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Rwanda: Why Agriculture Lags Behind in Strategic Plan Targets

Although agriculture sector improved much in different areas such as erosion control measures and availability inputs, it is still lagging behind in Fourth Strategic Plan for the Transformation of Agriculture (PSTA4) targets.

This is one of the findings of a report by the Ministry of Finance and Economic Planning.

The report called Sector Review for Quarter Two FY2020/2021 (Agriculture & Education sector focus) which was published in March 2021, said that those unmet targets include yield of major crops per hectare, including maize, beans, [Irish] potatoes, wheat and soybeans, which are still low.

The six-year strategic plan runs from 2018 through 2024, but its targets are in phases to ease their implementation and monitoring.

For instance, in 2019/2020, the average yield of maize per hectare was 1.6 tonnes, 0.6 tonnes for beans, 8.3 tonnes for [Irish] potatoes, 1.0 tonnes for wheat, and 0.5 tonnes for Soybeans.

This performance is short of the target which was 2.1 tonnes per hectare for maize, 1.5 tonnes for beans, 10.6 tonnes Irish potatoes, 1.17 tonnes for wheat, and 0.73 tonnes per hectare for Soybeans in the same fiscal year.

The implementation of the PSTA4 would cost Rw2.7 trillion over the six-year period, according to the Ministry of Agriculture and Animal Resources (MINAGRI).

This data implies that the strategic plan requires Rwf450 billion in agricultural investments per year. But, this financing is far from being achieved.

The plan was primed to increase agricultural growth from an average of six percent in the previous plan to 10 percent and halve poverty among Rwandans from 38.2 per cent in 2016/2017 to 15 percent by 2023, according to estimates from MINAGRI.

Still talking about crop production, green coffee (unroasted coffee) produce stood at 22,385 tonnes in 2018/2019, which reduced to 20,495 tonnes in 2019/2020, against the target of 27,000 tonnes in that year, the report indicated.

Also, the agriculture sector is still lagging behind in strategic reserves to be stored at district level where it is at 32,707 tonnes (maize) and 29,319.5 tonnes (beans) against 128,723 tonnes (maize) and 63,838 tonnes (beans) respectively.

Regarding irrigation, 63,742 hectares of farmland were developed for irrigation in 2019/2020 against the target of 68,684 hectares. The Government targets to increase the farmland under irrigation to 77,084 hectares in 2020/2021 fiscal year which will come to an end on June 30; and 102,000 hectares by 2024.

This requires huge investment given that the average farm area developed for irrigation has been around 5,000 hectares per year so far.

Speaking to The New Times, MP Théogène Munyangeyo said that there is a sort of paradox whereby most Rwanda are engaged in or live by agriculture, yet, the sector receives a modest share of loans provided by financial institutions.

This status quo, he said, should change to make agriculture receive a fair share of government financing.

He said that priority should be put on increasing the capacity for irrigation to reduce reliance on rain-fed agriculture or to get rid of being at the mercy of climate change effects on farming.

Need for increased, suitable financing for agriculture

According to the report, agriculture accounted for 5.88 per cent of total loans from financial institutions in 2018/2019, which dropped to 5.27 per cent in 2019/2020 against the target of 7 per cent.

Most importantly, Munyangeyo said that there is a need for developing a financing system that is suitable for agriculture growth, indicating that agriculture supports industrialisation and service sector growth.

He indicated that financing to agriculture is even falling short of the Comprehensive Africa Agriculture Development Programme (CAADP) recommendation consisting that every African country should allocate at least 10 per cent of public expenditures to agriculture sector.

Agriculture received Rwf120 billion out of Rwanda’s more than Rwf3,464 billion budget in 2020/2021, representing less than 5 per cent of the total public financial plan.

“In any way, we need a major fund that provides loans to finance agriculture and livestock projects at low-interest rate of not more than 4%,” he said.

He said that low-interest loans will stimulate private investments in the agricultural sector, citing irrigation which requires long-term ventures.

François Nsengiyumva, Chairperson of Rwanda Chamber of Agriculture and Livestock at Private Sector Federation told The New Times that there are various reasons that make the set agriculture targets under PSTA4 unattainable.

He said that there is a need to increase private sector financing.

Since 2003, he said, farmers have been requesting for establishment of an agriculture bank.

Meanwhile, he said, with the rise in population, increasing food production is critical.

“If the current situation continues, we might end up importing most of the food needed in the country,” he said.

He said that the private sector needs a fund to invest in agriculture at low-interest rates and boost food production at farm level and agro-processing among others.

“It is agro-processing that boosts farm production because it ensures that farmers have a ready market for their produce,” he said.

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