXECUTION for these major projects was 16% during the AND PROPOSALS 2016–2020 period. The limited efficiency of the procurement process The situation improved in 2021, with a BER of results in substantial delays in the execution of 75% for all projects. The BER even reached 81% development projects. This is partly attributed and 83% respectively in the MAAH and MRAH. to the cumbersome nature of procurement pro- It recorded an increase in the MEEVCC, rising cedures and the duality in these procedures, from 37% over the 2016–2020 period to 55% responsiveness issues in the procurement chain, in 2021. However, budget execution in the MEA time-consuming processes to obtain no-objection did not improve and remained stable at 21%. It is notices, and poor anticipation in the implementa- worth mentioning a decline in investments from tion of procurement procedures. financial partners in the water sector, dropping from 10.3 ­billion in 2020 to 5.4 billion in 2021. Furthermore, a lack of communication among vari- This underperformance is partly due to the ous actors involved in fiscal processes increases limited engagement of financial partners in the the number of unsuccessful files (UF), adversely construction of hydraulic infrastructure and to the affecting the budget execution of the subsequent deterioration of the security situation. year. Unliquidated commitments from one budget- ary year are carried over to the next budgetary Improving the budget execution of projects year with no assurance of retaining unspent funds. supported by external funding, requires strategic ­ This high occurrence of unsuccessful files is also changes to streamline these projects by promoting due to ineffective cost control during budget plan- the use of pooled funds and hastening the issu- ning. The services responsible for budget planning ance of no-objection notices. also reported the absence of planning software. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 33 Another factor contributing to the inefficiency Companies involved often have limited capacities, of budget execution is the protraction of the leading to delays and poor quality in project exe- budget execution process, characterized by cution, specifically in hydro-agricultural facilities. the dominance of ex-ante control during the Hence, revising the criteria for granting approv- commitment and liquidation of expenses. Lack als to providers by improving specifications and of communication between parties involved strengthening the control of execution. In addition, in the financial control can result in files being the mechanism for contesting render result by rejected for minor reasons, leading to delays unsuccessful bidders should entail sanctions for in the provision of goods and services. The unfounded challenges to avoid delays in contract lack of integration of the financial controller execution. (appointed by the ministry in charge of finances) within the Program Budgeting accountability Recommendations for efficient budget execution: chain exacerbates these inefficiencies in budget • Strengthen the capacities of the financial chain execution. actors, particularly in procurement and timely expenditure justification; A modulated control of expenditures is envisioned within the budget implementation framework. This • Improve communication among the financial involves delegating control of certain expenditure chain actors by using an intranet; commitments to authorizing officers, a task previously performed by the financial controller • Develop a software for public contract in the Ministry of Finance. This reform aims to monitoring and management; ­ optimize the control process by striking a balance • Set up a financial management system for the between compliance and efficiency. However, it procurement of hydro-agricultural facilities and remains uninitiated. the purchase of inputs in advance; A recommendation is made to shift from an • Minimize ex-ante control by successfully emphasis on ex-ante control to ex-post control. implementing modular control in lines with ­ This would involve verifying both compliance budget provisions; and the quality of goods and services after • Undertake advocacy initiatives with certain they have been received or services rendered, development partners to reduce the time addressing issues of subpar quality. Besides the needed to obtain no-objection notices through role of Parliament and the Court of Auditors in stringent deadline monitoring; these ex-post controls, enhancing the inspection services within ministerial departments is crucial • Impose sanctions on defaulting companies and to ensure effective ex-post controls. service providers; • Enhance accessibility to the Computerized Limited capacities at the decentralized level also Expenditure Circuit (CID) at the decentralized constitute an obstacle Due to a limited number level; and of financial agents at regional offices, there are delays in releasing funds and, consequently, the • Facilitate the comprehensive deployment cancellation of certain activities and credits in of the Computerized Circuit for External subsequent budgets. Centralization of budget Financing (CIFE) across all budgetary execution at the central level does not encourage execution units at both the central and financial agents to stay at the regional level. decentralized levels. 34 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW BOX 5: Evaluation of the Implementation of PNSR II In April 2018, Burkina Faso rolled out its second National Rural Sector Program (PNSR II) for the 2016–2020 period. This program serves as a reference framework for planning initiatives in the rural development sector as outlined by the National Plan for Economic and Social Development (PNDES) for the same period (2016–2020). It also aligns with regional (ECOWAP/ECOWAS) and continental (CAADP/NEPAD) agricultural policies. The PNSR reflects the Government’s aspiration to create a unified framework for the planning, execution, and monitoring and evaluation of all rural development-related initiatives. The cost for the execution of the PNSR II was estimated at 3,621 billion CFA for the period 2016–2020, representing 23.52% of the overall cost of the PNDES. This estimate is based on standard prices and on an annual growth target of 5.7% in the agricultural sector added value in line with the PNDES objectives. It also considers the mobilization and absorption capacities of the Ministries in charge of Rural Development. Concerning priorities, the second National Rural Sector Program focuses on food and nutritional security, the resilience of vulnerable populations, along with enhancing access to water, sanitation, and living standards, which account for 36% and 28% of the program’s expenses, respectively. PNSR II is divided into twenty sub-programs, with six strategic axes: • Axis 1: Focuses on ensuring food security and nutritional resilience for vulnerable populations. • Axis 2: Aims at improving market access and competitiveness in agro-silvo-pastoral, fisheries, and wildlife sectors. • Axis 3: Concentrates on environmental governance, promotion of sustainable development, and natural resource management. • Axis 4: Dedicated to enhancing access to water, sanitation, and improving living standards. • Axis 5: Emphasizes strengthening land security and human capital in the rural sector. • Axis 6: Focuses on the coordination of sub-programs Budget Execution of PNSR II The PNSR was allocated a total of 3,621 billion CFA Francs for the 2016–2020 period. Of this, 1,861 billion CFA Francs was actually set aside for the implementation of the program, which represents a mobilization rate of 51% (see Box 4). More than half of this mobilized amount (995 billion CFA Francs), equivalent to 53%, comes from State resources. Yet, the budgetary constraints faced by the State led to a nearly 18% reduction in these budgetary projections, resulting in a budgetary credit loss of 177.5 billion CFA Francs. Hence, it is crucial for the success of the PNIASP that ministries take all necessary measures to commit to priority expenditures as early as possible to avoid budgetary restrictions to the greatest extent possible. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 35 The contributions of technical and financial partners (TFP) and non-governmental organizations (NGOs) amounted to 701 and 166 billion CFA Francs, equivalent to 38% and 9% respectively. The support provided by TFPs, which includes both sectoral and overarching budgetary support, is recorded under the State’s resources. TABLE 4: Budget Forecasts for PNSR II Implementation Budget projections PNSR Mobilization Year Programming State TFP NGO Total Rate 2016 396 109 142 35 285 72% 2017 701 273 148 36 456 65% 2018 798 268 156 16 440 55% 2019 827 174 118 33 325 39% 2020 899 171 138 46 356 40% 2016–2020 3621 995 701 166 1852 51% Source: The authors using data from the DGB, the DGEP, and the DGESS Concerning budget execution, a sum of 1,343 billion CFA Francs was spent on the implementation of PNSR II, representing a total budget execution rate (TEF) of 37% compared to the 82% achieved during PNSR I (2011–2015) (Table 5). State resources (including sectoral and overarching budgetary support) made up 53% of the total expenditures, totaling 716 billion CFA Francs. Development partners (TFP) contributed to 31%, equivalent to 411 billion CFA Francs through development projects incorporated in the budget, and 16%, or 217 billion CFA Francs through aid implemented by NGOs outside the budget. Therefore, the contribution of the TFP is underestimated, given that approximately 70% of the funding channeled through NGOs originates from bilateral and multilateral donors. TABLE 5: Budget Execution for PNSR II Implementation Budget Executions PNSR PNSR Budget Year Programming II State TFP NGO Total Execution 2016 396 98 79 44.50 222 56% 2017 701 190 73 48.8 312 44% 2018 798 153 101 38.19 292 37% 2019 827 126 80 35.45 242 29% 2020 899 148 78 49.78 275 31% 2016–2020 3621 716 411 217 1343 37% Source: The authors, using data from the DGB, DGEP, and DGESS. 36 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW This budget execution of PNSR II includes an amount of 5 billion CFA Francs transferred to local authorities for the implementation of water supply and wastewater treatment programs. In addition, the Ministry of Trade and Industry invested 10 billion CFA Francs through the Project to Support Economic Transformation and Job Creation, with 9 billion CFA Francs earmarked for this purpose. A number of small projects were included such as the integrated development support project for the shea sector, the capacity building for the sesame sector, assistance in the marketing of dried mango and nuts, and notably, an allocation of 60 billion CFA Francs over the period 2016–2020 for the Bagré growth pole support project. In addition to the underperformance of budget execution (see paragraph I.3) and the unrealistic planning of PNSR II, the prevailing security situation across the country has severely affected the execution of projects, especially since most projects are located in high-risk areas. The Sahel, North, Centre-North, Boucle du Mouhoun, and East regions. This adverse security situation signifi- cantly hampers the mobilization of local actors who are beneficiaries of the activities, and teams responsible for the execution of development projects, due to movement restrictions (curfews in some regions, states of emergency in others) and particular constraints (some regions being inaccessible). Analysis of the Appropriation and Operationalizing of PNSR II Steering Mechanisms Appropriation of PNSR II Although the formulation of PNSR II is inclusive, a low level of appropriation of the program by stakeholders at both the central and decentralized levels has been observed. The program has not been considered as a reference document by the ministerial sectors in charge of rural devel- opment. Instead, they refer to the PNDES to evaluate their performance. A similar observation is made at the level of non-State actors who do not refer to it for their rural interventions. The operational structure for the governance of PNSR II At the national level, the oversight and management of PNSR II are entrusted to four bodies that include actors from both public and private sectors covering various political, technical, and operational aspects of program implementation. These bodies include: the Steering Committee of PNSR II, the three Sectoral Dialogue Frameworks (SDF), specifically (i) “Agro-Silvo-Pastoral Production,” (ii) “Environment, Water, and Sanitation”, and (iii) “Research and Innovation,” the Technical Committee of the PNSR, and the technical secretariat of the PNSR II steering mechanism. The monitoring and evaluation system is managed at the national level by SP/CPSA, which includes all relevant stakeholders (Administration, professional organizations, private operators, NGOs, technical and financial partners). At each ministry level, the monitoring and evaluation process for the implementation of PNSR II is conducted within each sub-program and coordinated by the General Directorates for Studies and Sectoral Statistics (DGESS). At the regional level, the monitoring and evaluation process is coordinated by regional directorates and focal points of PNSR II sub-programs within the regional technical secretariat. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 37 The performance of the governing bodies, coordination, monitoring and evaluation of PNSR II have been inadequate. Of the four bodies for the governance of PNSR II, only the sectoral dialogue frameworks have been formally established. Moreover, the establishment of the three SDFs for the steering of PNSR II has led to coordination challenges within the rural sector. Moreover, the Prime Minister’s Office, which leads the Bagré growth pole support project, and the Ministry in charge of Trade and Industry, which manages several agricultural export and agro-food processing development projects, do not participate in any of the SDFs of the rural sector. Finally, the monitoring and evaluation mechanism of the PNSR II has not been operational in a way that it can generate reports necessary for facilitating dialogue frameworks within the monitoring/ evaluation process of the PNDES. It has also been ineffective in preparing the biennial report on compliance with the Malabo commitments for the transformation of African agriculture. Yet, the recommendations rendered within these S&E frameworks have not been adequately considered during the annual preparation of the program budgets of the various sectoral ministries. Moreover, the joint agricultural sector review, endorsed by the African Union Commission as the main framework for monitoring/evaluation of the agricultural sector, has not been conducted since 2014. Coordination, Monitoring- institutional architecture. This has led to the creation of more than fifteen distinct budgetary Evaluation, Capitalization programs (PB) within the Ministries responsible for Agricultural Development. However, the and Appropriation of Public steering bodies within these BPs are not Expenditures on Agriculture adequately operational, leading to poor resource allocation and limited coordination among different programs. Moreover, coordination Improving the coordination of sector interventions among different programs is limited, and inter- is crucial to enhance the quality of public ministerial coordination is virtually nonexistent. expenditure. Despite commitments to align This lack of coordination hinders the efficiency with national procedures, the presence of of complementary initiatives outlined in various multiple projects and NGOs in the agricultural budget programs. sector, operating independently, remains a challenge. Moreover, the project-based approach Integrated projects are crucial for developing has enabled key projects (such as PAPSA, agricultural chains and value chains. However, the Neertamba, PCESA, Support Project for Bagré sustainability of these projects is compromised if Growth Pole, etc.) and various NGOs to address not adequately succeeded by the beneficiaries, agricultural development challenges effectively. particularly by professional agricultural organiza- These projects have managed to achieve what tions, with the support of decentralized services fragmented State services may have found and local authorities. As observed in the 2012 difficult, providing a coherent and comprehensive and 2016 PERA, the lack of budgeting for routine approach to agricultural development. maintenance of agricultural infrastructure con- stitutes a serious obstacle to their sustainability. Indeed, the implementation of Program Budgeting Farmers’ organizations sometimes lack leadership since 2017, aimed at optimizing public action and organizational capacity to effectively, manage in the agricultural sector, leans on the existing 38 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW infrastructure and other interventions, ensuring Given these shortcomings, strengthening the their maintenance and longevity. These challenges implementation of control, monitoring/evaluation, stem from the insufficient support provided to and capitalization activities by the State’s technical decentralized services, which have limited opera- services is crucial. Furthermore, the limited trans- tional capacities due to partial implementation of formation of the agriculture sector in Burkina Faso, the PBP, which continues to centralize resources. It despite the substantial public funding allocated is advisable to direct budgetary funds and delega- to this sector, raises efficiency concerns regard- tions to decentralized services to cover mainte- ing the existing intervention approaches and nance costs of infrastructure that are unaffordable modalities. A thorough review of ongoing and past to the beneficiaries. This approach would prevent sector interventions is needed to identify effec- costly restoration work due to complete infrastruc- tive approaches and modalities. In this respect, ture degradation. developing thematic guides on best practices is recommended. These guides should be regularly The absence of coordination among different updated and made accessible to all stakeholders. actors, especially evident with NGO interventions, They could also be integrated into the training pro- is a significant obstacle hindering the efficiency grams for technicians and engineers in agricultural of public investments in the agricultural sector. and rural development. The current political transi- Moreover, it is important to note that State services tion period presents an opportunity to undertake often fail to capitalize on successful practices this extensive review of public interventions in the developed by projects and NGOs. agricultural sector. TECHNICAL EFFICIENCY OF THE PROGRAMMING, EXECUTION, AND MONITORING-EVALUATION 39 40 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW C H A P TE R 5 Incidence, Impact, and Sustainability of Public Expenditures on Agriculture: Four Cases - Input Subsidies, Irrigation, Agricultural Finance, and Expenditures allocated to Forestry Analysis of Input Subsidies complemented the input subsidy. These initiatives mark a reengagement of direct State support to the agricultural sector, after a withdrawal CONTEXT AND OBJECTIVES OF INPUT in the nineties due to structural adjustment SUBSIDIES programs. Triggered by the global surge in food and This section evaluates the effectiveness and effi- input prices in 2007/2008, which impacted ciency of input subsidy initiatives. local markets, the Government of Burkina Faso launched a subsidy program targeting improved seeds and fertilizers for farmers as of the CASE OF MINERAL FERTILIZERS 2008/2009 agricultural season. This subsidy primarily focused on corn, rice, and cowpea for Structure and Development of the Mineral fertilizers. A broader range of crops including corn, Fertilizer Market rice, millet, sorghum, cowpea, peanuts, sesame, and soybeans benefited from improved seeds Apart from a natural phosphate production subsidies. Starting in 2011, there was an additional facility within the Phosphate Project in Diapaga, initiative to subsidize agricultural equipment and a fertilizer formulation unit at CIPAM in INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 41 Bobo-Dioulasso20, Burkina Faso lacks industries benefits for subsequent crops. The practice of for chemical fertilizer production. Consequently, rotating cotton and corn crops maximizes the use a significant portion of the fertilizers used in of fertilizers. agriculture is imported. Typically, the import volume increases each year, reflecting a rise in the The share of imported fertilizers dedicated to quantities used by producers. Official imports have cotton cultivation fell from 92% in 2000–2007 increased from an annual average of 100,000 tons to 80% during 2008–2015 and further to 60% at the end of the 2000s (2007–2009) to 250,000 during 2016–2020. This decline reflects a rise tons in 2016–2020. in use of fertilizers in the cultivation of food and vegetable crops. Key actors involved in the import and distribution of inputs include cotton firms, Nouvelle Société The official import sector is characterized by Sucrière of Comoé, the State, producer an o­ ligopolistic structure, where a a few large organizations, multinationals subsidiaries, ­ operators dominate the market. They import individual wholesalers, and retailers. It is worth fertilizers, which are then distributed by a large mentioning, however, the existence of undercover network of distributors, wholesalers, and retailers. networks and the unquantifiable volumes they A significant portion of imports are handled by import. large foreign-capital corporations. More than two-thirds of the imported fertilizers comes or Cotton growers obtain mainly their supplies from are assembled in CEDEAO countries, in particular the leading cotton company SOFITEX and two in Mali, Côte d’Ivoire, and Togo, benefiting from smaller companies (FASO COTON and SOCOMA). customs advantages like duty exemptions. A network of about 6,800 cotton producer This near-monopoly situation in imports could groups, including around two million producers lead to price inefficiencies for producers. under UNPCB helps determine producers’ needs, which guides the annual input procurement policy. Besides these official imports, a comparison Cotton inputs are provided to producers on credit, between the quantity of fertilizers used, esti- with deductions made upon cotton purchase. mated by an agricultural survey and customs sta- Furthermore, since 2004, UNPCB has been tistics suggests an annual volume of about 60,000 distributing fertilizers cereals to its members to tons of illicit imports over the 2016–2020 period. encourage diversification of their production and Limited control over both official and illicit imports boost food production. Besides the credit sales fails to assure fertilizer quality. of fertilizers by cotton firms, UNPCB also provides cereals fertilizers, on credit, with reimbursement The enactment of law 026/2007 on the during the sale of cottonseed. quality control of fertilizers allowed the training of approximately forty inspectors, the This strong integration within the cotton sector has establishment of an analysis laboratory within created a more efficient supply chain for fertilizers. the National Bureau of Soils (BUNASOL), and oviding inputs on credit allows cotton farmers the creation of the National Commission for easier access to essential resources like fertilizers fertilizer Control. However, this laboratory without the immediate financial burden. The has limited means to conduct analyses and same system that provides fertilizers for cotton produce results within the required timeframe. also makes these inputs more accessible for corn Furthermore, budget constraints and the farming. Fertilizers used for cotton have residual marginal priority accorded to control operations preclude unannounced inspections of fertilizer 20 Local production is however limited, as it accounts for less than 5% imports. Also, the control commission faces of the fertilizers consumed (Taondyandé M., 2016). challenges in holding its sessions due to a lack 42 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW of financial resources. The participation of private sector, the annual subsidy for cotton inputs laboratories in analyses could strengthen the amounted to roughly 12 billion CFA Francs, fertilizer quality control system. contrasting with the 2.4 billion CFA Francs earmarked for food crops. ­ Transition in Expenditures and Subsidized Amounts of Fertilizer The subsidized quantities cover only a small part of the fertilizer needs for food crops. Since The State’s procurement of fertilizers as part of the the subsidy’s initiation in 2008, the maximum subsidy for food crops, ranged between 3.3 billion quantities covered were reached in 2014 and CFA Francs in 2017 and 9.6 billion CFA Francs in 2019, with 28,836 and 26,147 tons of subsidized 2019. Averaging the period from 2016 to 2021, an fertlizers, respectively. Figure 17 below shows that annual amount of 6.5 billion CFA Francs was allo- except for 2014 when the coverage rate reached cated for the procurement of fertilizers. 4%, the coverage rate for mineral fertlizers needs for food crops (excluding cotton) remained below During the analyzed period, the quantities of 3%. During the period of this review (2016–2021), it subsidized fertilizers increased from 9,000 tons in averaged at 2%21. This subsidy level is insufficient 2017 to 26,000 tons in 2019. On average, over the to hope for a significant surge in the productivity period 2016–2021, around 17,000 tons of fertilizer of food crops. Moreover, according to input were subsidized for food crops. Despite the distributors, these small, subsidized quantities increase in cultivated areas, no continuous trend cause market disruptions. Farmers initially pin their was observed in the subsidized quantities. The hope on the subsidy following the Government’s fluctuations in subsidized quantities are primarily communication campaigns. However, they soon due to the availability of budgetary resources, face disappointment due to the lack of availability maintaining an average level of 17,000 tons during of subsidized quantities and are compelled the 2011–2015 period. to purchase non-subsidized fertilizers. These fertilizers are sometimes unavailable, as the late From 2008 to 2016, the retail prices of subsidized purchase intentions hinder the ability of small fertilizers to producers stood at 13,500 CFA Francs distributors to supply fertilizers, especially after for a 50 kg bag of NPK or diammonium phosphate, the deterioration of rural pathways due to rainfall. and at 12,500 CFA Francs for a 50 kg bag of urea. Therefore, a reform of the fertilizer system is From 2017, the price of chemical fertilizers was crucial to increase its efficiency. unified at 12,000 CFA Francs for a 50 kg bag, regardless of the type of fertilizers. Based on the Subsidy Implementation Mechanisms for State fertilizer cost and distribution costs (transport and Procurement of Fertilizers associated expenses), the subsidy reached an average of about 35% over the period 2016–2021. From 2008 to 2019 This means that the State covers roughly 35% of the total fertilizer cost for farmers. The total annual The methods for implementing the State’s subsidy subsidy averaged 2.4 billion CFA Francs, with on fertilizer procurement have evolved since the a cumulative of 14.3 billion CFA Francs over the initiative’s inception in 2008. Initially, corn and period. rice benefited from the subsidy. Then, it extended to millet, sorghum, cowpea, peanut, soybean, Cotton inputs received a more substantial sesame, and tubers (cassava and sweet potato) subsidy, with a cumulative total of 58.3 billion starting 2009/2010. CFA Francs over 2016–2021 and an annual average close to 10 billion CFA Francs. Except 21 These needs have been estimated for food crops based on in 2017, when no subsidy was allocated to the cultivated areas and rely on a minimum dose of 150 kg/ha. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 43 FIGURE 17: Change in subsidized quantities and the rate of coverage of mineral fertilizer needs 35,000 4.5% 4.0% 30,000 3.5% 25,000 3.0% 20,000 2.5% 15,000 2.0% 1.5% 10,000 1.0% 5,000 0.5% 0 0.0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Subsidized quantity Rate of coverage Source: The authors using data from the DGPV and DGESS/MRAH Until 2013, the Ministry of Agriculture procured directly to regional or departmental revenue fertilizers from importers and distributed them via collection services, and upon presenting the agricultural technicians at the decentralized level. receipt to a Ministry of Agriculture agent, collect There was no clear mechanism for targeting the subsidized fertilizers. This situation results in beneficiary farmers other than the requirement considerable travel expenses for the beneficiaries, that farmers should be cultivating corn and rice. as there are only 90 revenue collection services Regarding the fertilizer’s sales conditions, sales across the territory, or one service for every four were cash-based for individual farmers with credit municipalities. options available for groups of farmers. Credit repayment issues eventually led to the During the 2018/19 and 2019/20 campaigns, discontinuation of credit sales to farmers distribution was significantly supported by local organizations. administration, in particular by prefects and mayors, as well as farmers organizations like During the 2013/14 and 2014/15 campaigns, the Chambers of Agriculture and the Farmers’ the Government delegated the distribution of Confederation of Faso. subsidized inputs and agricultural equipment to private sector operators (AGRODIA and Adoption of Agri-Voucher starting from 2020 COCIMA) under a partnership agreement signed for this purpose. However, this system was During the 2020/2021 agricultural campaign, an discontinued from the 2015/2016 campaign electronic distribution system for fertilizers and due to credit repayment issues faced by private certified seeds was implemented. This system sector distributors. The former mechanism of scaled up from the pilot Agri-Voucher opera- 2013, which relied on distribution by Ministry tions of executed in 2018/2019 and 2019/2020 of Agriculture agents, was reinstated. Farmers under the PAPSA project initiative. This broader benefiting from the subsidy now make payments expansion was facilitated by the PReCA project, 44 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW funded by the World Bank. It is worth mentioning during the 5th General Population and Housing that a third of the fertilizer was distributed using Census (RGPH). Based on the principle of the old mechanism led by the regional director- fairness and efficiency, only farms of less than ates of agriculture. The lessons learned from this 5 hectares possessing agricultural equipment are campaign have led to the development, adoption, eligible for subsidies for the purchase of fertilizers and deployment of the Agri-Voucher starting from and improved seeds. Beneficiaries are randomly the 2021/2022 agricultural campaign. This new selected during each agricultural campaign. mechanism involves: This new subsidy mechanism addressed the efficiency concern by supplying improved seed • The Regional Directorates of Agriculture and kits and fertilizers to beneficiaries. However, Hydro-Agricultural Facilities (DRAAH), along the quantity of subsidized fertilizers remains with their decentralized units (AGRAAH, insufficient, and some beneficiaries have to Technical Support Zones, Technical Support acquire only seeds. Units) are responsible for the distribution, reception, beneficiary list clearance, The Agri-Voucher system offers the advantage monitoring, advisory support, and evaluation. of eliminating cash transactions handled by State • The National Chamber of Agriculture services, which previously led to embezzlement participates in the information dissemination/ of public funds. This approach contrasts with awareness-raising and orientation process, the previous method where multiple criteria verification/clearance and validation of benefi- (see Box 6) might have made the system almost ciary lists, and monitoring/evaluation of the universally applicable but with limited impact operation. due to the small amount of subsidized fertilizers. The ­Agri-Voucher, by randomly selecting • The Information Services Department is beneficiaries with a preference for small farmers, responsible for setting up the electronic reinstates the objective of fairness in the platform supporting the mechanism. distribution of subsidized inputs. • The Association of Wholesale and Retail Distributors of Agricultural Inputs (AGRODIA) However, sometimes insolvent beneficiaries is responsible for the reception, storage, and are chosen, who then need to be replaced. distribution of inputs and equipment purchased Furthermore, the RGPH agricultural operations by the State via electronic payments received database contains some errors, leading sometimes on tablets and smartphones. Members of to the selection of individuals who are not farmers the association responsible for distribution or posing challenges in identifying eligible farmers. were selected through a localized tender call The creation of a trustworthy database of farmers process. is crucial for the successful deployment of this new system. • The mobile money operator (Orange Money) is responsible for the development and Similarly, network coverage by the telephone provision of a USSD menu for payment, a operator in certain regions requires the mobile application for transaction validation at participation of other operators in this mechanism. the distributor level, a web interface for real- Furthermore, some local mobile money service time operation tracking, payment receipt, and providers are reluctant to handle large amounts transfer to the public treasury. ­ of cash due to security concerns. In such cases, it is essential to explore alternative solutions to The targeting of beneficiaries was based on the address these challenges. agricultural operations database established INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 45 BOX 6: Summary of Former Mechanisms Criteria for Targeting Beneficiaries The beneficiaries of this initiative are Individual farmers, farmers groups, cooperatives, agricultural entrepreneurs, and irrigation committees involved in the cultivation of rice, corn, and cowpea. Priority is accorded to households adhering to good agricultural practices (such as the use of organic manure, phosphate, water and soil conservation techniques (CES)/soil defense and restoration (DRS), etc.), with particular attention to small farmers and women. Furthermore, the fertilizer needs of organized or individual agricultural entrepreneurs are recognized given their significant contribution to production. Likewise, state-developed lowlands and those developed in partnership with the State for rice production are prioritized for receiving subsidized fertilizers, provided by the State or by the projects and programs financing them, based on availability. Finally, large production sites such as Bagré Pôle, the Sourou Valley, the Kou Valley, etc., were allocated subsidized fertilizers, based on their availability. Cost of the Agri-Voucher Mechanism challenges, including limited national fertilizer production capacity, high transport costs for The expenditure associated to the Agri-Voucher imports from coastal countries, lower purchasing mechanism includes two categorizes: the platform power efficiency as a small buyer from large deployment cost by the mobile phone operator, global suppliers, and the limited capacity of standing at 242 million CFA Francs in 2020, and national agro-dealers, especially for supplying the fertilizer distribution expense by AGRODIA food crop farmers. To mitigate these constraints, members, standing at 10,000 CFA Francs per Burkina Faso created the Centralized Purchasing ton. Therefore, the mechanism’s overall cost is of Agricultural Inputs and Equipment (CAIMA) in of approximately 20 CFA Francs/kg, constituting 2020 to address these constraints. roughly 5% of the subsidized fertilizers’ cost22. Despite the lack of comparable mechanisms in CAIMA Objectives, Legal Form, and Resources similar countries, the Agri-voucher system is likely more efficient than the previous system, given the CAIMA’s mandate is to facilitate the affordable reduced risk of diversion and the discontinuation procurement of inputs (fertilizers, seeds, and of agricultural advisory support tied to the old pesticides) and agricultural equipment through system. The integration of E-advice into the bulk purchases. It aims to achieve cost-efficient platform could further bolster the effectiveness pricing, especially for fertilizers procured from of the subsidy system. regional and global markets. CAIMA aims to address inefficiencies associated with the Analysis of the CAIMA Case purchasing of fertilizers, both by the State and private operators. Like other countries in the subregion, Burkina Faso has implemented a fertilizer market development Initially launched as a State-owned company, policy since the 2008 food crisis, with the intent CAIMA’s legal form has changes and is currently a to stimulate usage and ensure accessibility to non-profit association with a majority of non-public high-quality fertilizers at a reduced cost and in sector members. This structure differs from similar a timely manner. These objectives face several entities in other countries, like Niger’s CAIMA, which operates as a public enterprise. CAIMA 22 However, the cost of setting up the farmers’ registry is missing. 46 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW blueprint is inspired by the Centralized Purchasing raise the necessary financial resources for the pro- of Generic Drug Model. curement of inputs and agricultural equipment. A banking consortium led by the Agricultural Bank of The association is administered by a board of Faso has already expressed interest in supporting directors consisting of 15 members, with a majority CAIMA. Aligning with the input supply system for of 9 members from the private sector: the cotton sector, the State will act as a guarantor for loans granted to CAIMA. • 2 members from the sub-college of agricultural farmers, currently represented by the Peasant A hybrid system for fertilizer supply, based on Confederation of Faso and the National private sector importers and direct global market Chamber of Agriculture; purchases, is planned under CAIMA’s operational • 2 members from the sub-college of distributors framework. An evaluation conducted by private of agricultural inputs and equipment, repre- sector entities concerning the establishment of sented by the Association of Wholesalers and CAIMA is included in the following section. Distributors of Agricultural Inputs (AGRODIA) and COCIMA; Creation of CAIMA Justified by the Inefficiency of Fertilizer Pricing in Burkina Faso • 1 member from the sub-college of seed farm- ers, represented by the National Union of Seed According to a 2016 study commissioned by the Farmers of Burkina; Ministry of Agriculture, the creation of CAIMA • 1 member from the sub-college of farmers and should lead to a 10% drop in purchase price and importers of fertilizers, represented by CIPAM; a 25% in logistical costs, potentially translating to a cost reduction of 1,750 CFA Francs per bag of • 1 member from the sub-college of producers fertilizer (MAAH, 2016). An analysis of the State’s of agricultural equipment, represented by the purchase price of urea and the reconstructed Chamber of Crafts and Trades; cost price based on the global price, as well as an evaluation conducted by private sector stakehold- • 1 member from the sub-college of banks and ers on the efficiency of the supply system, are financial institutions, represented by BAdF; and discussed in the following section. • 1 member from the sub-college of specific farmers. Reconstruction of Urea Cost Price The public sector members include representa- In this section, the cost price of fertilizers is esti- tives from various Ministries like Agriculture, mated based on the global price of urea acquired Commerce, Scientific Research, Finance, Animal from Russia. As cotton accounts for 60% of total Resources, and Health. Technical and financial fertilizer consumption, and regions like Hauts partners serve as observers and are entitled to Bassins (40%), Boucle du Mouhoun (30%), the participate in meetings without any voting rights or Cascades (5%), and South-west (5%) contribute obligations. to 80% of cotton production, the cost estimations focuses on key cotton-producing regions and the CAIMA’s resources are made up of membership Abidjan-Bobo-Dioulasso corridor. The transporta- fees, member contributions, revenues generated tion costs of the fertilizer from Bobo Dioulasso to from the supply and distribution of agricultural the relevant provinces within these regions are inputs and equipment, and other services, and calculated. While focused on the cotton basin, extraordinary resources authorized by law. In this estimation provides a good approximation of 2020, CAIMA received a one billion CFA Francs the national cost, given the region’s importance support from the State to launch its activities. It in Burkina Faso’s fertilizer consumption. Detailed plans to collaborate with financial institutions to data was gathered from the Burkinabe Council of INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 47 Shippers and from studies conducted by IFDC and is not indexed to the international price. In 2016, MAFAP/FAO in 2019. The breakdown of the calcu- this price was 33% higher than the calculated lated cost price is detailed as follows: reference price, compared to 21% in 2017, 14% in 2018, 11% in 2019, 27% in 2020, and 18% (on • Global price of urea (source: World Bank) average) over the period (2016–2020). Factoring • Insurance cost and transportation cost to the in the profit margin rate for importers, set at 6% port of Abidjan of the wholesale cost, estimated at 15,000 CFA Francs per ton for calculating the reference • Port fees in Abidjan price, these significant discrepancies highlight • Road transport costs from Abidjan to the the inefficiency in the State’s fertilizer purchasing Burkina Faso border operation. An efficient urea supply system could have saved nearly 5 billion CFA Francs • Transit fees at the Burkina Faso border over 2016–2020, or about 1 billion CFA Francs • Transportation costs from the Côte d’Ivoire annually. border to Bobo When distribution costs are included, the average • Toll tax cost of urea in the municipalities of the cotton • Customs duties (0% for urea) basin was about 290 CFA Francs/kg. The retail distribution margin was set at 10,000 CFA Francs • Statistical fee (1%) per ton, bringing the cumulative margin for • Community import levies (UEMOA) (1%) both importers and distributors to 25,000 CFA Francs/ton, or 10% of the urea cost. This profit • Community import levies (ECOWAS) (0.5%) margin is deemed acceptable in a well-operating • Contribution to the Import Verification input market. However, the urea pricing in the Program (1%) cotton zone stood at 350 to 360 CFA Francs/kg during the said period, showing a price mark-up • Transit fees and taxes at Bobo’s dry port of over 20% above the estimated cost. The 50-kg (CFA Francs/T) fertilizer bag, sold at 17,000 to 18,000 CFA Francs • Handling fees in the zone, whereas, based on cost calculations, could have been priced more affordably at 14,500 • Storage fees in Bobo (3 months) to 15,000 CFA Francs. • Handling and storage losses (0.6’ * PEM) CAIMA’s aim to lower fertilizer prices for farmers is • Insurance and administrative fees justified based on the observed inefficiencies and ((0.3%+0.5%) * PEM) pricing discrepancies. As a non-profit association with sound management and financial support, • Financial fees (11% of the cost excluding CAIMA can establish an efficient supply system to margin) lower prices. • Importer’s gross margin However, some private operators may not be The cumulative cost of these factors gives the interested in participating in the activities of this factory exit price in Bobo-Dioulasso, which serves agricultural input supply platform. From the as a reference price (excluding transportation interviews conducted, some private-sector costs to the municipality) for the State’s tenders representatives expressed reluctance towards for input subsidies. The State’s purchase price for engaging in collective import operations. They urea stood at 335 CFA Francs/kg in 2016, shifted clearly indicated a preference for standalone to 315 CFA Francs/kg from 2017 to 2019, and rose business transactions, as they consider other to 343 CFA Francs in 2020 (Figure 18). This price import companies as competitors. They even 48 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 18: Comparison Between the Calculated Reference Price and the State’s Purchase Price of Urea 400 335 343 350 315 315 315 300 276 284 261 269 251 250 200 150 100 50 0 2016 2017 2018 2019 2020 Benchmark price Purchase price of fertilizers by the State Source: The authors using data from IFDC [2019], MAFAP/FAO [2019], World Bank, and Burkinabe Shippers’ Council indicated that CAIMA and the Association of fertilizers’ sale price to farmers. Stakeholders Wholesalers and Retailers of Agricultural Inputs recommend the creation of guarantee funds (AGRODIA). Without the support of the majority of and preferential credit lines by the State in private operators, CAIMA will have difficulty collaboration with financial institutions, to lower fullfilling its mission of improving farmers physical these costs. This move would significantly lower and financial access to seeds. Thus, this centratl- the financial costs included in the sale price. This ized purchasing body on international markets enhanced financing accessibility will allow them seems prone to failure. to better plan imports, thus reducing fertilizer purchasing prices. The expectation that bulk buying on global markets will significantly lower purchase prices The stakeholders’s limited storage capacities may be overly optimistic. Burkina Faso’s limited in the import and distribution chain restrict the fertilizer import quantity (approx. 250,000 tons) ability to take advantage of favorable global does not position it as a “price maker” able to market prices. To address this issue, stakeholders influence global prices. recommend the creation of guarantee funds for obtaining low-cost investment credits, with an Paths for Lowering the Cost of Mineral fertilizers extended repayment period of 5 to 10 years, to improve their logistical capacities. These structural Interviews conducted with stakeholders in the investments will enhance the efficiency of the fertilizer import and distribution chain showed input market operations. financing as the main obstacle to an efficient fertilizer supply. Nominal interest rates range Adjusting import duties and fees, especially for between 8 and 9% and with the addition of other NPK fertilizers, could contribute to price reduc- charges (such as processing fees, insurance, tions. Urea, irrespective of its origin, and NPK real estate expertise, notary fees, etc.) the imported from ECOWAS countries, are exempt effective interest rate may climb to 11 or 12%. from customs duties. NPK is taxed at 5% when This high financing cost significantly impacts imported from outside the ECOWAS region. Total the price of fertilizers. According to a 2019 exemption of NPK from customs duties could lead FAO study, financial costs make up 8% of the to a price drop of 600 to 1,000 CFA Francs per INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 49 50 kg fertilizer bag. However, this might discour- through bidding to purchase and distribute subsi- age investments in the development of new fertil- dized fertilizers. By fixing the subsidy at 100 CFA izer formulations. Francs/Kg, or 5,000 CFA Francs for a 50 Kg bag, and factoring in the distribution and service fees Moreover, fertilizer import formalities include of the mobile phone operator, estimated at 20 variable informal fees and administrative hurdles CFA Francs/kg, the annual average of subsidized that can be eliminated. In the short term, this quantities could increase from 17,000 tons to initiative is likely to curtail incidental costs, thus 55,000 tons, with the current resources allocated slightly lowering the price for farmers. Over by the State for the purchase and distribution of the long term, streamlining these formalities fertilizers. Under this system, a budget allocation will encourage the entry of new private sector of 12 billion CFA Francs would subsidize 100,000 players into the fertilizer import market, fostering tons of fertilizer, covering 12% of the food crop competition. fertilizer needs. The pricing analysis of fertilizers via the Abidjan The effectiveness of such a reform depends corridor, as included in the FAO study, shows that on ensuring that the price borne by the farmer transportation expenses constitute 12% of the price. does not exceed the current price of 12,000 This increase in the fertilizer price paid by farmers CFA Francs for a 50 kg bag. It is therefore is attributed to port charges and elevated land important that the fertilizer’s reference price transportation cost. Proposing integrated logistics (including distribution fees) from the selected contracts, which might include rail transport, is seen distributors remains below 17,500 CFA Francs as a way to reduce these costs. This approach for a 50 kg bag. Fertilizer price reconstruction could lead to a decline in fertilizers’ price. reveals that these objectives were achieved during the 2016–2020 period. However, the All these initiatives require thorough consultation ongoing rise in global fertilizer prices will and coordination among all stakeholders, making inevitably increase the subsidized price. In the establishment of a consultation platform any case, implementing measures aimed at essential. Certain concessions requested from reducing inefficiencies in the fertilizer market the State by private sector actors, like financial would yield more favorable prices despite the cost reduction and customs duties exemptions global situation. on non-ECOWAS NPK imports, may fall short if the savings are not relayed to prices to the farmers. The creation of such a platform is crucial CASE OF IMPROVED SEEDS for setting objective contracts among various stakeholders and ensuring effective mutual Seed Sector Structure monitoring. In Burkina Faso, the Institute of Environment and Increasing Subsidized Volumes through Agricultural Research (INERA) is the research body Subsidy Reforms responsible for producing pre-base and base seeds. However, the ECOWAS law on seeds allows Budgetary constraints due to the security crisis private seed producers (companies, cooperatives, prevent the expansion of public funds earmarked or individual operators) to produce base seeds, for input subsidies. However, the subsidized fertil- compensating for INERA’s limited resources and izers volumes may be increased while maintain- satisfying the growing demand for base seeds. It is ing the Agri-Voucher, by reforming the existing worth mentioning that INERA has received support system. A similar approach to the one adopted from several international agricultural research in Mali could be a viable approach. This could institutes like the International Institute of Tropical involve the State selecting private operators Agriculture, Semi-Arid Food Grain Research and 50 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Development, International Crops Research Despite the emergence of companies such as Institute for the Semi-Arid Tropics, and AfricaRice NAFASO, AGRO-Sahel, AGRO-Production, FAGRI, for the selection of millet, sorghum, corn, rice, and GMPS, the establishment of seed farms, and the cowpea seeds. structuring of producers into seed cooperatives and groups under a global umbrella of UNPS-B The role of the private sector in seed production and the National Association of Seed Companies has been on a steady rise, covering both upstream of Burkina Faso (ANESBF), the sector still faces and downstream stages of the process. This sector challenges, such as insufficient number of stor- includes merchants and distributors of agricultural age infrastructures, packaging material, and seed inputs such as fertilizers, pesticides, as well as processing machines in some regions. imported and local seeds. As part of a seed sector development policy formulated in 1993, which led Following the 2008 food crisis and in order to to the formulation of a specific program, a prime ­ mitigate the deficiencies in the seed sector, objective was to establish a network of certified various support initiatives have been launched seed multipliers and facilitate their distribution. by development partners like European Union’s These multipliers include seed companies, Food Facility program, the seed sector enhance- individual seed producers, or producers organized ment program funded by Japanese cooperation, in groups or cooperatives. Yet, given INERA’s assistance from Dutch cooperation and the United limited capacities, a revision of the seed law to States Agency for International Development extend the production of pre-base and base seeds (USAID) support to AGRODIA via Marketing Inputs to the private sector, in line with the provisions Regionally (MIR) project, implemented by the of the ECOWAS law on seeds, will compensate International Center for Fertilizer Development for the deficit in the quantity and quality of base (IFDC). Moreover, the World Bank-funded seeds produced by INERA. Agricultural Productivity and Food Security Project (PAPSA) has also extended its support to the seed According to the National Seed Service’s records, sector by building the capacities of stakeholders the number of individual seed producers has and building infrastructures. Furthermore, German increased, rising from 175 in 2001 to over 3,500 in cooperation, via GIZ, has also initiated the con- 2021. This rapid increase in the number of seed struction of seed processing centers in six regions producers over two decades reflects a better in the country. These various support initiatives organization of the seed sector and opportunities have played a pivotal role in bolstering the seed offered to stakeholders through State subsidies. sector by enhancing the production of pre-base This sector has a better organization since the seeds and the creation of a sustainable system for creation of the National Union of Seed Producers seed multiplication and certification. This has been of Burkina (UNPS-B) in 2004. This organization achieved mainly through establishing programs brings together various stakeholders such for stakeholders, input shops and setting up cold as groups, cooperatives, and individual seed storage facilities for seed conservation. ­ producers. The regulatory framework overseeing the pro- Private sector entities, either producers (seed duction of improved seeds is governed at the companies) or distributors oversee the seed supranational level by regulations issued by the distribution. However, there is a limited number of Permanent Inter-State Committee for Drought agricultural input distributors in some regions. As Control in the Sahel, UEMOA, and ECOWAS, and a result, access to inputs is restricted despite the at the national level, by law n°010-2006/AN on the creation and growing number of input distributor regulation of plant seeds. associations like AGRODIA and COCIMA. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 51 Trends in Expenditures and provincial agricultural units. These seed batches Subsidized Quantities are then stored in approved warehouses, sam- pled in mid-February, and analyzed in the labo- Crops that benefit from the seed subsidy include ratories of the National Seed Service no later corn, rice, cowpea, soybean, peanut, sesame, than the end of March. The certified, high-quality millet, and sorghum. During the 2016–2020 seeds are then repackaged and sealed by seed period, an annual average of 7,130 tons of certified inspectors. seeds received subsidies by the State, compared to approximately 6,450 tons for the 2011–2015 Finally, at level 3, the distribution of certified period, thus, a significant increase of 10.6%. The seeds to subsidy beneficiaries is similar to annual allocations earmarked for seed purchases the mechanism set for fertilizer distribution. stood at 3.8 billion CFA Francs. With an average Beneficiaries are selected using a process similar subsidy rate of 86% across all crops, the annual to the one used for fertilizers, through the Agri- cost of the subsidy is approximately 3.3 billion voucher system, introduced in the 2020/2021 CFA Francs for the 2016–2020 period. agricultural season. Subsidy Efficiency Mechanism for Implementing the Subsidy Operation Assuming that the recommended quantities per hectare are respected and that the distributed The State intervenes at three different levels for seeds are actually used, 24% of the corn culti- the promotion of the use of improved seeds: vation areas received State-distributed seeds i. The State provides support to INERA for the from 2016 to 2020, compared to 21% in the production of pre-base and base seeds and similar period. However, only 22% of the rice the certification of these seeds; seed requirements were met during 2016–2020 compared to 30% in the 2011–2015 period. This ii. It eases the access of seed producers to base can be attributed to the rapid increase in rice seeds and oversees the production and certifi- sorghum cultivation areas. Subsidies for millet and ­ cation of the seeds produced; and were minimal, meeting only 2% of the needs. iii. It is responsible for distributing certified seeds Overall, the subsidy covered 5.8% of the certified to farmers. seed requirements from 2016–2020, compared to 6.4% in 2011–2015 and 7.1% in 2008–2010. At level 1, the Directorate of Plant Protection and Consequently, except for corn, the subsidized Quality Control (DGPV) evaluates the quantities of quantities are increasing but remain significantly base seeds required, based on the needs articu- below the needs. lated by seed producers. It mobilizes resources for inspections, certification, and support for INERA For cash crops (cowpea, sesame, peanut, and and private base seed producers. soybean), the subsidies were very limited, barely covering 1% of needs, partly due to limited supply At level 2, seed inspectors use a list of seed and non-profitable purchasing prices for seed multipliers to monitor the use of base seeds by producers. conducting field inspections in accordance with existing regulations. The quantities produced The yields for millet, sorghum, and cash crops by seed producers are packed in appropriate are difficult to improve with such limited use containers and collected at the provincial level in of enhanced seeds. However, in the context designated warehouses, in agreement with the of climate change, promoting short-cycle and 52 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW water-stress-resistant varieties is essential to Through its intervention, the State should aim boost productivity. to foster a thriving seed market. An appropriate approach could be the gradual reduction of the Apart from the small, subsidized amounts, a subsidy rate, from an average of 90% to 50%. substantial variation in quantities purchased Farmers with sufficient resources to purchase from UNPS-B and ANESBF is linked to budgetary inputs at market prices could be excluded from resource availability. This lack of visibility regard- this subsidy, which then would be directed to ing State needs does not allow seed produc- small and medium-sized farmers. However, it is ers to effectively plan their production. Delayed critical to strengthen the resilience of chronically disbursement of budgetary credits for seed poor farmers and internally displaced individuals, purchases sometimes shortens the timeframe for who face challenges in accessing land resources repackaging operations, causing late seed avail- in their host areas, by implementing a special ability for farmers. Moreover, payment delays from assistance program. This program would include the State impose financial strains on UNPS-B, food and monetary aid and boost production which has to borrow funds to cover its members’ means by distributing free kits, which include salaries. seeds, fertilizer, livestock, and small agricultural equipment. A phased exit strategy should be Effects of the Subsidy on the Development of envisioned for beneficiaries after a 3-year period, an Enhanced Seed Market following the monitoring/evaluation of their performance. The State and its development partners are the main purchasers of improved seeds, with little The development of an enhanced seed contribution from parallel sales. This is especially market will also require strengthening the the case as the high purchasing prices set by the certification process. The National Seed State and allocated to UNPS-B and ANESBF, deter Service faces challenges with insufficient private sector actors from investing in the distribu- resources and delayed fund disbursement, tion of improved seeds. In fact, during the 2016– affecting the efficiency of the certification 2020 period, the State and some projects funded process. The one-week certification missions by external sources procured an average of 7,000 are considered insufficient by seed producers. tons of seeds per year, compared to an annual A National Seed Fund has been proposed, production of 12,000 tons. Thus, the State’s share funded by certification fees, to address budget in the improved seed distribution market stands constraints. Moreover, storage infrastructure at around 60%. Institutional purchases, including must be built in certain localities to store seeds those by NGOs, make up 80% of the improved for their certification. seed market. Finally, export restrictions on seeds, despite the Therefore, while the State’s intervention facilitates existence of a sub-regional market, hinder the vulnerable producers access to improved seeds growth of seed companies and their networks of at nearly zero cost, the State’s dominance in the small seed producers. For the growth and devel- seed market keeps the seed sector in an artificial opment of the seed sector, it is imperative to situation, masking the sector’s problems. As a remove these obstacles by formulating a policy result, the production and distribution of seeds that promotes trade and facilitates access to could face difficulties should the subsidy stop. financing for the relevant entities. The challenges faced in selling seed production in the non-subsidized segment of the input market confirm these concerns. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 53 Irrigation and medium irrigated areas, at 570,187 ha for small scale irrigated areas, and at 764,515 ha for lowlands (Burkina Faso, 2012). CONTEXT AND POLICY FRAMEWORK IN IRRIGATION With the expiration of its term, the SNDDAI 2003–2015 was replaced by a new SNDDAI for A surge in irrigation agricultural policies were a the 2021–2025 horizon. The overall objective of response to the droughts of the early 1970s that this strategy is to contribute to food and nutritional severely impacted plant production and livestock. security through the sustainable development An agricultural water management policy was of irrigated agriculture. A three-year action plan formulated in 1975 that focused on: (i) developing for the 2021–2023 period, requiring a financial small and medium-scale irrigation; (ii) broadening envelope of 938 billion CFA Francs, defines a large-scale irrigation by generating large-sized first phase for the implementation of SNDDAI irrigated areas through river diversion or construc- 2021–2025. tion of large dams; (iii) instituting revolving funds for inputs like fertilizers to improve yields; and This section on irrigation evaluates the extent (iv) promoting equitable land access on State- of public support to hydro-agricultural facilities managed areas. (HAF) and analyzes the effectiveness and efficiency of these public investments. A special emphasis will be laid on incentive measures From the 2000s, a review of the performance of aimed at promoting private investments in the different types of developments revealed many irrigation sector. challenges, including: (i) rapid degradation of irrigation infrastructure; (ii) disorganization in water management; (iii) declining yields; and (iv) increas- ANALYSIS OF THE LEVEL AND ing indebtedness among producers and their organizations. Due to these challenges, there was STRUCTURE OF EXPENDITURES a shift towards promoting small-scale irrigation for ALLOCATED TO HYDRO-AGRICULTURAL crops other than rice (MAHRH, 2004), and to some FACILITIES extent, the extension and restoration of large irri- gation developments. Analysis of the Level of Public Expenditures Allocated to Hydro-Agricultural Facilities To adress challenges related to agriculture in Burkina Faso, especially in the context of Following the adoption of the Program Budgeting, intensifying negative effects of climate change, the irrigation development strategy was imple- the National Strategy for Sustainable Development mented through Program 075 “Hydro-Agricultural for Irrigated Agriculture (SNDDAI) up to 2015 was Facilities and Irrigations” and Program 109 developed and adopted in December 2003. It “Hydraulic Developments,” which focuses on focused on four programs: (i) The “Large and water resource mobilization. Medium Scale Irrigation Schemes” Program; (ii) The “Small Scale Irrigation Schemes” Program; Initially earmarked budgetary funds for Hydro- (iii) The “Lowland Irrigation Schemes” Program; Agricultural Facilities (HAF) increased from 112.3 to and (iv) The Soil Management Program for the 189.5 billion CFA Francs between 2016 and 2017, sustainable development of irrigated agriculture in a rise of roughly 70% (Figure 19). This significant Burkina Faso. increase can be attributed to allocations from local resources, which rose from 42 to 94 billion However, the total developped area is significantly CFA Francs. The redirection of State resources below potential and stands at 153,475 ha for large to the security and defense sector due to the 54 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW deteriorating security situation has since led to a during the first semester of the year when dry continuous decline in these budget allocations. weather conditions are the most favorable for work Indeed, they dropped from 189.5 billion in 2017 execution. to only 95 billion CFA Francs in 2020. There was a further downward revision during the 2016– Structure of Expenditures in HAFs 2020 period by 60 billion CFA Francs because of budgetary constraints. The decline in public Expenditure for the 2017–2020 period23 under the support to irrigation continued in 2021 with initial Budget Program for Hydro-Agricultural Facilities funds set at 64.4 billion CFA Francs, later revised (Program 075) are distributed as follows: upward to reach approximately 76.3 billion CFA • 43% for Coordination of Actions Related to Francs. Irrigation Executed Expenditures in HAFs also follow the • 42% for Development/Restoration of Irrigated same trend as budget allocations. Indeed, after Areas and Lowlands peaking at 119 billion CFA Francs in 2017, they • 8% for Restoration, Conservation, and have continuously decreased to reach 64 billion Recovery of Agricultural Lands CFA Francs in 2020, a 47% drop. An analysis of expenditures by funding sources reveals that the ­ • 2% for Management of Hydro-Agricultural State has been the main investor in HAFs since Facilities 2017. Its share in the executed expenditures stood • 3% for Adoption of Innovative Irrigation at 57% during the 2016–2020 period. The low Technologies Budget Execution Rate of budgets allocated to HAFs can be attributed to the delayed disburse- • 2% for Small Water Collection Structures ment of funds, as well as to the cumbersome pro- curement process, which slow financial utilization 23 The Program Budgeting was implemented in 2017, and therefore it is difficult to include the year 2016. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 55 FIGURE 19: Budgets and Expenditures Allocated to HAFs, in billions of CFA Francs 200.0 180.0 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 2016 2017 2018 2019 2020 2021 Initial allocations Revised allocations Executed expenditures Source: Authors based on data from the DGB and DGESS The substantial allocation of expenditures to the 32% of total expenditures. These administrative “Coordination of Actions Related to Irrigation” is overheads are mainly composed of salaries and explained by the inclusion of specific projects within travel expenses, which represent 60% of the this initiative, such as the Rainfed Rice Project III, expenditures during the said period. the Irrigation Development Aid Project, the Large-scale Western Irrigation Project, the Northern Enhancing the efficiency of the program’s Water Utilization Project, the Resilience expenditure allocation by reducing Strengthening for Food Security in the Sahel administrative overheads and allocating more Project, the Cultivation of One Thousand Hectares resources to the management of completed of Agroforestry and Fisheries Areas Project, and investments is crucial. the Enhancement of Agricultural Productivity via Water and Soil Conservation Project, among ­ others. In contrast, the management of HAFs, a MAIN OUTCOMES AND GEORGRAPHIC crucial factor for preserving the sustainability of DISTRIBUTION OF HYDRO- investments, is underfunded with an annual budget of 966 million CFA Francs, representing AGRICULTURAL FACILITIES only 2% of the expenditures allocated to irrigation. Development and Restoration of Hydro-Agricultural Facilities The breakdown based on the economic use of funds under Program 075 reveals a relatively The analysis of hydro-agricultural facilities reveals significant portion allocated to administrative a less-than-satisfactory level of implementation costs (such as salaries, operating expenses, across various plans (Table 6). administrative premises, vehicles, etc.). Indeed, out of an average annual expenditure of Indeed, during the implementation period of 40 billion CFA Francs for the 2017–2020 period, hectares SNDDAI I, goals included restoring 3,000 ­ an amount of 13 billion CFA Francs was spent (ha), extending 17,000 ha, and developing new on administrative overheads, which constitute 56 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW large areas, along with 5,000 ha in medium-sized Of these targets, lowland developments areas. An additional aim was to develop and were completed at 65% (22,728 out of restore 5,000 ha in medium-sized areas. However, 35,000 ha), and the restoration of the Sourou over the 2004–2015 period, the intended restora- plain was executed at 90% (3,398 out of 3,818 tion of large-scale sites remained unaccomplished. ha) (see Table 6 below). The other envisioned Regarding new developments on larger areas, only structural investments were not achieved. Most 2,240 ha were achieved in the Sourou Valley under of the planned investments are currently at the the Millennium Challenge Corporation Compact, stage of project sheet formulation and in the which is only 13% of the targeted area. Expansion of process of external funding solicitation. medium-sized irrigated areas was minimal. The developed lowlands were primarily concen- Given the unimpressive implementation level of trated in six regions, accounting for 70% of the SNDDAI I, an increase in expenditures allocated total development. Leading regions include Boucle to hydro-agricultural facilities (HAF) for struc- du Mouhoun (15.4%) followed by the East (15.3%), tural investments has been integrated into the the North (13%), Centre-North (11.5%), Centre-West first National Economic and Social Development (7.7%), and Hauts-Bassins (7.4%) regions. The Program (PNDES I). Specific targets for 2016–2020 remaining 30% are distributed among other included: (i) development of 35,000 ha of lowlands; regions, with shares ranging between 3 and 5%. (ii) creation of 9,312 ha of new developments; The geographical distribution of the developed (iii) restoration of 5,078 ha; and (iv) construction of lowlands is mainly dictated by the physical and 14 new dams and restoration of 18 dams. resource potential of each region. TABLE 6: Status of Implementation of Structural Investments under PNDES I in the HAFs Planning Accomplishments Development of 35,000 hectares (ha) of lowlands A total of 22,728 hectares of lowlands were developed during the period. Development of 1,000 ha of agroforestry, pastoral, and fishing 457 hectares have been developed. areas in the regions of North Central, West Central, and Hauts Bassins Restoration of 3,818 hectares of irrigated areas in the Sourou Valley As of 12/31/2020, 3,398 hectares were restored. Development of 2,000 ha of hydro-agricultural areas for wheat Project sheets and feasibility studies. Letters of intent from Italian cultivation in Sourou and Chinese companies. Development of 2,000 hectares (ha) of hydro-agricultural areas in Pre-assessment by the African Development Bank of 817 hectares, Dangoumana and by the World Bank of 1,069 hectares (PDCA). Development of 1,812 hectares (ha) of hydro-agricultural areas in Preliminary project sheet and feasibility study. Sono-Kouri Development of 1,500 hectares (ha) of hydro-agricultural areas in Expression of interest from the People’s Republic of China for Bissan funding. Development of 1,000 hectares (ha) in the Niofila-Douna plain Project sheet and feasibility study. Restoration of the KOU BAMA valley plain (1,260 ha) Pre-assessment by the World Bank under the PReCA framework. Construction of a dam at Sanghin Source: SP/CPSA [2020] and [2021] INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 57 As for the mobilization of water resources for If the execution rate of the sustainable devel- irrigation, 8 dams were built and 10 restored, opment sub-program of agricultural water resulting in a physical execution rate of 57% and management reached 118% due to possible 56% respectively. underestimation of the needs during PNSR I implementation, the Budget Execution Rate of ­ Besides the structural investments outlined PNSR II sub-programs related to HAF has been in PNDES I, it is worth mentioning that insufficient. Indeed, an amount of 156 billion CFA approximately 7,500 hectares have been Francs was allocated to hydro-agricultural facili- cultivated over the 2016–2020 period within the ties, reflecting a Budget Execution Rate (BER) of scope of various projects funded by the State 42%, and 147 billion were spent on water resource and donor-funded projects. The horticultural mobilization, indicating a BER of 52%. developments covered 1,083 hectares during the said period. Slow contract approval processes by donors and their under-investments, particularly in dam The expansion of 4,400 hectares in the Bagré construction and restoration, have hindered perimeter, accounting for 59% of the total progress. Indeed, financial partners contributed developed areas, along with the cultivation of to 61% of the hydro-agricultural facilities, but 1,007 hectares in the Eastern region (making their contribution to water resource mobilization up 1.5%), constitute the majority of these new was only of 12%. Enhancing donors support developments. The remaining developments for the construction and restoration of dams in were carried out in the Central-West (619 ha, secure areas is crucial, given the severe budget 8.3%), in the Boucle du Mouhoun (483 ha, 6.5%), constraints due to the deteriorating security in the Central-North (257 ha, 3.4%), in the North situation. (220 ha, 2.9%), in the Hauts-Bassins (195 ha, 2.6%), and in the Sahel (162 ha or 2.2%). However, this insufficient Budget Execution Rate is also attributed to the limited technical capacities of Analysis of Constraints Pertaining to the the parties. The perceived lack of seriousness and Completion of HAFs instances of corruption in companies managing HAF projects create distrust among donors, which A key obstacle to Hydro-Agricultural Facilities can directly hinder the smooth execution of HAF (HAF) projects is the inadequacy of public finan- projects. cial resources for their construction and res- toration. The financial resource needs for the Finally, the limited financial participation SNDDAI I have not been assessed. The needs of private sector entities in funding HAF for the sustainable development sub-program of developments also restricts resource agricultural water management outlined under mobilization for HAF projects. The ambition to PNSR I (National Agricultural Development cultivate 50,000 hectares by private entities Program Phase I) have been estimated at under the Presidential Initiative “Produce One 248 billion CFA Francs. The funding needs for the Million Tons of Rice” should be encouraged. hydro-agricultural facilities and irrigation sub-pro- gram outlined under PNSR II have been estimated at 613 billion CFA Francs, and those for the water resource mobilization sub-program at 283 billion CFA Francs. 58 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW ANALYSIS OF THE EFFICIENCY OF Gravity Irrigation System THE DIFFERENT TYPES OF HYDRO- Gravity Irrigation System is the most common AGRICULTURAL FACILITIES irrigation technology but least efficient in terms of yields per-hectare investment costs Given the significant allocation of resources (especially for large areas), and water use towards irrigation investments, the use of available efficiency. Although considered the most resources is critical. This can be achieved by accessible technology for small-scale farmers, evaluating different types of irrigation projects gravity irrigation system requires substantial and technologies to identify those that yield the construction and operational inpuuts such as field best results. A summary of available evaluations leveling, network maintenance, water distribution is provided below. According to the SNDDAI 2019 scheduling, and control of unauthorized water evaluation although limited due to the inadequacy withdrawals. of Monitoring and Evaluation (M&E) mechanism to perform a financial and economic ex-post The efficiency of gravity irrigation systems is also analysis of the different types of interventions, influenced by the size of the cultivated areas, the yields achieved were significantly below the impacting income improvement and poverty predetermined targets, indicating that the benefits reduction outcomes. An assessment of the overall were insufficient. Bagré perimeter (Bazin et al., 2017), revealed that land access is the primary factor contributing to Analyses of investment outcomes (see Table 5) in disparities among farmers. Farmers were classified irrigation vary based on the focus of the projects, into five groups: showing mixed results across the different results types of irrigation projects (large, medium, village, lowlands) and technologies (gravity, pressurized piping, drip irrigation). TABLE 7: Comparative Overview of the Efficiency of the Used Irrigation Techniques Development Cost Irrigation Method (In millions of CFA Network Water Cost (Technique) Francs/ha) Average Yield (T/ha) Efficiency (CFA Francs/m3) Gravity-fed System GPI*: 7 à 10 Vegetable: 20 to 25 Approximately 5% GPI: 9.3 without Pumping MPI : 2 à 2.5 Corn: 2.5 to 3 MPI: 2.8 PPI : 0.130 à 2 Rice: 3 to 5 PPI: 4.5 to 10.8 Lowland: 0.3 à 3.5 Lowland: 3 Californian System / 3.5 to 6 Same as above Approximately Semi-Californian 60% to 65% System Drip Irrigation System 2.3 to 4  Sugarcane: 130 tons/ha compared 85% to 95% to 80 tons/ha with pivot or ramp sprinkler (200 tons/ha in Senegal) Vegetable: at least 80 Corn: not specified Source: Evaluation Report prepared by SNDDAI, 2019 *PI: Irrigated Perimeter; GPI: Large Irrigated Perimeter; MPI: Medium-sized Irrigated Perimeter; PPI: Small Irrigated Perimeter INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 59 i. Rice farmers cultivating 1 hectare or less in rain-fed and irrigated crops who have (45% of farmers, 35% of cultivated land), 1 hectare or less for rice cultivation on the cultivated perimeter (Group III). Their income ii. Rice farmers cultivating more than 1 hectare of from agricultural activities only reaches rice in the area (3% of farmers, 7% of cultivated the poverty threshold in favorable years. In land), average years, they need non-agricultural iii. Rice farmers cultivating 1 hectare or less income to meet the poverty threshold. in the area, and possessing rainfed plots In unfavorable years, their income falls below (33% of farmers, 28% of cultivated land), the poverty threshold but exceeds the food security threshold. iv. Farmers cultivating more than 1 hectare in the area, and possessing rainfed plots c. Farmers who do not reach the poverty (6% of farmers, 12% of cultivated land), and threshold. This category of farmers solely rely on a paddy field of 1 hectare or less (Group I), v. Diverse farmers (13% of farmers, 18% of devel- and does not reach the poverty threshold even oped land). These farmers typically have during favorable years, despite non-agricultural average land areas of 1.5 hectares within the income. In unfavorable years, their agricultural perimeter and 1.9 hectares outside of it. These income barely reaches the food security small farmers are attempting to circumvent threshold. land access constraints by shifting to the cultivation of vegetables or fruits on small Land access significantly impacts the performance plots. Some are diversifying by introducing of agricultural activities that utilize cultivated fruit production to their agricultural activities, plots in the Bagré perimeter. The improvement cultivating orchards of mangoes, citrus fruits, or of the economic situation of the poorest farmers bananas on their land, when possible, in addi- strengthening their capacities for the infrastructure tion to their rainfed crops, rice cultivation, and maintenance, and developing their capacities to vegetable farming. invest in their activities are highly contingent upon their access to arable land, both irrigated and non- The analysis of the total annual revenues across irrigated, that can generate an income exceeding different farmers groups revealed three distinct their family’s needs. economic situations: a. Farmers whose total income exceeds the Drip Irrigation System poverty threshold. This group includes diverse farmers (Group V) and farmers who Drip irrigation technology results in superior crop cultivate more than 1 hectare of rice, with or output and physical efficiency of the irrigation without rain-fed crops (Group II and IV). Their network, while maintaining investment costs income surpasses the poverty threshold comparable to those of medium and small- every year. In years considered good or scale gravity irrigation projects. Technological average, their agricultural income alone advancements have made the operation of drip surpasses the poverty threshold, allowing their irrigation systems easier and more cost-effective, non-agricultural income to be directed into particularly with the integration of solar energy productive investments. In unfavorable years, for pumping needs. Drip irrigation is particularly they need non-agricultural income to meet the effective for the cultivation of vegetables and poverty threshold. fruit trees, but less appropriate for cereal b. Farmers who marginally reach the poverty production. threshold. Farmers in this category engaged 60 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Drip irrigation has been encouraged in Burkina for rainfed crops, which can impede movement. Faso for almost two decades through numerous These irrigation systems, referred to as “California small-scale projects. Although small farmers have systems,” are more suited for off-season crops. shown willingness to engage in these pilot proj- ects, the adoption of this technology has not been These irrigation systems are appealing in sustained except in cases where incentives were Burkina Faso for their water saving potential. provided by specific projects, despite the rise of a However, they have faced “malfunction” issues private sector comprising professional technicians (SNDDAI Evaluation Report, p. 58). Based on the and equipment suppliers. According to certain evaluation conducted in the Northern region, analyses, farmers’ participation in these projects out of the 29 investments made in the semi- appears to be motivated more by the additional Californian system between 2005 and 2015, two- benefits provided by the projects such as agricul- thirds (or 19) were non-functional in 2019. tural inputs (like seeds, fertilizers and pesticides), water lifting devices, micro-credit, and infrastruc- Since the evaluation conducted of SNDDAI, two ture like wells than by the intrinsic performance additional completion reports for large-scale benefits of the technology. Once these projects irrigation investment projects have become end, farmers often abandon the use of drip irriga- available: one for the irrigation project in the DI tion kits (Wanvoeke et al., 2016 and 2017). perimeter in the Sourou Valley, and the other for the Bagré growth pole project. The DI perimeter Californian/Semi-Californian System (see Box 7) was mainly centered on onion production by small-scale farmers, while the Bagré These systems use low-pressure underground irrigation project (see Box 8) primarily focused irrigation networks as an alternative to above- on cereal production involving small farmers ground irrigation canals. The pipes are made and business-driven private investors. The post- of plastic materials (PVC) or asbestos-cement, investment evaluation of both projects in terms of and water is distributed through small valves. actualized Internal Rate of Return (IRR) fell short This irrigation system is more cost effective of the projected figures: the IRR for the Di project compared to lined canals, and despite the stood at −2.4% against the initial target of 4.2%, need for pumping, it is suitable for high-value while the IRR for the Bagré irrigation project stood crops typically cultivated in the dry season and at 13.3% against an initial target of 20%. Public alternated with rainfed crops. These systems avoid investment costs on a per hectare basis in both the need for irrigation canals in fields designated cases were considerably high. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 61 BOX 7: Performance of the Di Perimeter An agricultural area of 2,246 hectares located on the East bank of the Sourou River was developed with the financial backing of $89 million from the Millennium Challenge Corporation. This area hosts new drainage and irrigation systems, seven pumping stations, a levee, roads, and pathways were established. Beneficiaries in the Di perimeter received land allotments, land titles, training in irrigated farming, startup kits, and production inputs for the initial season and infrastructure management assistance. Water User Associations (WUAs) were established for capacity building and management. The rationale behind the Di perimeter initial program, was that improved access to irrigated lands, secure land tenure, and enhanced technical capacities of the beneficiaries via training sessions would increase crop intensity, foster crop diversification, improve yields, and increase the net agricultural income of the project’s beneficiaries. Lands within this perimeter are extensively cultivated during both seasons, with over 95 and 99% of the 2,246 hectares of perimeter lands being cultivated during the dry and rainy seasons, respec- tively. The cultivated area during the rainy season is more than double in size. Lands cultivated during the dry season witnessed a twentyfold increase. Yet, the profits per hectare are below the forecasted amounts for all types of beneficiaries. Profits generated during the dry season per hectare increased more than tenfold compared to the rainy season. Profits from onion cultivation exceeded those from corn but overall, they did not meet the pre-project projected economic rate of return (ERR). Post-investment evaluations showed the project’s ERR was slightly negative at −2.4%, below the pre-project projections of 4.2%. The shortfall in ERR primarily stems from the limited profits per hectare from onion cultivation, given that at project closure, onions were expected to constitute approximately 87% of the total annual profits. The ERR ranges between 4.5 and 0.4% while the lifespan assumptions of the project range between 10 and 30 years. Although the WUAs have appropriate routine maintenance systems for the pumping station, most sectors face challenges in cleaning channels and drains due to insufficient farmers participation and lack of proper equipment. The capacity to fix damaged access roads, cracked channels, and faulty valves is beyond the reach of both the WUAs and the Sourou Valley Development Authority. Given the state of infrastructure maintenance, stakeholders estimate the remaining lifespan of earth-made infrastructures (like drains and smaller channels) at 10 years, and between 10 to 30 years for pumping stations and concrete components (larger channels). Source : Knoll et al., 020. 62 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW BOX 8: Performance of the Bagré Growth Pole (2011–2020) The Bagré Growth Pole project initially planned to develop irrigation infrastructure in two of the three irrigated areas, covering a total land area of approximately 13,900 hectares. However, in 2016, this plan was significantly scaled down due to severe underestimations of costs and con- struction overrun expenses for the irrigation infrastructure, which left no funds for building the road and electrical infrastructure. With an additional $50 million funding secured in 2018, the focus shifted to restoring a segment of the irrigation area, and the construction of the project’s electri- cal and road infrastructure, essential to attract private investments. Simultaneously, the project’s robust counterpart subsidy and cash transfer programs generated significant economic activity in the project area. The construction of unpaved roads progressed slowly and was only completed at the end of the project. The revised agricultural production objective was attained, although it remains significantly below the initial expectations. The additional irrigated area extended to 2,200 hectares, exceeding the revised 2016 target of 1,500 hectares. As a result, the cumulative production target was reduced from an initial 450,000 tons of cereals to 300,000 tons and finally to 190,000 tons. The actual achieved target was 228,863 tons. The ex-pre-project estimation of the Economic Rate of Return (ERR) for the project, and incited private investments, was pegged at 20%. Considering changes in the project’s design and scope, an ex-post evaluation based on different approaches and parameters was conducted in the project completion report. This evaluation was based on the project’s total costs of $138 million, and an assessment of quantifiable costs and benefits. These included both agricultural and non-agricul- tural employment opportunities, as well as additional cereal production attributable to the project. The project facilitated the creation of 34,154 jobs, an additional production of 228,863 tons of cere- als across 2,200 hectares of newly irrigated land and attracted private investments totaling $33.6 million. The project generated an ERR of 13.3%. Private investors played a crucial role, particularly in providing electrical power for pump irrigation. Source: World Bank, 2021 Poor Performance of HAFs in the Cultivation of A similar trend was observed for rice. The rain- Rice and Corn fed yield on the cultivated plains and lowlands stood at 3.3 T/ha, against 1.6 T/ha on unimproved The analysis of the agricultural survey results lowlands. reveals that the efficiency of the Hydro-Agricultural Facilities (HAF) in the cultivation of rice and corn These average yields achieved on sites with has been limited. For rainfed corn, the average partial water control are below potential, making yield over 2018–2020 on cultivated plains and the public investments made in these projects lowlands was 3.5 tons per hectare (T/ha), only unprofitable. The small areas cultivated by farm- double that of the traditional undeveloped system, ers on these sites, ranging from 0.25 to 2 ha per which yielded 1.7 T/ha. farmer depending on the perimeter type, result in INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 63 yields that do not assure food security or generate ANALYSIS OF THE MANAGEMENT ­ sufficient margins for the adoption of more efficient AND MAINTENANCE OF HYDRO- technologies. AGRICULTURAL FACILITIES The goal of improving the food and nutritional Case of Large-Scale Perimeters security of the population benefiting from the HAFs, particularly in the context of climate-induced Eighteen surveyed perimeters are classified as rainfall variability, remains unachieved due to this large perimeters, with developed areas ranging poor performance. The average annual between 110 ha and 6700 ha (MAAH [2018]). contribution of irrigation to cereal production was only 4.6% during the 2018–2020 period. FIGURE 20: Yield of Corn and Rainfed Rice Farming Based on the Production System  Yield (T/ha) of corn 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2018 2019 2020 2018–2020 Traditional system Managed plains and lowlands Yield (T/ha) of rice 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2018 2019 2020 2018–2020 Traditional system Managed plains and lowlands Source: Authors, using data from DGESS/MRAH 64 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The operational and management mode of these (replacement) such as pumping stations (MAAH, large perimeters is self-management by farmer 2018). organizations in almost all large perimeters, with the exception of a few perimeters where An analysis of the actions and activities in the management is delegated to autonomous budgetary program 075 on hydro-agricultural organizations, such as in the Bagré plains facilities confirms this situation. Indeed, the annual (Bagrépôle) and Sourou. The farm size in these expenses allocated to HAF management during perimeters generally varies between 0.5 and the 2017–2020 period amounted to 960 million 2 hectares. Rice monoculture is the main crop CFA Francs despite the importance of the needs. cultivated on these perimeters. It is worth mentioning that Bagrépôle is currently piloting the This lack of a sustainable maintenance mechanism participation of private entities in the financing of for the infrastructure has led to significant degra- parcel improvements. dation of the perimeters. In 2020, the Directorate General of Hydro-Agricultural Facilities and Within the perimeters, farmers groups are Irrigation Development estimated that the total responsible for: (i) supplying inputs and farming degraded area at the perimeter level exceeded equipment and facilitating access to credit; 4,000 hectares. (ii) managing water rotation, and ensuring the maintenance of networks (clearing of drains, Case of Medium-Scale Perimeters upkeeping of secondary canals, maintenance of tertiary canals); and (iii) preserving infrastructure There are approximately fifty medium-scale and equipment. perimeters, each covering an area between 20 and 100 hectares. The typical irrigated area Following the early 1990s adoption of PASA, the allotted to each farmer in these perimeters is maintenance of the primary network on HAFs about 0.25 hectares, though larger areas are ceased to be responsibility of the State, except managed by cooperatives. in the Bagré, Di, and Douna perimeters. This left the irrigated perimeters in a state of severe The management approach of the medium-sized degradation. The physical efficiency of irrigation perimeters is typically self-management by the water24, ranging between 30 and 40%, is low. farmers. The management of the perimeters is There is no preventive maintenance. Preventive transferred from the State (or NGOs) to farmers and corrective maintenance is lacking (like clear- who are organized into groups, associations, or ing of canals, engine drainage, and filter replace- cooperatives. Farmers Organizations (FO) are ments) or corrective maintenance (like addressing responsible for the management and maintenance pump failures, significant leaks in the irrigation of these lands. Major maintenance tasks are either canals) planned. There are no arrangements for conducted directly by the FOs or outsourced to emergency situations or equipment depreciation daily wage workers, and routine maintenance is carried out by the farmers themselves. The water supply management within the perimeter is the 24 The physical efficiency of irrigation water measures the extent of losses and water “waste” in the irrigation sector (Chartered Institute responsibility of the irrigators’ committee, typically of Environmental Health, Centre for the Study of Agricultural headed by a water distributor or a pump station Machinery for Rural Engineering, Water, and Forests /1986). In the absence of water consumption monitoring data, the generally manager. However, in some cases, the mainte- accepted standards for measuring the efficiency of the perimeters nance of primary channels in certain medium-sized (Agronomist’s Handbook, GRET - CIRAD, 2009 edition; Dembélé Y. perimeters exceeds the financial capacity of the and IRAT / INERA works from 1969 to 1999) are: 1. Perimeters in Good Condition: optimal efficiency of 75%; average operators. efficiency of 60%. 2. Perimeters with a Poorly Maintained Network: efficiency ranging between 30 and 40%. This is generally the case of poorly The regional directorates for agriculture (RDA) maintained older perimeters in Burkina. provide supervision, but it is often inadequate. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 65 RDA agents, often agronomists, do not have the major challenges, exacerbated by the diversity necessary skills for the maintenance of the HAFs. ­ of brands and limited after-sales service. The sustainability of small-scale irrigation mainly Like for the large-scale perimeters, the depends on the existence of a solvent demand medium-scale perimeters face management for irrigated crops, which ultimately facilitates the and maintenance challenges leading to water renewal of equipment. wastage, structural degradation, and conflicts among users, particularly farmers of unauthorized The performance of small individual or private extensions. perimeters is relatively good. These perimeters engage farmers during the dry season, reducing Case of Small-Scale Irrigated Perimeters rural exodus and contributing to poverty reduction in rural and semi-urban areas. This type of Small-scale irrigated perimeters include: (i) perim- perimeter is less restrictive and can be expanded eters located downstream of dams for rice and at reasonable costs. The key challenge associated vegetable farming, using a gravity irrigation sys- with this type of perimeter remains the lack of tem, and managed by village groups; (ii) perime- water resources. In recent years, small-scale ters located upstream of dams, focusing on cereal irrigation has been increasingly popular in crops in the rainy season and vegetable farming Burkina Faso. in the dry season, using a pumping irrigation system; (iii) small village perimeters of 0.5 to 10 Case of Managed Lowland Areas hectares, using pedal pumps or motor pumps for irrigation, cultivating corn during the rainy season Lowland management is less costly, consumes and diversifying their crops during the dry season; less water, and poses fewer organizational con- (iv) small individual perimeters ranging in size straints compared to other types of agriculture. from 0.5 to 10 hectares, using pedal pumps and By endorsing agricultural intensification, lowlands even motor pumps, cultivating a few hectares; and facilitate efficient use of water and labor similar to (v) vegetable crops in lowlands with an irrigation irrigated rice perimeters. In rainy season, rainfed system using wells. rice is typically grown in the lower parts of the lowlands, while sorghum or corn is grown in the These small perimeters are typically managed by elevated areas. independent individuals, family, or cooperatives. Individual plots are generally very small in size Farmers in lowland areas are usually organized (0.10 ha to 0.25 ha). Technical support from decen- into associations, groups or cooperatives. They tralized services is still limited. manage very small farmed plots (ranging from 0.10 to 0.25 hectares). These organizations are respon- Private management is the primary method of sible for water management and maintenance of management of small-scale irrigated perimeters. the infrastructure. However, in community small perimeters, farmer self-management is the common management However, many managed lowlands face mode, similar to the management mode structural stability issues particularly with spillways observed in medium-scale perimeters. In village and small drainage gates. These challenges perimeters, either the project holders or a group hinder water drainage after floods, and uniform of farmers are responsible for the management water distribution due to the lack of land and maintenance of the small perimeters. leveling, leading to rapid degradation of levees. Operationality and maintenance of equipment are (MAAH, 2018). 66 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The sustainability of the managed lowland Low Rate of Water Fee Collection areas depends on several factors: (i) elevating management standards to balance cost, The fee represents “the operator’s contribution to sustainability and profitability; (ii) backing the operating expenses and maintenance costs the intensification of rice farming (securing of the infrastructure and equipment (pumping production levels) and modernizing cultivation stations) of the irrigated perimeter.” In most practices; (iii) capitalizing on the water-control perimeters, this concept does not seem to be improvements for small-scale off-season well understood, and Farmers’ Organizations face irrigation; and (iv) ensuring land security for these serious challenges in collecting these fees (delays agricultural developments. and low recovery rates). These challenges are compounded by the entrenched belief among Shared Challenges Across All Types of users that water should be free, which severely Agricultural Facilities hinders fee collection efforts. Specifically: i. In large scale perimeters, fee collection is Limited technical capacities for HAFs somewhat effective but faces collection chal- implementation lenges (delays) as illustrated in the Sourou perimeters with the initiation of Water Users The poor quality of some HAFs is attributed to the Associations (WUA). In Bagré, the annual fee limited capacities of contracting and engineer- is 90,000 CFA Francs, but farmers only pay ing firms. The lack of skilled on-site inspectors 12,500 CFA Francs, with a collection rate is a key obstacle to the construction of quality of 50%; infrastructure. ii. In medium-sized perimeters, fee collection is The National Society for Land Development fairly substantial (as in the case of Savili), but and Rural Equipment (SONATER), responsible inconsistent across perimeters, with some for delegated project management of HAFs, experiencing a nil collection rate. recommends the drafting of technical guides iii. In small perimeters, fee collection challenges on standards for hydro-agricultural facilities. are prevalent; Capacity-building initiatives targeting State officers at both the central and decentralized iv. In improved-irrigation lowland areas, levels are also needed for better supervision of challenges in fee collection are also observed. HAF works, including the compilation of technical files and selection of contractors to infrastructure Underperformance of Agricultural Professional acceptance. Organizations in Hydro-Agricultural Facilities Poor Management of Hydraulic Installations and In Burkina Faso, Agricultural Producer Water Shortage for Irrigation Organizations such as Pre-Cooperative Groups, Cooperatives, Irrigation Committees, and Many areas struggle with water shortage, espe- Agricultural Water Users Associations (AWUA)25 cially in the arid season, due to decreased rainfall, are responsible for overseeing the management silting up of reservoirs, and high evaporation rates of HAFs. (averaging 2,000 mm per year). Unauthorized areas off-taking water and low network efficiency (43%) exacerbate the situation. 25 The WUAs, established under the Millennium Challenge Account, are governed by Decree No. 2012-090/MAH/MATDS/MEF of 2012, but are limited to the Di perimeter. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 67 Unfortunately, it is undeniable that most of these Limited advisory support in water management farmer organizations are not effectively fulfilling and infrastructure maintenance their designated roles in the irrigated perimeters. As a result, associations and cooperatives are not Agricultural advisors providing consultative effectively managing the revolving funds allocated support in hydro-agricultural facilities come from to them as subsidies, leading to the depletion the Regional Directorates responsible for irrigated and exhaustion of these subsidies within a few agriculture with a majority coming from the muti- years. This inadequacy adversely impacts crop purpose agricultural center in Matourkou. They yields and agricultural production. Moreover, are primarily trained in agricultural hydraulics many associations have turned into mere empty with little practical experience. When deployed shells. Thus numerous irrigation committees are to hydro-agricultural facilities by the DRAAH, no longer fulfilling their responsibilities and have they are entrusted with roles without receiving become passive actors, losing their influence any specific training. As a result, their advisory over the perimeters, as the cooperatives that service is limited to technical itineraries (an area established them have stalled their activities. The they are familiar with) but hardly extends to water observed inefficiencies within the farmer organi- management and maintenance of irrigation zations in these perimeters are attributed to the infrastructure, as they lack proficiency in this field. following: (i) a lack of adequate understanding and Furthermore, their capacities to assist Professional assimilation of the cooperative spirit; (ii) failure to Agricultural Organizations in product marketing adhere to the conditions stipulated in the terms of and organizational structuring remains limited. reference; (iii) inadequate training in cooperative principles for farmer organizations with DRAAHs, Isolation of certain perimeters often inactive in the field; and (iv) the absence of clear objective contracts concerning DRAAHs sup- The isolation of certain irrigated areas (such as port to FOs. Savili) hampers performance due to poor road conditions, high transportation costs, and difficul- Only the WUAs on the Di perimeter, which ties in distributing perishable products. have been operational for five years, are currently functioning effectively (holding Water Resource Mobilization general assemblies, collecting water fees, etc.) and effectively performing their roles in water Water mobilization is facilitated by using small management and maintenance. Their success dams. Water is extracted via water intake struc- is attributed to the separation of roles between tures if the perimeter is located downstream of agricultural production, water management, and the dam, or by pumping if it is situated upstream. infrastructure maintenance, and the engagement The following factors hinder the mobilization and of a water services operator and Technical and management of agricultural water: Management Support Center (CATG). i. The lack of a coherent and efficient mechanism This successful management model observed in for harmonizing activities related to irrigated the Di perimeter could serve as a role model to be agricultural developments and water mobiliza- extended to all large and medium-sized perim- tion between the agriculture and water sectors; eters by extending the decree creating WUAs at the national scale. 68 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW ii. The planning of water control investments is ASSESSMENT OF POLICIES PROMOTING based on administrative boundaries, rather PRIVATE SECTOR PARTICIPATION IN than considering river basins’ hydrological and hydrogeological contexts, like the Comoé, IRRIGATION Mouhoun, Nakanbé, and Niger basins. Public-Private Partnership (PPP) Initiatives in iii. There is a stark limitation in the development Major Irrigation Projects (Bagré, Rice Initiative) of micro-irrigation in irrigated areas despite adverse effects of climate change; The promotion of Public-Private Partnerships (PPPs) aims at enhancing outcomes in large scale iv. Mant hydraulic infrastructures are inadequately irrigated areas where public budgetary resources managed and in poor condition, signifi- have been invested. In Burkina Faso, two PPPs cantly reducing the effectiveness of water initiatives are: the Bagré Growth Pole project mobilization; (2011–20), financially backed by the World Bank, v. Numerous perimeters, designed following the and the more recently launched Presidential Californian/semi-Californian system, are poorly Initiative on Rice. The investment stage of the first planned and abandoned; and initiative has been completed and has undergone formal evaluation, while the second initiative is too vi. The non-compliance with the management recent to derive more than preliminary insights. rules of spaces, structures, and water (facility degradation, water theft, encroachment on easement strips...). Bagré Growth Pole Project. This project aimed at expanding irrigation development in areas For the management of water resources, in with existing dam and irrigation infrastructure. Hydro-Agricultural Facilities (HAF), five water It adopted a clear approach focusing on spatial agencies (Cascades, Gourma, Liptako, Mouhoun, growth poles and value chains, aiming to stimulate Nakambé) have been established around the growth and job creation through private invest- main river basins. These agencies functioning ments and diversified, high-value-added produc- as Public Interest Groups and created by a tion. This initiative is in line with the National constitutive agreement between the State and Plan for Economic and Social Development the local authorities, aim to coordinate all water (2016–2020). stakeholders for integrated and sustainable management of the basin’s water resources. The The adopted approach posited that growth in Master Plan for Development and Water Resource commercial agriculture driven by the private sector Management (SDAGE) serves as the pivotal could be encouraged in the project area through planning and management instrument for the investments in complementary interventions, basin’s water resources. Out of the required five particularly in infrastructure and capacity-building. SDAGEs, two have been drafted and approved, The Bagré Growth Pole focuses on enhancing namely the SDAGEs for Mouhoun and Cascades. the irrigation network and electricity supply, and The one for Nakambé has been drafted and constructing roads for better market access and submitted to the Council of Ministers for approval, other community-related complementary services. and those for Gourma and Liptako are under The approach also included: (i) strengthening formulation. support to technical and business management skills to improve productivity at the enterprise level; (ii) improving the general management of the area and the business environment; and INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 69 (iii) strengthening connections with the regional/ investments cover the construction of storage global economy as well as promoting easier spaces, the supply of agricultural production access to secure land and facilitating investments. equipment and materials by SMEs and agri- investors, and additional developments by agri- Specific project activities that encouraged private investors. In 2020, the number of established investment included an investors’ conference, service providers reached 114, while the number of fiscal and customs incentives, promotional activi- other created enterprises reached 139, surpassing ties, land titles for agricultural activities (which are the initial target. necessary to secure bank financing and instilling confidence to private investors), and access to However, the land allocation for entrepreneurs credits through three financial institutions. increases land pressure, which heightens the risk of vulnerability for small farmers. Besides family farmers who will reap benefits from new developments, two other types of private Presidential Initiative to “Produce One Million partners benefited from this support: large- Tons of Rice.” This initiative was launched in scale agro-investor irrigators (15 were ultimately 2020, concurrently with the update of the Second selected and were actively engaging in agriculture National Strategy for the Development of Rice in 2020) and small enterprises linked to value Farming. This initiative aims to produce one million chains of products and services benefited from the tons of paddy rice by 2025 and three million tons boost in irrigation-related- activities. by 2030. A technical secretariat has been set up for this purpose to coordinate activities and, where Financial support was mobilized for this private applicable, evaluate results. sector backing, initially through a matching grants program, followed by a fund transfer mechanism, The Initiative encourages three types of public- which did not necessitate contributions from ben- private partnerships (PPP): eficiaries. For instance, matching grants for service • Encouraging private investment in expanding providers were financed up to 80% (or a maximum irrigation, utilizing water from large dams. As of US$100,000) of the cost of sub-projects exe- of mid-2021, discussions on PPPs focused on cuted by service providers for the development of projects covering nearly 20,000 hectares. essential services and the creation of commercial businesses like technical assistance to service • Supporting private companies in rice milling stations and the extension of existing Internet and and facilitating contracts between rice farmers telephone networks, similarly to SMEs and small (cooperatives) and rice mills for the delivery farmers to cover the cost of their sub-projects. and processing of paddy rice. Two companies have purchased processing equipment with aid Significant cost overruns and delays in the of the State. expansion of the funded irrigation system led to • Ensuring reliable rice supply for private rice the non-materialization of planned investments mills with public support for family rice farming, in the electrical network and paved roads (both mainly through irrigated cultivation. This are being pursued under subsequent projects). includes research on rice seeds, extension Nevertheless, private partners found alternative services, and assistance to family farmers in solutions, particularly for providing electricity for rice production, focusing on projects aimed pump irrigation. The private investment surpassed at lowland developments (project funded by the target of US$ 33.66 million CFA Francs in the IFAD). project area. Productive investments were made by SMEs, small farmers, Farmers’ Organizations, critical services, and agribusinesses. These 70 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The lessons learned from Bagré Pole Growth been reduced to 75% for the project’s expansion. Initiative in stimulating private investment towards Given the overall estimated cost lying between irrigation development are of great importance 30 and 35 million CFA Francs per farming project, as new public-private partnership initiatives are and with a vision of developing 300 potential implemented on a broader scale within the scope farming projects across the entire territory the of national efforts to develop irrigation. following eligibility conditions must be met: (i) possession of secure land; (ii) availability of • The importance of coordinating investment a high-flow well along with a 10 m3 reservoir; promotion efforts, as demonstrated by the (iii) willingness to irrigate at least 1 hectare by using National Agency for Investment Promotion drip technology and solar energy for pumping; and and the local office of the Bagré Growth Pole (iv) the development of an integrated system of project. agriculture-­ livestock-fish farming. It is still too early • Carefully planning the sequences of activities to assess the efficiency of this policy. However, is critical not only for the success of public the shortcomings of the service providers have infrastructure projects but also for attractiing resulted in the wasteful use of State resources private investments. Such a sequenced plan initially earmarked for funding subsidized helps defining the critical path, for instance, by investments. ensuring access to electricity before initiat- ing the constrcution of irrigation systems that Suitability of Public Services to Support Private depend on pumping, and securing access to Investments in Groundwater Irrigation the services required by the private sector in a specific region. Groundwater irrigation is expected to increase significantly within Burkina Faso’s climate-smart ­ • The right mix of conditions (infrastructure, agriculture strategy, given its potential for fostering services, value chain, investment climate) self-sufficiency and increasing resilience for both needs to be in place before the full family farms and private investors. Groundwater commitment of the private sector, which is a use can be increased across multiple river basins. long-term challenge. In gathering this right Developing this potential will inevitably increase mix of conditions, engaging in dialogue with pressure on resources and on sustainable man- the private sector for the validation of plans agement capacities. In this context, the public is crucial. sector has a key role in mitigating risks associated with private investments and ensuring that expen- The implementation of the New Agricultural diture allocation decisions are aligned with social Operating Model priorities, such as access to potable water. In addition to the abovementioned two initiatives, Strengthening public capacities to ensure the the Government is promoting private investments seamless provision of public goods and services in irrigation through a support project dedicated essential for sustainable management is crucial. to the establishment of private farming models. The key public goods and services required These models span from 3 to 5 hectares, using for groundwater management include: (i) eas- groundwater for irrigation. The project aims at ily accessible information regarding the physi- improving the productivity of agricultural activi- cal nature and performance of the groundwater ties in order to break the cycle of food insecurity resources; (ii) administration of a framework for through appropriate water management. the allocation and use of groundwater resources (including legal bases and administration of usage After the pilot phase in 2019, which fully rights); (iii) encouragement of collective initiatives subsidized eight farms, the subsidy rate has aimed at using sustainable resources, particularly INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 71 by strengthening the capacities of Water User on recent projections extending to 2030 (World Associations (WUA); (iv) implementing a resource Bank, 2018), surface waters are projected to monitoring system, including a piezometer net- approach stress thresholds in terms of use work, and evaluation of the evolving constraints and availability, while local pressures manifest and alternative options for sustainable resource more locally on groundwater in specific basins management, possibly through modeling. (Mouhoun). Establishing clear lines of administrative respon- sibility for groundwater management is crucial for Even though these projections suggest that effective implementation. groundwater resources should suffice to meet the projected demand until 2030, they rely on Capacity building has been ongoing for sev- fairly uncertain estimates of renewable resources, eral decades. A policy and strategic framework especially for the Nakanbé and Niger basins, and on have been developed with the 2016–2030 the credibility of demand forecasts. Furthermore, in National Program for Integrated Water Resources the Mouhoun basin, both surface water resources Management (PNGIRE), delineated over three and groundwater are already facing pressure. five-year implementation stages. The Permanent Secretariat for Integrated Water Resources In this context, the current density of the Management is responsible for coordination. piezometer network is too low (Map 1). Thus, Investment in physical infrastructure for ground- investments to increase the number of water monitoring has expanded the piezometer piezometers should persist. Priority should be network, managed by the Directorate General of accorded to area where groundwater demand Water Resources (DGRE), local agents, and gradu- is nearly matching available supply (e.g., the ally by water agencies upon network deployment. Mouhoun basin). Expansion is also needed This network facilitates monitoring at over 50 sites in areas with insufficient understanding of nationwide, with over 90 currently operational renewable resources remains inadequate, such piezometers. A decision-support platform – the as in parts of the Nakanbé and Niger basins. It is National Water Information System (SNIE) – has important to complement physical investments been set up, compiling data from the groundwater with “intangible” ones. These initiatives should piezometer network and the national surface water focus on strengthening groundwater resource hydrometric measurement network. The SNIE is management capacities, specifically: strengthening used for planning and management, aiding prelimi- the Government’s capacity to collaborate and nary evaluation of priority zones for collaborative enhancing aquifer users’ capacities to launch joint use of surface and groundwater. The provision of initatives focused on the effective management of public goods to ensure sustainable groundwater groundwater resources. extraction for economic purposes has thus pro- gressed, with thorough implementation and monitor- Analysis of Land Use in Hydro-Agricultural ing of PNGIRE’s annual activities and budget plans Facilities (DGRE, 2021). The PNGIRE’s annual activities and budget plans are supported by a multi-donor pooled Land management of Hydro-Agricultural Facilities fund and backed by several external partners (like faces numerous challenges despite the existence DANIDA and Sweden). of a National Policy for Land Security in Rural Areas since 2007, the law on Rural Land Tenure The challenges of managing supply and demand (law no. 034-2009/AN of June 16, 2009), and the for surface water are more critical than for law on Agrarian and Land Reorganization (law no. groundwater. Therefore, strengthening the 034-2012/AN of July 2, 2012). capacities for monitoring and managing surface ­ water streams and reservoirs is a more immedi- In the case of new small- and medium-sized ate priority compared to groundwater. Based perimeters, the absence of local land services in 72 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW MAP 1: National piezometric monitoring network Source: Ministry of Water and Sanitation, General Directorate of Water Resources, Directorate of Studies and Information on Water (2018). Annual piezometric monitoring report, 2017. some regions complicates process of supressing the participation of the General Directorate customary rights and compensating affected of Land and Rural Organization, and focus on people. Typically, in these small and medium-sized building the operational capacities of Rural irrigation development projects, only the minutes Land Services (SFR). of sale are available as proof of land ownership. Moreover, the process of registration of developed In the large-scale perimeters of Bagré and Sourou, sites is frequently not completed, leaving benefi- the process of land security for the developed ciaries without proper land documentation. sites and beneficiaries has been effective. In the case of Sourou, rural land possession certificates Land disputes are sometimes observed in cer- have been issued to farmers with the support tain lowland development projects, with a small of the Millennium Challenge Corporation. In the number of landowners opposing development case of Bagré, land titles have been issued to even when compensations are provided. The lack small farmers as part of the compensations, and of registration of these cultivated lowlands and lease contracts have been signed with agricultural customary rights clarification, coupled with the entrepreneurs. absence of formal occupation titles lead to chal- lenges regarding the rights of farmers. PLANNING, COORDINATING, To address these shortcomings and promote AND MONITORING-EVALUATION social cohesion and investment sustainability, the SNDDAI 2021–2025 focuses on initiatives OF INVESTMENTS IN HYDRO- that secure land rights and guarantee fair access AGRICULTURAL AREAS to developed lands for all categories of users. Moreover, land-related issues are prioritized in Observations suggest that irrigation projects certain HAF projects like the Regional Support under the MAAH are not optimally planned, Project for the Sahel Irrigation Initiative-BF with as indicated by the overlapping development INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 73 projects in identical lowland sites or irrigated medium and long-term loans. On the other hand, perimeters. This gives the impression that there monitoring loans granted to the agricultural sector is no clear strategy in selecting the interventions presents a financial burden to banks due to the for irrigation projects and in determining specific sector’s specificities. sites for development as highlighted by MAAH in 2019. The 2019–2023 national strategy for inclusive financing focuses on five key themes, with Moreover, most irrigation projects are managed Theme 3 dedicated to agricultural financing. from Ouagadougou, limiting the participation Two distinct objectives outlined for this theme of the regional directorates of agriculture are the development of financial products and and irrigation. These directorates, which are services aimed at agricultural financing, and the responsible for supporting HAFs in various promotion of mechanisms to facilitate access to regions, seem to have minimal engagement in agricultural financing. Under the first objective, the the monitoring and supervision of the actual two envisioned outcomes include: (1) increasing groundwork. the volume of accessible agricultural financing via farmers’ organizations; and (2) promoting Projects are often planned based on specialized financing products and ­ services administrative boundaries rather than such as warehouse receipt systems, value chain hydrological and hydrogeological conditions of financing, livestock cooperatives ­support, and river basins such as Comoé, Mouhoun, Nakanbé, tailored to the insurance-linked credit solutions, ­ Niger. This approach overlooks the interrelations needs of the various segments of the agricultural and dependencies created by watercourses. sector. The second objective has three expected Therefore, coordination must be strengthened outcomes: (1) advancing agricultural value chains; between the ministry in charge of HAFs and the (2) Instituting guarantee fund mechanisms ministry of water and sanitation, responsible for and interest rate subsidies; and (3) providing water infrastructure. financial education to farmers to enhance their understanding of financial services. Analysis of Agricultural Several initiatives have been deployed to facilitate agricultural financing, utilizing agricultural develop- Financing ment projects and public funds. This specific note aims at analyzing these mechanisms, focusing on the efficiency of matching grants, credit lines, INTRODUCTION and guarantee funds, drawing insight from evalua- tion reports of key completed projects employing Financial services play a critical role in improving these financial instruments. the livelihoods of people in low-income and least developed countries. In this chapter, the first section provides an overview of the agricultural financial system. Agricultural stakeholders often struggle to secure The second and third sections analyse the bank credit due to the sector’s perceived high risk. efficiency of matching grants, credit lines, The sector’s lack of adequate organization and and guarantee funds. The fourth section inability to provide moral and technical guarantees briefly outlines ongoing initiatives, while the to banks exacerbates this issue. Moreover, some last section summarizes key lessons learned banks have limited long-term resources to provide and offers policy recommendations. 74 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW OVERVIEW OF THE AGRICULTURAL banks are turning to stock-based financing, known FINANCING SYSTEM as warrantage but the underdeveloped storage infrastructure limits the growth of this product. In Burkina Faso, the agriculture sector receives Also, many farmers struggle to meet cash col- only a modest share of the financial resources lateral requirements (it is common for financial granted by financial institutions. Indeed, the institutions to require a cash deposit equiva- agricultural sector receives only 8% of bank loans. lent to 10–15% of the loan). A 2016 study by the Notably, 4.2% of this share is dedicated to cot- Consultative Group to Assist the Poor highlighted ton financing. On the other hand, microfinance the lack of collateral or guarantees, including cash institutions (MFIs) allocate 15% of their portfolio guarantees, as one of the main barriers to credit to this sector. Yet, agriculture accounts for more access, especially for women. than 25% of the GDP and provides employment to nearly 70% of the active population. Agricultural financing is also hindered by the financial institutions’ limited knowledge and The significant investment in the cotton sector expertise in agricultural financing. Few financial can be attributed to its well-structured framework, institutions have units or teams specialized in making it attractive to banks. The cotton sector agricultural financing. As a result, agricultural operates around three cotton trading companies credit is analyzed and managed like any credit to with a nationwide presence. These companies another economic sector, with financial products provide technical assistance to farmers and credit offered often overlooking the agricultural calendar for inputs. They purchase cotton from producers, and being collateral-based rather than cash-flow deducting advances from payments to farmers. based. This well-structured business arrangement signifi- cantly reduces the non-repayment risk, thereby Moreover, the agricultural sector is perceived as drawing financial institutions to finance this sector. highly exposed to production-related risks, particu- Moreover, as the second-largest source of foreign larly climatic shocks and market risks. Limited use currency for Burkina Faso, the cotton sector also of risk management mechanisms, like insurance, enjoys State support, mainly through input subsi- further restrains financing access. Climatic shocks dies to boost production. have a negative impact, significantly increasing the volatility of agricultural income. Although 25% of Apart from the cotton sector, only a few com- households according to FinScope have endured mercial banks and microfinance institutions (MFIs) drought and/or insufficient rainfall, the use of agri- provide financing to agriculture. This is attributable cultural insurance remains nascent. The insurance to several factors, including somewhat disorga- sector remains underdeveloped, with premiums nized nature of agricultural value chains (except representing less than 1.2% of GDP and a penetra- for cotton), scarcity of bankable projects, limited tion rate below 1% of the population. By the end exposure to financial institutions, challenges in of 2015, the World Bank’s Global Index Insurance providing guarantees, and the near-total absence Facility reported only 17,000 farmers insured under of appropriate risk management instruments limit a pilot project, with a total insured amount of smallholder farmers’ access to financing. $1.3 million, averaging $80 per farmer. Farmers typically offer land, equipment, or In attempt to mitigate these financing hurdles, the produce as collateral. According to the latest Agricultural Bank of Faso (BadF) was established FinScope survey conducted in 2016, only 8% of in 2018 and inaugurated in March 2019 with a agricultural households have formal land titles. share capital of 14,227,570 CFA Francs. Despite Moreover, the level of agriculture mechanization operating like traditional banks, it scarcely remains low. A growing number of MFIs and some addresses the specific needs of the agricultural INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 75 sector. By the end of 2021, only 33% of BadF’s study trips for livestock farmers. However, FODEL financing was dedicated to agriculture. To remedy faces challenges with low revenue recovery, this situation, the Government recently created occasionally necessitating State subsidies, which the Agricultural Development Fund (FDA), aimed amounted to 385 million CFA Francs in 2016 and at facilitating credit access for farmers holding 320 million CFA Francs in 2021. accounts at BadF. The BadF’s aims to provide loans for all agricultural activities, including production, Several other funds, not specific to agriculture but equipment acquisition, infrastructure construction, financing agro-sylvo-pastoral activities, are also product processing, and marketing. The target operational. According to an assessment con- beneficiaries are agricultural cooperatives, ducted by the Ministry of Finance in 2014 and individual farmers, and service companies 2015, of a total loan volume of 23.4 billion CFA operating in the agricultural sector. While BadF is Francs, agriculture received 9.97 billion CFA not yet operational, it is drawing strong interest Francs, or 42.6% of total loans. These funds from development aid partners and could provide include the Informal Sector Support Fund (FASI), up to 15 billion CFA Francs in funding. the National Fund for Deflated and Retired Workers (FONA-DR), the Support Fund for The National Livestock Fund (FODEL) dedicated Women’s Income-Generating Activities (FAARF), exclusively to the livestock sector, aims at the Support Fund for Youth Initiatives (FAIJ), the providing loans to livestock farmers and has Employment Promotion Support Fund (FAPE), the been financed since 1996 by a tax known as the Burkinabe Fund for Economic and Social Livestock Sector Contribution (CSE), levied by Development (FBDES), and the Financing and customs on livestock exports. 60% of the CSE is Promotion Agency for Small and Medium remitted to the Treasury, with the remaining 40% Enterprises (AFP-PME). The volume of credits directly going to the fund and not counted as provided by each fund, as well as the share State revenue. From 2016 to May 31, 2020, FODEL allocated to agriculture, is shown in Table 8. financed 1,733 micro-projects for a total amount of 2.16 billion CFA Francs. Besides loans, FODEL The establishment of the National Fund for has also built 32 vaccination parks and 42 wells, Inclusive Finance (FONAFI) under Burkina Faso’s provided 14 training sessions, and financed 8 National Strategy for Inclusive Finance is a TABLE 8: Volume of Loans Provided by Various Funds to Agriculture (excluding FODEL and FDA) Volume of Credits Provided (In thousands of FCA) Share of Agriculture (%) Funds 2014 2015 2014–2015 2014 2015 2014–2015 FASI 948,415 1,191,550 2,139,965 20.43 12.47 16.00 FONA-DR 661,427 286,600 948,027 37 30.27 34.97 FAARF 7,371,458 8,444,925 15,816,383 50.35 51.31 50.86 FAIJ 300,180 481,869 782,049 52.5 46.46 48.78 FAPE 752,289 745,100 1,497,389 45.26 3.27 24.37 FBDES 1,000,000 0 1,000,000 1.45 0 1.45 AFP-PME 847,420 357,068 1,204,488 51 16.81 40.86 Total 11,881,189 11,507,112 23,388,301 42.88 2.38 42.63 Source: MEFP 76 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW significant step toward enhancing financial inclu- the gap between what beneficiaries can afford and sion, particularly in the agricultural sector. FONAFI what they need to finance their projects. However, is specifically aligned with Axis 3 of this strategy, it should not be so large that it discourages the emphasizing support for agriculture. FONAFI aims use of financial markets or makes beneficiaries to create favorable financing mechanisms for overly reliant on the subsidy. The subsidy should financial inclusion, in collaboration with financial be sufficient to encourage participation and invest- service providers, following the “make-do” strat- ment but not excessive to the extent of enabling egy. FONAFI will be responsible for executing the the client to finance a significant part f the project Project for the Promotion of Inclusive Finance, without resorting to financial institutions. which aims to facilitate access to financial services for low-income populations in Burkina Faso. With C2. Matching grants should target longer-term a total cost of 44.4 billion CFA Francs, this fund is investments, with sufficient environmental and in line with strategic axis 3 of the National Plan for social benefits, including financing innovation and Economic and Social Development (PNDES). capacity-building/advisory services for farmers and agricultural SMEs. These services are often unavailable or scarcely found as they are not ANALYSIS OF THE EFFICIENCY OF covered by financial institutions or inadequately MATCHING GRANTS provided by the State. This section examines the performance of match- C3. Strengthening the financial system. Financial ing grants through the lens of two major projects institutions can play a role in matching grant proj- like the Support Program for the Development of ects. This strengthening can take various forms: Agriculture in Burkina Faso – Phase II (PADAB II), (i) For beneficiaries with no relationship with finan- the Support Program for Agro-Sylvo-Pastoral cial institutions, fostering a path to financial inclu- Value Chains (PAFASP), as well as the Neer-Tamba sion should be a core activity of the grant project. Project. Evaluation reports produced by these This could include collaboration with financial projects serves as the basis for this analysis. institutions as depositories, the legal formalization of beneficiaries’ enterprises and preparation of Main Criteria for the Design and Evaluation of business and financial plans; (ii) For beneficiaries Matching Grants with existing relationships with financial institu- tions, a more stringent financial discipline could be Drawing from its extensive experience in develop- required. This approach could facilitate access to ing countries, IFAD26 has developed a technical commercial credit by lowering credit fragmenta- note aimed at facilitating the design and evalua- tion levels; (iii) When lack of information and exper- tion of matching grants, outlining five best prac- tise in agriculture is identified as a major market tices. The evaluations of the two Burkina Faso gap, involving financial institutions in advisory or projects did not strictly adhere to this analysis grant management roles could be considered. model, leading to the absence of some criteria This would allow financial institutions to gather listed below. information and data on the beneficiaries, which might be used for future lending. C1. Beneficiaries’ contributions should be sub- stantial to ensure appropriation of the project C4. Technical assistance to help matching grant and attract commercial credit. The core issue beneficiaries prepare business plans and financing here is finding the right balance in the amount of proposals can contribute to the successful execu- subsidy provided. The subsidy should be sufficient tion of matching grants. This technical assistance to bridge the financing inadequacy – that is, to fill can also help financial institutions better under- stand these projects, encouraging them to finance 26 IFAD [2012], Matching Grant Technical Note. these projects in addition to the grant and the INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 77 beneficiaries’ own contributions. Ideally, techni- (excluding service provider costs and administra- cal assistance should not be limited to business tive overheads), averaging a subsidy of 1.2 mil- plan and financing proposal preparation but also lion CFA Francs per project. The evaluation was include program promotion, ensuring applicants conducted on a sample of 448 micro-projects, meet project criteria, and providing ongoing sup- representing a sampling rate of 24%. port and mentorship throughout the value chain. Based on a sample of 448 micro-projects, data C5. Matching grants should explore revealed that the execution of micro-projects synergies with other project components on generated a cumulative benefit of 211 million CFA a broader scale. For instance, reforms aimed Francs between 2007 and 2012, across all sec- at improving the investment climate could help tors. Sectorial benefit analysis revealed the follow- address market gaps that limit the capacities ing: the livestock/meat sector leads in generated of farmers and farming organizations to use benefits with 101,315,000 CFA Francs (48.0% of the unconventional collateral to secure loans. generated benefits), followed by the fish sector Similarly, complementing grants with partial credit with 66 million CFA Francs (31.2%), the cowpea sec- guarantees and providing technical assistance tor with 26 million CFA Francs (12.5%), the wood/ to banks and financial institutions could aim energy sector with 10 CFA Francs (4.5%), and finally to foster private sector financing and introduce the poultry sector with 8 million CFA Francs (3.8%). financial institutions to new types of bankable Considering the number of micro-projects per clients and investments. sector, the fish sector (mainly processing activities) appears to be more profitable, with an average Analysis of the Efficiency of Matching Grants annual benefit of 288,917 CFA Francs. It is followed in the Second Phase of the Burkina Faso by the livestock/meat sector, with an average ben- Agriculture Development Support Program efit over the period of 111,833 CFA Francs. The cow- (PADAB II) pea, wood-energy, and poultry sectors recorded average benefits over the period of 44,017 CFA With a funding of 25 billion CFA Francs from Danish Francs, 23,067 CFA Francs, and 14,767 CFA Francs, cooperation, the second Support Program for the respectively. The limited profits generated by the Development of Agriculture in Burkina Faso (PADAB poultry sector could be attributed to limited profi- II) was designed and executed between 2006 and ciency in production techniques, leading to high 2013 by the Ministry of Agriculture. The program mortality rates amongst the livestock. is aimed at executing national strategic initiatives aimed at promoting agro-silvo-pastoral and fisheries The average annual profits are thus estimated at sectors and combating poverty. To this end, a 78,540 CFA Francs per micro-project. Therefore, it Decentralized Regional Fund for Rural Development would necessitate over 15 years at least to recover (FD-DRD) was established to subsidize, on a cost- the cost of the received subsidy. The average sharing basis, micro-agricultural projects in the annual profitability rate calculated over the subsidy Centre-East, East, and Sahel regions. implementation span (2007–2012) is 6.4%. The limited profitability implies that promoters of these In the following sections, we will analyze the micro-projects may struggle to cover the financial efficiency of this subsidy, drawing on evaluations costs if they were to secure loans from financial conducted in the Centre-East and East regions. institutions. Case of the Central-East Region Case of the Eastern Region In the Central-East region, a total of 865 micro- In the Eastern region, the total amount obtained projects (MP) were financed during 2007–2012, from the Decentralized Regional Rural Development a with a total subsidy of 2.3 billion CFA Francs Fund for financed micro-projects between 2007 78 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW and 2012 is 1.4 billion CFA Francs, primarily dis- between the International Fund for Agricultural tributed among the three most important sectors: Development (IFAD) and the Burkinabè livestock/meat, cowpea, and shea. A total of 1,499 Government. With a total cost of over 60 billion micro-projects were financed with an average sub- CFA Francs, the project’s overarching objective sidy of 924,031 CFA Francs per micro-project. is to improve the living conditions and incomes of the most disadvantaged rural populations. Its Performance evaluation of these micro-projects specific objective is to help these target popula- reveals that the average annual profits was tions build and strengthen their autonomy and 133,967 CFA Francs per micro-project. Although their capacity to play a more significant role, fully the profitability achieved is higher than in the recognized by other stakeholders, in the develop- Central-East region, the generated income is ment of a sustainable economic and social fabric. barely above the poverty threshold of 130,350 An investment fund has been set up to partially CFA Francs per year per person as of 2010. This subsidize environmentally friendly micro-projects indicates that these projects might not significantly with the aim of increasing their productivity. This lift beneficiaries out of poverty, especially if they fund, implemented over the 2016–2020 period, have no other sources of income. Furthermore, the has been evaluated to assess its efficiency. profitability rate of 14.5% falls below the interest rates charged by microfinance institutions, which Between 2016 and 2020, the Investment Fund can reach 24%. for Micro-projects supported 2,672 micro- projects, including 1,395 individual initiatives and In both regions, the sponsors of micro-projects 1,277 initiatives led by Farmers’ Organizations. should benefit from management and marketing These financial supports represent a total amount training, overseen by the Decentralized Technical of 3 billion CFA Francs, with 2.7 billion CFA Francs Services and Private Operators (OP). However, the constituting grants, and 0.3 billion CFA Francs are advisory support provided has been insufficient. cash contributions from project holders, resulting Specifically, in the Central-East region, only 12.57% in a significantly high grant rate of around 90%. of the sponsors have been trained in micro-project With an average cost of 1.1 million CFA Francs, management via the designated system, against the financing of the micro-projects has impacted 20.9% in the Eastern region. Regarding market- approximately 15,000 people in the three target ing training, only 86.4% of the sponsors did not regions. In addition, thirteen business plans were receive this training against 73.4% in the Eastern financed for a total amount of 62 million CFA Francs. region. These results underline the need to inten- Unlike the micro-projects, which have reached a sify training in micro-project management and broad spectrum of individuals, only about a hundred marketing for ongoing projects, given the substan- benefited from the financed b ­ usiness plans of an tial allocations of funds for financing these micro- average cost of 4.8 million CFA Francs. projects. Without adequate training, these projects risk mismanagement due to the high subsidy rate, Targeting Efficiency which leaves sponsors insufficiently trained. This situation partially explains the low profitability of The support fund primarily targets individual and micro-projects in both evaluated regions. collective project holders from the most under- privileged segment of the population, particularly Analysis of the Efficiency of Matching Grants in those with limited agricultural assets, and little sur- the Neer-Tamba Project plus for commercialization. Funding applications from rural communities must be approved by the The Participatory Natural Resource Management village development councils, in consultation with and Rural Development Project in the North, the village coordination of the Regional Chamber Central-North, and East, also known as the “Neer- of Agriculture (CRA). In peri-urban and urban Tamba” project, is the result of a collaboration areas, this approval must be directly obtained from INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 79 the departmental coordination of the CRA. Despite catalysts to create a network among the promot- clear targeting criteria and a well-defined applica- ers, thereby facilitating marketing, input supply, tion process, the actual implementation seems to and adoption of good practices. This approach diverge from the intended approach. Applicants could be associated with the creation of a network who are close to local drafters of micro-projects of local trainers, supported by validated external had a higher chance of being selected at the local expertise. level. To guarantee the success of technical assistance, Development of Financial Services which is vital for enhancing support to rural micro- enterprises, the Agricultural Value Chain Support The strengthening of ties between subsidy ben- Project (PAFA-4R) in the Southwest, Hauts-Bassins, eficiaries and financial institutions has not been Cascades, and Boucle du Mouhoun regions, the subject of a specific evaluation. However, the initiated by IFAD following the Neer-Tamba proj- participation of MFIs/Fis in the implementation of ect, advocates for the implementation of Rural the subsidy has allowed promoters to become Entrepreneurship Resource Centers (CREER) familiar with these institutions, thereby paving the at the local level. The objective is to broaden way for future business relationships. According to the range of services for rural entrepreneur- the survey results, a substantial number of proj- ship. A partnership agreement with la Maison de ect holders intend to use their experience with l'Entreprise has been concluded for the accredita- MFIs/Fis for future access to credit. tion and support of CREERs. Efficiency of Technical Assistance Mixed Economic Performances A review of 106 projects by the World Bank27 Out of a total of 114 micro-projects covered by the pinpointed technical assistance as key survey, 94% show a gross operating surplus. From implementation modality for achieving positive these 94%, or 107 promoters, who record gross results in subsidy-driven projects. However, in surpluses, 83% have a gross result of less than the case of the Neer-Tamba project, a deficit in 500,000 CFA Francs. However, when factoring technical capacity building was observed for in the depreciation of infrastructure and/or equip- project holders in certain sectors/chains due ment, only 47 project developers, or 43%, show to deficiencies in the hired private providers. net surpluses. Across the three regions, the aver- Indeed, experiences with these providers age net operating result is 506,804 CFA Francs revealed multiple management issues, even with minor variations (Centre-Nord: 580,53; East: though technical assistance is one of the pillars 470,616; and North: 546,987). expected to improve the productivity of funded activities. The lesson learned from this experience Overall, the profit margins are fairly modest, underscores the necessity to include binding especially since some factors of production like clauses in intellectual service contracts, specifying promoter labor and hydro-agricultural facilities the expertise of the provider. have been overlooked in the calculations. Many micro-projects were scaled larger than neces- The review suggests that instead of resorting to sary for the actual needs, leading to inefficiencies national consulting firms, local providers special- and reduced profitability. In addition, insufficient ized in different segments of the sectors could organization of sectors has led to challenges in have, more cost-effectively, added value to project terms of input supply and production marketing. holders’ “know-how”. They could have served as Moreover, most promoters have still not embraced an entrepreneurial mindset and show minimal 27 Agriculture Finance Note #1 - Lessons Learned from World Bank accountability, especially because they benefit Projects Using Matching Grants [2016] from subsidy rates of 90%. 80 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW If one takes into account the average cost of those working with farmer groups to purchase advisory support, estimated at 400,000 CFA per essential equipment, while others might not be project holder, it appears that the profitability of eligible. the funded micro-projects is negligible. Additionally, the subsidies offered by PAFASP Analysis of the Efficiency of Matching Grants made it possible for participants to acquire from the for Agro-Silvo-Pastoral Chains Support innovative equipment that they might have Program (PAFASP) otherwise found difficult to obtain, due to the banks’ reluctance to finance such items fully, given The Agro-Sylvo-Pastoral Sector Support the inherent risks associated with investing in Program (PAFASP) implemented over the period innovation. 2007–2017 by the Government of Burkina Faso through the Ministry of Agriculture, Water, and In terms of results, evaluations have shown Fishery Resources (MAHRH), with the support that the project not only met but exceeded its of the World Bank aimed to foster and enhance objective of increasing producers’ income by 50% ­ a productive, competitive, market-oriented for 60% of the stakeholders within the targeted agricultural sector to increase stakeholders’ value chains. This significant achievement, which income. Under its Sub-Component 1.2 – Support reached 130%, was facilitated by the combination to Commercial Operators, Farmers, and Small of subsidies, improved access to credit, and the Agro-Processors and Access to Financing infrastructure built through the project. (fostering private sector initiatives), the project facilitated the establishment of a promotional The increase in income is attributable to several fund for these sectors. This fund provided cost- factors including production, post-harvest sharing for micro-projects submitted by producers operations, and marketing. The 2014 survey and agricultural entrepreneurs. These micro- revealed that approximately 122,000 beneficiaries projects covered a wide range of activities, such used the technologies promoted by the project, as adaptive research for technological innovation, leading to a fivefold increase in the average value capacity building, market studies, logistics of onion production and 1.6-fold increase in the tests, investments in basic infrastructure and livestock/meat value chain. For instance, the onion equipment28, dissemination of new technologies, value chain significantly benefited from the project technical advisory services, as well as expertise in funded storage units, enabling farmers to store food quality and safety, etc. This promotional fund onion bags for 6 months after harvest, selling them was managed by a commercial bank. later at ten-fold the initial price (i.e., 60,000 CFA Francs vs 6,000 CFA Francs for a 100 kg bag). As A key takeaway from PAFASP’s implementation is a result, the average onion production value per its efficacy in a context where banks are hesitant beneficiary increased drastically from 2.5 million to provide medium and long-term investment CFA Francs to 13 million CFA Francs. A change loans. It is worth considering maintaining such attributable to a yield increase from 6.5 tons/ha to an incentive for future initiatives. For example, 17 tons/ha. Likewise, beneficiaries in the livestock/ the mango sector was notably assisted with 65% meat sector witnessed their average production subsidies for tunnel dryers, enabling stakeholders value increase from 6.2 million CFA Francs to to meet international demands for dried mango. 10 million CFA Francs fueld by micro-financing This initiative represents a key strategy aimed initiatives. It is important to note that over 60% of at assisting small agro-processing firms and the subsidy was allocated to the livestock/meat value chain. However, the mango and poultry production value did not see a comparable level 28 For instance, to enable stakeholders in the mango sector to meet international demand for dried mango, tunnel dryers were of increase in production value, as observed in subsidized at 65% through the PAFASP. the onion and livestock sectors. Primarily due to INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 81 the absence of adequate market infrastructure for through two (02) credit lines, each amounting to these specific value chains. 2.5 billion CFA Francs, made available through Ecobank and Coris Bank following a selection process after a tender opened to all the banks in EFFICIENCY OF CREDIT LINES AND the country. As a result, these banks were able GUARANTEE FUNDS to disburse 2 billion CFA Francs and 7 billion CFA Francs, respectively, to finance investment and Access to bank credit has always been a working capital for SMEs and MFIs. The anticipated ­ significant challenge for actors in the agricultural leverage effect was 3.6 times the sums injected. sector. Indeed, this sector is considered risky by financial institutions. This perception is due to the The guarantee fund from SOFIGIB, amounting sector’s actors lack of organization and their inabil- to 750 million CFA Francs, was instrumental in ity to provide to moral and technical guarantees facilitating easier access to bank loans for small to banks. Moreover, some banks do not have the and medium enterprises in targeted agricultural long-term resources needed to finance medium sectors and for microfinance institutions seeking and long-term loans. As a result, the creation of refinancing. credit lines and guarantee funds within agricultural development projects has become a necessary Data collected from the two banks reveals that strategy. they provided 254 loans, roughly 2.5 times the initial target. The investment loans disbursed and The following sections analyze the performance of recovered totalled 1.67 billion CFA Francs, against these instruments used in the now- closed Project a target of 2 billion CFA Francs, with an execution for Economic Growth in the Agricultural Sector rate of 83.5%. Regarding working capital fund- (PCESA) and the ongoing Project for Financial ing, 11.9 billion CFA Francs was disbursed and Inclusion and Access to Financing for Small and recovered, surpassing the initial target of 7 billion Medium Enterprises (PAIF-PME). CFA Francs, with an execution rate of 169%. The leverage effect of the credit lines stood at 4.45, against an initial target of 3.6. The permanence of Case of the Agricultural Sector Project (PCESA) the credit line played a part in the success29 of this Economic Growth initiative. The Economic Growth in the Agricultural Sector The diversity of sectors benefiting from bank sup- Project was implemented during 2013–2020 by the port, and the variety of credit products provided, Ministry of Agriculture, with financial and technical demonstrate a satisfactory understanding of the support from DANIDA. Under its sub-component agricultural sector and the ability of bank agents A2, the PCESA aimed to facilitate access to credit to use the necessary approaches to fulfill their for agricultural sector stakeholders. Agricultural role. Based on the survey conducted during the economic operators (from all sectors, except those project’s final evaluation, a substantial 76% of ben- in the cotton production chain) thus benefited from eficiary firms expressed their satisfaction. a credit line made available through two banks (Coris Bank and Ecobank), and from a guarantee However, as a result of the absence of discounted fund through SOFIGIB. credit lines post-PCESA, these financial institutions find it difficult to offer loans to some agricultural Credit Lines Performance firms and/or firms related to the agricultural sector at a preferential rate of 8%. Ordinary loans annual Under PCESA, 100 medium-term loans were extended, with a minimum of 30% earmarked for 29 Revolving credit is a line of credit that remains available over time women-led businesses. These loans were issued even if repaid and can be reused by firms for financing investments. 82 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW interest rates range between 10 and 11%, and are medium-term loans, and 204 billion CFA Francs significantly higher for agricultural loans, reaching were used to cover short and medium-term loans, 24% in microfinance institutions. inclusive of 103 billion CFA Francs for short-term loans. In total, ten sectors benefited from the guar- Moreover, in the absence of a first-demand antee, with a predominance of the livestock-meat financial guarantee provided from a trust- sector (representing 35% of the total). The lever- management entity, financial institutions will age effect of the guarantee mechanism, calculated continue to demand the standard guarantees, by correlating the volume of guaranteed loans to which are usually challenging for agricultural the volume of the guarantee fund, stands at 2.6. firms to provide. Therefore, to foster agricultural This indicates a satisfactory performance of this entrepreneurship, banks have proposed two instrument, given the challenges faced by agricul- measures: (i) keeping the existing credit lines tural firms to access credit. under the current contractual terms, until another Program in the agricultural sector is implemented, This outcome can be attributed to the diverse although terms may be revised as needed, to approaches adopted by SOFIGIB throughout the continue providing reduced interest rate financing program’s lifecycle. Indeed, the program allowed to entrepreneurs; and (ii) setting up a monitoring only two partner banks, Ecobank and Coris Bank and support mechanism for all entrepreneurs who International, to submit guarantee applications to have received funding under PCESA. SOFIGIB. However, due to unsatisfactory results, the process was revised. In the new approach, The following factors contributed to the success entrepreneurs themselves directly submit their of this financial instrument: (i) the tender for the applications to SOFIGIB for evaluation. This selection of Financial Institutions (Fis) with credit change was part of a broader fund promotion mechanisms suited for the agricultural sector; strategy by SOFIGIB, which expanded its focus (ii) organizational diagnostics for strengthening to include: i) banks other than Ecobank and Coris the technical capacities of banks by developing Bank International; (ii) promoters through their financial instruments tailored to the agricultural professional organizations; and (iii) consultancy sector; (iii) continuous credit line (or revolving firms that play a role in supporting and build- credit); (iv) offering credit lines that span 6 to 10 ing the capacities of various economic actors. years at interest rates between 3% and 5% catered SOFIGIB’s guarantee, provided as simple surety to the needs of the agricultural sector, which is to creditor banks, covers up to 70% of the financ- accustomed to subsidies granted to bankable agri- ing needed, irrespective of the credit type or cultural SMEs and to short-term loans; and (v) the nature. Additionally, for investment loans, there is balance between loans to agricultural SMEs and a requirement for promoters to contribute at least loans to MFIs to support loans provided to rural 10% of the total cost, either in kind or cash. micro-enterprises. Furthermore, the modest absorption of the guar- Performance of the Guarantee Fund antee fund confirms the effectiveness of the system. At the conclusion of the project, SOFIGIB Funds were made available to SOFIGIB through had covered doubtful commitments totaling 102 an indefinite-term trust-management agreement million CFA Francs, indicating an absorption rate signed with the Ministry of Economy, Finance of the guarantee fund at 13.6%. However, this rate and Development in 2018. By 2020, SOFIGIB might decrease as banks continue their efforts to had guaranteed 75 loans (against an initial recover debts and address any non-compliance target of 100) totaling 1.9 trillion CFA Francs. with the loan disbursement terms set in agree- Out of this total amount, 838 billion CFA Francs ments between the involved parties. In cases of were used to cover only short-term loans, while disputes, SOFIGIB might potentially increase this 890 billion CFA Francs were used to cover only rate in case of disputes. Banks, however, have INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 83 expressed some dissatisfaction with the way investment mitigating losses in case of defaults. SOFIGIB operates. They particularly recommend By June 2021, this guarantee was extended the introduction of first-demand guarantees30 to to support businesses and farmers affected further stimulate the agricultural firms financing. by COVID-19 and climate change. This partial SOFIGIB’s stringent requirements and clauses guarantee fund has thus backed loans totaling have led some banks to seek alternative guaran- up to $174 million provided by private banks and tee funds. microfinance institutions, generating a 5x mul- tiplier effect.31. The success of this approach is Case of the Project for Financial Inclusion and partly due to the technical assistance provided Access to Financing for Small and Medium by the World Bank, which has been instrumen- Enterprises (PAIF-PME) tal in building the capacities of the guarantee fund’s managers and partner financial institutions, The aim of this project is to increase access especially in previously underserved new mar- to digital financial services and facilitate credit kets. The World Bank also facilitated South-South access for the targeted beneficiaries. This project knowledge and experience sharing through tech- comprises four components. Under Component nical assistance between the project partners in 1, the project aims to increase the utilization Burkina Faso and a similar project in Madagascar, of transaction accounts. This component sup- thereby accelerating the project’s implementation ports the digitization of Government payments in Burkina Faso. and the digital transformation of microfinance services. Within the scope of Component 2, the The guarantee from SOFIGIB has encouraged project aims to build the institutional capacities financial institutions to extend loans to tradi- of the national microfinance supervisory author- tionally underserved segments, such as Micro, ity and microfinance sector institutions, as well as Small and Medium Enterprises (MSMEs), female enhance the capacities of the Women’s Income- entrepreneurs, and farmers by absorbing part of Generating Activities Support Fund (FAARF), to their loan-related losses in case of default. The ease their beneficiaries’ transition to the formal average loans provided totalled around 15 mil- financial sector, and to improve financial sector lion CFA Francs for MSMEs, 6 million CFA Francs consumer protection. Under Component 3, the for farmers, and 4 million CFA Francs for female project aims to increase credit access for farmers, entrepreneurs. This initiative has also contrib- SMEs, and female entrepreneurs. Component 3 uted to narrowing the gender disparity in finan- aims to: (a) enhance the credit options for farmers cial inclusion. Since the project’s inception, a and SMEs and (b) increase the demand for credit. total of 3,000 borrowers (including 1,293 MSMEs, Component 4 is dedicated to project management 711 farmers, and 996 female entrepreneurs) and M&E. have benefited from this guarantee, with loans amounting to roughly $48.5 million. In less than Since its launch in 2020, PAIF-PME has cre- two years, six financial institutions have joined ated a partial credit guarantee of $35 million the mechanism, and four additional institutions with SOFIGIB to enhance credit access for have expressed interest in participating. Over SMEs, female entrepreneurs, and farmers in 80% of the 3,000 borrowers would not have Burkina Faso. This risk-sharing instrument has been able to access bank credit without this contributed to attracting private sector financial partial guarantee instrument. The guarantee fund has generated a 6% return from term deposits, 30 A first-demand guarantee is a standard security measure in the contributing to its stability. financial world. In this arrangement, a guarantor – typically a bank or financial institution – agrees to pay a specified sum of money upon request from the guaranteed party. This payment is expected to be made promptly, usually within a fortnight, to fulfill the terms of the 31 Source : https://www.worldbank.org/en/results/2022/05/16/afw​ agreed-upon service or contract. The guarantor cannot invoke any -unlocking-access-to-credit-for-underserved-borrowers-in-burkina​ reason to refuse payment. -faso 84 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Overview of Other Initiatives 5. The Agricultural Development Program aims to build the capacities of rice and cassava In addition to these major initiatives, access to producers in preparing loan applications and financing has always been a fundamental aspect managing credit and treasury through financial in the intervention strategies of most agricultural education training. development projects, as illustrated by the follow- 6. The Support Project for Agricultural Sectors ing ongoing initiatives: in the Regions of Boucle du Mouhoun, 1. In the context of enhancing access to bank Centre-West, Hauts-Bassins, and South- financing for rural micro-enterprises, in May West (PAFA-4R): The project (i) finances rural 2013, the Government of Burkina Faso received micro-enterprises (RME), (ii) facilitates partner- a $5 million grant, equivalent to CFA Francs ships between microfinance institutions and 2.5 billion from the Kuwait Fund for Arab grassroots farmers organizations for bulk Economic Development. A special account purchasing of agricultural inputs and equip- was opened in March 2014 with Coris Bank ment, and (iii) eases the establishment of Rural International to receive these funds, overseen by Partnership Resource Centers (CREER) to a tripartite agreement among the Government, assist rural micro-enterprises. It also empha- Coris Bank International, and the Kuwait sizes the importance of contracts between Fund. Through these resources, Coris Bank grassroot farmers organizations and market- International extends direct financing to project ing chain actors to address marketing-related promoters for working capital, inputs, equip- challenges. ment, and infrastructure. However, challenges in 7. The Agricultural and Food Risk Management management skills and credit handling among Project aims to facilitate the development of promoters have impacted the program’s success. agricultural insurance and other agriculture There has been insufficient focus on maintaining and food related risk management tools. The small accounts or financial records, which are efforts include designing and institutionalizing essential for monitoring production costs and agricultural insurance products and promot- assessing the profitability of agricultural firms. ing their adoption in rural communities. It 2. The second phase of the Program to Enhance also supports the creation of the Agricultural Agropastoral Potential in the East focuses on Development Fund within the Agricultural Bank supporting farmers in preparing loan applica- of Faso (BadF). tions and developing infrastructure to facilitate the warrantage process. These diverse initiatives, overseen by the Ministries in charge of Agriculture and imple- 3. The Agribusiness Bank Support Project also mented by NGOs, reflect a comprehensive plays an active role in fostering warrantage by approach to enhancing financial access in agri- drafting regulatory texts on warran- assisting in ­ cultural value chains. However, the lack of capi- tage and agricultural insurance policies. The talization and synthesis of these initiatives by the project has also supported the creation of a Directorate General for the Promotion of Rural warrantage database to foster networking, and Economy (DGPER) limits the identification of best helps establis farmer-managed warrantage practices tailored to each sector and stakeholder cooperatives. category. This gap restricts the broader application 4. The Agricultural Value-Added Development and potential institutionalization of these practices, Project has implemented three microfinancing which could otherwise enhance their effectiveness mechanisms to ease producers’ access to the and reach. financing needed for their activities, namely: Strategic Alliance, Mutual Guarantees, and Furthermore, often these credit lines and guarantee Matching Mechanism. funds, established under these various initiatives, INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 85 remain inactive in the financial institutions after demand, leading to forest resource depletion. the closure of the projects. Moreover, the lack Annually, Burkina Faso witnesses an average of transparency in the utilization of these funds loss of more than 240,000 ha of forest lands and transfer of property is a significant concern. due to agricultural expansion (51%), energy Without a clear and transparent framework, there wood consumption (40.2%), overgrazing is a risk that these funds could be diverted from (6.45%), and bushfires (0.86%)34. Moreover, their original purpose. mining and the collection of non-timber forest products also contribute to an average annual loss of 2,457 ha (0.99%) and 1,237 ha (0.5%), Analysis of Expenditures respectively. Consequently, the country’s forest cover has declined from 54.3% in 1992 to Allocated to Forestry 31.6% in 2014. Since the late 1970s, Burkina Faso has FORESTRY SECTOR CONTEXT AND implemented participatory forest resource POLICY FRAMEWORK management, including forest management projects (FDP) in the mid-1980s. multi-year forest Burkina Faso’s forests cover about 31% of the total management plans have been developed and land area, with 4.7 million hectares managed by received public funding through a dedicated forest local villages and municipalities, and 3.9 million management fund. Management partnerships hectares as classified State-owned forests. These between Forest Management Groups (GGF), State-owned Forests are divided into 78 separate the Union of Forest Management Groups, and entities, including forests (880,000 ha), national the Government (MEEA) have been established. parks (390,000 ha), partial and total wildlife A decree was published in 201435, aimed reserves (2,545,500 ha), biosphere reserves, at transferring sustainable natural resource and fallow lands. Collectively, these forest lands management and competency from the State to contribute to roughly 9.6% of the GDP32. Major municipalities with provisions for State funding to contributions come from firewood production cover recurring and investment expenditures in (5.3%) and non-timber forest products (3.9%). this sector. Other contributions (0.5%) include conservation and environmental services like tourism, hunting, Policy Framework carbon sequestration, and biodiversity preserva- tion. Over 40% of households earn some income Burkina Faso has demonstrated a strong and from forest-related activities.33 ongoing commitment for decades, both domesti- cally and globally, in favor of the sustainable man- Over the years, Burkina Faso has witnessed a agement of natural resources. The strengthening significant degradation of its forest resources. of its policy, legislative, and institutional frame- Between 1994 and 2014, nearly half of the works for forest governance has been an ongoing forest cover was lost, mainly due to agricultural process, especially in the review period between expansion and overgrazing. The country heavily 2016 to 2020. relies on wood resources like firewood and charcoal, for 96% of its energy consumption. However, the sustainable supply of these 34 Drivers of Deforestation and Forest Degradation in Burkina Faso - resources has been unable to meet the Trends and Strategic Options, MEEVCC, 2018 35 https://www.pif-burkina.org/wp-content/uploads/2018/07/Decret​ -portant-sur-les-modalit%C3%A9s-de-transfere-des-ressorces-et​ 32 World Bank (Burkina Faso, Sector Note on Forests) -des​-comp%C3%A9tences-entre-lEtat-et-les-commune-dans-le​ 33 Source: World Bank, Burkina Faso Rural Income Diagnostic, -domaie​-de-lEnvironnement-et-la-Gestion-durable-des-ressources​ December 13, 2019 -Naturelles.pdf 86 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW At the international level, it is worth noting Burkina The existence of these numerous texts, both Faso ratified the United Nations Framework at the global and domestic levels, lays a legal Convention on Climate Change in 1993; the foundation for interventions in the sector, helping Convention on Biological Diversity (CBD) in 1993; in setting rules and practices for the sustainable and the United Nations Convention to Combat management of forest resources. However, the Desertification in 1995. implementation process presents numerous challenges. These challenges include the lack At the national level, the Constitution of of internalization and adaptation of international June 1991 with its amendments establishes texts to national social contexts, inadequate environmental protection as a fundamental duty regulation enforcement, largely unknown to of the State and the nation. Various specific forestry sector stakeholders, and the absence laws reinforce this commitment, including: of implementing texts and/or coherence Law No. 003-2011/AN of 2011 on the forest among may laws. These challenges encourage code in Burkina Faso; Law No. 006-2013/AN practices that are detrimental to the sustainable of 2013 on the environment code in Burkina management of forests. Faso; Law No. 008-2014/AN of 2014 on sustainable development guidelines in Burkina On a practical level, the environmental and natural Faso; Law No. 016-2015/CNT amending Law resource management has been addressed by No. 055-2004/AN of 2004 on the general the sub-sector components of the environmental code of local authorities in Burkina Faso; the themes embedded in four sectoral policies, and in Agricultural, Forestry, Livestock, Fisheries and the structural investments and strategic reforms of Wildlife Guiding Law of 2015; and the law on the PNDES. Furthermore, emergent environmental national land-use planning and sustainable themes such as climate change, green economy, development in 2018. sustainable consumption and production frameworks, and sustainable land and natural The legislative framework has continued to evolve resource management have also been included to achieve greater integration of forestry into in PNDES I. Moreover, PNDES II (2021–2025) broader rural sector policies and ­ activities. This aims to increase vegetation cover to 48.1% of the integration is reflected in the national policy for national territory and restore 25% of degraded the management of classified forests, the sectoral lands. Key actions identified include integrating policy on the environment, green economy and environmental and sustainable development climate change for 2017–2026, the strategy and subjects into development planning documents, action plan for the Great Green Wall Initiative for as well as securing State conservation areas and the Sahara and Sahel for 2018–2022, and the classified forests. adoption of the National Environmental Strategy 2019–2023 and the National Rural Sector Institutional Analysis Program (PNSR II) for 2017. The policy for environmental conservation and The Forest Investment Program (FIP, 2014–2021) sustainable forest management is implemented by improved forest policy and introduced REDD+ the Ministry for Environmental Affairs. (Reducing Emissions from Deforestation and Forest Degradation, as well as the conservation By the end of 2020, the Ministry for Environmental and enhancement of forest carbon stocks). The Affairs employed approximately 3,000 agents Forest Investment Program (2014–2021) enhanced (civil servants) with three-quarters being foresters, forest policy and regulatory environments, and the rest environmentalists (of different ranks). incorporating the REDD+ mechanism to mitigate The majority of the technical staff were trained climate change effects while promoting sustain- and graduated from the National School of Water able development. and Forests. Foresters are part of a paramilitary INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 87 group known as (“the Water and Forests Corps”), various means, including Government contri- adhering to a military-styled hierarchy, whereas butions, taxes, donor-funded projects, as well environmentalists (or other specialists) adhere to as grants, etc. The FIE also channels funds a different hierarchical model, despite undergoing from the World Bank-funded Forest Investment similar training. Despite the Ministry's attempts to Project (FIP) to local communities. actively recruit women in the forestry sector, only • The Union of Forest Management Groups. about 11% of the technical staff of the Ministry are women, highlighting a gender gap in a field where Research Conducted Under the Supervision of women play significant roles. Other Ministries includes the National Center for Scientific and Technological Research (CNRST), Most of the technical staff (approximately a forest production service, and the National 2,300 people) are stationed at the regional level, Institute for Environment and Agronomic Research but they lack the necessary public budgetary for (INERA). field missions. Moreover, there is a discrepancy between the actual and needed number of Coordination: The Permanent Secretariat for technical agents at the regional level, estimated the Coordination of Sectoral Agricultural Policies at 2,700 according to the Ministry's five-year (SP-CPSA), under the supervision of the Ministry recruitment plan. of Agriculture, Animal Resources, and Fisheries (MRAH), is responsible for harmonizing policies Several structures under the MEEA umbrella focus and sectoral reforms in the agro-silvo-pastoral on forestry: sectors including water, sanitation, and environ- • The National Office for Protected Areas. mental sectors. However, coordination is chal- lenged by the tendency of the relevant Ministries • The National Center for Forest Seeds (CNSF), (MRAH, Ministry of Water and Sanitation, and which is a public administrative institution, Ministry of Environment, Ecology, and Sustainable primarily tasked with supplying high-quality Development - MEEA) to prioritize their indi- forest seeds to producers. vidual agendas. This hampers SP-CPSA’s efforts • The Agency for the Promotion of Non-Timber in achieving cohesive policy implementation. Forest Products. Effective cross-sectoral engagement mechanisms are recognized as necessary but are yet to be fully • The National School of Water and Forests, established, indicating a need for improved inter- training paramilitary forces and environmental- ministerial collaboration. ists for forest conservation, with an ambitious ten-year strategic plan (2019–2028) for its Insufficient Support for Decentralization: With growth. the ongoing decentralization process, the State, • The Environmental Intervention Fund (FIE, particularly the Ministry responsible for environ- see Box no. 9) includes the Forest Fund (FF), mental affairs, is expected to guide municipalities and provides grants with its third cycle initi- on natural resource management. ated in 2017. It does not operate as a revolving fund, necessitating new capital injections to However, this support has been insufficient, and remain operational and often faces challenges the Ministry has delegated less than 10% of opera- in securing a sufficient recurring budget (for tional expenses to decentralized services between example, to supervise the grants), mainly 2017–2020. contingent upon the national annual budget. The FIE was established in 2015 as a financial The annual average of 5.5 million CFA Francs per mechanism supporting Burkina Faso’s national region is allocated, which may be inadequate for environmental strategy. It is funded through effective regional environmental management. 88 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Under such conditions, without support for proj- and a worsening security crisis. Despite the ects and programs or transfer of funds from central recognition of the long-term impacts and risks of services, decentralized services are unable to initi- deforestation, the budget for the forestry sector ate actions. The lack of decentralization in budget has remained very limited, amounting to planning and execution hinders the autonomy approximately 1.1% of the annual national budget. of these decentralized services in launching initiatives. During 2016–2018, personnel costs represented 28% of the allocated funds, but increased to 55% in 2019 and averaged 46% during 2020–2022 ANALYSIS OF THE LEVEL AND primarily due to the salary increase of forest STRUCTURE OF EXPENDITURES rangers, following the implementation of their ALLOCATED TO FORESTRY special status. Evolution of Budgetary Allocations and Investment allocations represented only 36% of Efficiency of Budget Execution within the MEEA the total allocations in 2019–2022, against 60% in 2016–2018. Narrowing the focus to domestic There was a substantial increase in the budget resources, the share dedicated to investments between 2016 and 2017, reaching 36 billion dropped from 34% in 2016–2018 to 25% in CFA Francs in 2017. 2019–2022. Although the salary enhancement of forest rangers contributes to better enforcement This was followed by a downtrend, dropping to of regulations in favor of sustainable forest 21 billion CFA Francs in 2019. management, a budget primarily directed to personnel expenses is insufficient to overturn A subsequent increase occurred in 2020 and the ongoing trend of forest and natural resource 2021, reaching 29 billion CFA Francs. degradation. However, the budget projections for 2022, initially The overall BER averaged 75% over the 2016– set at 26.6 billion CFA Francs, face potential 2020 period (Figure 22). For investments, the downward revision due to the political situation BER was lower, standing at 51% during the same FIGURE 21: Evolution of Budget Allocations to the MEEA (in billions of CFA Francs) 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2016 2017 2018 2019 2020 2021 2022 Budget allocations Source: The authors, based on data from the DGB INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 89 FIGURE 22: Budget Execution Rate by Category of Expenditure and Funding Source 120% 104% 98% 100% 87% 80% 71% 65% 62% 59% 60% 46% 40% 20% 0% Current Investments on Total budget on Investments on expenses internal resources internal resources external resources MEEVCC MAAHM-MRAH-MEA Source: Authors based on data from the DGB and DGESS/MEEA period. An analysis of budget execution based Nearly half of these expenditures (9.5 billion CFA on funding sources reveals a BER of 87% for Francs), or 49%, were allocated to salary domestically financed budget. payments, leaving limited resources to cover This good performance compared to other operating expenses at the local level and for ministries responsible for rural development is investments (Figure 23). MEEA operating expenses attributable to a BER of 98% for current ranged between 800 million and 1.16 billion CFA expenses, which constitutes 71% of the Francs, representing only 5% of the total domestic resource allocations provided to the expenditure. The forestry authorities lack the MEEA. However, the BER for State-funded human, material, and financial resources to investments averaged 59% throughout 2016– effectively protect the 3.9 million hectares of 2020 period, against 65% for other ministries in public classified forests. Moreover, forestry officials charge of agriculture. The BER for investments lack the necessary resources to perform their externally financed showed modest duties at both central and local levels, with the performance, standing at 46% for the MEEVCC situation being particularly critical at the local level. compared to an average of 60% for other ministries. The deterioration of the security Annual transfers to entities affiliated to MEEA aver- situation was identified as the key factor aged at 2 billion CFA Francs, constituting 11% of hindering the execution of MEEA projects. the ministry’s expenditures. The expenditure structure of the Ministry The share of investments in the MEEA’s budget is of Environment, Ecology, and Sustainable the lowest among Ministries responsible for rural Development (MEEA) development, representing 35% of total invest- ments. In terms of volume, investments ranged MEEA’s annual expenditures, including external between 6 and 8 billion CFA Francs per year funding, dedicated to the environment and sus- throughout the 2016–2020 period. More than tainable forest management averaged 19.3 billion half of these investments, or 54%, were financed CFA Francs during the 2016–2020 period. by external aid. 90 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW FIGURE 23: Breakdown of MEEA Expenditures by Category, in billions of CFA Francs 12.0 10.0 8.0 6.0 4.0 2.0 0.0 2016 2017 2018 2019 2020 Staff Operation Current transfers Investments Source: Authors based on data from DGB and DGESS/MEEA Relatively Good Execution of Planned Structure of Expenditures Investments under the PNSR Including (Including Off-Budget Aid) by Off-Budget Aid Budgetary Program Off-budget aid allocated for environment and With the implementation of the Program natural resource management is substantial, Budgeting, MEEA interventions are organized into totalling 68.5 billion CFA Francs throughout the five distinct budgetary programs: 2016–2020 period and representing 3.7% of the • 086 Sustainable Management of Forest and total aid volume included in the State budget, Wildlife Resources, which was 18.3 billion CFA Francs over the same period. This aid is implemented by non- • 087 Environmental Sanitation and governmental organizations and associations Enhancement of Living Conditions, engaged in environmental initiatives. Although • 088 Environmental Governance and it offsets the observed public underinvestment, Sustainable Development, it suffers from a lack of coordination and capitalization of interventions. • 089 Green Economy and Climate Change, and • 090 Steering and Support. When factoring in this off-budget aid, the total expenditures allocated for environmental conser- In 2016–2020 period, the largest share of the vation and natural resource management amounts budget was allocated to Program 086 to 165 billion CFA Francs during the 2016–2020 (Sustainable Management of Forest and Wildlife period, compared to a projected 347 billion CFA Resources) with expenditures totaling 87.5 billion Francs under PNSR II, representing a Budget CFA Francs and representing 53% of the total Execution Rate of 48%. This rate surpasses the expenditures (see Table 9). It is followed by overall BER of PNSR II, which stood at 37%, thus Programs 088 (Environmental Governance and indicating that natural resource management Sustainable Development) and 090 (Steering and received a higher priority from technical and finan- Sector Support), which received 19% and 18% cial partners than other areas covered by PNSR II. respectively of total expenditures. Expenditures INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 91 TABLE 9: Breakdown of Expenditures by Budgetary Program (including off-budget aid), in billions of CFA Francs Portion Budgetary Program 2016 2017 2018 2019 2020 2016–20 2016–20 086 Sustainable 6.7 22.0 16.3 28.4 14.1 87.5 53% Management of Forest and Wildlife Resources 087 Environmental 1.2 0.9 0.5 0.5 0.7 3.8 2% Sanitation and Enhancement of Living Conditions 088 Environmental 2.8 9.0 9.9 3.6 5.8 31.2 19% Governance and Sustainable Development 089 Green Economy 1.6 2.0 1.5 5.8 1.8 12.7 8% and Climate Change 090 Steering and 7.5 4.0 5.5 4.4 8.8 30.1 18% Support Total 19.8 37.9 33.7 42.7 31.2 165.3 100% Source: Authors, based on data from DGB, DGEP, DGCOOP, and DGESS/MEEA for Program 090 (Steering and Support) totaled nomenclature, expenditures allocated to forestry 30 billion CFA Francs, whereas they were antici- include the following: pated to stand at 16.5 billion CFA Francs under • Management of forestry affairs and services; PNSR II36. The substantial part of these expendi- conservation, expansion, and rational utilization tures allocated to personnel costs is attributable of forest reserves; oversight and regulation of to the salary increase for foresters and the forestry initiatives and the issuance of tree- incorporation of the Project for Support in felling permits; Sustainable Forest Resources Management (AGREF) in this budgetary program. • Execution or support of reforestation projects, pest and disease control, forest fire-fighting Analysis of Public Expenditures Directed and prevention services, and extension Towards Forestry services for forest operators; • Generation and dissemination of general Methodological Aspects information, technical documentation, and forestry-related statistics; Expenditures allocated to forestry will be under- estimated if limited only to those incurred • Grants, loans, or subsidies aimed at supporting under Program 086. According to the COFOG commercial forestry initiatives; • Management fees and operating expenses of government agencies engaged in applied 36 In PNSR II, the budgeting of the steering program is not broken down by axis or sub-sector. The share of environmental governance research and experimental developments in and sustainable management of natural resources has been forestry; estimated by applying its percentage to the overall cost of the steering program. 92 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW • Grants, loans, or subsidies to support applied considered as contributing to forest conservation. research and experimental developments in These initiatives include promoting renewable forestry, conducted by research institutes and energies and green technologies, income diversi- universities. fication, fostering green employments favorable to forest conservation, including the enhancement, Expenditures on Forestry education at both univer- exploitation, and promotion of non-timber for- sity and formal secondary education level is clas- est products. Furthermore, cross-cutting benefits sified under “education” according to the COFOG from environmental governance and sustainable nomenclature. However, if these expenses are development (program 088) directly and indirectly substantial, it is recommended to include them37 in benefit forest resources. the analysis. Additionally, according to the COFOG classification, group 05 comprises expenditures Level, Evolution, and Structure of dedicated to environmental conservation, cover- Public Forestry Expenditures ing areas such as parks and forests protection and integrated conservation projects. In each Although these expenditures fluctuate, funds case, only expenditures related to forests should allocated to forestry have increased through the be extracted. Yet, in reality, they are difficult to 2016–2020 period. In reality, they witnessed an identify. average annual growth of 10.35% during this period, rising from 20 billion CFA Francs in 2016 to Thus, a decision has been made to incorporate 43 billion in 2019, although dropping to 31.2 billion all expenditures allocated to the environment and in 2020. Despite the near-consistent budgeted sustainable management of natural resources expenditures (Figure 24) averaging 19.3 billion under the category of forestry-related expendi- annually, the trend in public expenditure allocated tures. This decision is justified by recognizing that to forestry is influenced by off-budget aid, which most initiatives aimed at mitigating the effects represents an average of 41% of executed public of climate change under program 089 can be expenditure for forestry. FIGURE 24: Evolution of Public Expenditures Allocated to Forestry 45.0 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2016 2017 2018 2019 2020 Total expenses Budgeted expenses Off-budget aid Source: Authors, based on data from DGB, DGEP, DGCOOP, and DGESS/MEEA 37 PROFOR [2011] “Forest Sector Public Expenditure Review: Review and Guidance Note”. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 93 Forestry expenditures represented an average of The FIP was supported by two main projects: 1.2% of total public expenditure during the 2016– (i) the Decentralized Forest and Wooded Area 2020 period, contributing to more than 9% to the Management Project, supported by the World GDP. When considering only resources, the share Bank and the European Union; and (ii) the of these expenditures drops to 0.85% of the total. Participatory Management of Classified Forests These figures reflect the limited public investment for REDD+, supported by the African Development in forestry conservation and development, despite Bank (AfDB) in collaboration with the National the substantial economic resources derived from Counterpart. A substantial part of the FIP was forest exploitation. executed through the Forest Fund (FF), which is part of the Environmental Intervention Fund (FIE) Initiated in 2014, the structuring of forestry (see Box 9). expenditures by the Forest Investment Program (FIP), aimed at mitigating deforestation and Major projects budgeted under the MEEA, degradation in classified forests and wooded areas representing 80% of the total amount executed, in five designated regions (Boucle du Mouhoun, include: The Support Project for the Sustainable Centre Ouest, Centre-Sud, Est, and Sud-Ouest). Management of Forest Resources (AGREF), the PCFC/REDD+, the Forest Sector Support The FIP aims to introduce new forestry manage- Project, the Support Project for REDD+ Anchor ment approaches that balance conservation with Development in the Comoé Basin (PADA/REDD+), the valorization of forests, aiming to increase the Ecosystem-based Adaptation Project forest carbon stocks, combat poverty, and (EBA-GEF), the PGDFEB, and the National Forest reduce pressures on forests and wooded areas. Sector Support Program. Investments under FIP include the management, conservation, and restoration of wooded areas, The main off-budget projects, representing 70% of ligneous and non-ligneous resources, wildlife, the total, are listed in Table 10. agroforestry, alternative livelihoods, and support for small and medium-sized enterprises. TABLE 10: Main Off-Budget Projects Expenditure 2016–20 Off-Budget Projects (In billions of CFA Francs) Participatory Natural Resource Management and Rural Development Project in the Central North and 11.9 East (NEER-TAMBA) Transboundary Biosphere Reserve WAP: 2019,69,161 6.6 Thematic Budget Lines Environment/EU 8.8 Integrated Rural Development Project in the Central Plateau 4.2 Program Related to Biodiversity and Climate Change in West Africa 4.1 Support to Various NGOs and Associations (Belgium) 3.8 Local Governance of Forest Resources (Tree Aid/SNV/UNCDF/GAGF) 3.3 Support to Sustainable Forest Resource Management (BKF/023) * 2.7 Source: Authors, using data from DGCOOP * This project was only budgeted in 2020, although it began in late 2018. 94 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW BOX 9: Environmental Intervention Fund (FIE) and Forest Fund (FF) The Operation of the Forest Fund within the Environmental Intervention Fund The Forest Fund, established under the articles of Law No. 003-2011/AN (2011) on the Forest Code, is integrated into the FIE - Environmental Intervention Fund. The two decrees operational- izing the FIE were adopted in July 2015 by the Government, facilitating the tangible implementa- tion of the FF. The FIE operates in multiple ways, with its primary mode being the solicitation of micro-­ projects focused on environmental and forestry issues, although it can also use alternative methods. Both the FIE and the FF can finance compensations paid to local community emergency actions, and offer financial incentives via preferential interest rates or bank guarantees. The FIE third project solicitation in December 2017, covered six regions, and mainly focused on forestry (conservation or production). The subsidy rates typically fluctuated between 80–90%. With a total amount of approximately 2 billion CFA Francs, this third project solicitation financed 197 projects in 2018. By the time of COP 26 in 2021, he FIE had already financed 370 projects. The FIE benefits from the support of various Technical and Financial Partners, such as the Forest Sector Support Program 2012–2019, and received funding from Sweden and Luwembourg, each contributing to 11 million euros. Despite these supports, the FIE faces a budgetary constraints that limit its capacity to monitor and sustain the subsidized projects. Analysis of Public Reinvestment of Ecofiscal revenues. Together, these two sectors contributed Revenues in Natural Resource Management to 93.1% of Burkina Faso’s eco-fiscal revenues. Over 99% of revenues generated by eco-fiscal ini- The analysis on environmental taxes reveals tiatives related to natural resources came from the that revenues from environmental taxes mining sector alone, while other sectors like water, increased from 197.8 billion CFA Francs in forests, hunting, and fishing contributed to less 2014 to 344.2 billion CFA Francs in 2019, an than 1%. Transport-related measures (excluding average annual increase of 12%. These revenues fuels) and measures targeting pollution and waste represented 20% of the State’s internal revenues control made up a smaller portion of the total eco- in 2019. The share of these revenues in the Gross fiscal revenues, i.e. 6.8% and 0.4%, respectively. Domestic Product (GDP) rose from 3.4% in 2014 to 4.4% in 2019. The share of these revenues allocated to the sus- tainable management of natural resources remains In 2019, the mining sector (Table 11) was the limited. Between 2016 and 2019, only an average predominant contributor to eco-fiscal revenues, of 5% of the expenditures funded by the State’s accounting for nearly half (47.9%) of the total. internal resources from eco-fiscal revenues was The energy sector was the next largest con- allocated to the environment and natural resource tributor, representing 44.7% of the total eco-fiscal management. When narrowed down to revenues INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 95 derived from taxation on natural resources, this insufficient to reverse the prevailing trend of rate stands at around 10%. natural resource degradation. It is imperative to increase these reinvested revenues, given the This reinvestment of eco-fiscal revenues in limited of public investments in natural resource natural resource management remains low and management. TABLE 11: Summary of Revenues from Updated Environmental Taxes, 2014–2019 (in millions of CFA Francs) 2019 M CFA % total Categories of eco-fiscal measures 2014 2015 2016 2017 2018 Francs revenue ENERGY (including fuel used for 87,890 100,543 104,137 129,848 148,485 153,936 44.7% transportation) TRANSPORTATION (excluding fuel 16,364 16,387 16,378 20,385 21,042 23,289 6.8% used for transportation) NATURAL RESOURCES 93,575 97,131 115,034 126,893 148,171 166,386 48.3% MINES 91,801 95,272 113,062 125,212 146,554 164,699 47.9% WATER 585 620 742 522 524 813 0.2% FOREST 877 1,014 1,026 996 959 810 0.2% HUNTING & FISHING 313 225 204 163 134 64 0.0% POLLUTION AND WASTE 0 0 0 0 118 563 0.2% TOTAL: 197,830 214,061 235,549 277,127 317,816 344,174 100.0% Annual growth rate : 8.2% 10.0% 17.7% 14.7% 8.3% ENVIRONMENTAL TAX RATIO /GDP 3.4% 3.9% 3.7% 3.7% 4.1% 4.4% Source: DGESS/MEEA [2020] 96 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW REALIZED OUTCOMES Regarding the restoration of degraded lands in forest and agro-forest ecosystems, the restored Main Outcomes in Terms of Forest Management areas increased from 8,528 ha in 2016 to 1,709 ha in 2020. Over the 2016–2020 period, the total In terms of reforestation, the National Center for restored areas amounted to 26,731 ha against Forest Seeds (CNSF) supplied and distributed a target of 50,000 ha set under the PNDES I. 43,000 tons of improved seeds during the Insecurity in the target areas and insufficient finan- 2016–2020 period, resulting in the production of cial resources limit investments for the restoration 52 million saplings. Of these, 55%, or 29 million of degraded lands. saplings, were planted. However, the survival rate of these plantations increased modestly from 25% Several external funded projects have facilitated to 45% between 2016 and 2019. the achievement of these outcomes. An evalua- tion of the PIF in 2021, being the most important Public investments play a significant role in forest program, revealed that it helped reducing forest management. It is worth mentioning deforestation and degradation of classified forests that a classified forest under management and wooded areas in five targeted regions (Boucle refers to a forest owned either by the State or du Mouhoun, Centre Ouest, Centre-Sud, East, a Territorial Community in accordance with the and South-West). Indeed, the rate of deforestation Forestry Code and its implementing regula- and degradation in classified forests decreased classified forest is divided into units that tions. A ­ from 0.25% to 0.15%. The PIF has facilitated the comprise a certain number of plots, all subject full demarcation of 284,000 hectares of classified to similar treatment methods and manage- forests and the registration of the five (5) forests ment rules. A classified forest is deemed under mentioned above. Moreover, it enabled the con- management when it is managed according to struction of key infrastructures within and around a Forest Management Plan. Burkina Faso has the classified forests, including the construction seventy-seven (77) classified areas with a total of clearing structures, the development of water area of 3,930,097 hectares, including 65 classi- points inside and/or around the forests, the refor- fied forests with a total area of 982,397 ha. The estation of degraded areas, the establishment of security situation, particularly the occupation of water and soil conservation structures, the soil certain forests by armed groups, poses a signifi- protection and restoration (CES/DRS), the restora- cant threat to the achievement of the sustain- tion of life bases, the development of wood and able management objective of 65% of forests fodder markets equipped with haystacks, the con- by 2023. struction of premises for multifunctional platforms, and the creation of vaccination parks, restoration, The efforts to secure the land tenure of classified maintenance, and conservation of forests. forests have been inadequate. Until 2020, only the classified forest of the Ouagadougou dam, Furthermore, the AGREF project, with a total with an area of 260 ha, was officially registered cost of more than 12 billion CFA Francs for the by the land registry services. Thanks to the Forest period 2019–2022, financed the development of Investment Program (PIF), five forests (Torouba, 472,000 hectares of forests. Tissé, Kari, Oualou, Nosebou) in the Boucle du Mouhoun, with a total area of 65,200 ha, have Sustainable Biomass Production been subsequently registered. The registration process is underway for six forests in the Hauts Burkina Faso energy consumption is mainly met Bassins (Dinderesso, Kou, Kua, Pèni, Koulima, by three sources of energy: traditional energies Tèrè) with a total area of 3,017 ha, facilitated by (biomass energy) represent 90% of consumption, the Sustainable Forest Resources Management followed by hydrocarbons, and electricity, while Support Project (AGREF). the share of renewable energies is negligible. INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 97 TABLE 12: Evolution of Firewood Production in Forest Management Sites (FDP), cubic meters Year 2016 2017 2018 2019 2020 2021 (target) Values 112,873 225,166.84 243,522.09 214,662.72 277,669 300,000 Source: DGESS/MEEA Thus, forest management practices for firewood Non-Timber Forest Products (NTFP)38 supply to cities has been carried out since the 1980s to ensure sustainable forest management. NTFPs play a significant role in Burkina Faso’s Forest Development Projects (FDP) initiated for economy, contributing to 3.85% of the country’s this purpose are managed by Forest GDP (2018). Their economic relevance is particu- Management Groups (GGF). There has been a larly pronounced in the Southwest region. The six significant increase in firewood production, from main products (see Figure 25) yield a revenue of 112,873 cubic meters in 2016 to 277,669 cubic 11.3 billion CFA Francs, representing 87% of the meters in 2020, demonstrating the effectiveness total annual revenue from NTFPs. NTFPs are an of the FDPs. Despite the increase in production, important source of income, especially for women the coverage rate of firewood needs for major and impoverished individuals, and contribute to cities like Ouagadougou and Bobo Dioulasso was 23% of household income and employment in only 17% in 2016, indicating that a significant rural areas. portion of firewood consumption still comes from deforestation. A target coverage rate of 21.5% FIGURE 25: Total Revenue of the Six Main NTFPs, was set for 2021, aiming to reduce the reliance in millions of CFA Francs, 2016 on deforestation. 826 To reverse degradation trend, it is important to increase forest developments for firewood 4,386 production. Except for occasional support provided by certain externally funded projects, FDPs do not receive investment from the State. As previously indicated, eco-fiscal revenues from forests are negligible. To enhance the 6,913 management and sustainability of wood-energy 108 116 production, it is important to re-assess the 217 economic value of firewood. This could lead to increased revenues from wood-energy, which can Baobab Néré Kapok Tamarind Date Shea be reinvested into sustainable forest management. Source: MEEVCC [2018] The revision of decree 326/MEF/MET of 1982, which sets the rates for products from natural The development of NTFPs thus provides oppor- forests and forest plantations in Burkina Faso, is tunity to increase income, create sustainable job recommended. This revision, supported by the opportunities, widening market reach, diversify environmental taxation study conducted by the businesses in rural areas, and strengthen the eco- MEEA, will allow for an upward adjustment of nomic empowerment of poor rural communities. the wood price. 38 National Strategy for the Development of Access to Non-Timber Forest Products (NTFP) to Markets, MEEVCC, 2018 98 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The production targets outlined for NTFPs under creation of improved varieties should mainly the PNDES I have been substantially achieved. focus on the following: (i) improving produc- Indeed, the total production of NTFPs reached tivity (ii) shortening the maturation period to 2.63 million tons against a target of 2.65 million enable faster harvesting and (iii) enhancing tons set for the 2016–2020 period. Moreover, The resilience to climate change. transformation rate of NTFPs was 67% against a • Advocating for the clarification, strengthening, target of 65%. Export values of almonds and shea and implementation of the legal rights related butter increased from 26.4 billion CFA Francs in to Non-Timber Forest Products (NTFPs). 2015 to 57.4 billion CFA Francs in 2019. • Facilitating the ongoing transition of the The production, transformation, and distribution legal status of Forest Management Groups of NTFPs are organized by the concerned (GGF) – entities partially overseeing collection stakeholders themselves – these include management – from associations to village collectors, purchasers, and resellers, primarily cooperatives, following the reforms initiated operating in the informal sector, independent by the Organization for the Harmonization of from administration oversight. Each NTFP value Business Law in Africa. chain has its own organizational structure, and • Implementing measures to guarantee fair some sectors have created interprofessional outcomes in value chain development, especially associations to promote their interests. However, for women, who often face challenges in secur- underinvestment is an obstacle across various ing land rights for NTFPs, particularly in the shea stages of the value chain, particularly in areas sector, where they are often excluded from land such as: (i) traceability and quality control systems; agreements. The issue of access to resources (ii) marketing strategies; (iii) product labeling and such as shea trees is not only crucial for forest certification; (iv) strengthening capacities for the law, but it also holds significant importance for provision of standardization services; and (v) the broader context of gender equality. fostering partnerships and contractual agreements with major distributors. The private sector, which Tourism is crucial for addressing these underinvestment issues, faces the financial institutions' lack of Sightseeing tourism plays an important role in the engagement in the NTFPs sector. economy of Burkina Faso. According to the fourth report on the State of the Environment, the wildlife Public expenditure dedicated to forging partner- sector, closely linked with sightseeing tourism, ships and assisting private initiatives in these value contributed 0.47% to the country’s Gross Domestic chains should focus on: Product (GDP). However, the tourism sector has • Conducting scientific research to foster been adversely affected by insecurity and the expertise and develop patents, contribut- COVID-19 pandemic (Table 13). Besides the classi- ing to household income. A diverse range of fied forest and the Nazinga game ranch, as well as research centers including universities, the the Deux Balés, other wildlife preservation zones National Center for Scientific and Technological are no longer accessible for tourism. Research (CNRST), have a special depart- ment dedicated to forest production; the TABLE 13: Evolution of the Number of Tourists in National Tree Seed Center (CNSF); the Wildlife Protection Areas Research and Training Unit in Life and Earth Sciences; the National Institute for Agricultural Years 2016 2017 2018 2019 2020 and Environmental Research (INERA); and the Albert Schweitzer Ecological Center Number 3,875 5,723 4,283 1,687 17 Association. Research for the selection and Source: DGESS/MEEA INCIDENCE, IMPACT, AND SUSTAINABILITY OF PUBLIC EXPENDITURES ON AGRICULTURE 99 PLANNING, COORDINATION, exploitation of classified forests persists with- MONITORING/EVALUATION, AND out guaranteed sustainability and compliance with regulations; DECENTRALIZATION • Only one of the classified forests (the Maro Due to limited monitoring and evaluation classified forest) has a management plan that is capacities, the State lacks information on both valid and fully validated. the efficiency of its expenditures allocated to sustainable forest management. Forest With limited State funding, forest service agents authorities are overwhelmed due to a shortage have sought alternative funding from GGF, the of human, material, and financial resources. Union of Forest Management Groups, and local They also lack the necessary data to make municipalities. This could lead to conflicts of informed decisions, and therefore operate under interest. significant technical constraints. The importance of off-budget aid in the sector As a result, several important activities associated also creates issues with coordination, synergy, to forest resource planning remain unexecuted: and capitalization of interventions, exacerbated by human resource constraints. • Forest management plans are not updated due to a lack of external funding; Empowering local governments for decentralized management of forest resources is critical for • Some forests are designated as classified sustainable management. However, few actions forests even without the development of are taken to this effect by the Ministry in charge management plans; of Environmental Affairs, whose limited resources are primarily deployed at the central level. • The existing methodology for forest manage- This issue is addressed sporadically by certain ment planning has not been updated since externally funded projects, but this remains 2002, making the process outdated, lengthy, insufficient. Indeed, support for local governments and costly; in establishing and managing forest or wildlife • Recent developments and emerging needs in conservation areas is limited. In 2016, only 41 forest management have not been integrated out of approximately 350 municipalities received into the planning process. The ongoing support, a number which decreased to 19 in 2020. 100 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW Conclusion Between 2016 and 2020, public support for the security and rural organization (5.1%). However, agricultural sector faced significant budgetary livestock, fisheries, and aquaculture sectors were constraints due to the redirection of State underfunded despite their high growth potential. resources toward defense and security sectors, Moreover, agricultural extension, advisory services, due to an escalating security situation. The budget and agricultural research are inadequately funded. cuts for agriculture totaled 180 billion CFA Francs during this period. Despite these constraints, the Increasing Resources for Research, Extension, average annual public expenditures on agriculture and Advisory Services and reforming the system (PEA) reached 213 billion CFA Francs, recording a is crucial. There is a need to boost funding for 17% increase compared to the 2011–2015 period. these critical areas, especially by focusing on local agents and integrating digital technologies for Several factors hindered effective budget execu- extension, given the country’s security challenges. tion, including: inadequate management of costs Increasing resources allocated to livestock, in budgetary programming, low anticipation and fisheries, and aquaculture sub-sectors is also responsiveness, and poor communication among crucial. This approach seeks to: (i) enhance animal stakeholders, long delays in obtaining no-objec- genetics, promote the production and certifica- tion notices from donors. Furthermore, the partial tion of quality forage and aquaculture seeds; (ii) implementation of the Program Budgeting leading strengthen veterinary services; (iii) secure sus- to inefficient and centralized budget programming tainable management of fishery resources; and with limited operational autonomy for decentral- (iv) introduce advisory support mechanisms in ized services, and poor intra- and inter-program aquaculture. budget coordination. Coordination challenges, monitoring/evaluation challenges, and the numer- To ensure efficient mobilization and utilization ous projects in the agricultural sector impair the of resources in the agricultural sector, efficiency of these interventions. it is recommended to: (i) accelerate the implementation of the Program Budgeting by Regarding the efficiency of PEA allocation, the creating consultation and coordination entities for review reveals that about 70% of PEA is effectively both intra and inter-budget programs; (ii) enhance invested in the agricultural sector, prioritizing water the provision and continuity of public agricultural management issues, with 40.3% of PEA allocated services by allocating necessary resources to the to irrigation. Some of the PEA are earmarked for operation of these services, rather than financing food crisis prevention and management (9.5%), them through investment projects; (iii) initiate a fostering entrepreneurship and agricultural value series of actions and reforms to improve budget chains (8.2%), agricultural inputs and equipment execution, including capacity building for financial (7%), natural resource management (5.8%), land chain actors, particularly at the decentralized level, CONCLUSION 101 instituting an intranet workspace for procurement seed production, seed certification, and fertilizer and public procurement management, develop quality control to compensate for the State limited a software for monitoring and managing public capacities. procurement, create a financial management unit dedicated to managing contracts for hydro- Regarding irrigation, the infrastructure's poor qual- agricultural facilities and procurement of inputs ity and challenges in managing hydro-agricultural in advance, impose sanctions on defaulting facilities (HAF), despite substantial resources allo- companies and service providers, advocate with cation (exceeding 80 billion on average per year), donor partners to reduce the period needed for limit the efficiency of water management policy. the issuance of a no-objection notice, and conduct Indeed, crop yields in irrigated areas only exceed diagnostic studies on the modalities of State, twofold those obtained through rainfall. Besides project, and NGO interventions in the agricultural existing policies, promoting the private sector in sector. irrigation, revising the management of HAFs by broadening the scope of Water Users Associations Specific analyses have been conducted on (WUA) in the Di/Sourou region to all large and agricultural inputs, irrigation, agricultural financing, medium-sized perimeters is crucial. Moreover, and forestry. it would be opportune to consider involving the ­ private sector in water management and infra- Regarding inputs, addressing inefficiencies in structure maintenance to support WUAs through the purchase and sale of fertilizers by the State. lease contracts. Continuing the implementation of the Agri-Voucher system and transferring the subsidy implementa- To enhance the efficiency of investments in tion process to private distributors to improve h ­ ydro-agricultural facilities, given the context of efficiency. With the current financial envelope, climate change and growing vulnerability of the this approach will increase subsidized fertilizer Sahel, the following actions are recommended: quantities from an average of 17,000 tons per year (i) developing and disseminating technical guides to 55,000 tons. Moreover, promoting structural for building hydro-agricultural infrastructures; investments in the import and distribution chain, (ii) expanding WUAs; (iii) allocating budget lines and addressing inefficiencies in the input market for infrastructure maintenance based on tripar- by establishing a framework for dialogue and tite or bipartite performance contracts between actions between the State and private import- the State, Management Company, and WUAs; ers/distributors, will contribute to reducing fertil- systematically registering developed lands, (iv) ­ izer prices. Developing the seed market should including reserve lands for future expansions; be accompanied by a gradual reduction of the (v) securing beneficiary rights in both old and subsidy rates. new perimeters by delivering land titles or lease contracts according to the policy defined for In this regard, it is recommended to implement the perimeter; (vi) developing and adopting a the Support Fund for the Seed Sector (FASS) mechanism for allocating agricultural lands on to build the technical capacities of existing developed perimeters to ensure economic sus- laboratories and construct new regional labora- tainability and efficient use of HAFs; (vii) design- tories. Concerning fertilizers, structural measures ing new training programs on the maintenance, should be taken within the CAIMA framework in economic, and financial management of devel- favor of private sector stakeholders by reducing oped perimeters in vocational schools; and finally fertilizer prices by stimulating competition and (viii) increasing investments in piezometers for addressing inefficiencies in the transport, stor- better monitoring and sustainable management age, and distribution chain of fertilizers. Ultimately, of groundwater to encourage private investments encouraging private sector involvement in basic in irrigation. 102 BURKINA FASO AGRO-SILVO-PASTORAL SECTOR PUBLIC EXPENDITURE REVIEW The examination of financing mechanisms for financing initiatives, including intervention modali- actors in agro-silvo-pastoral chains set up by major ties, best practices, successes, and failures. projects over the last fifteen years have revealed the limited efficiency of shared-cost subsidies Finally, the forestry sector plays an important role due to the following factors: (i) persistent adverse in Burkina Faso’s economy. Besides its direct selection due to the lack of capitalization on contribution to economic activity (9.6% of GDP), successful experiences and especially the high its environmental functions (carbon sequestration, rate of the subsidies; (ii) high cost of technical biodiversity, protection of water bodies against silt- and management assistance provided to benefi- ing, mitigation of land erosion, etc.) are crucial for ciaries; (iii) lack of structure and development in agricultural activity and an enhanced quality of life. agro-silvo-pastoral chains. However, subsidies can Non-Timber and Wood Forest products generate be effective when associated with investments 40% of revenues for rural communities. However, that address technological, organizational, and the over-exploitation of forest resources is a threat infrastructure constraints at various levels of the to their sustainability. The country has indeed targeted value chains. Moreover, credit lines and lost nearly half of its forest cover. Despite the guarantee funds set up in financial institutions for vital importance of forest resources, public sup- actors in the agricultural value chains address the port for sustainable forest management remains challenges of lack of guarantees from farmers insufficient. Sixty percent of the State’s resources and scarcity of long-term financing resources from allocated to the ministry in charge of forests are financial institutions. Credit lines and guarantee dedicated to salary payments. Technical services funds can have a significant multiplier effect on lack the necessary funds to perform their core credit access. It is still crucial to continue develop- missions. Moreover, the transfer of State resources ing other financial products (such as warrantage, to local authorities for local forest management agricultural insurance, etc.) and to identify and has yet been to be materialized, partly due to an direct project funds and credit lines toward the outdated eco-fiscal policy that not only under- agricultural development fund to prevent loss at values forest resources but also generates insuf- project closure. ficient revenues for the State to make appropriate investments. Regarding recommendations, it would be appropri- ate to: (i) reduce the subsidy rate in interventions The recommended actions for improving aimed at easing financing access to project hold- sustainable forest resource management include: ers; (ii) improve cost-efficiency related to technical (i) mobilizing internal and external resources assistance provided to beneficiaries of agricultural for financing phase 2 of the forest investment financing funds (subsidy, credit line, counter-fund) program, including implementing strategies for by encouraging the use of local service provid- reducing carbon emissions and enhancing carbon ers; (iii) promote the combination of credit lines sequestration to leverage resources for climate and guarantee funds in agricultural financing; (iv) financing (ii) enhancing skills and transferring include necessary actions to address difficulties forest management to local authorities; and (iii) along value chains in agricultural financing initia- appropriately financing the ongoing operational tives; and (v) set up a directory of agricultural expenses of the Forest Intervention Fund (FIE). 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