Study on Public Expenditure in the Agrifood Sector of Honduras

RUTA provides support to SAG on analyzing and improving the efficiency and equity of Public Expenditure in the Agrifood Sector of Honduras (GPAH)

RUTA, in response to demand from the Management Planning and Evaluation Unit (UPEG) of the Ministry of Agriculture (SAG) of Honduras, has concluded a study entitled “Honduras: A strategy towards greater efficiency and equity of public expenditure in the agrifood sector”.

This document is part of a global research initiative funded by DFID and coordinated by the World Bank, covering six countries and whose main goal is to generate and disseminate good practices on public expenditure management in the rural sector. The report also provides inputs to the World Bank study on public expenditure at macroeconomic level, which is being jointly analyzed with the Government of Honduras.

The study encompassed an analysis of public expenditure in the agrifood sector of Honduras between 1999 and 2006. The objective was to provide information to improve efficiency, effectiveness and equity of public expenditure, seeking to increase the likelihood of reaching priority targets of the Sector Strategic Plan (2006 – 2010). The analysis was carried out through a participatory process involving public sector representatives (Ministry of Finance, Presidency and agrifood sector agencies), the private sector (initially through COHEP), international cooperation agencies and civil society (National Anticorruption Commission). The study also sought to strengthen processes, mechanisms and capacity to manage international aid among government institutions working on the sector.

Conclusions, Recommendations and Next Steps

The recommendations of the study seek to strengthen the operational linkages between the public expenditure in the sector and the macroeconomic aspects (i.e. poverty reduction strategy). They emphasize the need for a programmatic approach; promote processes and criteria to establish priorities, budget planning, monitoring and evaluation at sector level (with greater decentralization); promote better portfolio management and fund raising; and propose capacity development to coordinate, formulate and manage budget across the sector. The implementation of recommended actions along with the corresponding reforms could lead to significant improvements to management, efficiency and equity of public expenditure in the agrifood sector in Honduras.

The quantitative and qualitative analyses stress the importance of improving governance of the assignment, administration, monitoring and evaluation of public resources in the agrifood sector, seeking to attain greater impact on rural poverty reduction in Honduras.

The study provides fourteen recommendations on how to improve public expenditure strategies, processes and guidelines for the agrifood sector, which are being implemented and/or reviewed and discussed. These initiatives are led by SAG, with support from UPEG under Minister’s guidance, and have been endorsed by the Agricultural Development Council (CODA).

The study concludes that in order to implement the recommendations and the required reforms, it is essential to ensure ownership of the study and to increase the leadership of key actors in Honduras, all under SAG coordination as the sector’s leading agency. Thus, the draft is being disseminated among key actors of the agrifood sector, promoting the discussion and appropriation of its recommendations through a series of workshops and meetings at central and regional levels.