How Gicumbi farmers are reaping big from privatisation of tea factories
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when tea growers in Gicumbi District bought a big stake in Mulindi tea factory in 2012, they were uncertain about managing the business, but hopeful of the future. With 45 per cent of the tea processing plant under their name, the farmers set out to see how they could better benefit from the enterprise.
The strategies put in over five years ago have yielded enough fruit as they have been able to increase productivity and strengthen their bargaining power and, thus ensuring they get better prices.
The move has completely changed lives of tea growers in the district, according to Anastase Bihoyiki, a farmer. He added that before he bought a stake in the factory, he could hardly save Rwf50,000 a month.
“But now I’m able to save up to Rwf200,000 monthly, which has enabled me to build a decent house worth over Rwf3 million,” he says.
He says the price of tea has since doubled from Rwf100 to Rwf211 per kilogramme currently.
Bihoyiki was speaking during a farmers’ field day event last week, where Agriculture and Animal Resource Ministry and Wood Foundation Africa marked four years of partnership in tea farming.
Gicumbi tea farmers acquired shares in the factory under government’s the privatisation programme of tea factories, where the Wood Foundation and The Gatsby Foundation, through their regional philanthropic investment vehicle, East Africa Tea Investments (EATI) acquired majority stake 55 per cent and 60 per cent, respectively, in Mulindi and Shagasha tea factories.
During the event, tea growers commended government efforts in streamlining tea industry, saying it has enabled them to improve their lives significantly.
Speaking during the function, Dr Geraldine Mukeshimana, the Minister for Agriculture and Animal Resource, challenged the farmers to increase further the factories production capacity, observe proper leaf handling practices and ensure quality to remain competitive.
“The government is committed to supporting you to improve green leaf process as well as your household income and livelihoods. However, you must be more innovative and creative to spur growth of the enterprise,” said Dr Mukeshimana.
The processing capacity of the factory has increased from 3,500 tonnes four years ago to 5,300 tonnes presently, according to the ministry. Farm productivity has risen by 30-40 per cent per hectare, all of which are attributed to good management practices by tea farmers and factory officials.
Sir Ian Wood, the Wood Foundation founder, said their goal is “not to make money, but to enable tea farmers improve their skills and the plant’s production capacity so as to earn more from the venture”.
He added: “We decided to invest in Rwanda’s tea sector, not only because the country produces one of the best tea brands in Africa, but also due to the strong commitment by the government to support smallholder farmers.”
The foundation is working with more than 17,000 tea farmers in Gicumbi and Rusizi districts.
Rwanda produced 105.16 million kilogrammes of green leaf from January to November 2017 and realised over $78.14 million (about Rwf67.3 billion) revenues from more than 24.3 million kilogrammes of tea exported over the reporting period.