For Sam Rubagumya of Nyagatare district, there is no doubt agriculture is a viable and profit-making sector. “Even farming can be a very lucrative occupation once it is practiced professionally,” he says.
And he knows what he is talking about, with 27 years of experience in modern farming using best practices from plowing over weeding to post harvest handling. And accounting. “It also requires counting – the same way people do when they go shopping – to know exactly your expenses and expected production,” says the 55-year-old.
Rubagumya exploits 50 ha in Nyagatare where he grows maize, and confirms that he can earn up to Frw 1.4 million per hectare. He is part of a group of farmers who consolidated their land in Muvumba marshland; the ministry of agriculture has already provided free hillside irrigation and mechanization infrastructure on a total land of more than 400 ha cultivated by more than 500 families. They also received improved crops and fertilizers, all of it at a total investment of Frw 5 billion.
A farmer in the area can now get between 4 and 7 tons of maize per hectare from 1.5 tons before, according to Jules Mporana, the coordinator of Government Funded Irrigation (GFI) in Nyagatare, the project that is monitoring all activities. The industry has really potential to transform life of the farmer, but also generates jobs for people in the area.
“We are doing so not only with the purpose to ensure food security, but also to make it a vibrant commercial activity,” Mporana points out.
The same project is being tested in Kirehe. In addition, countrywide investments in crop intensification, use of fertilizers, terraces, land use consolidation, mechanization and irrigation among others have been promoted by Minagri to boost production. As a result, the ministry is predicting to get around 630,000 tons of maize and 560,000 tons of beans for this season only. Officials of the ministry last year announced a surplus of 300,000 tons of maize and 200,000 tons of beans.
Public investment in agriculture now stands at 13% of the national budget, though the wish is to reduce it to 10% as part of its workforce goes to the services sector. Currently, agriculture still employs 80% of the working population. The farming sector accounts for 30% of the GDP, and constitutes the main economic activity for the rural households. It also remains their main source of income.
Transforming the sector into commercial farming with agro-processing and the resulting import substitution and export of surplus is key to efficient usage of Rwanda’s scarce land and critical to achieving Vision 2020 and the EDPRS, which among others target to increase the number of off-farm jobs.
That of course can’t happen all of a sudden, but requires considerable investments in agro-processing so that even smallholder farmers can add value to their production. Though different initiatives undertaken over the last few years have boosted harvests, there is still a long way to go when it comes to agro-processing. Indeed, many farmers still don’t see for instance that instead of selling their bananas raw or use them to brew traditional beer, using them to make cakes would significantly increase their profit margin.
Rubagumya and his colleagues in Nyagatare however have seen the light. He has been making flour and animal feed since 2002. “It was to maximize profits but without having to make huge investments in machines,” he explains, adding that he earns 30% to 40% more from his processed produce.
Minister of Agriculture Agnes Kalibata agrees that agro-processing is still embryonic. She points out that over the last five years the focus has not only been on safeguarding food security, but also to allow those who can venture in agro-processing to get enough raw materials.
“In the next five years, we want to concentrate on agro-processing,” she says, adding that already there are entrepreneurs who process soya, maize and cassava. “People are really willing to invest in it.”
However, for this to become a success other investments will also be required. Simon Pierre Munganyinka, an accountant at Bugesera Rice Mill, says that the company still has to import simple packaging envelopes from Uganda and Kenya. Minagri recognizes the problem, but ensures that they are collaborating with investors to remedy it.
“It’s a challenge for us, but also opportunity for the private sector,” Kalibata points out, adding that they hope to get an investor by the end of this year.
All these efforts in agriculture, the Minister notes, will contribute to achieving Rwanda’s target of becoming a middle-income country by 2020. “This is the same process Asian middle income and developed countries went through,” Kalibata said. “There is no doubt that we are heading where we should go. What remains is to step up the effort.”