If we invest in improving agriculture value chains, we’ll help reduce poverty

Thursday January 17 2019


Local consumption of beef is expected to increase as well as export demand. PHOTO | CYRIL NDEGEYA 

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Demand, especially for edible livestock products in Rwanda , has increased as a result of growth in domestic consumption and exports.

This demand is predicted to more than double due to rising disposable incomes, a growing middle class and conference tourism as well as the anticipated new emerging markets, including China.

At the same time, dairy farmers are counting losses due to increased production as local consumption of milk has not significantly increased.

However, dairy farmers are also concerned about high costs of packaging that make their products un-competitive in the region. There is also concern about limited access to modern infrastructure for milk processing. As the export market demand increases, so will the need for higher standards for meat and dairy products.

If the government does not deliberately develop a value chain for the livestock industry, we risk losing this immense opportunity and with it a chance to improve lives of many ordinary Rwandans who are currently engagedin informal business.

This is because higher volumes in formal markets require a greater level of organisation of smallholders through groups, associations and cooperatives, and access to specific services in order to maintain quality, volume, and flow.

Therefore, absence of a well-developed value chain for livestock industry undermines the potential of smallholders who stand to benefit from the emerging new markets.

There is an urgent need to develop a proper value chain in response to a clearly identified market opportunities since they promise a positive return on investment.

Finding ways to link smallholder farmers to markets is generally considered a critical part of any long-term development strategy to reduce poverty and hunger.

With the right approach, meeting this growing demand can be a pathway out of poverty, especially for small-scale livestock keepers, provided they are organised and have access to the necessary inputs, services and finance.

Livestock keepers at the bottom of the pyramid, and even landless people, can also participate in value chains as service providers, feed suppliers or simply workers.

Moreover, a thriving livestock value chain supports others as it “pulls” demand from the small-scale crop producers who grow fodder crops or supply crop residues to livestock producers. In particular, the value chain should aim to improve the quality of livestock products to comply with buyers’ requirements.

There is also a need to invest in producing and improving new goods or services either upstream — for example, livestock keepers producing high-quality fodder for their animals or for sale — or downstream, say, farmers making yoghurt from milk.

It is important that the livestock sector is formalised to minimise chances of exploitation of the farmers by middlemen who often tend to exploit the farmers.

Agriculture, as the largest employer of many rural Rwandans, remains the best opportunity for thousands to escape poverty. Studies show that income growth generated by agriculture is up to four times more effective in reducing poverty than growth in other sectors.

For this reason, more needs to be done to improve productivity in the agriculture sector.