Rwanda shares secrets to agricultural success
JAMAICA HAS long been interested in the growth of its agricultural sector, with Prime Minister Andrew Holness even recently stressing the need for the mobilisation of capital to address local food security concerns. Recently, Chief Executive Officer of the Rwanda Development Board (RDB), Clare Akamanzi, shared some of the strategies his country implemented to become an exporter of agricultural produce throughout Africa.
During an interview with The Gleaner, Akamanzi stated, “We were able to achieve food security by providing training services to farmers about best practices … . We used our local government structures, and also our agriculture extension services, to ensure that we are able to get the best possible productivity from farmers.”
Agriculture is one of the sectors responsible for Rwanda’s economic success as the country’s gross domestic product grew from $6.12 billion in 2010 to $10.83 billion in 2020. During his state visit to Jamaica, Rwandan President Paul Kagame outlined that Rwanda’s commitment to efficiency and productivity was the linchpin of his country’s success.
To achieve these objectives for the agricultural sector, Akamanzi explained that Rwanda introduced a crop intensification programme, which saw farmers consolidate their holdings to make larger farms in order to ensure optimal land usage. The country also researched what crops were likely to succeed in specific regions, given factors such as weather and soil type.
When asked about the challenges to achieving meaningful land reform locally, Jamaica Agricultural Society (JAS) President Lenworth Fulton shared, “Our land reform process here is woefully lacking, so there are properties which should not be split up, like Bernard Lodge, and turned into housing.”
In his view, this fragmented approach eroded the profitability of fertile farmlands.
Akamanzi expounded that another successful approach adopted by Rwanda included subsidizing the costs of inputs like seedlings and seeds. “We started supporting farmers by organising bulk purchasing of inputs like feeds, fertiliser, among others. So we can buy them from the world market in bulk, so we could make it easier for farmers to access that,” added Akamanzi.
Even though Jamaica currently buys fertiliser in bulk, the increasing costs of inputs triggered by supply disruptions have proven to be a challenge. Fulton recommends that Jamaica procure fertiliser with other CARICOM states as a bloc, as the region’s small size makes it an unattractive market for suppliers.
However, the most seminal reform that Rwanda has introduced is facilitating access to credit for farmers. Accessing credit has been a long-standing issue for Jamaican farmers, as many in the industry complain about the risk-averse nature of the banking system.
However, Septimus Blake, chief executive officer of National Commercial Bank, outlined some of the challenges with the agriculture sector.“You have praedial larceny, you have weather-related risks. Institutions have to find a way to mitigate against those risks, as, at the end of the day, when you lend out depositors’ money it needs to be repaid … . You find that agriculture, especially, because of some high levels of informality, will have a challenge accessing financing,” he said.
However, Rwanda was able to overcome these obstacles through the creation of agricultural co-operatives. Rwanda has over 2,400 co-operatives and nearly 300,000 members. Using their land and crops as collateral, farmers are able to negotiate with banks to access credit through the co-operative.
This programme has already yielded success, with Irish potato production increasing from 2,240,000 tonnes in 2013 to 6,000,000 tonnes in 2019.
Expounding on the reasons for the industry’s success, Akamanzi stated, “Irish potato farmers created what we call ‘bankable data’, where they put together their records, so how much do they harvest, how much do they sell … so they share this data and track record with banks. Based on that, banks were able to support them and provide them with access to credit.”
REDUCED REGISTRATION PERIOD
It is also easy for farmers to register their business as the RDB has reduced the registration period from 24 hours to just six hours, and the process is also free.
Fulton shared that having cooperatives borrow resources on their members behalf is a feasible strategy to improve access to credit and reduce costs to lease properties and provide tools.
“Our agriculture really developed through co-operatives, and the JAS was really the entity the co-ops all reported to. But over the years, the laws governing the co-operatives here have become archaic,” he said.
Some reforms to the Co-operative Societies Act that Fulton would like to implement is to reduce government control. Fulton shared that a part of the challenge with the Government is that it is quick to close co-operatives, and it only offers a plethora of ancient training techniques. In his view, the inability of companies to join co-operatives also hinders progress.
Akamanzi also revealed that in order to reduce the risk posed by adverse weather conditions, Rwanda launched the National Agriculture Insurance Scheme in April 2019. The arrangement is subsidised by the government, who pays 40 per cent of the insurance premium, while farmers pay the remaining 60 per cent.
Both Fulton and Blake concurred that the continued formalisation of the local agriculture sector and the provision of insurance were measures that could be useful in promoting the industry’s development. However, historically, there has been limited progress.