Riceprocessors have been given up to next Sunday to clear outstanding farmers payments. Some farmers have taken up to four months without pay.
The Ministry of Trade and Industry gave the ultimatum following numerous complaints of payment delays from farmer co-operatives across the country.
In a meeting between farmers, processors and trade ministry officials at the end of last month, the ministry gave the dealers up to September 20 to have paid all the arrears.
Athanase Murenzi, the co-ordinator of Rurambi rice growers’ co-operative, said that farmer co-operatives countrywide had already appealed to the Ministry of Trade and Industry, which subsequently ordered the rice dealers to clear the arrears owed to farmers by September 20.
Francois Kanimba, the Minister for Trade and Industry, told Business Times on Wednesday last week that the ministry was aware of the farmers’ problems and was working out a solution.
Many of the farmers and co-operative leaders interviewed by Business Times blamed the problem of delayed payments on quasi-monopoly in awarding of contracts to dealers. There is always one rice buyer in any given rice growing area.
The farmers say they are losing a lot of money in bank penalties because of failure to service their loans as scheduled.
“The dealers are benefitting at the expense of rice growers, who are subjected to bank penalties resulting from delays in servicing their loans,” said Hemed Kazimoto, the co-coordinator of rice growers’ co-operatives in Kiriba zone of Ntende marshland, Gatsibo.
Félicien Rusagara, a zone co-ordinator of rice growers in Rurambi sector, Bugesera District, echoed similar concerns.
He said they supplied rice to Mayange, firm in July but the dealer paid only Rwf5 million out of Rwf100 million.
“Our contract with the firm states that we should be paid within four days from the time they collect the produce,” Rusagara said last weekon Wednesday.
He also complained of low prices, saying the dealer contracted by the co-operative pays them peanuts.
“Rice farming activities require a lot of money, but they buy the cereal at Rwf240 per kilo (short grain), and Rwf253 per kilo of long grain rice,” he said.
Rice processors speak out
However, processing firms claim locally-produced rice does not have market, which they say affects their ability to raise enough funds to buy or pay for produce in time.
“We have a challenge of the market… rice growers are aware of this. Our stores are still full of last season’s crop.
“Therefore, this is one of the reasons we fail to pay farmers on time,” said Celestin Nzeyimana, the manager of Mayange Rice Firm in Bugesera District.
Illegal dealers blamed
Nzeyimana has also blamed the increase of illegal dealers in rice processing business for their woes.
“They sell rice at lower prices of Rwf540 per kilo instead of the standard Rwf600 per kilo. We have identified over 20 illegal operators across the country, whom we reported to the ministry, but they are reluctant to apprehend them,” he said.
Rice imports question
Uzziel Niyongira, the manager of Mukunguri Rice Promotion and Investment Company, said the country might be importing a lot of rice, making it hard for the local processors to sell the product.
“We compete with foreign firms, which offer quality rice compared to ours. Besides, many Rwandans like the imported rice. So, we have to improve product quality, marketing and branding to compete favourably,” he noted.
Niyongira added that during the meeting with farmers and ministry officials late last month, the ministry pledged to crackdown on illegal rice processors within two months.
According to Robert Opirah, the ministry’s director for trade and investment, Rwanda’s rice production has increased from 70,680 tonnes in 2010 to 86,969 tonnes in 2014.
Opirah said due to increasing incomes and changing lifestyles, the demand for rice has exceeded the local production, a reason why local producers should not be complaining of lack of market.
He said the country allowed importing milled rice from countries, such as Tanzania, Pakistan, Vietnam and Uganda, to fill the gap.
Rwanda, in accordance with its EAC membership, he added, does not tax rice imports from EAC countries, and imposes a common external tariff of 45 per cent on rice imported from outside EAC bloc.
As of 2014, the national annual consumption stood at 143,846 tonnes of rice, among which 86,969 tonnes were locally produced while 56,877 tonnes were imported, according to Opirah.