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MoAFF budget disappoints

A farmer waters plants at Chroy Changvar district in Phnom Penh earlier this year
A farmer waters plants at Chroy Changvar district in Phnom Penh earlier this year. Hong Menea

MoAFF budget disappoints

Cambodia's agriculture sector is set to receive a funding boost, according to the government’s 2015 draft budget statements, but the anticipated increase has not impressed industry experts.

The draft budget documents show the Ministry of Agriculture, Forestry and Fisheries (MoAFF) will receive $126 million for 2015, up 29 per cent from $97.8 million this year.

“It is only 40 per cent of the capital demand needed for the sector to grow. It is not enough,” said Srey Chanthy, an independent agricultural analyst. “And the money from foreign funding is mostly coming from loans, and less grants.”

More than $81 million, raised through domestic revenues such as taxation, will be allocated to MoAFF departmental administration costs and infrastructure investments, according to the statements.

The remaining $44 million, which has been raised through foreign donors, will be allocated to development projects such as poverty reduction programs, small business growth, and support for the fishery and livestock sub-sectors.

While MoAFF’s domestic revenue funding has increased more than 100 per cent, from $39.8 million in 2014 to $81 million, foreign funding has decreased by 30 per cent, from $58 million in 2014 to $44 million.

Despite welcoming the budget allocation increase, political analyst Kem Ley questioned the government’s efficiency and priorities in budget planning and spending.

“Most of the time only salary expenses are being spent efficiently. This budget for the agriculture sector is quite alright if the money is being spent efficiently. There should be more budget for human capital development,” he said.

“The government has spent too much on the security and defence sector compared to human capital development sectors, which include education, health and food [agriculture].”

Overall, the government has outlined more than $3.75 billion of expenditures in the budget statements.

Of that, $324 million will go to the Ministry of Health, up from $244 million in 2014. The Ministry of Education will receive $453 million, up from $335 million. And the Ministries of Interior and Defense will collectively receive about $536 million, up from $489 million.

Ley also raised concerns over the Cambodian government’s increasing level of foreign loan dependency, not grants or aids.

“Since 2011, 70 per cent of foreign funding has been through loans and only 20 per cent are grants. Though the foreign funding for the [agricultural] sector has decreased almost 30 per cent, it is still not a good sign,” he added.

Overall, the Cambodian government will rely on almost $800 million worth of loans and financing to support its budget expenditure. Taxation is hoped to raise $2.4 billion for the government, non-tax revenues are projected to rake in $366 million, and bilateral aid will make up just $134 million of the total 2015 budget.

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