As a measure of mitigating economic and social consequences of the Covid-19, the budget for 2020/2021 fiscal year will focus on the government economic recovery plan to maintain the economic growth trend of the pre-Covid-19 period and in line with the National Strategy for Transformation 2017-2024 (NST1). Among the priorities include improving agriculture productivity in order to ensure food security following the periods of shocks. The move requires both public, private and partners investments. Doing Business has put together some key investments to finance smallholder farmers and unlock agricultural loans. Agriculture insurance to reach 20,000 farmers In order to increase agriculture productivity, government has allocated Rwf122.4 billion with agriculture insurance as one of the priorities in financing farmers and helping them recover from losses caused by disasters. Disasters posing threat to farmers include floods, landslides, storm, animal diseases, crop diseases, dry spells and others. Due to lack of crop and livestock insurance, smallholder farmers have been struggling with access to agricultural loans from banks that are reluctant to provide loans in risky sectors especially those affected by weather disasters. Agriculture insurance scheme is expected to reach 20,000 farmers and insurance will also be provided to 57,500 domestic animals; cows, pork and chickens. A total of 13,647 hectares of maize, rice, cassava, soya bean, pepper and banana plantations will be insured. Rwf1.3bn Government Funded Modern Irrigation Investing in irrigation is a key element in unlocking agricultural loans. This means insurance companies are likely to accept to insure irrigated crops rather than those that are not irrigated and banks will also be more confident in providing loans to insured and irrigated crops. Government is set to invest Rwf1.3 billion in a Government Funded Modern Irrigation (GFI) across the country. Other projects include Kayonza Irrigation and Integrated Watershed management Project to be implemented at the cost of Rwf7 billion. Development of irrigation facilities will be set up on marshland and hillside areas. This includes Small Scale Irrigation Technology to increase crops resilience to climate change. The prioritised irrigation projects include Gako Project on 1,800 ha in Bugesera District, Gabiro Agri-business project phase 1 on 5,000 ha and Mpanga marshland on 659 ha. Infrastructure for managing disasters The government priorities also include rehabilitation of agriculture infrastructure destroyed by disasters in Rwamagana, Rurambi, Bugarama, Umuvumba ,Gatuna and Kamiranzovu Districts. This is part of implementing the crop intensification project and development of agricultural infrastructure to combat soil erosion through the construction of radical terraces and progressive terraces. Last fiscal year, in order to protect soil against erosion, 4,587 ha of radical terraces were constructed against 2,710 ha that was planned and 12,944 ha of progressive terraces constructed against 8,279 ha planned as end of May. About 4,000 ha of crops were destroyed following disasters in the first four months of 2020. Managing disasters is supposed to unlock agricultural finance from fearing banks and insurance companies. Rwf2.5bn loans to smallholder farmers At least 5,000 farmers, 25 cooperatives, five aggregators, 110 agro-dealers among others are expected to access credit worth Rwf2.5 billion to improve agricultural productivity in the next five years. The Irish potato, horticulture, maize and poultry farmers -to benefit from the joint facility -have been linked to a local bank under the support of Hinga Weze-USAID funded project. Through the same partnership, 10,000 farmers and 50 cooperatives will be trained in post-harvest handling, storage techniques, good governance and financial literacy. The same initiative has so far has facilitated access to Rwf3.5billion of agriculture loan from 25 financial institutions. Agriculture Development Fund in offing Government has announced that it is going to develop the Agriculture Development Fund to support farmers to access financial institutions. Through the fund, government projects that by 2024 over 10 per cent of loans by financial institutions will be going to the agriculture sector from the current 5 per cent of banks’ loans. Strategic grain reserve to store 10,000 tonnes of grain Government will buy and reserve food for smallholder farmers who are sometimes hit by hunger due to drought effects and other disasters. This is part of strengthening the national strategic grain reserve whereby 7,000 tons of maize and 3,000 tons of beans will be stored using the national budget. Government continues to invest in reduction of post-harvest losses through establishing new drying shelters and storage facilities.
