Govt spends Rwf5bn to protect coffee farmers from falling prices

Farmers during coffee harvesting in Rwamagana District. The Government has moved to fully subsidise fertilisers amid falling coffee prices.

Coffee and tea have been struggling to get good prices on international markets which threatens the income of farmers as well as the country’s export earnings, the Minister of Agriculture and Animal Resources has said.

Gérardine Mukeshimana said this week during a press briefing that because of low prices the Government was obliged to intervene, especially to protect coffee farmers’ income.

“Coffee prices have not been performing well. It even got to a level where buyers were giving farmers prices lower than farmers’ investments,” she said.

“That necessitated the government’s intervention so as to save farmers’ spending on fertilisers. In this fiscal year (2019/2020), the Government invested over Rwf5 billion in order to fully subsidise fertilisers that coffee farmers need”.

Speaking to Sunday Times, Théopiste Nyiramahoro, the President of Rwanda Coffee Cooperatives’ Federation (RCCF) said that the government’s support was very needed.

“The farm gate price for coffee cherries was Rwf190 a kilogramme – which is itself low – and it was about to be lowered further to Rwf170 in this farming year. So, the government listened to farmers’ concern by covering the total fertiliser expenditure, and maintaining the Rwf190,” she said.

Nyiramahoro estimates that the cost of about 7,000 tonnes of fertilisers in this farming year was fully covered by the government.

Meanwhile, Nyiramahoro said that given that the average produce per coffee tree is 2.5 kilogramme per season, there was a need to put more efforts into good agriculture practices.

“There are coffee farmers who get eight kilogrammes per tree thanks to good farming techniques. The produce can even be higher than that,” she said, underscoring the need for increasing both the quantity and quality of coffee produce as one of the means to get more income from the crop.

“Tea has many categories. While the top grade costs up to $7 a kilogramme – a record high price that Rwanda has held at the recent Mombasa Tea Auction – the average price for all the tea that we produce annually is about $2.2 a kilogramme,” Mukeshimana explained.

Figures from the National Agricultural Export Development Board (NAEB) show that tea export revenue decreased by 5 per cent from $88 million in 2017/2018 to $83 million (about Rwf74 billion based on current exchange rates) in 2018/2019.

For tea, its average price reduced to $2.73 a kilogramme in 2018/2019 from $3.17 a kilogramme in the previous fiscal year, which represents a drop of 13.8 percent.

The same report indicated that coffee revenue decreased from $69 million in 2017/2018 to $68 million (about Rwf61 billion based on current exchange rates) in 2018/2019, whereas the export quantities increased by 6 percent from 20,000 tonnes to 21,000 tonnes in 2018/2019.

The average price of Rwanda Coffee reduced by 6.7 percent to $3.18 a kilogramme in 2018/2019 from $3.41 per kilogramme in 2017/2018.

The average price of Rwanda Coffee was $3.41 per kilogramme in 2017/2018, which reduced by 7 per cent to $3.18 a kilogramme in 2018/2019.

Exploring diversified coffee, tea markets

Minister Mukeshimana said that given the current situation, the government was moving to diversify markets for these traditional cash crops.

The government, she said, is working on the development of other market venues apart from the already existing markets such as the New York Coffee Exchange for coffee, and the Mombasa Tea Auction for tea.  

She cited the Alibaba online market where Rwandan coffee has started being sold, and the agreement with French football club Paris Saint-Germain whereby Rwandan coffee and tea have received exclusive rights to be consumed by people who need such beverages at every match at the team’s Parc des Princes Stadium.

“This helps us to have amount of the commodities traded outside the ordinary system,” Mukeshimana said.

“Currently, we are negotiating how this arrangement with Paris Saint-Germain will be made. Between 20 and 26 this month, our people will go to Paris to work with the French football club so that we study well how that activity will be carried out,” she said.

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