With the current tumultuous global economic situation, characterised by escalating fuel prices, high food prices, Rwanda’s food security is likely to be shaken.
These global factors, according to the Minister of Finance, John Rwangombwa, are also likely to affect the macroeconomic stability of the county triggering yet another shift in the inflation digits currently standing at 4.54 per cent from 0.2 percent in December last year.
Nonetheless, during his June 8, 2011 budget reading, Rwangombwa shed some hope as he highlighted measures to mitigate against external shocks from spilling over the Rwanda’s economy.
Among the highlights on the agenda was the slashing of fuel levies to contain inflation.
To curtail the food crisis, the government has increased the agricultural sector budget to Rf67.1b from Rf64.4b last year, an increase of about five per cent.
The increase is mainly targeting boosting the sector’s productivity. It also reflects the theme for the financial year 2011/12 budget which is “Ensuring Food Security and Price Stability whilst Maintaining Sustainable Growth.”
Whilst the Minister of Agriculture, Agnes Kalibata, is convinced that increasing investments in forming farmers associations, irrigation and increasing post harvest facilities, strategic food reserves and sustainable markets will translate into food security.
Moreover, analysts say that the increase in agriculture spending may not be sufficient to yield the output needed to offset the rising prices on the market.
Because there are no new priority areas identified in the budget to guzzle the money added to the sector’s budget, analysts argue that, there is a likelihood that replication of the same policies and strategies will still slap yet another sluggish performance in the sector.
“Policies are already set, the budget does not work to set strategies; the budget contributes to existing strategies. So we already have a policy on food security and a strategic plan on how to increase food security and the budget adds to that” Kalibata said.
Although she acknowledges that current investments do not necessarily culminate into the increase in production, she noted that improving storage facilities and minimizing losses will increase production.
Yet, the growth of the sector is also partly constrained by high prices of inputs such as fertilisers and seeds with industry experts suggesting that government should further subsidise these farm inputs.
“Our strategy is to make sure that we secure all means to ensure that farmers have inputs, access to inputs ensuring that we deal with drought issues by dealing with irrigation systems.” Kalibata said.
Alexis Nkurunziza, a budget analyst underscores the need to provide extra funding for the agriculture sector, noting that the increase is modest and cannot accomplish all the current initiatives within the sector.
“This analysis underscores the significant contribution of Agriculture sector to Rwanda’s economy, Further; we emphasise the need to enable women to access agricultural credit and to reduce the sector’s overdependence on external funding,” he explained.
While Rwanda agriculture has been registering an upward trend in funding witnesses, there is a downward trend in production in the recent past, analysts said.
But the Minister of agriculture dismisses this argument, saying that there has been achievement in the sector.
“In the last five years we have seen an increase in food production, we have not gone down,” she said.
There is no way you can tell that in year X you are going to do irrigation and be done with it,” she said, adding that every year the government’s decisions are based on the needs and priorities.
She said that post harvest losses have been reduced from about 35 percent since last year to 5 percent this year. As a way of helping famers improve quality, Kalibata says that her Ministry is putting in place drying grounds where farmers can dry their crops.
To ensure that famers benefit from their production to stir the development, the Minister stressed government’s commitment to provide market access to commodities.
“Linking famers in terms of information, like now we have Isoko which means information so that they can know where they can sell their produce. We have introduced a system where we require public institutions to purchase food from cooperatives”.
With the current establishment of Agriculture Export Promotion Board, agricultural exports are set to increase.
Rwanda exports most of her food exports through the cross border trade to neighbouring countries that are currently hit with food shortages.