Kigali:Rwanda is planning to invest at least $75 million beginning next year in its horticulture sector.
The move is expected to reduce its current dependence on traditional exports of coffee, tea, minerals and tourism that currently account for about 60 per cent of total export revenue but are vulnerable to price volatility. Under the six-year action plan for the sector, the government plans to construct a modern packhouse with a capacity of 20,000 tonnes per day in Kigali at a cost of $500,000.
It also plans to construct 30 collection centres at a cost of $1 million, and purchase post harvest equipment, a move that is expected to reduce post harvest losses from 40 per cent to about 10 per cent and improve the quality of export produce.
“Currently we have inadequate post-harvest infrastructure and facilities. Some exporters are using their sitting rooms for storage and to pack their products,” National Agriculture Export Development Board international market officer Jean Marie Munyaneza said.
The government plans to help farmers get farm inputs, increase the area under cultivation and increase horticultural production. Emphasis will be put on increasing output of flowers, pyrethrum, macadamia and essential oil plantations. “The volumes are still too low to make it attractive for private investors. We would like to increase production and add value to the products such that at a later stage we can have a partnership (with an investor),” he said.
Current production levels are low due to many farmers growing horticulture products as an additional crop, rather than dedicating land to a single crop.
High incidence of diseases and pests, lack of production skills and collection centres, and training in post-harvest handling constrain production growth. While horticulture exports fetch about $3 million a year, the sector has the potential to generate more than $9 million by 2015 through value addition and diversification.
“Exporters need incentives because they are competing for the same market with countries like Kenya, which have a developed sector,” Mr Munyaneza said.
He added that airfreight costs from Kigali to international markets are high.
“Incentives such as income tax exemption, supporting exporters to penetrate new markets and setting up a horticulture investment fund are needed to promote the sector,”
Financial institutions, Mr Munyaneza said, see horticultural finance as an unattractive venture because of the high risk and seasonality of the products.
Further, there are many small value-added producers in the country who are unable to export due to difficulties in financing, lack of input skills and usage, and a lack of market information.
“We have started on the process of international certification by Global G.A. P (a key reference for Good Agricultural Practice (G.A.P.) in the global market)with 29 co-operatives (involved in horticulture) but our target is to have at least 50 co-operatives certified by 2017 to help our exporters to penetrate international markets,” he said.
Through an array of interventions including agricultural extension agents, land consolidation and tax incentives for value addition, Mr Munyaneza said this will encourage the long-term success of this sector.
Rwanda needs to diversify its export base to cut back its rising trade deficit. The country’s trade deficit increased in the first half of this year to $587 million compared with $543.7 million in June last year.
This year the country is projecting more than $300 million in export revenue, up from $ approximately $297 million collected last year. Alphonse Rudasingwa, the President of Agritech Cooperatives that brings together 850 farmers underscored the need to increase vigilance on the quality of seeds imported into the country for cultivation which leads to low yields.
“Most of the seeds we are using are not clean and without clean and good quality seeds you can harvest nothing. For instance this season we were expecting to harvest about 300 tonnes but we only got 30 tonnes.” he said.
Mr Rudasingwa also noted that the high cost of transport and limited market information as a major barrier to access export markets.
Source: The EastAfrican