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Rwanda is Planning to Reform an Agricultural Market which has Long Been Based on Smallholders

Agriculture has long served as the backbone of the Rwandan economy and today employs 70% of Rwandans and accounts for 31% of GDP and 90% of domestic consumption. With regional food insecurity mounting and the African Continental Free Trade Area (AfCFTA) promising to greatly increase intra-African trade, Rwanda is targeting a role as a food exporter. One of the government’s priorities is the formation of cooperatives to phase out small, unproductive subsistence-level farms (which account for 75% of agricultural production) and move towards a market-oriented agricultural sector. This is done by offering farmers access to subsidies, oversight, inputs and technology, all of which offer economies of scale. The Rwanda Cooperative Agency is charged with promoting cooperative farms to increase productivity and increase farmers’ access to financial solutions, advice, and competent management. Its current priority is the promotion of Savings and Credit Cooperative Societies (SACCOs), which allow farming communities to cover risks and provide collateral against receiving credit. Vision 2050 will seek to include all farmers in this system to encourage a virtuous circle of investment and scale economies.

SOURCE: AFRICAN BUSINESS