Inside Akens and Kernels Ltd warehouse in Kigali’s Special Economic Zone, in Gasabo District, one can see sack piles of chia seeds belonging to thousands of farmers, who supplied them to the firm months ago, but have not yet been paid. Yves Ndayisenga, Chief Finance Officer of Akenes and Kernels Ltd, told The New Times that the chia seeds in the warehouse are estimated at 1,800 tonnes, worth between $10 million and $12 million (between over Rwf10.6 billion and Rwf12.8 billion) in terms of export sales. The company, he said, has been working with people in two categories. The first consists of out-growers, who are farmers that own farms, to whom the company has been selling chia seeds [as farm input] and providing technical assistance, as well as buying their produce. The second is about stakeholders in the form of contract farming. These, he said, are the people who do not have time to go on farm to carry out agricultural practices, rather bring their money [to the company] so that it does all on their behalf – from tilling land to buying their produce. Under the stakeholders or contract farming, he said, there are about 1,800 people, while in the out-growers, there are about 6,600, bringing the total to about 8,400 people working with the company in its portfolio. Billions owed to farmers for unpaid produce Speaking to The New Times, Emmy Nsengiyumva, the president of the committee of chia seed farmers in Rwanda, said that the company owes farmers [including those within the country and from the diaspora] over Rwf21 billion for the produce they supplied to it, exposing that the issue of not paying them started mainly in February this year. He noted that they were able to collect at least 3,000 contracts that farmers signed with the firm, but that the number of farmers might be higher than that as a contract might belong to a cooperative with many members. For him, the delay in paying farmers has had a negative socio-economic impact. “On social aspect, you find that for instance, a person took a salary advance (loan) from a bank and invested it in chia seeds expecting to get profit, yet they do not have agreement with their spouse on that [repayment of the loan]. Many homes (marriages) are breaking up,” he said. “Some people are unable to pay the school fees for their children, and pay their medical bills,” he revealed, adding that their houses are threatened with auctions. However, Ndayisenga said that, overall, the company owes about Rwf15 billion in arrears to stakeholders and out-growers (farmers) for their produce. This amount includes an unsettled amount of Rwf900 million owed to out-growers for their Season A of 2022 produce, and Rwf14 billion the company has to pay to the stakeholders (for contract farming), he indicated. Still, he said that the company faces the issue of the season B produce – estimated at between 1,500 tonnes and 1,700 tonnes (worth between Rwf4.5 billion and Rwf5.1 billion), which is still among the residents [farmers], yet it has to buy it. Talking about solutions to the identified problems, he said that for season A payments, all the produce [some 386 tonnes] that was shipped to Gulf Cooperation Council (GCC) for sale, will help settle the outstanding amount (Rwf900 million) for farmers (out-growers). Chia seed market worth up to $24m So far, Ndayisenga said, the three Rwandans from the diaspora – including him – who founded the company, own 100 per cent of its shares. “But, we want to open them (shares),” he said, referring to it as another source of funding for the firm to be able to meet its financial obligations. He said that the stakeholders (people in contract farming), who are owed money, might turn part of that amount overdue into shareholding, pointing out that a group of diaspora stakeholders from Diaspora expressed interest in turning the money they are owed – estimated at Rwf2.3 billion – into shareholding in the company. On markets, he said that currently, the company has three chia seed markets including the GCC, Benelux (Belgium, the Netherlands, and Luxembourg), and Turkey. Those markets are estimated at between $20 million and $24 million per year – involving 2,480 tonnes of organic chia seeds, and 6,660 tonnes of conventional chia seeds, he indicated. He said that the money that could come from the three organic [chia seed] markets, will be used to help pay the amount (Rwf14 billion) owed to the stakeholders (contract farmers). Also, he said that the company seeks to get a loan to support it to pay the money in question. For Season B produce, he said that two firms expressed interest to make joint venture with the company (through money injection) so as to buy the produce from the farmers, indicating that these are namely the Royal Al Emarat General Trading LLC (from the UAE), and the Agro Processing Trust Corporation Ltd (APTC) – a Rwanda Defence Force affiliated firm. For APTC, he said that its investments could consist of buying shares in the company. “But, it (APTC) wants to buy shares in the company in two parts: One, they want to buy the produce from the residents [farmers], and two, make capital injection into the company so that it is able to breathe again, and for the business to have some stability,” he said. The New Times has learnt that APTC intends to partner with Akens and Kernels to help farmers get a ready market for their produce and ensure the sustainability of “this import crop” – chia – with social economic potential. However, APTC has not yet entred the venture as the company liability and business viability as well as valuation were still a matter of study. “For now, Akenes and Kernels is undergoing an audit, whose findings will be made public to show the valuation of the company, including how much one share is worth so that those who want to buy some shares do it with,” Ndayisenga said. Why does the firm owe farmers that much? The company, Ndayisenga indicated, introduced chia farming in Rwanda in 2018, and the first trial was done in Remera Sector of Ngoma District, Eastern Province. After realising that the crop was growing well, he said that farmers started embracing it. Talking about the factors that made the company unable to pay the due amount to farmers, he said that they include the delay in accessing organic farming certification. “This [chia] crop we grow is mainly organic. It has international standards that should be complied with along the entire value chain,” he said, adding that the delay to get the organic farming certification made the firm unable to tap into the organic chia market for about nine months. However, he said that things might get better as the firm currently has the required certification, including the organic produce certificate, the global gap certificate to be able to trade on the international market in general, that for enabling it to entre the European market, the Japanese market, and the American market. He remarked that the chia seed from Rwanda were tested in international laboratories including in UK, Germany and Dubai (UAE) and indicated that its quality was better than that of those from South America. But, Ndayisenga voiced concern that because of the ‘pressure’ from some farmers urging the company to pay them, he said that it resorted to selling organic chia seeds as ‘conventional’ – or non-organic – which had a negative impact on revenues. As a result, he said, while, normally, a kilogramme of organic chia seeds is between $4 and $7 at the export market, the company was selling it as conventional at $2.8 a kilogramme [in Dubai]. Meanwhile, farmers' representative, Nsengiyumva, said that before the problem occurred, farmers were getting profit from this crop, expressing that “since 2018 to 2020, they [Akenes and Kernels] paid [farmers] well. But, he said, a farmer had to pay Rwf90,000 to get a kilogramme of seeds to grow on a hectare, from Akenes and Kernels, and pay Rwf200,000 to the company per season for agronomic services including monitoring the organic farming for the crop. He explained that a farmer was spending around Rwf1.5 million per hectare, and they were getting paid Rwf3 million by Akenes and Kernels for their produce at the end of four months, indicating that a farmer had over Rwf1.2 million as profit, after deducting all the investments. “Normally, chia is a cash crop. If the country promotes it, it is a crop that can change the livelihoods of people in a short time, because a kilogramme is bought by Akenes [and Kernels at Rwf3,000, which means that a farmer was harvesting Rwf3 million in four months [because 1,000 kilogrammes are hectare produced per hectare],” he said.
