Rwandan farmers are not benefiting from regional rules of origin because of high costs of production and low agricultural productivity, according to agricultural sector players.
The regional rules of origin prioritise agricultural commodities wholly produced within the region mainly by removing import taxes.
The issue was highlighted during the Grain Sector Consultative Workshop on the Rules of Origin in the proposed Tripartite Free Trade Area (TFTA) held on Friday in Kigali. It was organised by the Eastern Africa Grain Council (EAGC).
The main purpose of the workshop was to convene grain sector stakeholders in Rwanda to review the existing COMESA, EAC and SADC Rules of Origin for grain-related products and develop a National Grain Sector Position on the harmonisation of the Rules of Origin for the proposed TFTA.
In June 2015, Heads of State and Government from EAC, SADC and COMESA Member States signed an agreement to establish the Tripartite Free Trade Area (TFTA).
But, actors in cereal and grain trade have said that for this policy to be effective, it should go hand-in-hand with stimulating local production capacity in crops including grains and cereals.
For instance, people engaged in cereal and grain value chain raised concerns that Rwandan farmers have not yet been able to supply the large market offered by the Africa Improved Foods (AIF) which has started producing fortified food in Rwanda.
Figures from AIF show that its factory needs 28,000 tonnes of maize and 11,000 tonnes of soya per year to produce 45,000 tonnes of fortified food annually.
However, the firm said in December 2016 that it was getting less than 10 per cent of the needed soya and maize produce locally.
Faustin Niyibizi, advisor and member of the board of directors for KOTUKA, a cooperative of maize, beans and soya farmers in Nyagatare District said that, on average, their cooperative produces about five tonnes of maize per hectare and that it targets to produce at least seven tonnes.
The cooperative counts 1,450 members and grows the crops on about 1,300 hectares.
There is high cost of production per a unit of arable land for Rwandan farmers which he said results in some of the agro-processing industries importing cereals such as maize into the country.
“If agro-processors tell us, as farmers, what they want and we have a contract that benefit all of us, we can produce the food items they want,” he said expressing that farmers are not being empowered enough to meet agro-processing industry requirements.
Christine Murebwayire, the Chairperson of the Chamber of Rwanda Farmers at the Private Sector Federation, told Sunday Times recently that farmers are not given incentives to produce needed quality and quantity as they are not accessing required finances and agricultural inputs.
“Agro-processing factories are requesting farmers to give them sustainable supply of commodities but they are not considering incentives to farmers to meet their requirements,” she said expressing that it was one of the reasons for cuts in the supply chain because farmers don’t have the requisite irrigation technologies to get enough produce during drought.
Given that some cereals and grains are not available in the East African Community or the COMESA and SADAC region, the rules of origin state that imports of such commodities from countries outside the region is allowed but restricted to just 30 percent of the product.
Jean Bosco Safari, a member of EAGC Country Programme Committee said that what should be done is to open up the commodity market and help local farmers ensure sustainable agricultural produce in both quality and quantity.
For Bienvenu Alexis Gahenda, the Managing Director of Win Win Deals Ltd, a company that trades in maize, beans and sorghum and plans to also venture into soya, farmers should engage in commercial farming and do it professionally so that they can produce more at farm level and reduce the cost of production.
The intended benefits of the TFTA include boosting regional trade through lower transaction costs, promoting economic growth and improving food security, among others.
Daniel Mirimo, a Crop Export Specialist at the Ministry of Agriculture and Animal Resources (MINAGRI), said the government has been subsidizing seeds and fertilisers so that farmers get them at affordable prices and get improved yields.
He noted that contract farming has been working well on some crops such as tea and coffee, as industrialists in those sub-sectors have an agreement to work with farmers to get needed produce, urging industrialists in other crops to follow suit.
According to a statement from EAGC, TFTA now stands as the largest Free Trade Area in Africa and stretches the entire length of the continent from South Africa to Egypt.
It represents more than 626 million people in 26 countries, making it bigger than both the European Union and the North American Free Trade Agreement. Its combined GDP is over USD 1.6 trillion, over half of the economic output of the entire continent.