In the 1990s, Mozambique’s government had undertaken a substantial program of macroeconomic and policy reforms. Most of the major policy-induced distortions in the agricultural sector had been removed and the environment was favorable for growth, but the Ministry of Agriculture in Mozambique was weak and existing support activities in the agricultural sector were heavily dependent on fragmented donor resources.
The Agricultural Sector Public Expenditure Program (PROAGRI) pioneered a “sector-wide approach” to agricultural development, pooling donor support to underpin a three-phase, 15-year development program with a significant focus on policy and institutional actions.
The project included structural and functional reform of the Ministry of Agriculture, capacity building and human resource management, planning and budgeting processes, financial management and procurement systems, decentralization, policies and regulations for natural resource management, agricultural research and extension, etc. The goal was to create the environment for market-based agricultural development, to improve the effectiveness of public support services for agriculture and to regulate agricultural markets and natural resource use.
The Ministry of Agriculture has been strengthened and has moved from a focus on direct interventions to a focus on regulation and facilitation, and from a top-down operational style to a decentralized, client-focused one.
- Extensions of agricultural services: the project succeeded in increasing the number of producers and producers' associations assisted by the ministry’s extension of services. A total of 191,630 producers and 1,766 producers' associations were assisted during the program's first phase (1999-2006).
- Cooperation between extension services and NGOs has enabled the adoption of several disease tolerant, short-cycle crop varieties and clones.
- The project promoted land tenure regulations. As a result, a technical Annex to the Land Law was passed in 2000 to provide guidelines for the demarcation and registration of rural land. To implement these laws and regulations, land administration institutions were restructured, decentralized and strengthened, and a computerized cadastral system was implemented.
- The process of land allocation and registration has been simplified: between 2001 and 2002, the number of steps was reduced from 64 to 7, and processing times reduced from two years to 90 days for at least 90 percent of the land transactions.
- Agriculture research has been restructured through the establishment of a unified national agriculture research institute presiding over four zonal research centers.
- In the area of internal management systems, a modern financial management system has been instituted. Procedures and accounting practices are in line with commonly accepted international standards, and subject to annual auditing. A decentralized procurement management system has also been introduced.
- The ministry has been restructured. Overall staff qualifications have been improved and initial steps to introduce a human resource management system have been undertaken. The planning and budgeting process of MAP has been significantly improved. Annual planning and budgeting is now a de-concentrated, systematic and time-bound activity, with participation from districts to central level bodies. The practice of quarterly planning and budgeting has been developed to allow concurrent adjustments to annual plans.. The Ministry’s transformational experience under PROAGRI has helped make it a model or pilot of public sector reform, with significant impact on other ministries and government departments. Its planning and budgeting system has become a model for the Ministry of Finance and others.
- Total project cost was US$216.5 million, of which US$30 million is from IDA.
- Together with other donors, provided the government with mentoring and technical assistance in the design of PROAGRI.
- IDA was also instrumental in convincing government of the need to adopt the necessary, institutional reforms through analysis and policy dialogue.
- Within the Bank, experience in the financial management of this program was a critical input in the subsequent development of financial management guidelines for budgetary support operations.
- Other co-financiers/ contributors included: the EU, the International Fund for Agricultural Development (IFAD), the Food and Agricultural Organization (FAO), the United Nations Development Program (UNDP), and the governments of the US, Canada, Finland, Italy, Denmark, Sweden, Ireland, the Netherlands, the UK, Australia, and Austria.
- In 2001, a memorandum of understanding between the government and key donors established the operational and legal framework that allowed funds from IDA and other donors to be channeled through a Common Flow of Funds Mechanism. This marked an important milestone in donor harmonization towards use of government procedures and helped simplify program implementation and supervision.
Subsequent phases of PROAGRI are expected to continue financing MINAG’s essential functions, with government gradually assuming full responsibility for the recurrent costs over the course of a 15- to 20-year period. A second phase, PROAGRI II, is already under implementation.¬†Bank support is provided directly to the country's budget.
Agricultural Sector Public Expenditure Program (PROAGRI) (1999-2006)