More than 800 small-scale irrigation projects will receive financial subsidies under a new government initiative to forge partnerships between farmers, credit institutions and service providers.
According to state minister for Agriculture and Animal Resources, Tony Nsanganira, the projects will be linked to financial institutions and service providers for a further analysis before they can be funded.
“We are currently categorizing them and closely working with credit institutions and development partners to ensure they get the necessary support,” Nsanganira said.
He was speaking during a consultative meeting with stakeholders on possibilities of financing small-scale irrigation projects in Kigali, yesterday
Government last year put a 50 per cent subsidy on importation of irrigation equipment, to boost productivity and agro exports.
The Ministry has so far registered over 800 projects seeking to benefit from subsidies.
Government is also targeting to develop at least 10,000 hactares of irrigated land by 2017/18.
Nsanganira urged farmers to come up with business plans that can attract funding to increase production to achieve the desired output.
Judith Aguga, the access to finance Rwanda technical director, said supporting small irrigation schemes will help de-risk the sector.
“However, for the scheme to succeed, both financial institutions and service providers must be allowed to deal directly with farmers,” Aguga advised.
Government can then play the supportive role from the background, she added.
According to Innocent Nzeyimana, the head of land husbandry, irrigation, and mechanisation department at Rwanda Agriculture Board, only 5 percent of about 35000 hactares of land has been irrigated under this particular scheme.
The ministry has an annual target of atleast 2000 hactares every year to be able to cover more than 50,000 hactares by 2018.
Lack of capacity
Despite the government subsidies, many farmers still lack capacity to pay the 50% taxes to be able to purchase the irrigation kits.
“We are therefore trying to find ways of linking them to credit institutions,” Nzeyimana said.
Statistics from the Central bank indicate that by August this year, only Rwf9.5billion of the total banks’ loan portfolio went to financing agricultural activities.
And to boost the capacity of the sector, the ministry is collaborating with government of Israel to train its field officers on new irrigation technologies.
Under EDPRS II, the government wants to transform subsistence farming into market-oriented agriculture to achieve sustainable economic growth. Special focus has also been put on production of flowers, vegetables and fruits to help diversify the country’s exports.