Impact of public agricultural expenditure on food availability in Lesotho

Abstract

Public Agricultural expenditure plays a huge role in boosting the effectiveness of the agricultural sector. It is also a great tool to curb food shortages. Lesotho signed the CAADP Declaration alongside other African countries in 2003 and reinstated it in 2014.The pledge was to increase the percentage share of the total budget allocated to agriculture to at least 10%. However, many countries were not in progress with this commitment. Current literature shows that consistent public agricultural expenditure improves food security, output, and economic growth in various parts of Africa. This study sought to contribute to this knowledge by determining the impact of public agricultural expenditure on cereal and livestock availability in Lesotho. Country-specific findings could help make cross-national comparisons and address issues related to unsatisfactory progress.

The Autoregressive distributive lag model is used to analyze time series data from 1995 to 2021. The data was obtained from FAOSTAT, ReSAKSS, and World Bank online databanks. The predictor variables modeled were share of public agricultural expenditure (PAE), research and development spending, rural population, consumer price index, agricultural land, and government effectiveness. The results show that Lesotho did not register noticeable progress on the CAADP’s commitment to improve public agricultural expenditure in Lesotho from 1995 till 2014. However, there was some progress post-2015 with a percentage average above 5%. Cereal production consistently declined since 1999, while livestock trends have been steady since 2001. This study also found a significant reverse relationship between the share of PAE and cereal production, but an insignificant positive with livestock production in both short and long run. Further, an insignificant positive relationship is found between R&D and both cereal and livestock production in the long run, and a significant and negative one in the short run with cereals. The study further concluded that lack of policy longevity in R&D upset livestock production. On the other hand, a decline in cereal yields was connected to poor governance leading to the likelihood of mismanagement of allocated funds. The study recommends use of actual public agriculture expenditures to determine a concise impact on cereal and livestock production. To remedy a high dependence of PAE on the donor agencies for revenue, the government is encouraged to strive for financial sufficiency and maximize limited funds allocated to agriculture by engaging in suitable targeting. Good quality governance also will contribute a great deal to the effectiveness of CAADP initiatives in Lesotho.