High food prices due to regional markets

While over the past years food production has steadily increased, this has so far had little impact on prices, which remain relatively high.

Trade and Industry Minister Francois Kanimba: the market determines the prices. (photo Eric Didier Karinganire)

Trade and Industry Minister Francois Kanimba: the market determines the prices. (photo Eric Didier Karinganire)

Yields of beans for instance increased 37% in 2012 season A compared to the same season last year, while it was 19% for maize. And earlier this year, the ministry of agriculture and animal resources announced an expected annual surplus of 300,000 tons of maize and 200,000 tons of beans.

While such an increase in supply would normally result in lower prices, the situation on the market is that food stuff is not only quite expensive, but prices are often increasing. Trade and Industry Minister Francois Kanimba, this is due to the instability of the regional market as a result of drought that has stricken many areas. Kenya has been worst hit by unusual weather patterns, with several regions in the country facing food shortages.

As a result, part of the Rwandan harvest has been exported, mainly to EAC countries given that most commodities cross borders taxes free in the bloc.

According to Kanimba, there is little the government can do about this. “We do not set the prices, they are determined by the market,” the Minister explained. “What we can do is to put in place favorable policies to further increase production.”

He also pointed out that nevertheless, prices on the Rwandan market are rather stable compared to the rest of the region.

On of the main measures to boost agricultural production is to fully exploit all arable land, Kanimba remarked. Large marshlands like Akanyaru and Nyabarongo therefore will be prepared for farming activities.

Use of improved seeds and fertilizers will also help in ensuring food security. “Better use of fertilizers, for instance, has doubled maize yields per hectare,” Kanimba pointed out, yet he added that there is still much room for improvement – today, only 30 kg of fertilizers are used per hectare, while developed countries use between 100 and 150 kg per hectare.

For this reason, the Minister pointed out, the government is subsidizing fertilizers at the rate of 50%, while farmers can pay the remaining half in installments.

 

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