By Gordon Conway
Visiting farms in Rwanda is an exercise in mountaineering, scrambling sometimes on all fours over great volcanic boulders. But the effort is worth it. As we saw on our visit there in February, farmers in Rwanda are beginning to do well.
The statistics tell a good story. GDP has rebounded with an average annual growth of 7-8% since 2000 and average annual agricultural growth rates reached 5.7% between 2001 and 2012. And you can see the effects on the ground, partly the consequences of a good partnership between NGOs, the private sector and the government. The new minister of agriculture Dr Gerardine Mukeshimana, who gained her PhD in bean genetics from Michigan State University is a good example of President Kagame’s policy of appointing technically qualified ministers. She works on developing new policies while one of her predecessors Dr Daphrose Gahakwa is DDG of the Rwanda Agricultural Board that oversees research, extension and other implementing agencies.
Farm plots across the country have an average size of 0.6 hectares and tend to be fragmented over several locations. As a result, many households actually farm as little as 0.4 hectares. Farmers use the flat land to grow crops to sell at local markets, and the steeper, more difficult to farm slopes for growing food for household consumption. An increasing population density is putting additional pressure on the scarce land, encouraging people to move on to ever steeper slopes. The mountainous landscape presents significant challenges to farmers. Farming is not only physically more demanding and tiring but the shallow soils found on steep slopes are also prone to erosion and landslides.
Despite these challenges, smallholder farmers in Rwanda are fortunate to have two growing seasons. Season A usually runs from September through to January, while season B lasts from February to June. In some areas there is also a third, shorter season, between June and September. Being able to grow at least two crops over two seasons allows smallholder farmers to survive on small plots of land and to even make a surplus to sell at the markets, allowing them to send their children to school or rent additional plots of land. The two growing seasons give smallholder farmers in Rwanda the opportunity to produce for diverse markets and hence take better advantage of the new opportunities that arise from being more integrated into emerging agribusiness value chains.
We visited farmers benefiting from One Acre Fund (OAF). OAF works with over 125,000 smallholder farmers with average farm sizes of less than one hectare of land. OAF provides farmers with a package of goods and services on credit, including financing for farm inputs, distribution of seed and fertiliser, training on agricultural techniques, market facilitation to maximise profits from harvest sales, and crop insurance. The bundle costs about US$80 per farmer and farmers are responsible for paying it back during the course of the agricultural season. In 2015, Rwandan farmers who benefitted from OAF’s model saw an average gain of 53% of their total income. Access to modern maize varieties and fertilisers, appropriate for local soil needs, increases yields to 4-6 tonnes per hectare during season A. This allows farmers to increase productivity beyond the subsistence level, using other land to cultivate crops such as cassava and bananas for sale at the local market. From these sales, farmers can pay back their loans – OAF financing has a repayment rate of 98% – and cover other costs such as education and health care. By creating access to credit, quality farms inputs, markets and information on effective and sustainable farming techniques, OAF has removed some of the major barriers to well-functioning value chains for smallholders.
Rwanda, in line with trends for the entire continent, has a rapidly growing young population, with a current average age of just 18 years. Many of those young people live on US$2 or less a day, and youth unemployment figures remain high, putting pressure on the government to find suitable employment for young people in both urban and in rural areas. Young people often see agriculture as an outdated, unprofitable, and labour intensive sector, but this is not always the case. It can be a dynamic sector with a myriad of opportunities for entrepreneurship.
TechnoServe’s ‘Strengthening Rural Youth Development through Enterprise’ (STRYDE) programme shows what can be done. Between 2011 and 2014 the programme helped over 3,500 young people in rural areas in Rwanda get their business ideas off the ground and become successful entrepreneurs. It provides a 3-month intensive training programme covering business management skills, financial literacy, personal development and confidence building exercises. Upon completion of the training, TechnoServe supports the STRYDE graduates to develop sound business plans and facilitates access to loans. This method is successful in empowering young people to make their businesses work and achieve their ambitions. Jackson Fatirakumutima and Schadrack Habumuremyi, both in their mid-twenties, are just two of many young farmers who went through the STRYDE training and now run small (but growing) successful businesses in the northern district of Musanze.
In some cases, STRYDE helps to form cooperatives of young people. The ‘Association pour la vision des Élèves de Nyonirima’ (AVEN), is a group of twelve young people who decided to form a cooperative following their STRYDE training. AVEN’s main business is in producing improved potato seeds in partnership with Musanze Catholic University, which provides them with quality seeds and access to their greenhouses. AVEN received an initial loan of US$2000 to start their potato business. With their profits, the group now aims to acquire more land, increase their harvest to up 45 tonnes per season and acquire a warehouse in order to store their crops before they sell them at local markets. Each member also runs a small business on the side, ranging from growing and selling garlic and tree tomatoes, owning a bar, providing mobile banking services, running a rabbit-rearing business to selling the services of their bull for cattle insemination.
We came away with many other good impressions. There are grounds for optimism for Rwanda’s food sector value chains. Strong and well-functioning agribusiness value chains are providing opportunities for entrepreneurship and employment particularly for smallholder farmers and young people in rural areas. The agriculture sector is ripe with opportunities that need to be harnessed to improve livelihoods, strengthen rural economies and to allow smallholder farmers to diversify to other crops or livestock and to off-farm activities to improve their incomes and increase their resilience to socio-economic shocks and climatic stresses.
Rwanda’s combination of government, NGOs and the private sector is making valuable contributions, often in partnership, that allow the rising number of young people to get their ideas and dreams off the ground. The work by One Acre Fund and TechnoServe highlights interventions at different stages of the agricultural value chain that are impactful, scalable and can offer lessons for other countries.
Follow the link to download the new A4I briefing paper, Off The Ground: Investing in Rwanda’s Agriculture Value Chains