Although the agricultural sector has improved a lot in various areas such as erosion control measures and availability of inputs, it still lags behind in the fourth Strategic plan for agricultural transformation (PSTA4) targets.
This is one of the conclusions of a report by the Ministry of Finance and Economic Planning.
The report titled Sector Review for the Second Quarter of Fiscal Year 2020/2021 (Agriculture and Education Sector Focus) which was released in March 2021, said that these unmet targets include the performance of main crops per hectare, including maize, beans, [Irish] potatoes, wheat and soybeans, which are still weak.
The six-year strategic plan runs from 2018 to 2024, but its objectives are phased to facilitate their implementation and monitoring.
For example, in 2019/2020, the average maize yield per hectare was 1.6 tonnes, 0.6 tonnes for beans, 8.3 tonnes for [Irish] potatoes, 1.0 tonne for wheat and 0.5 tonne for soybeans.
This performance is below the target which was 2.1 tonnes per hectare for maize, 1.5 tonnes for beans, 10.6 tonnes of Irish potatoes, 1.17 tonnes for wheat and 0, 73 tonnes per hectare for soybeans in the same fiscal year.
the the implementation of PSTA4 would cost Rw2.7 trillion over the six-year period, according to the Ministry of Agriculture and Animal Resources (MINAGRI).
These data imply that the strategic plan requires Rwf 450 billion of agricultural investments per year. But this funding is far from being achieved.
The plan was initiated to increase agricultural growth from an average of 6 percent in the previous plan to 10 percent and halve poverty among Rwandans of 38.2% in 2016/2017 to 15% by 2023, according to MINAGRI estimates.
Still speaking of crop production, the production of green coffee (unroasted coffee) amounted to 22,385 tonnes in 2018/2019, which fell to 20,495 tonnes in 2019/2020, against the target of 27,000 tonnes this year. there, says the report.
In addition, the agricultural sector is still lagging behind in the strategic reserves to be stored at the district level where it is respectively 32,707 tonnes (maize) and 29,319.5 tonnes (beans) against 128,723 tonnes (maize) and 63 838 tonnes (beans).
Regarding irrigation, 63,742 hectares of agricultural land were developed for irrigation in 2019/2020 against the target of 68,684 hectares. The government objectives to increase irrigated agricultural land to 77,084 hectares in fiscal year 2020/2021 which will end on June 30; and 102,000 hectares by 2024.
This requires huge investments as the average agricultural area developed for irrigation has so far been around 5,000 hectares per year.
Talk to New timesMP Theogene Munyangeyo said that there is a kind of paradox according to which most Rwandans are engaged or live from agriculture, while the sector receives a modest share of loans granted by financial institutions.
This status quo, he said, would have to change for agriculture to receive a fair share of government funding.
He said priority should be given to increasing irrigation capacity to reduce reliance on rain-fed agriculture or to get rid of being at the mercy of the effects of climate change on agriculture.
Need for increased and adapted financing for agriculture
According to the report, agriculture accounted for 5.88% of total loans from financial institutions in 2018/2019, which fell to 5.27% in 2019/2020 from the target of 7%.
Most importantly, Munyangeyo said there was a need to develop a financing system adapted to agricultural growth, indicating that agriculture supports industrialization and the growth of the service sector.
He said financing for agriculture is even below the Comprehensive Africa Agriculture Development Program (CAADP) recommendation that each African country should allocate at least 10 percent of public spending to the agricultural sector.
Agriculture received Rwf 120 billion over Rwanda’s budget is over Rwf 3,464 billion in 2020/2021, representing less than 5 percent of the total public financial plan.
“Either way, we need a major fund that provides loans to finance agricultural and livestock projects at a low interest rate of no more than 4%,” he said.
He said low-interest loans would boost private investment in the agricultural sector, citing irrigation which requires long-term businesses.
François Nsengiyumva, president of the Rwandan Chamber of Agriculture and Livestock of the Private Sector Federation, told the New Times that various reasons make the agricultural targets set under PSTA4 inaccessible.
He said there was a need to increase private sector funding.
Since 2003, he said, farmers have been calling for the establishment of a agricultural bank.
Meanwhile, he said, with the increase in population, increasing food production is essential.
“If the current situation persists, we could end up importing most of the foodstuffs needed into the country,” he said.
He said the private sector needed a fund to invest in agriculture at low interest rates and to boost farm-level food production and agribusiness, among others.
“It is the agro-industry that stimulates agricultural production because it guarantees farmers a ready market for their products,” he said.