Maize farmers expressed excitement over new farmgate prices, saying they stand to get profits from their investments upon sales amid increased cost of production.
According to a communique issued by the Ministry of Trade and Industry (MINICOM), on January 19, a kilogramme of maize grain (threshed) must be bought at a minimum Rwf400 from a farmer, while that of maize grains still on cobs must be at least Rwf311.
The new prices apply for maize produce for season A of the 2024 farming year – which runs from September 2023 through February 2024.
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They are higher than Rwf323 a kilo for threshed grains, and Rwf309 for maize cobs in the farming season A of 2023 – with which the new prices are being compared, the Director of Domestic Trade at MINICOM, Cassien Karangwa, told The New Times, on Saturday, January 20.
As per MINICOM’s statement, the new prices were set based on resolutions of a meeting held on January 18. The meeting convened officials from MINICOM, the Ministry of Agriculture and Animal Resources, Rwanda Agriculture Board, farmers’ representatives, maize processing factories, and major maize buying firms.
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Speaking to The New Times, Evariste Tugirinshuti, the president of the National Federation of Maize Farmers’ Cooperatives, said the new prices are higher than the previous ones, and indicated that harvesting in the season under consideration is estimated to be at 20 per cent, with the peak is expected to be reached late January.
"The new price represents an increase of Rwf77 per kilo. The main factors that were considered are the investments made by a farmer, and the profit they can get from their produce,” he said.
It was realised that a farmer who uses adequate farm input invests Rwf353 to produce a kilo of maize, meaning that their profit margin is Rwf47 if a kilo is sold at Rwf400, Tugirinshuti pointed out.
"As farmers, we are happy with that [the new prices] because the ministry [MINICOM] took our proposals into consideration,” he said, calling for effective price enforcement and compliance so that a farmer does not incur losses.
Contributing factors for change in pricing
On factors that drove up minimum prices at which farmers’ maize produce must be bought, MINICOM’s Karangwa concurred with farmers that the latter incurred higher production costs. They include increased farming activities occasioned by a lengthy rainy season, such as weeding more times compared to the previous season, and fertiliser expenses.
Meanwhile, different from the past when the purchase of maize cobs would result in deducting 23 per cent of the quantity a farmer was selling to buyers, the new price prohibits such a practice.
Instead, MINICOM’s statement instructs buyers to pay a specific price that factors in the inedible part of a maize cob that should not be paid for.
Karangwa told The New Times that the decision was informed by farmers’ appeal.
According Tugirinshuti, if the inedible part of the maize cob was to be deducted from the quantity for sale, a kilo would be Rwf389 – instead of Rwf311.
Jean-Chrysostome Twiringiyimana, a farmer from Nyagatare District, told The New Times that major buyers such as Africa Improved Foods (AIF) like purchasing maize cobs as they have strict grain handling requirements, including moisture content drying.
"When maize cobs are bought at that price [Rwf311 a kilo] without deducting the inedible part, we will not incur losses,” he said.
According to the Seasonal Agricultural Survey 2023 annual report by the National Institute of Statistics of Rwanda (NISR), more than 508,000 tonnes of maize were produced in the 2023 farming year. This is almost 11 per cent higher than over 458,500 tonnes of maize produced in 2022, as per the 2022 survey by NISR.
Tugirinshuti said that there are signs that maize production in season A of 2024 will be higher than that of the same season in the previous year.