Smallholder farmer shave secured a deal to supply maize to major buyers, including agro-processing firms, which effectively contribute to addressing the challenge of lack of access to formal markets that has troubled farmers for long.
So far, over 25,000 Rwandan smallholder farmers have benefited from the arrangement by supplying more than 10,000 tonnes of maize to five major buyers through what is known as contract farming – a practice where the quantity of crop production is determined by an agreement between the buyer and farmers.
The revelation was made on Thursday in Kigali during a meeting that brought together over 150 farmers’ organisations under a project called “Farm to Market Alliance”. The project seeks to support smallholder farmers to shift from subsistence farming to market-oriented agriculture.
The project is worth over £3.7 million (Rwf4 billion). The beneficiary countries include Rwanda, Tanzania and Zambia.
According to experts, market engagement with smallholder farmers is traditionally perceived as a high risk venture, but steady demand is key to unlocking the smallholder value chain.
Rwanda produces an estimated 700,000 tonnes of maize every year, according to statistics from Rwanda maize farmers’ cooperative federation. With demand outstripping supply, experts said there a high chance the new arrangement will be successful.
For example, Africa Improved Food and MINIMEX – two major local maize processing companies – need about 50,000 tonnes of maize annually, according to official figures from the ministry of agriculture and animal resources.
The demand for maize from other agro-processing factories including animal feed mills is estimated at 80,000 tonnes. Most of the maize produced in the country is consumed by households as well as other institutions like schools.
This means that agro-processing firms resort to maize imports for their raw materials, reflecting untapped market for local producers.
Official statistics also suggest that between 20 per cent and 30 per cent of the farm produce is being lost during post-harvest period.
Marie Jeanne Ntirenganya, president of KABITADU, a cooperative of maize farmers in Nyagatare District said that the cooperative made up with 48 farmers growing maize on 48 hectares.
It supplied about 40 tonnes at Rwf250 a kilogramme to EAX – a regional commodity exchange offering commodity trade services in Rwanda and East Africa Community (EAC).
“Before the project, we did not have a ready market; we would sell our produce to middlemen who were buying at prices as they pleased. Smallholder farmers did not have bargaining power,” she said, calling for sustainability of the project through honouring contracts between farmers and buyers.
There has been an improvement in empowering smallholder farmers to formal markets but more effort is needed for them to maximise the potential of the market, said the Eugene Rwibasira, the Executive Secretary of Rwanda Development Organisation (RDO) – one of the implementers of the project.
Daniel Mirimo, food crops production specialist at MINAGRI, said that the project helps the Government of Rwanda to make farmers professional as it is based on contract farming.
“The increase in the number of buyers and the produce is a good move in line with promoting professional farming,” he said.