Thousands of small- scale farmers are victims of fraud fueled by agro-dealers who collude with some government officials to land lucrative contracts to supply farm inputs, Rwanda Today has learnt.
For instance, fertilisers bought using taxpayers money are channeled to commercial firms which end up increasing the cost. Some of the fertilisers are also sold to neighbouring countries.
This pushes many small-scale farmers out of business while others have to borrow expensive loans to survive.
Rwanda Today learnt that government spent monies purchasing tonnes of fertiliser for distribution to individual farmers across the country at a subsidised rate of up to 60 per cent, that ended up in the local commercial chain, or were exported at expense of intended beneficiaries.
Sources who spoke to Rwanda Today on condition of anonymity to speak freely, say bulk of the fertiliser intended for subsidised distribution found its way into commercial supply chains, with dealers exploiting frequent supply bottlenecks to sell the volumes to farmers at higher prices, or found a way of exporting to the neighbouring countries’ markets where they fetched higher margins.
“With a subsidy of almost a half the cost, agro-dealers in neighbouring countries found it relatively cheaper and easier to get fertiliser from Rwanda compared with all other markets,” a source familiar with goings on in the input distribution chain told Rwanda Today on condition of anonymity.
“This went on till around 2016. There was no mechanism to check such malpractices because representatives of farmers’ groups hoarded the supplies, that’s how manipulation of lists of beneficiaries came in.”
Evidence of subsidised farm inputs being sold out of the country were documented in a 2013 Rwanda Cross-Border Agricultural Trade Analysis by USAID under its project dubbed Enabling Agricultural Trade (EAT).
At the time, Rwanda imported 30,000 metric tonnes of fertiliser consisting of 8,000 tonnes of urea, 10,000 tonnes of DAP, and 12,000 tonnes of NPK.
2,000 metric tonnes exported
USaid did not determine the overall extent of the trade out of Rwanda in terms of quantities sold and how long it lasted, but it found that substantial volumes were sold largely in Burundi where 2,000 metric tonnes were exported over a three-month period.
There was evidence that traders from Rwanda moved fertilizer by boat along the Kagera River for sale directly to growers in the neighboring country.
A separate assessment undertaken in 2014 in support of the African Fertiliser and Agribusiness Partnership also found the input subsidy leak across the borders to the neighbouring countries.
Francois Hakuzimana, a representative of farmers in Western Province who blames this to weak control mechanisms, said these issues always came to haunt local farmers in form of inadequate volumes of subsidized inputs locally while even commercial prices remained unaffordable to smallholder farm owners who are the majority the subsidy scheme is meant to serve.
Farmers like Hakuzimana say things changed from 2014 when both importation and distribution of subsidized fertiliser was fully privatized.
The on-going court case in which some members of the private sector are accused of embezzling agro inputs under a scheme subsidised by the government has laid bare rampant malpractices that have weighed down farmers for several years undermining the performance of the agricultural sector despite continued heavy investment from the government.
Details of the case in which a dozen of contractors in the distribution of fertiliser to farmers are implicated indicate there was a manipulation of lists of beneficiaries, that took place over several agriculture seasons between 2009-2013, costing the taxpayer over Rwf9 billion.
The prosecution accuses contractors of manipulating lists of beneficiaries, and failing to remit in State coffers payments collected from the farmers.
As per the contract, the government paid importers on evidence that farmers had bought their fertilizers at the pre-set subsidized price.
However, some of the major distribution firms have denied the prosecutor’s charges of forgery, tampering with exhibits and breach of trust in the ongoing case.
Some of the companies link the cited losses to accumulated credit arrears by farmers who defaulted on payments of their share either due to bad weather, as well as instances of local officials’ failure to expedite recovery of unpaid bills.