The government says it has ended set prices for agricultural produce, a major policy shift that now lets farmers and buyers determine prices through open market negotiations. The reform, in place since last year, aims to liberalise the agriculture sector, strengthen competitiveness, and attract private investment. ALSO READ: End of price regulation opens new chapter for Rwandan farmers Officials say the change is already easing past tensions between producers and buyers that often disrupted trade. Speaking to The New Times in an exclusive interview, the Minister of Trade and Industry, Prudence Sebahizi, argued that the pricing model had become unsustainable. In the past, we had cases of buyers refusing to purchase produce when fixed prices were high, and sellers refusing to sell when the prices were lower than their expectations — for example, in the case of rice, the Minister said. Questioned on the impact of pulling out of the market price regulation, Sebahizi pointed out, Since last year, when the government stopped fixing prices, we have observed two agricultural seasons without such issues. Today, prices are determined by market forces — supply and demand, he stressed. ALSO READ: Agric minister backs farmers' supply contracts as loan collateral Under the previous system, the government announced indicative prices for crops such as maize, beans, and Irish potatoes at the start of each season. The aim was to protect farmers from exploitation and ensure affordability for consumers. But the approach often led to stalled transactions, losses for cooperatives, and reduced incentives for private traders. The fixed-price system created market distortions, according to Minister Sebahizi. When government-set prices were above market equilibrium, buyers stayed away or sourced from informal channels. When prices were set below production costs, farmers withheld supply or diverted crops to neighboring markets where they could fetch better returns. What pulling back means According to the Ministry of Trade and Industry, market liberalisation in agriculture removes government intervention in price setting, allowing supply and demand to determine value. This typically encourages efficiency, as producers respond to price signals and allocate resources to higher-value crops. Traders can now negotiate directly with farmers or cooperatives, and prices can adjust more quickly to changing conditions such as weather shocks, harvest volumes, or regional demand. The policy aligns Rwanda with broader regional trade frameworks, particularly the African Continental Free Trade Area (AfCFTA), where open pricing makes Rwandan produce more competitive in cross-border trade. Alfred Bizoza, an agricultural economist, believes that the shift to market-based pricing could make Rwanda's agriculture more efficient, but also introduces new risks. Farmers without access to storage or reliable market data could face pressure to sell produce quickly at low prices during harvest peaks, he argued. “Small-scale farmers are particularly vulnerable. Unlike large commercial producers, they lack bargaining power, storage infrastructure, and information on prevailing market rates. This asymmetry can lead to exploitative pricing by intermediaries who dominate rural market chains,” he said. To offset these risks, the government recommends strengthening farmer cooperatives, expanding warehouse receipt systems, and ensuring transparent market information. These tools would allow farmers to store produce, access credit using stored goods as collateral, and sell when prices improve, Minister Sebahizi urged. For consumers, the liberalisation means prices will now fluctuate more directly with supply and demand. During bumper harvests, prices may drop significantly. But in lean seasons or after poor harvests, consumers could face sharp price increases without the cushion of government-set ceilings. Under the changes, the Rwanda Inspectorate, Competition and Consumer Protection Authority (RICA) has been tasked to monitor markets to prevent collusion and unfair trade practices. ALSO READ: Inside RICA's mission to rein in substandard goods and spur healthy competition This regulatory oversight is critical to ensuring that liberalization does not lead to “artificial price inflation”. Lessons from the region Regional experiences suggest that liberalisation works best when supported by active oversight. For instance, Kenya and Tanzania both saw investment growth after similar reforms, but also periods of price instability when regulation lagged. In Kenya, the removal of maize price controls in the early 2000s initially led to volatility and accusations of hoarding by large traders. The Nairobi government eventually introduced strategic grain reserves and market information systems to stabilize supply. Tanzania's experience with cashew nut liberalization in the 1990s showed that without strong cooperatives, farmers lost bargaining power to exporters. Prices improved only after the government reformed cooperative structures and introduced quality standards that increased the crop's global competitiveness. Uganda's coffee sector offers a more positive example. Liberalization in the 1990s, combined with investment in farmer training and quality improvement, led to higher farmgate prices and expanded export revenues over time. For Rwanda, according to Bizoza, the challenge now is to balance efficiency with fairness — “ensuring that open markets benefit both producers and consumers.” He maintained that key success factors include transparent price information systems and enforceable competition rules. “The government will also need to monitor the impact on food security, particularly for staple crops like maize and beans, where price volatility can have significant social consequences.” Equally important is investment in post-harvest infrastructure, such as warehouses, cold storage, and rural processing facilities, which will be essential to help farmers capture more value and reduce losses.
