Rice farmers in the country hope to return to profitability after a reduction in land levies, which had seen local produce fail to attract buyers due to cheaper rice imports.
The land levies, which varied between Rwf60,000 to Rwf120,000 per hectare per annum depending on the district were reduced to only Rwf4,000 per hectare per annum this year.
The administrative fee that each farmer is charged also reduced from Rwf10 per kilo of rice to Rwf8.
Rice in the country is largely cultivated on state-owned swamp land and farmers say the huge levies and high input costs distort the produce market resulting in losses.
As a result, farm gate rice prices reduced for the first time from between Rwf270 to Rwf290 a kilogramme last year to between Rwf250 and Rwf270 a kilo of short grain and long grain respectively this season.
The new tariffs, which are expected to see local rice compete with imports, were recently agreed on by the Ministry of Trade and Industry after extensive consultations with farmers’ co-operatives and millers.
“While we are yet to see a difference in the market, this is a good development because now millers know they are able to sell the produce and farmers will not have to wait a long time to get paid in cash,” said Appollinaire Gahiza, head of the Rwanda federation of rice farmers.
For the past three seasons, the high cost of production made it impossible for local rice to get buyers and resulted in losses for local rice millers in parts of the country due to pressure from cheaper imported rice in the market.
Farmers had complained to the government that without a quick intervention, they would stop commercial rice farming as most of them were struggling to repay their loans and meet basic needs.
Peter Uwamahoro, who runs a rice mill, told Rwanda Today that the final prices for local rice could reduce by between Rwf20 to Rwf40 a kilo to sell at between Rwf540 to Rwf560 a kilo for short grain rice, and between Rwf590 to Rwf600 a kilo for long grain rice.
“This doesn’t put us yet where we want in terms of competing with imports from Pakistan and Tanzania.
But it won’t be like last year when we had to sell at a loss of more than Rwf60 a kilo due to competition,” he said.
Rice farmers are not the only ones who have been incurring losses, which saw the Ministry of Trade set a minimum farm gate price for other “sensitive” agriculture commodities such as maize, milk and Irish potatoes.