Rwanda: Good Tidings From Agriculture Sector

There was some good news from Parliament last week. On Thursday, Prime Minister Damien Habumuremyi presented the state of the agricultural sector before deputies and Senators. This is a sector that employs over 80 per cent of the populations.

Overall there was a marked increase in crop and animal production stemming off food scarcity recently witnessed in some countries in the region. Land consolidation, hillside and marshland irrigation and the use of fertilizers were cited as some of the key drivers that were behind the increase in agriculture production.

Consolidated land increased from 250ha in 2010 to the present 624ha while 54 per cent of the farmers currently use fertilizers.

Production of some crops like maize and Irish-potatoes has since doubled; Irish potato production increased from 8 tonnes per hectare in 2007 to 16 tonnes per hectare today. There was good progress in the livestock sector with increased milk production largely boosted by the One Cow per Family Programme.

The use of marsh land for crop production has also been a big boost to the sector. Maize production is expected to hit its peak, especially in the Eastern Province where marsh land was optimally utilised.

These are enviable developments in a sector that has largely attracted little investment from the private sector and the glaring reluctance by banks to finance agricultural projects that are considered risky undertakings.

Sustaining this growth calls for sustained efforts in designing policies that will entice more investments, especially from the private sector.

These should be policies that should ensure that agriculture sector is run as a viable business and not only for subsistence production.

Policy makers will have to play a key role for this to be achieved. Recently Mt Meru, an oil company, inaugurated an edible oil refining plant in the Eastern Province district of Kayonza. This is one of the biggest investments to be recorded in agriculture by the private sector.

Swayed by the friendly investment climate in the country and soils that are condusive for oil seed production, company owners are optimistic but say more needs to be done.

For the plant to operate at its maximum capacity, they say, it will require sustained supply of oil seed. They say the plant has the potential to benefit thousands of farmers if only the right policies are put in place.

In Tanzania where the company runs a similar business, the country's parliament has put in place policies that have helped boost production of oil seeds and incomes for small scale farmers.

In the 2011-2012 budgets, the Tanzanian government decided to levy zero rate VAT on edible oil made using local oil seeds. This means that the local manufacturer has a price advantage of 18 per cent over imported palm oil and can therefore, give a better price to local farmers who, in return enhance production of seeds.

This move led to a doubling of production in just one year. This consequently resulted in better monetary returns for thousands of farmers and a boost to the local oil industry.

Such sector friendly policies, in addition to other programmes like irrigation, agricultural mechanization, post-harvest management, strengthening cooperatives, crop intensification, value addition and financing, will no doubt boost the sector that is vital to the national economy.

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