In September last year, a young Rwandan chilli farmer, Dieudonne Twahirwa, landed a deal to supply Chinese firm GK International Enterprise chilli worth $500 million in a space of five years.
The deal brought a lot of excitement in the agricultural sector. Finally, a Rwandan farmer had succeeded where many had failed. More importantly, it gave farmers hope.
According to the contract, Twahirwa was to supply up to 10,000 metric tonnes of chilli annually. However, the reality is that Twahirwa is struggling to raise the required quantities.
The deal has exposed the critical gaps that have existed in the agricultural sector for years.
The first gap that the country’s agriculture sector has come to light is the lack of arable land to accelerate commercial agriculture.
An official from the National Agricultural Export Board indicated that it is impossible for Rwanda to generate 10,000 metric tonnes of chilli annually, unless farmers halt other crops and replace them with chilli.
Rwanda’s arable land is a meagre 1.5 million hectares. Of this, only 0.4 per cent of the country’s farmers use up to 5ha each for agriculture. A big chunk of this land is on highlands, while another part is occupied by wetlands and forests.
For Rwanda to make any headway in taking advantage of the opening markets for its agricultural products, it will have to expand its arable land and help farmers gain access to this land for large scale commercial farming.
The campaign started a decade ago to group farmers in co-operatives has generated some results in terms of food production, but this has largely satisfied the local markets.
As the government embarks on looking for external markets, it should do this in tandem with working at building capacity to produce the required quantities. There is also a disconnect in the local and regional upply chains of the different agricultural products.
For example, much as Rwandan chilli has been gaining momentum on international markets, there is still no established chilli supply chain.
Despite having a number of government and private entities charged with fast-tracking agricultural production at different levels, there is no streamlined channels through which these farmers who intend to break into international markets can be speedily supported.
Financing is a key ingredient in the success of commercial farming, especially for exporters. For Twahirwa to meet his 10,000 metric tonnes annual target, he needs an estimated $3 million in financing.
If the country is to achieve its agricultural export ambitions, there is a need for streamlined investments in commercial farming.
Banks, on their part, need to embrace the agricultural sector because with value addition there is real gold in the sector especially in export markets.