rwanda agribusiness marketscan report

Rwanda Agribusiness MarketScan Final Report | May 2012 The Netherlands Embassy, Rwanda

PortfolioVentures in Laterite’s portfolio meet two basic requirements (i) provide a high quality service that is currently not offered locally; and (ii) address a signi!cant capacity gap that has the potential to improve decision making in the public and private sectors.

Laterite’s pilots which are currently at the early stage include:

ECONAFRIQUE (LTD) Econafrique provides economic research and policy advisory services. Key products include: country and sector growth diagnostics, economic updates and indexes, export analytics, and impact evaluations.

ISOKO RESEARCH (LTD) Isoko Research is a market intelligence company that provides customized market, consumer and industry research, investor support services, and Rwanda’s !rst business con!dence index.

RWANDA EXECUTIVE DEVELOPMENT (LTD) RED is a leadership and talent management company that provides specialized strategic management coaching services addressing the needs of mid to high - level executives in Rwanda’s public and private sectors.

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ECONAFRIQUEEconafrique provides economic research and policy advisory services. It’s approach involves evidence-based policy advice using cutting-edge services tailored to the needs of governments, development partners and foreign investors in Africa.

Econafrique’s core services include:

growth diagnostics Growth Diagnostics at the country or sector level enable policy makers to better understand the relationship between growth and certain constraints.

economic updatesEconomic updates are detailed micro and macroeconomic assessments at the sector or country level. They help policy makers take stock of current trends.

export analyticsEconafrique has developed a unique export analysis tool that helps policy makers understand current export dynamics and areas of potential future growth.

impact evaluationsOur impact evalutions use innovative techniques such as synthetic control tests, matching and randomized evaluations to enable policy makers to test the effectiveness of policies.

market opportunity for economic policy firmThe market rationale for starting an economic policy advisory !rm in Rwanda is strong as: (i) there is currently only one independent policy think tank and not a single economic policy advisory !rm in the country; (ii) for economic policy advice, the government largely relies on individual Rwanda-based consultants or foreign consultancies, which has implications from a cost and quality perspective; and (iii) both the government and development partners have indicated a strong willingness to pay for local high quality economic policy analysis and advice.

success criteriaEconafrique’s success criteria for year one are:1. Partner with a leading international economic policy organization2. Publish a bi-annual assessment on the Rwandan economy3. Launch a new technique to conduct export analytics and publish this methodology

in a leading global economic journal4. Successfully complete at least 3 policy related projects in Rwanda.

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ISOKO RESEARCHIsoko Research provides market intelligence advisory services in Rwanda. Its approach involves traditional market research tools such as focus groups and interviews, but also more innovative technological platforms such as mobile phones. We envision Isoko Research to be the leading market intelligence !rm in Rwanda.

ACKNOWLEDGEMENTS

This report was prepared by Laterite Ltd. (www.laterite-‐africa.com), a Kigali-‐based advisory service firm, for the Embassy of the Royal Netherlands as part of a Rwanda-‐Uganda trade mission organized by the Netherlands African Business Council and the Rwanda Chamber Foundation. The principal consultants were Dimitri Stoelinga and Sachin Gathani from Laterite Ltd. The consultants would like to thank the Rwanda Development Board, National Agriculture Export Board, Rwanda Agricultural Board, Ministry of Agriculture & Animal Resources (MINAGRI), the Belgian Development Corporation (BTC), and all the companies, cooperatives and individual farmers we interviewed through the course of this study for their contributions. Please note that the agribusiness sectors profiled in this report have been selected based on discussions with the Netherlands African Business Council and the Rwanda Chamber Foundation.

Rwanda Agribusiness MarketScan | May 2012

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TABLE OF CONTENTS

CHAPTER 1: OVERVIEW OF RWANDA’S AGRIBUSINESS SECTOR ........................... 3

CHAPTER 2: COFFEE & TEA ................................................................................... 11

CHAPTER 3: FARMED FISH ..................................................................................... 14

CHAPTER 4: PROCESSED FRUITS (INCLUDING STRAWBERRIES) ....................... 17

CHAPTER 5: MACADAMIA NUTS ........................................................................... 22

CHAPTER 6: ANIMAL FEED (FROM WHEAT AND MAIZE) ................................ 24

CHAPTER 7: PAPRIKA ............................................................................................. 26

CHAPTER 8: SOYBEANS ........................................................................................... 28

CHAPTER 10: SEEDS ................................................................................................ 33

Annex ........................................................................................................................ 35

1.1 RELEVANT CONTACTS BY AGRIBUSINESS SECTOR ...................................................................................... 36

1.2 LIST OF MINAGRI PROJECTS ....................................................................................................................... 38

1.3 SUPPORT ORGANIZATIONS/PROGRAMS FOR RWANDAN AGRICULTURE ................................................. 41

1.4 BUSINESS-‐TO-‐BUSINESS SUPPORT PROGRAMS IN RWANDA .................................................................... 44


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Chapter 1: Overview of Rwanda’s Agribusiness sector as an investment destination

1. The Agribusiness Sector: what does Rwanda process? Rwanda’s agribusiness sector is mainly known for being a small but high quality supplier of coffee and tea. Together coffee and tea account for about 50% of Rwanda’s product exports, compared to 40% for the mineral products sector (tin, tungsten / wolfram, chromium, etc.), about 5% for manufactured products and another 5% for other agricultural / livestock products. Annual exports for the coffee and tea sectors amounted to about US$91m in 2010, or about 41,000t. As a rule of thumb, the vast majority of coffee and tea exports are destined to Europe and the United States (even though the majority of tea transits through the tea auction in Mombasa, Kenya). Foreign ownership in these markets is large, with major global players having significantly invested in the processing of tea and coffee in Rwanda. While still dominated by ordinary coffee and black tea, both sectors have been steadily increasing value addition: the coffee sector is increasingly moving towards specialty coffee and coffee roasting; the tea sector has been moving to green tea and white tea production (see Chapter 2 on Coffee and Tea). Other than the tea and coffee sectors, the only other large agribusiness/agro-‐processing sectors are the beverages (beer, sodas), wheat milling and dairy industries: • The beverages (beer and sodas) sector is the largest agribusiness industry in the country,

with annual revenues of more than US$150m. The dominant player in this market, which also happens to be the largest company in Rwanda, is Bralirwa (annual turnover: US$130m in 2010). Bralirwa was incorporated in 1963 and was the first company to be listed on Rwanda’s new stock exchange in 2011. It is owned by the Heineken Group which holds a 75% stake. Bralirwa, which means “Brasserie et Limonerie Rwandaise”, has the license to produce beer under the Heineken, Guinness, and Amstel brands (80% of production / 1.1m hecto-‐liters) and is also a producer of Coca Cola soda brands, such as Coke, Sprite, Fanta, Vitelo, and Tonic (20% of production / 0.3m hector-‐liters). A new entrant in the market, which carries the Skol brand, is Brasserie des Milles Collines, owned by the Belgian group Unibra. While Brasserie de Milles Collines remains comparatively small in size (the annual turnover in 2010/2011 was less than US$15m), the company is investing heavily in expanding production to serve both the Rwanda and Burundi markets. This sector is not very export oriented, with less than 2% of current production1 exported to neighboring Burundi and DRC (an estimated US$3.1m), pointing to a potential opportunity for expansion. The sheer size of the sector however makes it one of the largest non-‐coffee / non-‐tea exporters in the country.

• The wheat milling industry, just behind the coffee sector, is the third largest agro-‐processing industry in the country, with annual revenues of more than US$50m (based on domestic production only). There are two large players in the market: Pembe Flour (owned by a Kenyan group), which entered the Rwanda market in 2007; and Bakhresa Grain Milling (owned by a Tanzanian consortium), which started operations in 2011. Both produce wheat flour for the local market and export wheat bran (the by-‐product of the wheat milling industry, which serves as animal feed) to Kenya. Wheat bran exports in 2010 amounted to about US$2.3m (see Chapter 6 on Animal Feed). With the middle class in Rwanda and neighboring EAC countries growing very rapidly, there is an opportunity to explore other products of the milling industry, such as cereals, starches, wheat gluten, etc.

• The dairy industry, which is dominated by one player: Inyange Industries, owned by Rwanda’s largest group, the Crystal Ventures Group. Inyange Industries is a producer and exporter of

1 Based on 2010 export data (Comtrade)


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milk, yogurt, water and fruit juices, with annual revenues in 2010 of about US$7.5m. The company is rapidly expanding with planned investments of US$35 million2.

Smaller agro-‐processing industries in terms of the local processing capacity, include: • The sugar sector, which has a sole processor: Kabuye Sugar Works (KSW), owned by a larger

Ugandan Group (the Madhvani Group). Local demand for sugar is estimated at US$80-‐90m annually, compared to domestic production averaging US$10m in 2010/2011.

• • The maize milling industry, which is dominated by one large miller: Minimex (turnover:

US$4m in 2010). Minimex is Bralirwa’s sole supplier of maize grit in the country, and has entered a joint-‐venture with Bralirwa to start Rwanda’s two first mechanized maize farms in pilot sites. The joint venture is called BraMin. Minimex produces maize grit, maize flour and maize bran (See Chapter 6 on Animal Feed).

• The rice industry, which has a number of very small rice millers but is dominated by Australian-‐owned ICM Rwanda Agribusiness (with revenues in 2011 estimated at US$7m).

• The food processing sector, which commercializes and packages traditional foods and drinks,

such as local pepper oil (Akabanga), passion fruit juice, banana wine, cassava flour, oil from passion fruit seeds, etc. While there are many small producers, the country’s largest processor in this sector is Urwibutso (with annual revenues of about US$3.5m).

• Pyrethrum sector, for which production and exports – in the form of refined pale extract,

crude oleo resin, and pyrethrum marc –amounted to about US$1.5m in 2010 and more than US$4m in 2011. The country’s only pyrethrum processor is Sopyrwa, which is owned by a large Rwandan holding group, the Horizon Group.

Rwanda at a glance3 Total Land area: 26,338 sq km Cultivated Land: 46% (or 1.8m ha) Climate: Temperate; two rainy seasons; mild in mountains

Freshwater use: 68% used in agriculture Fertilizer use: 16kg/ha (2010) Main agricultural products: Coffee, tea, bananas, beans, sorghum, potatoes

2 Rwanda Development Board and NAEB, Opportunities for Investors in Rwanda’s Horticulture Sector, February 2012 3 Adapted from IFDC: http://www.ifdc.org/Nations/Rwanda


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2. The Agriculture and Livestock sectors: what does Rwanda produce? a. Agriculture There is a mismatch between the largest agro-‐processing sectors, and the largest agriculture sectors by production/cultivation. As can be seen in graph 1, the largest crops in terms of cultivation area in 2010 were by and large: banana, beans and cassava; followed by maize, potatoes, sorghum and sweet potatoes. These staple crops are produced by smallholder farmers -‐ within cooperatives -‐ for domestic consumption. There is very little processing, packaging or exporting of these products. Excluding tea, coffee, pyrethrum, and processed foodstuffs, total agricultural/agribusiness exports of these products in 2010 amounted to a mere US$2.3m, of which beans (US$1.3m) and maize (US$0.5m) accounted for 85%. While aggregate production numbers and the overall productivity of these sectors remain low, recent trends are encouraging. A big government-‐led push to improve agricultural production practices has led to impressive increases in both the productivity and production levels of certain targeted crops. For example: the productivity of cereals, such as wheat and maize, has increased by a whopping compounded annual rate of 25-‐30% between 2006-‐2010; the productivity of cassava production by 16% a year. Average fertilizer use has doubled from 8.5kg/ha in 2006 to 16kg/ha in 2010; and farmers are making increased use of better seeds: +62% for maize, +46% for wheat and +16% for Irish Potato4. Based on World Development Indicators, the land productivity of Rwanda (in terms of value added per ha) was comparable to that of Kenya in 2009, almost double Uganda’s, triple that of Burundi, and significantly higher than comparators such as Tanzania, Ethiopia and Mozambique. Over the past few years, there has also been an increasing focus on horticulture and alternative high value export crops. Rwanda has the right climatic and soil conditions to produce: • Fresh fruits (such as avocadoes, passion fruit, strawberries, tree tomatoes, gooseberries,

pineapple, desert bananas, Japanese plums, and mangoes); • Vegetables (mushrooms, soybeans) • Spices (capsicum -‐ paprika, Bird’s Eyes Chilies) • Nuts (macadamia, cashew nuts); • Cut Flowers (roses, and orchids); • Specialty plants (essential oils – such as petunia and geranium, pyrethrum, vanilla and silk) Small-‐scale investments in these sectors have started to take hold: East African Growers, a leading Kenyan agribusiness group, has invested in commercial avocado production in Rwanda; there are also new entrants focusing on mushroom production (Kigali Farms), plant propagation for fruits and horticulture products (FAIM), macadamia nuts (Norlega), and soybeans (Soyco Ltd. with the Mount Meru Group of Kenya).

4 World Bank, Rwanda Economic Update, Spring Edition, 2011

0 100 200 300 400

Sugar Rice Tea

Groundnuts Yam & Taro

Coffee Fruits Peas

Wheat Vegetables

Soya Sweet Potato

Sorghum Irish Potato

Maize Cassava Beans Banana

Hecatares

Graph 1 -‐ Cultivated area (2010)


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While growth has been strong for food crops and high value export crops, there is currently no private market for agri-‐inputs, in particular fertilizers and seeds (see Chapter 10 on Seeds). Currently seeds and fertilizers are imported and distributed by the Rwanda Agriculture Board (RAB) for food crops and the National Agricultural Exports Development Board (NAEB) for export crops. Private firms, such as the Export Trading Group, Agrotech and Africhem, import seeds and fertilizers to supply RAB and NAEB. The Government has preliminary plans to privatize the fertilizer sector during the 2013-‐2017 period, and there are ongoing initiatives to encourage private sector investments in the seeds sector. Given the increases in fertilizer and seeds usage over the past 5 years, these are sectors are becoming attractive for potential private investment. The Monitor Group5, for example, estimates current annual fertilizer use in Rwanda to be 34000Mt, or about US$30m. b. Livestock & fisheries The livestock and fisheries sectors are important for the Rwandan economy and in particular for people’s livelihoods, but only account for about 5% of the total value added in the agriculture sector, or 1.69% of GDP. The livestock sector contributed US$60m to GDP in 2011, while the fisheries sector contributed US$11.5m6 . Livestock exports are nevertheless a larger foreign exchange income earner than the horticulture sector. For example: live animals and raw hides & skins exports amounted to an estimated US$6.4m in 2010. While sector growth has been comparatively modest over the past 5 years, growing at a compounded annual rate of 3% between 2006-‐2011, the livestock sector is showing signs of a new found vibrancy. Between 2009 and 2010, for example, the animal population increased significantly: the chicken population doubled, from about 2m to 4m; the goat population increased by 20%, from 2.5m to 3m; the rabbit population doubled, from about 0.4m to 0.8m7, etc. According to the Ministry of Agriculture and Animal Resources, the outputs of the livestock sector have also increased by about 20% between 2010-‐2011, including the production of milk, eggs, honey, meat and fish. The downstream and upstream industries of the livestock sector are very small though. Downstream, there are some local large-‐scale producers of animal feed, in particular producers of wheat and maize bran, but these by-‐products of the milling industry tend to be exported to due to the small and scattered nature of the local market (see Chapter 6 on Animal Feed). Upstream, the country’s largest slaughterhouses and leather producers have shut down and there is hardly any processing or packaging of meat or chicken. Chicken breasts, for example, are not available locally. The structure of the fish industry will be discussed in more detail in Chapter 3.

5 Monitor Group, Investment Profile on the Fertilizer Sector for the GrowAfrica Initiative, 2012 6 Based on National Institute of Statistics, GDP – National Accounts 2011 7 Ministry of Agriculture and Animal Resources, Sector Evaluation Report for the Joint Sector Review, FY2010/2011.


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3. The Policy Context & Rwanda’s Business Environment The Government of Rwanda has played a very pro-‐active role in: (i) designing and implementing policies that have significantly impacted the performance of Rwanda’s agriculture sector; and (ii) improving the attractiveness of Rwanda as an agri-‐business investment destination and securing foreign investment deals. Rwanda’s overarching National Agricultural Policy was designed and adopted in 2004. This policy led to the development of two 5-‐year strategic implementation plans, the second of which was adopted in 2009. The updated Strategic Plan for Agricultural Transformation (PSTA) became the basis of the first CAADP8-‐approved Agricultural Sector Investment Plan in Africa. This plan has led to the introduction of a number of large-‐scale agricultural transformation programs, in particular the Crop Intensification Program (CIP), the One Cow per Poor Family (the Girinka program) and, the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) Program. These programs, in particular CIP, are credited with significantly improving agricultural productivity.

Crop Intensification Program (CIP) The LWH Program The Girinka Program

The CIP invests heavily in the provision of subsidised inputs (e.g. fertiliser and high-‐yielding seed), hillside irrigation, progressive terracing and marshland development, which has allowed farmers to increase yields substantially (see World Bank Economic Update). The CIP program targets the production of: maize, rice, Irish potato and wheat, beans, banana, soya, peas and cassava

Rwanda became the first country to receive funding for the Global Agriculture and Food Security Program (GAFSP) in April 2011. The $50M funding will be directed towards the Land Husbandry, Water Harvesting and Hillside Irrigation (LWH) Program. The objective is to improve land husbandry and increase productivity in 101 watersheds covering at least 30,250ha of land.

The Girinka Program -‐ or the One-‐Cow Per Poor Family program – has distributed over 11300 cows to targeted low-‐income households in Rwanda. The objective of the program is to reduce poverty by increasing household assets, income and improving food security.

Rwanda’s Business Environment: In terms of Rwanda’s efforts to increase the attractiveness of the country as an agri-‐business investment destination, the following points are worth highlighting: • Rwanda has consistently been amongst the world’s top Doing Business reformers since 2009

and amongst the least corrupt nations on the continent. In DB2012, Rwanda ranked 8th in the world in terms of the ease of starting a business and getting credit, 19th in the world for the ease of paying taxes, and 39th in the world for contract enforcement. In practice, however, it has been difficult to obtain credit and ensure contract enforcement although starting a business and paying taxes in Rwanda is easier than its EAC counterparts.

8 CAADP – Comprehensive Africa Agriculture Development Program – the continental strategy that addresses policy and capacity issues across the entire agricultural sector and African continent.


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• Stable macro-‐economic management: Rwanda is one of the top 10 fastest growing economies in the world (with a CAGR of about 8.2% between 2001-‐2011), it has a comparatively stable currency, a controlled inflation rate (lower than other East African Community comparators), sustainable debt management (credit rating upgraded to B by Fitch), and one of Africa’s best public financial management systems, in terms of transparency, target-‐orientation and budget execution.

• Rwanda joined the East African Community (EAC) in 2007 and the EAC Common Market in

2010. This gives companies operating out of Rwanda access to a market of more than 132m potential consumers (not including Eastern DRC’s 30m population).

• Targeted investments and initiatives which have been realized:

o Investments in cold-‐storage facilities at the airport (current capacity 30t);

o Increased air-‐links and active negotiations with airlines to drop cargo prices to below US$2/kg (current airlines connecting to Kigali include KLM, Marinair Cargo, Brussels Airlines, Turkish Airlines, Qatar Airlines, and in the near future Emirates Cargo which has recently obtained a license to serve Kigali airport);

o The identification of 20 specific sites for investors in the horticulture sector all within 100kms from Kigali.

o Institutional investments in the Rwanda Development Board and the National Agriculture Export Development Board, which have dedicated departments for the horticulture sector and investor support.


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4. Key challenges We chose to highlight three key challenges for foreign investors in Rwanda’s agriculture / agribusiness sectors: 1. Land availability. Despite efforts by Government to identify sites for foreign investors, land

availability in Africa’s most densely populated country, where 80% of the population lives in rural areas, is a major constraint. The small size of available sites puts a limit on the scale of potential future mechanized/commercial farming. Companies that have had to put expansion plans on halt because of land issues include Kabuye Sugar Works, Rwanda’s only sugar processor, as the currently allocated area for sugar farming (3100ha) does not suffice to support growth. In order to bring agricultural production to scale in Rwanda, investors will have to focus on high-‐yield/high-‐value crops or adopt a business model that entails working with numerous cooperatives, often in different locations and with varying levels of management capacity. The Government is actively trying to alleviate the land constraint, by promoting voluntary land consolidation – where farmers keep the land rights, but synchronize production with neighboring farms.

2. Low productivity and quality of produce due to soil quality, soil erosion, low irrigation, bad post harvest management and low access to finance. Arguably the biggest problem agribusiness firms in Rwanda face is low capacity utilization due to the low quantity and quality of the local produce (the raw material). Minimex, Rwanda’s maize miller is running below capacity because of low access to high quality maize; Sorwatom, Rwanda’s tomato processor has to import tomato paste from China, given that fresh tomatoes on the local market are few and of bad quality; ICM, the largest rice processor, also faces shortages because of the quality and quantity of rice production, etc9. The main reasons why productivity is low and quality is poor include10: (i) limited skill base in good agronomy practices in most agricultural sectors (ii) low soil quality, due to over-‐cultivation and too little fallowing; (iii) high soil erosion, given that 80% of arable land is on a slope; (iv) insufficient irrigation, which makes farming prone to landslides, flooding, changes in rain patterns; (v) bad post-‐harvest management, leading to an estimated loss of 15% of production; and (vi) low access to finance at the cooperative and farmer levels, which are major barrier to capital intensive farming.

3. High international transportation costs. Despite Government efforts, airfreight transport remains expensive. While Rwanda has recently expanded links for passenger travel, cargo links remain less developed. The under-‐utilized and limited cold-‐storage capacity is also a constraint to large-‐scale horticulture efforts. Exports are therefore only feasible for high-‐value / lightweight crops. The state of the local transportation infrastructure also provides a supply chain challenge. For example, Rwanda has a total of 12,000 km of roads, of which only 1,000 km are paved; the remainder are dirt roads with varying quality. Furthermore, the road infrastructure leading to the ports of Mombasa (Kenya) or Dar es Salaam (Tanzania) are also in a deplorable state, which has increased production costs in Rwanda.

9 Sachin Gathani and Dimitri Stoelinga, Learning-‐by-‐exporting – A Deep-‐dive into Rwanda’s exports sector, focusing on firms, products and destinations, forthcoming, May 2012 10 Based on World Bank Rwanda Economic Update, Spring 2011


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5. Identified opportunities Opportunities to invest in Rwanda’s agriculture/agribusiness that have been documented in previous studies include: • Sourcing and canning of beans for the domestic and regional markets. With the middle class

in the region growing rapidly, the market for canned beans in Rwanda and neighboring countries (Eastern DRC, Burundi) could reach $55 – 85M by 2017. There is currently no local beans processor11

• Soybeans. There is a high, unsatisfied demand for soy-‐based cooking oil, which is currently imported. The scale of the opportunity is confirmed by Soyco’s US$15m investment in this sector aimed at producing soybeans for local consumption and processing oil and animal feed. The Soyco investment will go some way to meet the high demand for soybean products but there remains scope to meet the supply gap

• Maize milling and farming. Minimex – Rwanda’s largest maize miller -‐ has a large unutilized

capacity and is looking to expand commercial maize farming • Plant propagation. High demand for new plant varieties from government and agribusiness

companies, focusing on varieties for which there is high demand on global markets • Avocado packaging facility for avocado exports. Europe is having difficulties in sourcing

avocado and avocado supply is subject to seasonal fluctuations; Rwanda has the ideal agro-‐climatic conditions for avocado cultivation12

• Fruits & nuts. Rwanda has ideal agro-‐climatic conditions for a wide variety of high-‐value fruits

and nuts. Current production is not based on high quality varieties • Expanding local production of essential oils. Expand existing production capacity at Ikirezi,

and expand cultivation in Nyagatare, Gasabo and Kireke districts • Marketing and distributing fertilizers and seeds. Given recent growth in fertilizer and high

quality seeds use, there is a potential market for the private marketing and distribution of seeds and fertilizer in Rwanda

• Fish-‐farming. Due to low supply, fish consumption is lower than in neighboring countries: 1kg

per person per year in Rwanda vs. 3.6 in Burundi, 6.9 in the Democratic Republic of Congo and 10kg in Uganda.

11 See Monitor Analysis, Grow Africa Initiative -‐ Investment Cases for Rwanda, May 2012 12 See Monitor Analysis, Grow Africa Initiative -‐ Investment Cases for Rwanda, May 2012


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Chapter 2: Coffee & Tea 1. Background & Overview Coffee and tea are Rwanda’s main export crops. The tea sector – for which exports in 2010 totaled about US$55.7m -‐ has undergone significant changes over the past few years. The ongoing privatization of the tea sector, that started in the early 2000s, is almost complete (94% of production comes from private tea factories) with production increasing by 14% per year between 2006-‐201013. During this period the average productivity of tea has also increased from about 6,350kg/ha to 6,643kg/ha. New entrants in the tea sector include Birla Tea (via Jay Shree Tea & Industries), McLeod Russel India, Imporient and Rwanda Mountain Tea. There are currently 11 tea factories located primarily in the Western, Northern and Southern provinces of the country. The tea sector currently provides employment to about 70,000 people. Rwanda’s tea is considered one of the world’s best and regularly fetches premium prices at Mombasa’s tea auction. At the first African Tea Convention in Mombasa in July 2011, Gisovu Tea Company from Rwanda was nominated the best tea company among 35 companies from the East African region, with another Rwandan tea company (Kitabi) coming in third. The local tea sector is also diversifying into higher quality teas such as green, orthodox, and even white-‐tips tea that are geared towards the high-‐end international markets. High quality teas are directly sold to retail stores in Europe and elsewhere. Coffee remains one of Rwanda’s most important export products, with about US$56.7m in exports in 2011. The sector employs about 500,000 farmers. Three things have changed since the end of the privatization process in the late 90s: (i) there are many more processors in the market (the most recent new entrants include Rwashoscco in 2005, and the Kivu Arabic Coffee Company in 2005); (ii) the share of specialty coffee has increased substantially, from less than 1% in 2002 to 20% in 2010, leading to a 50% increase in the average price of Rwandan coffee between 2006-‐2010 (the move to specialty coffee was a deliberate government strategy); and (iii) roasted coffee production has increased from 32t in 2006 to 330t in 2010, for a total market value of US$2m. Current buyers of Rwandan coffee including large Swiss firms (Sucafina, Schluter, Bernhard Rothfos Intercafé), Belgian firms (Supremo, Rucquoy Freres, N.V.Coffeeteam S.A, WBP, Koffie F.Rombouts N.V), German firms (Hambourg Coffee Company, Roland Gerken), British firms (Twin Trading ltd, Falcon Commodities Ltd, Taylors of Harrogate), and American firms (e.g. Intelligentsia Coffee). The only major buyer headquartered in the Netherlands is Louis Dreyfus Commodities. Rwandan specialty coffee is sold by companies such as Starbucks, Pete Rogers, Pete’s Coffee and Sweet Maria’s, and Sainsbury’s in the US and the UK. Coffee is grown in all provinces and districts but coffee farmers are primarily concentrated in the Western and Southern provinces. 2. Policy context The National Tea Strategy: NAEB developed a new tea strategy14 in 2009 focusing in particular on finalizing the privatization of the tea sector. The last two government-‐owned tea factories, Mulindi and Shagasha, are currently being auctioned.

13 World Bank Rwanda Economic Update, Spring 2011 14 www.naeb.gov.rw


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The National Coffee Strategy: a revised coffee strategy was implemented in 2009, increasing the focus on the production of premium fully-‐washed/specialty coffee. Regulators: National Agricultural Export Development Board registered under the Ministry of Agriculture. The Rwanda Tea Authority (“OCIR THE”), the Rwanda Coffee Authority (“OCIR CAFÉ”) and Rwanda Horticulture Authority (“RHODA”) were merged to form National Agricultural Export Development Board 3. Profiles of Large Firms Coffee Business Center –CBC was started in 2002 by its current Managing Director, Mr. Jean Paul Rwagasana. CBC dry-‐mills both semi-‐ and fully-‐washed coffee, which it then exports to Belgium. CBC’s main client is Supremo and its current annual production is approximately 4600 tons. RWACOF – RWACOF, one of Rwanda’s top two coffee processors and exports was started in 1996 by the Swiss multinational Sucafina, which two years earlier had established Ugacof, one of Uganda’s first coffee operators. RWACOF processes and exports ordinary and specialty Arabica coffee. The company has an annual capacity of about 4700 tons, out of which about 4100t is ordinary coffee (87%) and 600t specialty coffee (13%). This amounts to about 25% of Rwanda’s total coffee production. Rwanda Trading Center -‐ RTC started in 2009 by US investors as a social for-‐profit venture. Today RTC owns and operates a state-‐of-‐the-‐art milling and export facility in Kigali, Rwanda, with an installed capacity of 3000 tons/year. The mill exported about 15% of Rwanda’s total production in 2010. Sorwathe – Sorwathe was the first private tea factory to be established in Rwanda, in 1975. Sorwathe is owned by an American company called Tea Importers Inc. Sorwathe produces about 3500t of tea per year (about 10% of Rwanda’s annual production) and currently produces black, green, orthodox, white, and silver tips tea. The bulk of its production is black CTC tea (Cut-‐Tear-‐Curl), which accounts for about 85% of production, followed by green tea and orthodox tea. Rwanda Mountain Tea -‐ Rwanda Mountain Tea (RMT) was formed in 2006. RMT’s first purchase was the Rubaya-‐Nyabihu tea estates located in the North Western region of Rwanda. Later in 2009, RMT acquired 60% of another tea estate, Kitabi Tea Company, in the south of the country. RMT has the capacity in its factories to process more than 16,000 tons/year of tea but it currently achieves only 60% utilization (~10,000 tons/year). 4. Supply Chain For Tea: Rwanda primarily produces CTC tea (Cut-‐Tear-‐Curl), which is handpicked and brought to the tea factories for processing. Most tea is exported with limited quantities earmarked for domestic consumption. Packaging is typically sourced from Uganda or Kenya and is then sent to the Mombasa Tea Auction where it is re-‐exported to international markets.

For Coffee: Coffee is also handpicked and is then sent to washing stations that are located across the country. Rwanda has now developed sufficient capacity to wash almost two thirds of all coffee produced. The number of coffee washing stations has grown from 2 in 2002 up to almost 200 in 2011. However, only 20% of coffee is currently fully washed and many of the coffee washing stations that have entered the market are in financial distress. Fertilizers used to be subsidized by the government but subsidies for the coffee sector are gradually being removed. IFDC, through the PReFER project, is assisting the transition out of the nationalized procurement and distribution of fertilizers.


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5. Sector Exports and EAC context Exports: The majority of Rwandan coffee and tea is exported to international markets. Switzerland is the largest buyer of Rwandan coffee. Coffee exports to Switzerland in 2010 totaled USD$26.3m or 46% of aggregate coffee exports that same year15. Tea is also exported to international markets via the Mombasa auction and then re-‐exported to other destinations, mainly EU and the United States. EAC: All the countries in East Africa grow coffee with Kenya and Tanzania having the largest production numbers. The East African Fine Coffee Association (EAFCA) is the regional member-‐driven association overseeing the East African coffee market. Tea is grown in large quantities in Kenya, Uganda, Tanzania and Rwanda. The East African Tea Trade Association (EATTA) is the primary organizing body for the East African tea industry. 6. Challenges Ongoing issues in the coffee sector include the volatility of production due to the natural cycle of the coffee trees, the ensuing underutilization of washing station capacity (only 43% in 2010), and the lack of consistency in the quality of specialty coffee. There have been significant improvements however, with companies investing significant resources towards hiring cupping specialists, investing cupping labs, and building the capacity of coffee farmers and cooperatives from pre-‐harvesting through to washing. 7. Potential opportunities • Investment: There are few investment opportunities for Dutch companies in the tea and coffee

sectors: the Government of Rwanda has privatized most of the tea factories/estates in the country and is currently reviewing the bids for the last two factories; the coffee market is currently operating under-‐capacity, pointing towards high market saturation.

• Trade: There are opportunities for Dutch companies to invest in sourcing high quality Arabica coffee (both ordinary and specialty) and/or tea from Rwanda. Currently only Louis Dreyfus Commodities, headquartered in Rotterdam, trades in Rwandan coffee. In the tea sector, Rwanda is increasingly moving towards higher-‐grade teas, including green tea, white tea, and silver-‐tips tea, which can be sourced directly from companies such as Sorwathé or recently privatized tea factories.

15 Sachin Gathani and Dimitri Stoelinga, Learning-‐by-‐exporting – A Deep-‐dive into Rwanda’s exports sector, focusing on firms, products and destinations, forthcoming, May 2012


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Chapter 3: Farmed Fish 1. Background & Overview Fish farming in Rwanda is practiced mainly in Lake Kivu and on some of the other 24 lakes that are dotted around the country, such as Lake Muhazi and Lake Mugesara. The main fishing districts are Karongi, Nyamasheke, Rubavu, and Rutsiro. Fishing has historically been concentrated on Limnothrissa miodon (locally known as Isambaza), despite Lake Kivu having approximately 26 different fish species. Most fish farming in Rwanda is geared towards local consumption. The national fish production is estimated at 13,000 tons of which capture fisheries contribute 9,000 tons and aquaculture 4,000 tons. Rwanda is currently by a net importer of fish from neighboring Uganda and Tanzania16. One of the main issues afflicting the Rwandan fishing industry, given it is concentrated around Lake Kivu, is the high level of methane in the lake. However, the Government has taken a proactive role in elevating the role of fish farming with the introduction of the PAGIEALAC program given the sector’s role in providing employment to about 200,000 people17. Based on local production and imports data, we estimate the size of Rwanda’s 2010 market for fish to be US$15m or 18,900t a year. 13,000t are produced locally, and 5,900t are imported for domestic consumption. That amounts to an estimated 1.89kg per person, well below regional averages (Burundi 3.6 kg/ year; DRC 6.9 kg/ year; Uganda 10kg/year and Tanzania 11.9 kg/year). Based on current population estimates, total fish consumption in Rwanda will need to increase to 60,000t by 2020 should average consumption increase to 4kg per person / per year (in line with Burundi) or 120,000t should average consumption increase to 8kg per person / per year. That would amount to an annual compounded growth rate of between 13%-‐20%. There is a large un-‐met demand for fish in Rwanda.

2. Policy context The Government of Rwanda’s role in the domestic fishing industry is led by the PAGIEALAC (Inland lakes Integrated Development and Management Support Project). It is a AFDB funded project that runs till the end of 2012 and is involved in the capacity building of local fisheries, watershed protection for 17 inland lakes, rehabilitation and creation of fish ponds, rehabilitation of Kigembe Fish farm into a modern fish hatchery, construction of landing sites for harvested fish, lakes restocking, purchasing brood stocks on behalf of farmers, assisting farmers with the 1st cycle feed and supplying them with 8 units of small fish feed making machines, and training and organizing study tours on behalf of fish farmers. PAGIELAC recently signed an $80K agreement to plant tilapia in Lake Kivu on the Rusizi side. The project will be entirely funded by PAGIEALAC and is aimed at increasing productivity of fishing cooperatives and local living standards. 3. Profiles of Large Firms Kigembe Fish Farm –was constructed in the late 1950s and was used at a subsistence level to produce table fish. The farm has 32 production and 10 research ponds sited on more than 10 ha of land, it has infrastructures for both staff and for keeping associated animals like pigs and poultry. Before the 1994 Tutsi Genocide which dilapidated it, it had reached a production capacity of 6.5 Tones /ha /year. The station had 4 qualified and 4 support staffs with many casual temporary laborers. Kigembe has been currently rehabilitated by the Government, through the PAGIELAC

16 Master Plan for Fisheries and Fish Farming, 2011 17 Ibid


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program, starting with the ponds and today they are being used for seed production to support the upcoming fish farmers. The rehabilitation of the Centre is continuing by upgrading it into a fish hatchery capable of producing at least 10 million fingerlings annually. It has 7,000 males and 5,000 females (broodstock of Oreochromis niloticus) that developed from the parent stock imported from Lake Albert. Today they are using a set of 32 incubators to reproduce the Nile Tilapia and have been able to produce up to 1 million Tilapia fingerlings in 4 months. Lakeside Fish Farm – began in 2010 by Roger and Faith Shaw, Lakeside is a newly established high-‐end aquaculture firm. The company will establish a modular, self-‐sufficient and independent fish production line, from ‘breeders to market-‐size fish’. The facility will be an independent and self-‐sufficient fish production system, including a complete production line from maintaining brood stock and fry production, to market-‐size fish and the processing-‐packing facilities, including all necessary auxiliary systems. The company plans to begin operations with the construction and implementation of a hatchery with capacity to supply 6,000,000 fingerlings (live baby fish) per year. 4. Supply Chain PAGIEALAC has supported numerous cooperatives in farming fish. Traditionally, fish farming has gone hand-‐in-‐hand with rabbit farming in Rwanda. Feed is a major input in aquaculture production that can account for up to 60% of production costs18. There is no industrial manufacturing of fish-‐feed in the country with limited on-‐farm feeds being developed at farms. The industry depends on feed imports from Uganda. The fish-‐feed industry is at an impasse as the demand for fish-‐feed is too low to justify the significant investment requirements to manufacture feed locally but as the fish industry grows, there will be a strong need to develop a local feed factory. 5. Sector Exports and EAC context Exports: the only fish exports are to DRC, which are re-‐exports of imports from the region. Rwanda does not currently have the capacity to export in large quantities. EAC: The East African Community has an abundance of opportunities for fishing throughout the region, as it is blessed with the longest and biggest lakes and rivers in the world: Lake Tanganyika, Lake Victoria, Lake Kivu, Congo River, Ruzizi River and River Nile, with an estimated 350 species of fish. Main species include the legendary Nile Perch, abundant Tilapia, Tiger-‐fish, Mud-‐fish and Cat-‐fish. The EAC, under the umbrella of the Lake Victoria Fisheries Organization (LVFO), is the main regulatory body overseeing the regional fish industry and they recently decided to increase awareness of proper fishing methods to curb fishing irregularities. 6. Challenges The quality of fish farming practices is still a major issue in the Rwandan fisheries industry. The main challenges are: • Increased degradation and overexploitation of the lake-‐environments; • Poor management of fisheries at the local level: There are 17 aquaculture stations (Kigembe,

Rwasave, Runyinya, Rushashi, Ruli, Rusumo, Ngarama, Cyamutara,Muko, Bwafu, Ndorwa,

18 Master Plan for Fisheries and Fish Farming, 2011


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Kazabe, Mabanza, Kivumu, Karengera, Nkungu and Nyamishaba) many of which are dilapidated -‐ Kigemebe, Nkungu Rwasave and Rusumo been rehabilitated by PAIGELAC;

• Almost total depletion of natural fish stocks due to overfishing; • Lack of fish-‐eating tradition that does not recognize it as a high-‐value commodity, partly as a

result of the cost and fish shortages on the local market; • Poor linkage of aquaculture and other agri-‐production systems; • Lack of fisheries and aquaculture inputs including seed, feed, gear, equipment and others. 7. Potential opportunities Based on growth estimates for Rwanda’s fish sector, there are a number of opportunities for Dutch companies to consider: • Fish farming: opportunity to start high-‐tech / low cost fish-‐farms in Rwanda to address gaps in

the local demand, both in terms of quantity and variety. Popular species include Tilapia. • Fish feed: as aquaculture in the country grows, there will be an opportunity to import or locally

produce fish-‐feed in Rwanda. Fish-‐feed can be produced using vegetable proteins, cereal grains, soy, which are all locally available.

• Fish trading: the importing, transporting and distribution of fish is not well developed in Rwanda. There is a potential for investment in the entire value chain.


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Chapter 4: Processed Fruits (including Strawberries) 1. Background & Overview Rwanda has the perfect climatic conditions to support the cultivation of a whole range of different fruits, including banana, avocado, pineapple, passion fruit, tree tomatoes, mango, strawberries, gooseberries, etc. Rwandan fruits are developed primarily for domestic consumption and the regional export markets. A large amount of informal trade in fruits takes place across the borders in the region, often by boat, bicycle, and foot as well as by vehicle. Fruit consumption in not a major component of adult diets in Rwanda, in particular in rural areas. Rwanda’s main fruit, in terms of both hectares under cultivation and total production, is banana – of which Rwanda produces a number of varieties. Estimated total banana production per year amounts to about 2.8m tons. The estimated total production of other fruits, which has grown at an estimated annual compounded rate of 9% between 2006-‐2010, is about 450,000t or about 45kg per person per year. There are only two large fruit processors in the country along with more than a dozen smaller companies. They produce a range of fruit pulp, juices, concentrates, sauces, fruit wines, and jams, some of which are exported. A few entrepreneurs have carried out experiments for drying fruit but so far, they can be only considered to be artisanal (see Shekina). There is no fruit packaging happening in Rwanda at this point in time. Banana: is by far the dominant fruit crop in Rwanda in terms of value of production. Four members of the banana family are consumed or produced in Rwanda: cooking bananas, beer bananas19, apple bananas and plantains. Apple bananas20 have the highest unit value and are being exported in organic form to Europe (in 2010, banana exports to Belgium amounted to about US$12,000 or 10tons21). Most elements of the banana value chain are largely in place though one link in particular needs to be improved: management of cold storage facilities at the airport. There is also a large export market for organic dried apple bananas and a 2006 survey found that dried organic apple bananas and dried organic pineapple were Rwanda’s two main opportunities for the dried fruit market22. Current productivity of banana production is estimated to about 8 tons/ha but should be 35-‐40tons/ha23. Avocado: After bananas, avocado is the most widely produced fruit in Rwanda, with an annual output of 82,000t per year and 15,000ha under cultivation, and is produced by more than 500,000 small holder farmers. Rwanda’s climate is perfectly suited for avocado production. However, even though the local variety of avocado in Rwanda is superior in taste and consistency, the international market prefers the Hass or Fuerte variety, which also has good taste and also has a tougher rind which means it is less perishable and, consequently, easier to ship long distances without damaging the fruit24. The main reason that avocado exports from Rwanda have been low is due to the limited production of the Hass or Fuerte avocado varieties by smallholder farmers25. To counter this, the Government has taken a proactive step by distributing export-‐grade seedlings and educating farmers on the value of different avocado varieties in recent years. This is expected to yield exports of 20,000 metric tons over the next few years26. Avocado is produced all year round in Rwanda and can yield an estimated 21 metric tons per hectare for Hass avocadoes, compared to just 10 in Kenya. In a recent investment profile for Rwanda’s avocado sector, the monitor group identified

19 Sometimes referred to as wine bananas. 20 Also known as baby bananas, dessert bananas or sweet bananas. 21 MINAGRI data 22 OTF, Dried Fruit Survey Analysis, February 1 2006. 23 Based on interview with FAIM, May 2012 and MINAGRI data for 2011. 24 Study on Marketing, Post Harvest, and Trade Opportunities for Fruit and Vegetables in Rwanda, 2009 25 Monitor Group, Investment Profile on the Avocados Sector for the GrowAfrica Initiative, 2012 26 Ibid


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avocado packaging and exporting (through the ports of Mombasa or Dar es Salaam) as a significant investment opportunity for foreign agribusiness firms. New entrants in this market include East African Growers, a Kenyan group, although production is expected to be limited, subsidized, and targeted mainly at the local market. Pineapple: is a significant horticultural crop in Rwanda, grown mainly in the eastern and southern parts of the country. In addition to some import substitution, there is an export market for pineapple juice, pulp and jam. Urwibutso, among others, produces pineapple juice and Shema Fruits also used to regularly export fruit jam to Europe. The main challenges with pineapple are: (i) the variety that is produced locally is not as amenable to the preferences of the international market, which are inclined to production from producers such as Ghana, Ivory Coast, Cambodia, etc.; (ii) because of the tropical climate, pineapples from Uganda and Burundi are considered to be of better quality; (iii) high airfreight costs means that Rwandan pineapples cannot be competitive in the export market due to the relatively low value-‐weight ratio of pineapple (in relation to many other fruits and vegetables)27; and (iv) current yields are low as the fruit is being over propagated and is only producing 1ton/ha when it can yield 35-‐40tons/ha28. Nevertheless, a study by JE Austin Associates indicated that there are several opportunities for other pineapple related exports, in particular “pineapple concentrate” for which there are interested buyers in Switzerland and Singapore29. Passion Fruit: is the fruit of choice for juices in the domestic market, as confirmed by processors such as Inyange Dairy and Urwibutso. Rwandan passion fruit also has a superior flavor that is well received in the European market and the regional market. The main challenges are passion fruit diseases and weak linkages between producers and processors. Similar to pineapple and bananas, the current yields are low at approximately 10tons/ha due to the woodiness virus, which regularly afflicts the fruit. Tree Tomato: or tamarillo30 is grown mostly in the northwestern and western parts of the country. Although it is a relatively new product on international markets, there is strong demand for fresh tree tomato (especially organic, therefore Fair Trade certification would help) particularly in the UK, Germany, Netherlands and Spain 31 . After being imported, it is processed into juices, concentrates, jams, gelatins and sweets. If processing facilities and adequate transport were available, it could be exported also in the form of fruit pulp or concentrate. Other principal exporters of tree tomato include Kenya, Zambia and New Zealand. The main challenges are the lack of a cold-‐chain storage system and inappropriate practices for post-‐harvest handling. Mango: requires a prolonged period of measurable rainfall, which is limited in most areas of Rwanda, especially for the varieties sought on export markets. International experts agree that mangoes cannot be competitive in Rwanda in comparison with mangoes grown in warmer climates in Burundi, Tanzania and Uganda32. But this does not mean they cannot be grown in Rwanda for domestic consumption. In value, mango is the third most important fruit produced in the country, after sweet bananas and avocadoes. Gooseberries: This crop already has a small domestic market in Rwanda, particularly for jam and pastries. Internationally, Europe imports significant amounts of gooseberries, especially from Colombia and mostly for consumption in Germany. In order to compete with Colombia, Rwanda

27 Study on Marketing, Post Harvest, and Trade Opportunities for Fruit and Vegetables in Rwanda, 2009 28 Interview with FAIM, May 2012 29 Ibid 30 This crop is also referred to as Japanese plum, and internationally it is known as tamarillo. 31 Study on Marketing, Post Harvest, and Trade Opportunities for Fruit and Vegetables in Rwanda, 2009 32 Ibid


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would have to export organic gooseberries; the Colombian product has been subject to criticism for high doses of pesticides, and this leaves an opening for an organic competitor33. Strawberries: Rwanda has good growing conditions for strawberries but the local varieties are small and often have poor color, to the point of sometimes being unacceptable for jams. California produces excellent varieties of strawberries and it is worth conducting trials of them in Rwandan conditions. Currently, there is no large-‐scale production of strawberries but there are about a dozen cooperatives and individual growers producing strawberries around the country. Strawberry production is however expanding rapidly in Rwanda with the introduction of new strawberry varieties by FAIM (see below), and increasing demand from the largest processor of Strawberry products, Urwibutso. Urwibutso makes strawberry jam and juice. 2. Policy context The main regulator for processed fruits in Rwanda is the National Agricultural Export Development Board (NAEB). The policy strategy is incorporated within NAEB’s Horticulture Policy that was developed in 2006. The Horticulture Production Department, the Certification and Export Unit, the Quality Control, Inspection & Standards Compliance Unit and the Marketing & Export Logistics Unit perform the primary functional roles within NAEB for fruits and vegetables. 3. Profiles of Large Firms Urwibutso: was started in 1983 by Mr Gerard Sina. The company began the production of passion-‐fruit juice and has now moved into banana-‐wine, pineapple juice and strawberry juice, biscuits and the famous chili pepper sauce “Akabanga”, oil from passion fruit seeds, cereal based flour, yogurts, packaged peanuts, wine, and most recently introduced mineral water. Inyange: was started in 1997, as part of Crystal Ventures Group, with the vision of becoming the leading food processing company in Rwanda. Inyange’s product lines focus on three main areas dairy, which includes pasteurized milk products such as fresh whole and skimmed milk, UHT milk, milk, fresh cream, and yoghurt, as plans to add higher-‐value products such as ice cream, butter, and cheeses; mineral water, which includes bottled purified water in a range of sizes; and fruit juices, which include nectars and juice drinks with a wide range of flavors. Inyange has a capacity to produce 5000 liters/hours of mineral water, 5000 liters/hour of milk, and 5500 liters/hour of juices in the familiar Tetrapak one liter bricks. They also have a Krones line with the capacity to produce 13000 half liters/hour and 10000 liters/hour. It currently only operates at 35-‐40% capacity, although the company hopes to increase this to 50% by the end of the year. Forestry and Agricultural Investment Management (FAIM): set up in 2011 by experienced horticulturist, Steve Jones. They have established Rwanda’s only state-‐of-‐the-‐art plant propagation nursery on a 475ha plot in Rwamagana and also plan to develop a tissue lab, in order to meet the demand for more productive plants and seeds from government agencies, food processors and farmers. They currently sell high quality, disease-‐free plants grown in modern plant propagation nurseries and provide extension services. They currently produce horticulture crops like bananas, passion fruit, tree tomato (tamarillo), strawberries and bamboo. There is a concerted effort to develop varieties that are more amenable to the international market, e.g. sweet Charlie strawberries, Manzano bananas, and MD2 pineapples. FAIM has invested up to USD 4.5M in the propagation nursery and expects to begin construction of a tissue lab. FAIM has plans of producing atleast 1m plants his year and their goal is to reach 6-‐8m plants per annum.

33 Ibid


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Shekina Enterprises: is an agro-‐processing company, was started in 2008 by Mr Pierre-‐Damien Mbatezimana in Rulindo district. Shekina Enterprises is a pioneer firm in the dried cassava leaves market and after 4 years remains the only dried cassava leaf producer in the country. Shekina has also started experimenting with other products, including the drying and/or milling of millet, sorghum, wheat, soya, and even the drying of fruits and vegetables such as pineapple, bananas, eggplant, amaranth, carrots and leeks. Strawberry Cooperatives/Small Holder Farmers: Apoder Ganira – owned by female entrepreneur, Henriette Nyirantwali, Apoder Ganira is located in the southern province of Nyanza. The small company produces juice (200litres/month), jam (500kgs/month), starch (200kgs/month) from strawberries which are sold to local hotels, restaurants and supermarkets in the following areas: Nyamagabe, Rusizi, Gitarama, Kigali and Ruhengeri. The company is inhibited by the lack of capital in order to grow and currently produces on an order basis only. Abakundaamahoro – a 30-‐member cooperative also based in the Southern province, Muhanga. They produce different varieties of strawberries, carrots, onions, eggplant, beetroot, and paprika. They do not conduct any processing but only cultivate and sell to public markets and restaurants. They produce approximately 38kgs of strawberries per week. The cooperative is also seeking capital in order to begin processing strawberry juice. 4. Supply Chain Fruits are harvested by cooperatives and there are no commercial fruit farms at this point in Rwanda (except a recent investment by the East African Growers, a Kenyan group, to cultivate avocadoes for the local market). Fruits are either sold on local markets, exported informally to neighboring countries (in particular Burundi, Uganda and DRC), or sold to a few processors, including Urwibutso (which processes a whole range of fruit and vegetable products) and Inyange which also processes fruit juice. Packaging is typically sourced from the region and distribution is conducted through wholesalers that service Kigali and the rest of the country. There are currently very few exports of fruit-‐based products. 5. Sector Exports and EAC context Exports: Estimated official fruit exports in 2010 totaled US$1m only. EAC: The fruits export sector is not very strong in East Africa, although it is picking up with Kenya being the largest exporter. The main export products from Kenya are avocadoes, mangoes, pineapples, passion fruits, bananas, and strawberries. There are several large fruit exporters in Kenya, such as East African Growers. 6. Challenges The main challenges the processed fruits industry in Rwanda is:

• Quality is the single most pervasive concern for development of the fruits (and vegetables). This requires appropriate production methods including approaches to disease control, post-‐harvest handling procedures, the use of cold chain facilities, product and process certifications, and even the type of packaging.


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• Critical infrastructure needs include coolers and dryers at the field level, cold chain facilities, greenhouses or tunnels, and improved rural access roads

• Financial and technical assistance for obtaining organic and other certifications will be needed for groups of small farmers

• In general, alliances between buyers (or processors) and producers need to be strengthened and made into multi-‐faceted relationships

• In many cases financial and technical assistance will be needed for market exploration including sample shipments

• The varieties are not amenable to tastes in potential export markets. 7. Potential opportunities There are number of potential opportunities for Dutch firms: • Investing in avocado packaging and exporting of the Hass variety: using a nuclear farm

model associated with out-‐growers. Exports of avocado would be conducted through the ports of Mombasa and/or Dar es Salaam. Rwanda’s advantage lies in its climatic conditions, the comparatively high yields it achieves, and its proximity to the avocado exports value chain in Kenya and Tanzania.

• Investing in strawberry exports: strawberry exporting has potential in Rwanda as the climatic conditions suit strawberries very well. The constraint to strawberry exports are currently the variety used in-‐country, the high cost of air-‐transportation and post-‐harvesting methods. Nevertheless, the sector is growing rapidly with the introduction of new varieties by FAIM and increasingly also strawberry based products (jams, and yogurts).

• Other fruits with export potential include passion fruits, tree tomatoes and organic gooseberries.


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Chapter 5: Macadamia Nuts 1. Background & Overview Macadamia nuts are the highest valued nuts in the world. They are produced commercially primarily in Australia, Hawaii, South Africa, Kenya, Malawi, Colombia, Costa Rica, Guatemala and Brazil. The main markets for macadamia nuts are United States, Australia and Japan with increasing demand from European and Asian countries. The nut has several properties that contribute to its increasing demand: (i) natural taste and as a cooking agent (ii) additive in anti-‐aging creams (iii) oleic acid component which is similar to olive oil, that helps reduce cholesterol and (iv) its health properties due to its mono-‐saturated fatty acids. Macadamia was introduced in Rwanda in 1980s but did not attract significant interest in either the public or private sectors. Macadamia trees were re-‐introduced in the early 2000s supported by the Ministry of Agriculture’s Real Sector Support Project (RSSP). Since, macadamia nut cultivation has grown steadily, although production remains low. Based on a recent BTC study, there are between 85,000-‐200,000 macadamia trees in the country, which can produce up to 700 MT annually of nuts-‐in shell or the nuts after the husk has been removed. Currently, production is organized through cooperatives and there is only one processor, established in 2010. Rwanda has excellent agro-‐climatic conditions for macadamia trees, for which there are 2 harvesting seasons in the East of the country (between February and May and November and January), and one in the South and West of the country (between October and November). The following conditions are necessary for macadamia to grow well: annual precipitation of 1500mm to 3000mm throughout the year, no more than two months of drought, temperature range between 18oC to 29oC. Rwanda provides for these climatic conditions but would require irrigation during the dry season. Macadamia nuts are produced country-‐wide, but in particular in the Eastern districts of Kayonza, Ngoma and Nyagatare. 2. Policy context The production of higher-‐value nuts, such as Macadamia nuts, has been supported by the Ministry of Agriculture and various development projects since the early 2000s. Today the National Agriculture Exports Development Board has 2 ongoing initiatives to support macadamia nut production: (i) NAEB runs the only macadamia tree nursery in the country, with seeds imported from Kenya; and (ii) NAEB is working in close collaboration with Norlega, the only processor, to open macadamia nut collection centers throughout the country (to date only 3 collection centers have been opened). These activities are still in their early stages. 3. Profiles of Large Firms The only and largest player in Macadamia nut roasting is Norlega Macadamia. Norlega Macadamia, started as a cooperative in the early 2000s, but was only registered as a firm in 2010. Norlega has the capacity to process 1t of macadamia nuts a day, of which only 50kgs is retained after the nut has been cracked, dried, and roasted. In 2011, Norlega processed a total of 40t of macadamia nuts, and expects to double production in 2012. Aluminum packaging is imported from China. Currently all packaged nuts are distributed to local clients (the supermarket Nakumatt, the national airline -‐ RwandAir, etc.), but the company is country exploring potential exports to Sudan and Nigeria.


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Norlega focuses on bioorganic production and is currently seeking to obtain bio certification from the East African association of bio producers. 4. Supply Chain There is only one nursery in the country that grows and grafts macadamia trees (operated by NAEB). The trees are then distributed to farmers, who grow them with minimal fertilizer. The grown nuts are then collected, sold directly on the market or collected by Norlega representatives for roasting and packaging. Distribution is currently local only. 5. Sector Exports and EAC context Exports: there are currently no exports of Rwandan macadamia to the region or internationally. EAC: Kenya is one of the largest producers of macadamia through the Kenya Nut Company, one of the leading macadamia nut processors worldwide. 6. Challenges According to Norlega, the main challenge to growth in the macadamia sector is the lack of macadamia tree nurseries as well as low farmer awareness about the high-‐value nature of the tree and best post-‐harvest practices. With limited processing capacity in the market and to-‐date a not very structured supply chain (with only 3 active collection centers in the whole country), there are market coordination failures that are constraining growth. 7. Potential opportunities • Expanding Macadamia nut production and exports, using a nuclear farm-‐model and an out-‐

grower scheme. Given the high-‐value nature of the crop and Rwanda’s excellent agro-‐climatic fit, there is a large opportunity to expand production, conditional on resolving the main constraints, which is the lack of macadamia tree nurseries, post-‐harvesting methods and farmer awareness about.


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Chapter 6: Animal Feed (from Wheat and Maize) 1. Background & Overview Rwanda is not a large producer and consumer of animal feed. Total production of animal feed amounts to about US$5m, out of which the majority is exported to Kenya. The demand for animal feed in Rwanda is scattered, as there are no large cattle farms. Imports of animal feed is also low, and amounted to an estimated US$500,000 in official imports in 2010. The main domestic sources of animal feed in Rwanda come from wheat flour production and recently maize flour production, where the bi-‐products, wheat and maize bran are used as animal feed. There is concerted effort to develop soybean and cassava production to primarily increase food security but also to supplement the animal feeds production. In Rwanda, the output for animal feeds is projected to reach 12,000 metric tonnes per year in the next four years with a potential export market of 3,500 tonnes to the DRC and Burundi34. The major producers in the country are Minimex, Pembe Flour and Bakhresa Grain, however, the bran used for animal feed is a relatively small bi-‐product of their main production and a large portion of the feed is exported to Kenya due to the larger demands from the commercial farms. SOPAR is the only animal feeds manufacturer in the country but are currently facing financial difficulties and looking for external investment. 2. Policy context The Government has recognized the need to develop a local animal feeds sector given that the scarce supply of animal feeds is regularly cited as one of the major challenges facing local farmers. Furthermore, it has been identified as a high potential export commodity to DRC and Burundi. As a result, the Government has assisted in promoting cassava and soybean production, through the establishment of Soyco Ltd. (see Chapter 8: Soybeans) and a cassava-‐processing factory in the Southern province that will produce cassava flour and convert the waste into fertilizer and animal feed. 3. Profiles of Large Firms Minimex: Minimex is Rwanda’s largest maize mill and was established in 2002 by a lawyer, Felician Mutalikanwa. Minimex has recently seen the entrant of a Dutch investor, Mr. Claude Mansell, who is the current Managing Director. Minimex has 4 main operations: (i) a modern maize milling plant on the outskirts of Kigali; (ii) Pro-‐Dev, its sister company, which in 2011 established a modern maize drying and storage facility in Rwamagana (iii) maize grits supplies to Bralirwa, for which Minimex is the sole supplier in the country and; (iv) BraMin, a joint venture with Bralirwa (the largest beer manufacturer in Rwanda), aimed at operating a modern maize farm in the Eastern region of the country. The bi-‐product maize bran is used as animal feed and represents a good source of income for the company (approx. 15%); it is sold directly to farmers at the factory and recently to buyers for large farms abroad (e.g. Kenya). Bakhresa Grain Milling: Bakhresa Grain Milling was incorporated in Rwanda on January 2009 and began operations as a wheat mill in Rwanda in May 2011 after a year of construction. Bakhresa’s Rwanda operations are part of the Bakhresa Group, a family business based in Tanzania. Bakhresa is one of two wheat flour producers in the country, vying with Pembe Flour Mills as the largest wheat producer. Wheat bran is exported to Kenya as animal feed for commercial farms.

34 http://www.newtimes.co.rw/news/index.php?i=14975&a=52940


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Pembe Flour Mills: Pembe Flour Mills was registered as a new business in Rwanda in 2007. Pembe Flour Mills Group, headquartered in Kenya and with operations also in Tanzania and Uganda. Pembe’s main product is wheat flour, which it sells under the “Pembe” brand name and it also sells the bi-‐products of production for animal feed. 4. Supply Chain Currently almost all the wheat is imported internationally by both Pembe and Bakhresa, which is then processed in their factories and distributed through Rwanda. Both Pembe and Bakhresa do export the wheat bran, which is used as animal feed to the region and primarily to Kenya due to the higher demand for animal feed in those markets. There is limited supply of animal feed to the local market which has led to commercial farmers mixing the feed themselves on site and few farms have purchased their own small machines to make the feed. 5. Sector Exports and EAC context Exports: Pembe and Bakhresa both export their animal feed back to Kenya and Uganda given their established presence in these countries and the availability of a larger market for animal feed. There is a significant potential to export feed to Burundi and DRC, estimated to be approximately 3,500 tonnes. EAC: Unga Farm Care, part of the Unga Group of Companies (milling of wheat and maize, manufacture of packaging materials and animal nutrition products, and the distribution of animal health and crop protection products), is one of the largest animal feed companies in the region with operations in Kenya, Uganda and Tanzania. Unga is currently evaluating options to invest in the animal feed business in Rwanda, Burundi and eastern DRC and is negotiating with government to purchase SOPAR. It is estimated that Uganda has a comparative advantage over other regional countries in the production of raw materials for animal feed. 6. Challenges Domestic production is limited in Rwanda. The only animal feeds manufacturer, SOPAR, is currently facing financial difficulties limiting operations and the other main producers (Minimex, Pembe and Bakhresa) do not see animal feeds production as the core of their business. There is also an effort to increase livestock farmer awareness of using quality concentrated animal feeds as a significant number of commercial farmers tend to mix their own feed. 7. Potential opportunities The Government is currently in negotiations with the Unga Group regarding investment into SOPAR, which is the only local animal feeds company that has run into financial difficulties. There is scope to expand animal feed production, given the unmet domestic demand for animal feeds.


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Chapter 7: Paprika 1. Background & Overview Paprika in Rwanda is grown in small quantities and is referred to the Capsicum genum (also known as bell pepper) and not the powdered spice that can be made from some forms of capsicum. It is used as a cooking vegetable in meals and is not used frequently as a spice in local cooking. There is no commercial farm that grows paprika on a large-‐scale but several cooperatives have focused their efforts on this product. Based on an internal market research survey35, we found that most cooperatives grow the California variety of paprika primarily for domestic consumption during the 3-‐month season. The paprika is sold in local markets and due to the unpredictable demand, is produced mainly on an order-‐basis. The average retail price of paprika is approximately RWF 400/kg (USD 0.66)36. 2. Policy context Paprika is not a high priority of the government or the donor/NGO community in Rwanda due to the limited and erratic market. We are not aware of any support mechanisms or initiatives to support the paprika sector. 3. Profiles of Large Firms Geranium Cooperative: is one of the cooperatives that produces the highest quantities of California paprika – approximately 10,000 – 40,000kgs during the 3-‐month season. They sell the products directly to many restaurants in Kigali, grocery stores, and hotels. The cooperative grows the California variety of paprika but is piloting three other varieties. They currently export limited quantities to the DRC. 4. Supply Chain Most cooperatives obtain their seeds from either Agrotec, a key player in distributing agricultural inputs in Rwanda. A number also produce their own seeds or import from either Kenya or the Netherlands. Inputs for paprika include NPK37 , DAP38 and imborera (natural fertilizer from animals). NPK inputs are used by at least 80% of the cooperatives surveyed. The paprika is cultivated over a 3-‐month season and sold in local markets and directly to restaurants and hotels. There is no local processing of the paprika and packaging is rudimentary. 5. Sector Exports and EAC context Export: Geranium Cooperative is the only organization we are aware of only one cooperative that exports limited quantities to the DRC. No informal exports of paprika have been recorded. 35 Laterite interviewed 21 cooperatives and small-‐holder farms that were involved in growing paprika 36 Based on internal market research survey 37 Nitrogen, phosphorus potassium complex 38 Di-‐ammonium phosphate


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EAC: One of the largest producers of paprika is based in Tanzania, the Tanzania Spices Ltd, which grows raw paprika for exports to Spain. The company is a local subsidiary of a major Spanish spice processor, EVESA. Kenya is also an exporter of paprika spices to Europe. 6. Challenges The main challenges identified by the cooperatives during the survey include (ascending order):

• Limited domestic market • Drought • Diseases • Fake agricultural inputs, e.g. fertilizers and seeds • Lack of fertilizers

7. Potential opportunities The domestic market is limited with erratic demand discouraging farmers from growing paprika at scale. However, cooperatives did indicate that a regional market combining Burundi and DRC would make paprika-‐growing a viable opportunity if investors are willing to source the market on their behalf. Given the success of the Tanzania Spices Company, there is an opportunity to export raw paprika to Europe for spice processing.


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Chapter 8: Soybeans 1. Background & Overview Soybean production in Rwanda dates back to the 1920s when it was first introduced by INEAC (Institut National pour l'Etude Agronomique du Congo Belge). By 1977, Rwanda's soybean production increased to 6,000 hectares motivated by the installation of a new oil mill that used soybeans. A subsequent decision to nationalize most of the trade sector led, unfortunately, to a sharp drop in soybean cultivation, since farmers had difficulty selling their crops. Research on soybean continued in 1975 through trials in collaboration with the University of Illinois, which led to the identification of several highly productive varieties that are adaptable to Rwanda agro-‐ecological conditions39. But soybean production in Rwanda has never existed on a large scale, and has declined over recent years due to the fact that the Rwandan Agricultural Research Institute (ISAR) ceased producing the inoculation material needed for nitrogen fixation by the soybean plant (the bacterium Rhizobium). At present, only small-‐scale production and processing of soybean takes place: maize-‐soy-‐sorghum blend (through Somoma industries), tofu and soy-‐milk (via the cooperative Abahuje) and as subsistence consumption when used in porridge, sauces and snacks40. 2. Policy context Since the Rwandan Agricultural Research Institute (ISAR) ceased producing the Rhizobium bacteria needed for nitrogen fixation by the soybean plant, there has been limited policy and research development into soybean production in Rwanda. Through the Clinton Hunter Development Initiative, there is a renewed interest in soybean development in Rwanda. 3. Profiles of Large Firms Soyco Ltd.: incorporated in 2009, Soyco is a large soy processing business that will dramatically increase the demand for soybeans. The company is contracting with an estimated 30,000 local farmers to grow soybeans and is providing inputs to support them. Soyco’s own commercial farm will employ up to 1,400 farmers, and its factory will employ a staff of around 120. The project investment is expected to be USD 15M for produce edible cooking oil from soy and sunflower seed and the bi-‐product of the plants i.e. soy and sunflower cake is to be used as animal feeds. The plant will be based in the Kayonza District and is scheduled to be operational in mid-‐2013 and capacity is expected to be 200 mt per day although full capacity is expected to be achieved in the next 5 years. Partners include the Kenyan conglomerate Mt. Meru Group, Clinton Hunter Development Initiative, Crystal Ventures Ltd, Rwanda Social Security Board and Kayonza District. Sosoma Industries: is located in Kigali and processes a small amount of soybeans (300 MT/year) for blending with maize and sorghum to produce a nutritious porridge for children. Abahuje: the only other soy processing operation in Rwanda at present is the ABAHUJE soymilk and tofu factory in Ruhango, which processes 1.5mt soybeans per year. The facility has got a storage capacity of 10mt, and was in the process of obtaining new machinery to process both tofu and soybean oil.

39 Rwanda Agricultural Research Institute 40 Assessment of Post-‐Harvest Opportunities in Rwanda, USAID 2010


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4. Supply Chain Generally, Rwandan soybean production takes four months from sowing to harvest and is cultivated for two seasons, in rotation with maize, rice, or other staple crops. In a 2010 study, some soybean demonstration plots where all inputs and improved production practices were applied reported achieving 1800 kg/ha but typically, yields average around 500kg/ha41. Small-‐scale farmers mainly produce soybean, and production is not organized into cooperatives with the exception of those producing for the Sosoma factory, and three cooperatives producing for the Abahuje soymilk and tofu factory in Ruhango. As mentioned above, soybean production has been seriously reduced by the cessation of supplies of Rhizobium, the bacterium) which must be used to inoculate the seed prior to sowing in order for nitrogen fixation which impacts the growth and productivity of the crop42. This is expected to change with the onset of the Soyco project in Kayonza. The very small volumes of soybeans currently produced result in negligible trade in Rwanda. The only significant commerce is between the Abahuje soy processing facility and three cooperatives which process soybean with their (and IFDC) assistance, and the soybean producing cooperatives affiliated with Sosoma Industries. 5. Sector Exports and EAC context Exports: Currently, there are no exports of soybeans to the region or internationally. EAC: Most soybean production in the region comes from Uganda, with limited quantities from Kenya. Soybean in the region is primarily used for animal feed but also includes some blending with other grains to produce breakfast porridge or a corn-‐soybean blend (CSB) for regional relief or school programs. There is an increased demand for producing soybean to be used as an oil crop. 6. Challenges The main challenges afflicting the soya bean industry include:

• Poor production techniques have led to significant losses arising from pod shattering. In addition, producers require training on improved threshing techniques, and grading and sorting;43

• Lack of Rhizobium (which is needed at sowing to ensure nitrogen fixation) since the production unit at ISAR-‐Rubona ceased operations;

• Small-‐scale farmers have limited experience producing crop on commercial scale therefore, will require substantial training;

• Intensification of production increases risk of outbreak of soybean rust disease 7. Potential opportunities The potential for soybean production in Rwanda exists due to the large demand for cooking oil, which is currently imported from neighboring countries. The Soyco/Kayonza plant is expected to partially satiate this demand and drive the growth in the soybean production and processing industry in Rwanda but there remains scope for additional investment in the soybean industry. 41 Assessment of Post-‐Harvest Opportunities in Rwanda, USAID 2010 42 Ibid 43 Ibid


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Chapter 9: Mushrooms 1. Background & Overview Mushroom growing started in Rwanda in 1996 where they were grown in bean plants residues. Production was limited until 2006 when MINAGRI signed an agreement with their Chinese counterparts to teach the mushroom growing technique called Juncao (“growing mushrooms in grass”), which has been quite successful. This method is used in Rwanda where residues of rice, maize, sorghum and others crops are grounded, mixed and made into mushroom beds. Over 30 cooperatives in Rwanda use the same process to grow mushrooms and today, there are over 1000 mushroom growers in Rwanda. Production is concentrated in the Kigali area and the Musanze area too due to the favorable climate. “From a climactic point of view, mushrooms like it fresh and humid. They have a narrow tolerance range for temperature. Oysters, depending on the stage in their life cycle, like it between 20 and 25 C. One can recreate this temperature range with air conditioning, but that is energy-‐intensive. In the elevated parts of Rwanda, one can use the prevailing climate as is, with very little human tweaking. In addition, the high density of the population somewhat makes up for the lack of cold chain. It is never very far from the market, and as it happens, the best growing area, climate-‐wise, is in the North, only one hour’s drive away from kigali, the largest market. There is very little formal tracking of yields. My best guess is that yeilds at the moment are aboyt 30-‐40% of what they should be, due to high contamination rates and sub-‐optimal management of environmental factors (temperature, humidity, Co2 levels). Mushrooms are found in the markets mostly in the rainy season, when they can be found wild. Furthermore, encouraged by NGOs, development agencies and international institutions alike, many Rwandan cooperatives have slowly moved into the mushroom growing business. The main varieties grown in Rwanda include oyster mushrooms, and small quantities of shitake mushrooms. A 2008 study by RDB indicated that the national demand (1,520 tons) current doubles the supply, which was later confirmed by a 2010 Oxfam survey citing the frustrations of local restaurants and hotels in obtaining the appropriate quality and quantity of fresh mushrooms. 2. Policy context The Rwanda Agricultural Board (RAB) is taking a lead role in encouraging mushroom production primarily for nutrition reasons but also to boost smallholder farmers’ incomes. Given the success of the Chinese “Juncao” technology to grow mushrooms, 30 companies are already producing seeds (spawns) for commercial mushroom production and more than 1000 farmers are involved in mushroom growing. Based on these results, in 2006, the Government through RAB invited the Chinese Fujian Agriculture and Forestry University to set up the Rwanda Agriculture Technology Demonstration Centre (RATDC) to train farmers in mushroom growing. The program based in Rubona has benefited 200 farmers to date. 3. Profiles of Large Firms Kigali Farms: is a for-‐profit social enterprise started in March 2010 by the Belgian entrepreneur Laurent Demuynck. KF’s focus has been on the cultivation of oyster mushrooms because they can grow year-‐round, are rich in nutrients, and can produce high yields per acre. They mass-‐produce the substrate at half to a third of the cost of today’s substrate, incubate the mushroom spawn in it, and help set up a network of independent entrepreneurs, farmers and cooperatives who can “fruit”


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the substrate, then harvest and sell the mushrooms. The company has set up an operation in Byumba to produce the substrate on a large scale by importing the bulk processing techniques from Italy and Spain, which they hope will reduce the cost of the substrate. In addition, they have plans to explore regional exports, mushroom processing, and using alternative substrates such as coffee pulp or rice straw. BN Producers: set up in 2006 by a woman entrepreneur, Niyibaho Berthilde. The company focuses on production of mushroom seeds (tubes) and more recently selling fresh and dry mushrooms to hotels and supermarkets. BN Producers has partnered with Duterimbere, a women’s cooperative to build capacity of women growers and has sought financing from Oxfam’s Enterprise Development Program. In March 2012, a new mushroom seeds production factory in Bugesera was launched, funded by MINAGRI’s PADAB (Project d’Apuis au Development Agricole de Bugesera) project. The factory is expected to produce 20 thousand seeds per day. 4. Supply Chain Mushroom cultivation differs from traditional farming as they obtain their energy from degradation of organic matter (“substrate) and not the sun. Three main stages are involved in the cultivation of mushrooms: spawning (seed production or starter culture), substrate, and shooting/cropping. The spawn is typically imported from Europe but the incorporation of the seeds factory in Bugesera indicates a move towards local sourcing which will improve the economics of the production. Substrate development is being conducted at a large scale by Kigali Farms; the raw materials for the substrate are locally available agriculture by-‐products such as wheat straw and potentially, coffee pulp residues44. The post-‐harvest substrate can then be composed into fertilizer or used as animal feed. The lack of cold storage facilities prevents the exports to regional or international markets so most of the produce is geared towards the local market and is primarily sold fresh but can be sold dry or in powder form too. 5. Sector Exports and EAC context Exports: there are no exports of mushrooms to regional or international markets. All produce is used for domestic consumption. EAC: Exports to regional markets would be a secondary priority given the high transport costs. Burundi, Eastern DRC and southern Uganda can be serviced overland and Nairobi, possibly by air (though the lack of cold storage facilities could hamper this unless dry mushrooms are exported). 6. Challenges The main challenge in the sector is the use of unreliable production methods, which has resulted in high production costs and market prices, as well as limited and unpredictable yields. The cost of the substrate is very expensive and will be required to drop by a factor of two, in order to make it viable for farmers to grow it at scale – however, new initiatives led by Kigali Farms (importing bulk

44 These substrate ingredients are an initiative of Kigali Farms; other by-‐products can be obtained from rice, maize, sorghum, and other grounded crops.


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processing techniques) and the Rwanda Agriculture Technology Demonstration Centre (RATDC) bodes well for the future of this promising sector. 7. Potential opportunities As indicated above, the demand for mushrooms far outweighs the current supply. This is substantiated by the high market prices which is on par with meat prices (current market prices hover around the RWF2,000/kg mark). In addition to fresh mushrooms, there is a market for dried mushrooms, whole or in powder form45. The powder can also be used as a fortification agent when mixed with flour. According to local experts in the mushroom industry, there is potential to develop every node of the value chain but the keystone is the “substrate”, which is critical to the quality and cost control. “If you can get substrate quality up and production costs up, then substrate manufacturers can sell their product at a price that is profitable for them, and profitable for the mushroom growers downstream. There will be need for capital in both segments of the value chain. We prefer the substrate segment, because it enables the rest of the chain.”

45 Interview with Kigali Farms


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Chapter 10: Seeds 1. Background & Overview The formal seed production (regulated seed system) is in the infant stage in Rwanda and as a result, it has been difficult to ascertain the size of the domestic demand but current supply in the formal sector is known. Currently the Government of Rwanda provides agriculture seeds and vegetative propagates for free of charge to the farmers for crops such as maize, wheat, potato and cassava. Its future policy is that the farmers, gradually, will directly pay for the seed. The Rwanda Agricultural Board (RAB), the implementing institution for MINAGRI, produces certified seed through a network of seed multipliers and also purchases and delivers the certified seeds to farmers through the Crop Intensification Program (CIP). Currently, there are few private players in the seed trade. Some regional seed companies as Pannar (distributor: Murphy Chemicals) and Kenya Seed/Simlaw have started up some activities in Rwanda. There are also few national seed distributors that operate in Kigali, the largest being Agrotech and Africhem. Agrotech has also outlets in the country. Only small companies are involved in seed production locally – though this is set to gradually change with increased efforts to engage the private sector in seed production. However, there is significant potential to develop the horticulture seed market primarily the vegetable seeds for the domestic market, given that there is strong demand. Rwanda’s topography and varying climatic conditions afford it numerous possibilities to set up production units for international horticulture seed traders/companies involved within vegetables and flower seed production, as well as research. 2. Policy context There are a number of initiatives in for developing the seed sector in Rwanda. Currently, a government enterprise is under construction, the Rwanda Seed Enterprise. The aim of this company is to process, threat and bag, sell and distribute agricultural seed on the national and regional market. However, the main challenge is the conformity to EAC harmonization and international seeds standards such as ISTA and OECD, but process is in development. The government is committed to promote the private sector and there are a lot of plans ongoing for assuring a better business environment in the seed sector. There are some NGOs and development agencies working in the seed sector. The main player is the Belgian Development Agency (BTC), which is supporting RAB with its implementation of Rwanda Seed Initiative. The IFDC is also active through its Rwanda Agro-‐Dealer Development (RADD) program that among other activities is seeking to boost the supply of certified seed. 3. Profiles of Large Firms Currently, there is no major firm that is developing seeds in Rwanda but there are several seed distributors that operate in Kigali by importing their seeds from Europe and South Africa, such as Agrotech and Africhem, However, there are a few local private professional plant propagation nurseries mainly in potato production whose main clients are professional farmers.


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4. Supply Chain Currently there is no large-‐scale production of seeds in Rwanda. RAB produces certified seed by a net of seed multipliers and directly purchases and delivers the certified seeds to farmers. There are a number of development agencies and NGOs that are working on certified seed multiplication (directly or indirectly) and who distribute seed such as IFDC, FAO, Catholic Relief Services, USAID, Research Into Use, etc. 5. Sector Exports and EAC context Exports: currently, there are no seed exports to the region but there is potential to export seeds to DRC and Burundi, given their own problems with developing their own seeds locally. EAC: The area around Arusha, Tanzania is one of the main sites of horticulture seed production in the region; Rwanda has a strong potential to also develop a similar seed production industry given its favorable and varying climatic conditions and the growing market demand for specific seed products such as vegetable and forage seeds. 6. Challenges The main challenge facing the seed industry is that the demand for quality seeds is not detailed known. Secondly, there is limited farmer awareness of quality seeds usage, which compounds the problem for some of the crops. 7. Potential opportunities Despite the absence of robust market information, vegetable and forage seeds can be seen as viable opportunities in Rwanda 46. Another potential crop is potato seed (the seed and crop production of potato is primarily concentrated in Musanze area). Other possibilities are investment in seed production units by international horticulture seed traders/companies, which can to be exported to the Netherlands and other countries and thereafter being distributed internationally. Similarly, horticulture seeds such as green beans seeds and annual flower seed have good potential given that the current Arusha production is limited.

46 Interview with BTC’s International Seed Business Expert and the RAB National Seed Coordinator, the co-‐managers of the Rwanda Seed Initiative


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Annex

1.1 Relevant Contacts by Agribusiness Sector

1.2 List of Ministry of Agriculture & Animal Products (MINAGRI) Projects

1.3 Support Organizations/Programs for Rwandan Agribusiness

1.4 Investment Support Programs in Rwanda

1.5 Main Agribusiness Challenges and GoR responses


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1.1 Relevant Contacts by Agribusiness Sector

Coffee & Tea

Coffee Business Center (CBC) Jean Damascene [email protected]

Rwacof Anbalagan Swamy [email protected]

Rwanda Trading Company Matt Smith [email protected]

Sorwathe Rohith Peiris [email protected]

Rwanda Mountain Tea Ephraim Turahirwa [email protected]

NAEB Coffee Division Celestin Gatarahiya [email protected]

Farmed Fish

Kigembe Fish Farm Wilson Ruta 0788858239

Lakeside Fish Farm Roger Smith [email protected]

PAIGELAC Dr. Wilson Rutaganira [email protected]

Processed Fruits (including Strawberries)

FAIM Steve Jones [email protected]

Shema Fruits Salum Rombe 0788503640

Urwibutso Sina Gerard 0788305111

Apoder Ganira Cooperative Henriette Nyirantwali 0788504707

Abakundaamahoro Cooperative N/A 0788426825

CODEFM Cooperative N/A 0783042566 COOPAGEAR Cooperative N/A 0788305199

CODEPAR Cooperative Joseph Ngekarabigwi 0788417818

Macadamia Nuts

Norelga Macadamia Nord Felize 0788561860

CAAN Cooperative 0788958548

APAETA Cooperative 0788305035

Isata Bio. Macadamia Cooperative 0788312928

Rutatina Richard Individual 0788300069

Umuhoza Delphine Individual 0788561860

Animal Feed (from maize and wheat bran)

Minimex Claude Mansell [email protected]

Pembe Flour Rwanda Taib Mohammed [email protected]

Bakhresa Grain Milling K.P. Rao [email protected]

Paprika

Geranium Cooperative N/A 0788747572

Ndahimana Livin Individual farmer 0788497577


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Ndabananiye Samuel Individual farmer 0785632231

Twizeyimana Jean Individual farmer 0783729671

Harerimana Emmanuel Individual farmer 0783194411

Abahujingendo Cooperative Cooperative 0783291128

Mukarukundo Donathila Individual farmer 0783068779

Twifatanye Cooperative Cooperative 0785260290

Impobaruta Cooperative Cooperative 0788544484

Coaleka Cooperative Cooperative 0788550190

Codeprag Cooperative Cooperative 0788631785

Mukakarera Vestine Individual farmer 0783519229

Gasana Ibrahim Individual farmer 0783227149

Karugarama Venuste Individual farmer 0783358258

Bimenyimana Eugene Individual farmer 0788487975

Koamboka Cooperative Cooperative 0783382783

Zikamabahari Cooperative Cooperative 0783193294

Ntahondi Cooperative Cooperative 0783239504

Twisungane Cooperative Cooperative 0788888731

Soybeans

Soyco Ltd. Ramendra Bhargava [email protected]

Sosoma Industries Thadee Musabyimana [email protected]/0788384189

Abahuje TBD TBD

Mushrooms

Kigali Farms Laurent Demuynck [email protected]

BN Producers Niyibaho Berthilde 0788479053

COODAC Cooperative 0788551118

Peace Cooperative Cooperative 0788468394

Garukurebe Cooperative 0788762790

Uwimanireba Redempta Individual 0788906879

Hitabatuma Denys Individual 0788881194

Seeds

BTC Seed Initiative Britt Granqvist [email protected]

National Seed Coordinator Daniel Nyikiza [email protected]

ARDE (nursery seed production) Paul Murenzi [email protected]


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1.2 List of MINAGRI Projects MINAGRI Project Objective Main Activities

CICA (Agricultural Information and Communication Centre)

To regularly collect, produce, process, adapt, store and disseminate agricultural information.

Agricultural information services through 5 departments: ICT "Website and AMIS”, Extension material development, Audio Visual Extension material Development, Library and GIS.

PAPSTA (Support Project to the Strategic Plan for the Agriculture Transformation)

To increase the agriculture income and improve the nutrition of poor rural population by implementing the Strategic Plan for the Agriculture Transformation

Strengthening institutional capacities and responsible stakeholders’ skills in their commitment and involvement in PSTA; Combat soil degradation by putting in place the new soil protection system “bocage” soil restoration, integrating animal husbandry and intensification of rice crop and high cash and nutritional value crops.

PRICE (Rural Income Through Exports)

To raise smallholder farmer’s income

Promote sustainable increased returns to farmers from key export-‐driven agricultural value chains through increased volumes and quality of production, improved marketing and effective farmer organizations.

RSSP-‐2 (Rural Sector Support Project)

To increase agriculture production and marketing in marshland and hillside in an environmentally sustainable manner

Marshland rehabilitation, irrigation, hillside protection, capacity building and marketing

LWH (Land Husbandry Water harvesting and Hillside Irrigation)

Increase productivity and commercialization of hillsides agriculture in target area

Capacity development in farmer organization, extension marketing and rural finance; Land husbandry, Water harvesting and Irrigation

PADAB (Bugesera Agricultural Development Support Project)

Increase agricultural production in Bugesera Region by setting up irrigation infrastructure, protecting catchments and improving rain-‐fed farming on nearly 5 000 ha of hills, as well as building the capacity of farmers and supervisory institutions

-‐ Setting up Irrigating infrastructure in Rurambi Valley (1000 Ha) on which rice and market-‐garden crops would be cultivated two seasons yearly -‐ Water and soil protection (WSP) through erosion control facilities on nearly 3200 ha of catchment basins. -‐ Building the capacity of the beneficiaries; -‐ Extending new technology; -‐ Distributing improved seeds and plants, and intensifying rain-‐fed crops and agro-‐forestry; -‐ Conducting rural extension; -‐ Establishing marketing infrastructure

PAIGELAC ((Inland lakes Integrated Development and Management Support Project)

The sector goal is to contribute to the strengthening of the food security while the specific objective is to improve the incomes of actors in the fishery sub sector in a sustainable manner

-‐ Capacity building activities to fishers especially in lakes management and sensitizing them on sustainable fishing methods,

-‐ Watershed protection activities around 17 inland lakes

-‐ Assisting fish farmers in the rehabilitation and creation of fish ponds

-‐ Rehabilitation of Kigembe fish farm into a modern fish hatchery

-‐ Construction of landing sites in order to


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reduce post harvest losses and improve fish commercialization

-‐ Carrying out lakes restocking with Tilapia niloticus

-‐ Purchasing Tilapia niloticus brood stocks to supply to the farmers for the 1st stocking phase

-‐ Assisting fish farmers to get the 1st cycle feeds and supplying them with 8 units of small fish feed making machines.

-‐ Training and organizing study tours to fishers and fish farmers in order to acquire more knowledge and skills on commercial fish farming

NSC (National Sericulture Project)

Provide possible logistical and technical support to beneficiary farmers/cooperatives to optimize production and maximize profits with a major thrust on value addition initiatives for production of various silk products / handcrafts for local and foreign markets

N/A

SPAT II (Market Oriented advisory services and quality seeds)

Improved access to advisory services for crops and livestock Improved access and use of high quality planting materials of food crops for men and women

-‐ Support RAB to implement “The Rwanda Seed Initiative (Seed policies, Seed production, Genebank, Rwanda Seed Enterprise, Private sector development and Quality control) -‐ Support RAB to implement “The Rwanda Farmer Field School Initiative” (Nationwide FFS for all major crops and livestock, Contract private agricultural services providers, improved demand articulation) -‐ Support to CICA (National extension resource center, Centre of excellence for extension material development, Mass coverage through radio messages)

PAIRB (Bugesera Natural Region Rural Infrastructure Support Project)

Improve food security in Bugesera region through a sustainable increase in agricultural production

-‐ Develop lake and marshland watersheds over a surface area of 4000 ha; -‐ Rehabilitate irrigation facilities over 1 500 ha of marshland; -‐ Develop irrigation facilities in small hillside areas watered by lakes (100 Ha); -‐ Develop production (distribution of selected seeds, integration of cattle and goat rearing with irrigated farming, organization of farmers into cooperatives); -‐ Rehabilitate 50 km of rural access roads; -‐ Set up storage and processing facilities, and construct buildings

LISP (Livestock Infrastructure Support Program)

The goal of the LISP is the creation of an enabling environment that will

The specific objective of LISP is to build the necessary infrastructure and services that will


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stimulate the development of a modern livestock industry in Rwanda through value addition and access to markets.

contribute to the development of a sustainable and profitable livestock production and marketing and overall improvement of the livestock industry in Rwanda.

KWAMP (Kirehe Community-‐based Watershed Management Project)

The goal of the project would be the reduction in rural poverty in Kirehe District, as evidenced primarily by a step improvement in household food and nutrition security, asset ownership and quality of life indicators, particularly amongst vulnerable groups including woman-‐headed households, orphans and those living with HIV/AIDS

-‐ Local institutional development (Support to Agricultural Transformation, Water and Land Use management) -‐ Agricultural Intensification (Value Chain development, Crop and livestock intensification, Irrigation development, Soil and Water conservation) -‐ Feeder Roads -‐ Project coordination


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1.3 Support Organizations/Programs for Rwandan Agriculture

Organization Program Main Activities Contact

International Fertilizer Development Center (IFDC)

Africa Fertilizer Efficiency Program

Training small-‐holder farmers in new farming technologies and provide high quality agro-‐inputs including fertilizer and high-‐yielding seed varieties

IFDC Rwanda 730, Kimihurura II, Gasabo District P.O. Box 6758 Kigali -‐ Rwanda t: +250 551 042 11 e: ifdcrwanda ifdc.org: www.ifdc-‐catalist.org

Catalyze Accelerated Agricultural Intensification for Social and Environmental Stability (CATALIST)

The project enables farmers to increase their crop production and incomes through an integrated approach combining sustainable agricultural intensification technologies with farm-‐to-‐market linkages, agroforestry and infrastructure construction

Privatization of Rwanda’s Fertilizer Import and Distribution System (PReFER), 2010-‐2015

Facilitate the orderly transition of the Rwandan government out of nationalized procurement and distribution by identifying policies that support the private sector’s involvement in the fertilizer market and contributes to the development of a sustainable supply system

Rwanda Agro-‐Dealer Development (RADD)

Build, strengthen and professionalize networks of agricultural input importers and agro-‐dealers by improving farmers’ access to inputs, decreasing transaction costs and increasing the demand for inputs

Belgian Technical Cooperation (BTC)

Rwanda Seed Initiative

Aims to create a more professional seed sector by increasing private sector involvement in the seed sector and assisting the public sector in its responsibilities in the seed chain

Britt Granquist [email protected]

Rwanda Farmer Field Schools (FFS) Initiative

Create nationwide access to the farmer field schools (FFS) for all main crops and livestock via a participatory extension approach in which elected farmers are trained to be facilitators and farmers attend a season long training session conducted in their fields.

Raf Somers [email protected]

Centre for Information & Communication in Agriculture (CICA)

Supporting the CICA in order to become a resource centre for advisory services. CICA also provides regular radio messages to millions of farmers about relevant agricultural information

TechnoServe Coffee Initiative

Provides technical and business expertise to help small-‐scale farmers produce better quality coffee and secure higher prices in the marketplace. Areas of training include

Nupur Parikh [email protected]


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quality coffee assessment and processing — particularly the effective use of wet mills to produce quality washed coffee — as well as agronomy best practices.

Dairy Program Establishment of dairy enterprises and developing market, technical and financial linkages

Ndavi Muia [email protected]

USAID

SPREAD Coffee (Sustaining Partnerships to Enhance Rural Enterprise and Agribusiness Development

Through financial and technical assistance, USAID helps farmers to establish cooperatives and improve the lives of their members, builds coffee washing stations, trains world-‐class Rwandan cuppers (professional coffee tasters) and markets Rwanda's premium coffees in the global market

Ryan Washburn Economic Growth Team Leader USAID/Rwanda [email protected]

SPREAD Pyrethrum

Provide enhanced drying facilities, business training, and improve annual target for production of pyrethrum.

SPREAD Chilli Pepper

Help facilitate linkages between suppliers and international exporting companies. The partnership promote the development of high-‐value markets to increase the incomes of farmers who grow bird’s eye chili peppers and others involved in the value chain. SPREAD also funds infrastructure related to the production such as furnaces, etc

USAID Dairy Competitiveness Project

Aims to increase the productivity and profitability of dairy processors, expand opportunities in the dairy industry and improve the lives of Rwandans in rural areas, especially people living with HIV/AIDS and orphans and vulnerable children

Land O’Lakes Rwanda Dairy Competitiveness Program II

Technical assistance will be provided to groups along all areas of the supply chain – including dairy farmers, milk haulers, Milk Collection Centers (MCCs), processors, and retailers – helping to build robust horizontal and vertical business-‐to-‐business partnerships.

Frank O’Brien [email protected]

International Fund for Agricultural Development (IFAD)

Support Project for the Strategic Plan for the Transformation of Agriculture

See MINAGRI list of projects

Aimable Ntukanyagwe [email protected] Kirehe

Community-‐based Watershed Management Project

Creating strong district, watershed and farmer-‐based institutions capable of sustaining efficient and non-‐destructive agricultural and livestock production; empower small-‐scale and landless farmers to plan and


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implement sustainable market-‐led investments jointly with the private sector; develop 2,000 ha of irrigated land, protecting and intensifying about 20,000 ha of cultivated catchment area, and providing cattle and goats for animal solidarity chains; rehabilitate feeder roads to improve links between farmers and markets

Project for Rural Income through Exports

Benefit smallholder farmers, and especially woman-‐headed households and households with little land, involved in the production of coffee, tea, sericulture and horticulture by achieveing sustainable increased returns to farmers from key export-‐driven agricultural value chains, through increased volumes and quality of production, improved marketing and effective farmer organisations; strengthen producer cooperatives as full-‐fledged economic partners of the private sector

One-‐Acre Fund

NGO supporting on one-‐acre subsistence farmers in Sub-‐Saharan Africa

The “market bundle” has 4 components: empower local groups of farmers (self-‐help), provide customized farmer training, provide capital for seeds and fertilizer, market facilitation (post-‐harvest handling and storage) and finally, crop insurance.

Eric Pohlman [email protected]

Gardens for Health

Non-‐profit focusing on HIV-‐positive individuals to improve their nutrition and health

GHI provides access to land and patient capital for community gardens, seeds and tree seedlings for family home gardens, technical assistance in sustainable agriculture and nutrition, and market linkages.

Caitlin Hartman [email protected]


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1.4 Business-‐to-‐Business Support Programs in Rwanda

Organization Program Main Activities Contact

The Netherlands Embassy

Matchmaking Facility

Facilitates the connection of companies in developing countries with Dutch business partners/investors.

Ben Rutten [email protected]

PUM Entrepreneurs for Entrepreneurs

PUM deploys experienced senior managers and experts to provide expertise to entrepreneurs in developing countries. Entrepreneurs only have to cover costs of local stay of the expert

Private Sector Investment (PSI) programme

Subsidy for innovative investment in emerging markets; the subsidy covers 50% of total investment costs (max. investment budget per project max: EUR 1,5M min: EUR 250K)

Africa Enterprise Challenge Fund (AECF)

AECF is a US$150M private sector fund, backed by DANIDA, DFID, IFAD, NMFA and SIDA

Awards are given to the best business plans The maximum amount the AECF can award to a single business idea is US$ 1.5m and the minimum is US$ 250,000, although this amount may vary depending on the competition. The average amount is expected to be around US$ 750,000

Contingent on Funding windows – currently there is not a Rwanda-‐specific funding window. Applications can be found at http://www.aecfafrica.org/regform/pcw/

Swedish International Development Cooperation Agency (SIDA)

Innovations against Poverty programme

Designed for companies, which are based or operate in a poor country. The programme functions as a risk sharing mechanism for sustainable business ventures (commercial companies or market oriented organizations), which have a strong potential to reduce poverty. Small grants (under €20,000) and one for large grants (€20,000 -‐ €200,000) are awarded to the best business plans that meet the criteria of the programme.

Applications should be sent to [email protected] Detailed instructions on the application process can be found at: http://www.sida.se/English/Partners/Private-‐sector/Innovations-‐against-‐poverty/How-‐to-‐apply/ Deadline: November 2012

Business Partners International (BPI) Rwanda

BPI Rwanda SME Fund

BPI provides risk capital to formal SMEs (sector-‐agnostic except for farming operations) based in Rwanda (applicable to JVs with local partners too). Funding ranges from between $50,000 to $1M

Application instructions are located here: http://www.businesspartners.co.za/page/bpi-‐rwanda-‐apply-‐for-‐finance

Clinton Hunter Development Initiative (CHDI)

Agribusiness Support

CHDI seeks to identify large-‐scale business opportunities, develop the market research and business plans to support them, and then actively invest in the businesses alongside local co-‐investors. CHDI maintains a hands-‐on involvement through construction and implementation phases, lending

Innocent Uwimana [email protected]


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management, technical, and marketing expertise. e.g. CHDI is in the process of developing two new large-‐scale, value-‐additive businesses in Rwanda: a soy processing plant and a coffee roasting business.

Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)

Promotion of the economy and environment

Certain companies can be selected for support in the form of development partnerships with the public sector (PPPs). Assessment for support is made on a case basis

Thomas Bedenbecker [email protected]


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1.5 Main Agribusiness Challenges and GoR responses47

Barrier Challenge Actions to address the barrier

Access to finance

The financial sector is relatively shallow and is only now entering the agriculture sector.

The Rural and Agricultural Finance Strategy has been formulated and GoR is developing insurance products to encourage increased lending. The Rural Investment Facility and Agricultural Guarantee Fund have been set up to improve access to finance. Strong macroeconomic management, including stable inflation, will exert downward pressure on interest rates.

Land availability

Rwanda is a small densely populated country, and as a result there is a scarcity of land available for cultivation, or for sale to private investors.

A recent land law has been passed which gives secure tenure to local and foreign investors through 99-‐year leasehold agreements. GoR reserves the right to acquire property for public interest and qualified private investment, and transparent mechanisms are in place to resolve land disputes. RDB can provide direct support to investors to facilitate land transfer and deeds.

Transport

While there are good trunk roads, the rural road network needs to be upgraded to lower costs and reduce post-‐harvest losses

African Development Bank and the World Bank have large feeder road programs and these investments will be focused around areas of high production (ie Food Baskets). Additionally, the EU is investing €40 million over the next five years to improve the rural road network.

Post-‐harvest infrastructure

There has been historic underinvestment in post-‐harvest infrastructure, including for drying and storage. This issue has become more prominent as levels of production have increased.

A Post-‐Harvest Handling and Storage Task Force has been established in the Ministry of Agriculture to facilitate construction and development of post-‐harvest infrastructure. Strategic Food Stocks have been built, or are planned, in all Food Baskets of the country.

Energy

Cost of electricity has been relatively high, and availability low. This problem has been more acute in rural areas.

The Government is delivering a $140 million project to extract methane from Lake Kivu and increase Rwanda’s power capacity by 40 percent in the first phase. Overall the Government’s rural electrification plans aim to increase total power generation from 100MW today to 250MW by 2013.

Water

The availability and cost of water is a barrier to investment, especially in agro-‐processing (eg Coffee Washing Stations).

The Irrigation programs within the Ministry of Agriculture have set out a framework for water management at the farm-‐level (Water Users Association) and have outlined the key Irrigation investments to meet the target of 100,000 hectares under quality irrigation by 2017. Additionally, firms from India are now developing irrigation schemes.

Skills and labour

In the aftermath of the 1994 genocide, there were substantial losses to human capital, including vital specialist skills and knowledge.

The Government continues to work with tertiary institutions to create new curriculums that will help meet the demands of a modern agricultural sector. Efforts to build an extension service with a mix of public and private sector providers will improve the skills of smallholder farmers in high-‐value crops.

47 Grow Africa Forum – Rwanda Brief November 2011


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Air Links and High-‐Value Exports

Insufficient international transport, in particular airfreight, has so far limited the expansion of high-‐value agriculture products

Airlines are rapidly ramping up their air cargo services with numerous new routes now regularly flying to new destinations in DRC, Europe, Middle East and Asia opening up in 2011. Cold Storage Facilities are in place at Kigali airport with 30 tons of quality storage currently and government subsidies offered for horticulture exporters.

Sector organisation

Until recently, sector efficiency was compromised by disconnected subsistence smallholder farmers

Through increasing support to cooperatives in Rwanda, land consolidation to organise agricultural input distribution and improve productivity, and SME development being a key government priority farmers, the capacity of farmers in Rwanda is rapidly improving.

Quality of Produce

Quality of horticulture and staple crops have come from historically low levels of production capacity and input application

MINAGRI has invested significantly in extension services, improved inputs, post-‐harvest infrastructures, land husbandry and irrigation to improve quality. Farm-‐level capacity building through technical assistance has been provided by MINAGRI, Belgian Technical Cooperation, East African Growers and the World Bank.

Tax administration

Although tax rates are very competitive in the region, the administration of taxation laws is often cited by private sector as a barrier.

RDB is providing improved regulatory services. Reform of Rwanda Revenue Authority (RRA) continues at a fast pace.

Certification

Compliance with international Sanitary and Phytosanitary standards will be vital for the sector to access regional and international markets.

A dedicated Inspections Directorate is being established in the Ministry of Agriculture, with international support to train and develop staff in Sanitary and Phytosanitary standards.

Agro-‐inputs

The price of fertiliser (both organic and inorganic) remains relatively high (though cushioned by Govt subsidies to smallholders), and the country continues to be very dependent on imports of seeds and fertiliser.

Supported by MINAGRI and USAID, the inorganic fertilizer market is expanding through the agro-‐dealer network and the introduction of international fertilizer companies.

rwanda agribusiness marketscan report

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