Rwanda: How Covid-19 Disrupted Rwanda’s Market-Driven Agriculture Targets
The fourth Strategic Plan for Agriculture Transformation (PSTA4) which Rwanda launched in 2018 – and runs through 2024 – targets among other outcomes, improved productivity and inclusiveness of agricultural market systems, increased value addition, and competitiveness of diversified agricultural commodities for domestic and export markets.
This, according to the plan, will be achieved by strengthening market-oriented production, productivity, and processing of diversified agricultural commodities, through increased engagement of the private sector.
However, the Covid-19 impeded this move by disrupting the agriculture supply chain.
Though agricultural activities were allowed to continue during the Covid-induced lockdowns, along with the trade of foods even during strict measures to control the Covid-19 pandemic, the sector players argue that its performance was still adversely affected by the pandemic.
Substantiating their arguments, they cited issues including the restrictions on the movement of goods and people both within the country and for cross border trade, and a halt in the hospitality industry such as closure of hotels and restaurants, among others.
They indicated that the transport costs for farm inputs such as fertilisers, and farm produce increased because there were few vehicles to transport them as a result of the demanding conditions to comply with the measures to curb the pandemic.
François Nsengiyumva, Chairperson of Rwanda Chamber of Agriculture and Livestock at Private Sector Federation told The New Times that though agriculture continued even during the Covid-19 induced lockdowns, it was more of subsistence, not commercial farming.
“This implies that agriculture was largely being done for subsistence – so that people in the country are able to get the food they need to survive the [pandemic] crisis – but not for the commercial agriculture to generate money for further investment,” he said.
“We [as farmers] incurred huge losses because of a lack of market,” he said.
He went on to say that in 2021, no major projects or new investments capable of making a positive impact on the sector were undertaken, suggesting that the situation is attributed to the Covid-19 crisis that caused financial constraints.
Venuste Muhamyankaka, Executive Director of Scaling Up Nutrition (SUN) Alliance – an umbrella of Civil Society Organisations engaged in improving nutrition in Rwanda – said that the disruption in the agri-food supply chain had a negative impact on the sector and reduced the amount of farm produce that reached consumers.
Because factors including the restricted movement of goods and lack of ready buyers, he said that for the perishable horticulture produce such as fruits and vegetables, farmers who could not afford cold room technologies were much affected.
“Prices of food items in Kigali increased because there were difficulties taking the farm produce to market,” he said, adding that by affecting agricultural supply chain, the pandemic had a negative impact on the nutrition and welfare of the population.
Govt bought eggs from farmers to protect them from losses
The Cabinet meeting held on April 24 2021 decided that Government buys eggs from poultry farmers who lost their market due to the Covid-19 pandemic.
Less than a week later, the Rwanda Agriculture Board (RAB), and the then National Early Childhood Development Programme (NECDP) issued guidelines on provision of the eggs to children from needy families under early childhood development programme in order to improve their nutrition.
But, even with this decision, farmers’ proceeds were reduced because, according to the instructions, the Government would buy be buying a raw egg at Rwf60. Normally, a raw egg goes for between Rwf70 and Rwf80, according to farmers.
Commenting on the development then, Andrew Butare, the Chairperson of Rwanda Poultry Industry Association told The New Times that the Government’s move was timely, pointing out that though the price was relatively low compared to the investment by a poultry farmer, it saved them from losses.
Nsengiyumva said that was a temporary decision to help solve the issue that was affecting some poultry farmers, but the performance of the poultry value chain continued dropping because that did not guarantee a long-term market opportunity for farmers to grow their poultry businesses.
“Overall, poultry farmers for both layers and broilers lacked a market for their produce. As a result, they reduced production in response to the shrunk market,” he said.
Effects on Agri-SMEs
According to Covid-19 Impacts on Agri-SMEs in Rwanda & Policy Response to Covid-19 Challenges, a report published in August 2021 by the Rwanda Private Sector Federation through its Chamber of Agriculture and Livestock six companies (about 4.3 percent of the 141 sampled Agri-SMEs) had closed their businesses due to Covid-19.
Main documented reasons reported for this closure comprise inadequate working capital (60 percent), lack of market for their products (60 percent), limited access to finance (40 percent), and low profit compared to the situation before Covid-19 (60 percent) accompanied by post-harvest losses particularly in horticultural crops, tubers and livestock products.
Also, the report showed that the Covid-19 negatively affected revenues of Agri-SMEs. Overall, 87.9 percent of the sampled Agri-SMEs registered a decline in their revenues due to the Covid-19 outbreak in the country.
In order to address both recovery and post Covid-19 long-term development of the agriculture sector, it proposed among other solutions, the establishment of an Agri-SMEs revolving fund where Agri-SMEs are supposed to play an active role in addition to the support from the government and development partners.