The Rural Sector Support Project (RSSP) has committed to facilitate farmers to maximise on their farming activities through what it termed as ‘contract farming.’
This was announced at a recent meeting that brought together members of cooperatives, rice millers, financial institutions and business development centres.
According to a statement from RSSP, through the new initiative, farmers will be supported to determine market prices and access loans, local markets, inputs and extension services, among other things.
The statement noted that contract farming would help farmers to easily access local markets, fetch better prices as well as higher returns.
The Project Coordinator, Jolly Dusabe, said the new initiative will help farmers to transition into profitable and self-sustaining cooperatives.
She added that it also provides an opportunity for the farmers to network.
“Contract farming is one of the different governance mechanisms for transactions in agri-food chains. The use of contracts (either formal or informal) has become attractive to many agricultural producers in Rwanda because of benefits such as the assured market and access to support services.”
Jonas Kamili, the agri-project manager at Banque Populaire du Rwanda, underscored the need to ensure timely planting.
He added that his bank through the Netherlands-based Rabobank, whose core business is agricultural lending, intends to help local farmers to form strong cooperatives.
“After Rabobank merged with BPR, we decided to focus on how to help farmers to access agricultural loans in order to meet quality standards and improve production,” Kamili said.
He added that contract farming would enable the two banks to link with cooperatives, agri-dealers and processing plants.
He observed that the new initiative would also help in planning, supply of inputs, extension services, among other things.
“This will facilitate cooperatives to be in position to assist its members in case of an emergency loan,” he noted.
RSSP is a Ministry of Agriculture-affiliated project that aims at revitalising the rural economy and improving the quality of life of the rural poor through increased transfer of technical financial resources for the sustainable rural development.
The project has to sustain poverty reduction through capacity building to facilitate efficient application of resources to the development and management of investments.