Rwanda: How Rwf70 Billion Project Will Boost Smallholder Farmer's Agri-Exports

Nina Nyirampeta, a chilli farmer from Rulindo District, recounts how she lost at least Rwf4 million because of a lack of a ready market for her chilli produce back in 2019, leading to it rotting on the farm.

That situation almost made her quit chilli farming, despite the income potential of the crop when it has buyers.

"I had grown chilli on one hectare in 2019. I was expecting to get about Rwf8 million from the produce sales," Nyirampeta told The New Times, indicating about eight tonnes would be harvested per hectare.

Nyirampeta is one of the many farmers who are affected by the adverse effects caused by the unavailability of ready and reliable buyers.

ALSO READ: Gatsibo chilli farmers counting losses due to lack of market

Lack of access to the market is one of the issues that a $62.89 million (about Rwf68.4 billion) project dubbed 'Promoting Smallholder Agro-Export Competitiveness Project' (PSAC) in Rwanda, seeks to solve.

Rwanda signed a financing agreement with the International Fund for Agricultural Development (IFAD), on February 16, and, The New Times learnt, the project will run through 2028.

According to the Ministry of Agriculture and Animal Resources, the project seeks to help Rwanda increase the incomes of the rural poor by supporting inclusive and sustainable agri-exports value chains, through scaling up of their capacity to practice climate-resilient farming and market access.

For Nyirampeta, such initiatives should ensure that the farmers they are financing have a good and reliable market, as well as deal with extreme price fluctuations, pointing out that a kilo of fresh chillies costs between Rwf800 and Rwf1, 200 when prices are good and buyers are willing to take the farmers' produce, but goes down to just Rwf150 a kilo during the low season.

Information from the PSAC project design report by IFAD, which is dated December 14, 2022, shows its beneficiaries are expected to experience an increase in income as a direct result of the increased volume and value of targeted commodities exported from Rwanda.

Such an impact, it indicated, will be due to better crop management practices; access to advisory services, and market and financial services which facilitated smallholder inclusion in sustainable export-driven value chains.

The selected value chains under the project are coffee, tea and horticultural products, which its developers said present strong opportunities as the sectors enjoy favourable agro-climatic conditions and an investment-friendly environment.

ALSO READ: How high prices buoyed Rwanda coffee exports

Project beneficiaries

The project will specifically target small-scale farmers who are vulnerable, have limited access to resources - less than 0.5ha of land - and depend on crop production, seasonal labour or external support, as well as market-oriented producers who have on average 0.5 ha or more, and have moved beyond subsistence farming, or are owners of small and medium-scale enterprises.

The revised estimation after the concept note indicates the main direct beneficiary group will be composed of 56,695 households (approximately 255,128 household members, of which 73,704 persons will receive direct project services), the aforementioned report shows.

It will target 14 districts out of 30 across Rwanda, with a particular emphasis on the western and southern regions, which include some of the most vulnerable rural populations.

The beneficiary districts are Nyamasheke, Rutsiro, Karongi, Nyabihu and Rusizi in Western Province; Huye, Nyaruguru, Nyamagabe, Ruhango and Nyanza in Southern Province; Rulindo and Musanze in Northern Province and Rwamagana and Bugesera in Eastern Province.

Coffee, tea and horticulture sector growth

On allocations, the component consisting of investments to enhance climate-smart production and productivity of selected export-driven value chains was allotted approximately $38.35 million.

Such money will go into areas such as supporting smallholder farmers' production and productivity. Here, it is planned the project will focus on the expansion and rehabilitation of plantation areas of 8,242 ha of coffee, tea and horticulture while adopting innovative climate-resilient technologies and practices.

That cropland includes 4,132 ha for coffee; 2,410 ha for tea; and 1,700 ha for horticulture (avocado, mango, chilli and macadamia) and essential oil crops (such for making sweet scent cosmetics).

ALSO READ: Horticulture: Rwanda's new cash cow

Another component is enabling a business environment along selected export-driven value chains (approx. $17.94 million). It is planned that it will enhance competitiveness and sustainability by improving smallholder value chain actors' access to advisory services, sustainable markets, and financial services.

Meanwhile, Rwanda's annual agricultural export revenues increased by 45 per cent to over $788.7 million (about Rwf859.5 billion) in 2022, from $543.1 million (about Rwf591.8 billion) in 2021, according to the National Agricultural Export Development Board (NAEB)'s December 2022 report.

ALSO READ: How can Rwanda achieve its $1bn target in agric exports?

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