Traders in Rwanda have intentionally and unjustifiably increased prices of locally grown food and are using the Russia-Ukraine war as a ploy.
Prime Minister Edouard Ngirente has warned traders against increasing prices of locally grown foods such as sweet potatoes, tomatoes, and cassava.
He said this during a news conference that focused on the country’s economic recovery on Wednesday, March 16.
“Those who have started speculating that the current increases in food prices are attributable to the ongoing war are wrong,” he said.
He assured the residents of Rwanda of the country’s food security. “Prices of most foods grown locally did not increase, rather the costs rose for agricultural products that Rwanda largely imports including cooking oil and sugar did.”
He observed that most traders increase the prices of their goods because some locally grown produce such as Irish potatoes isn’t ripe for harvesting. The Premier observed that the current increase in prices of some foods produced in Rwanda is caused by speculation and the fact that it is not yet harvesting time for some products such as Irish potatoes.
For imported commodities, he noted that the factors that contributed to price increase are the ongoing machine maintenance some producing factories are undergoing which has slowed down production as the Covid-19 impact that rose the cost of trading.
Kabuye Sugar Works – the only sugar factory in the country – produces 17,000 tonnes of sugar per year, a very small production compared to the country’s annual sugar demand.
This makes the country heavily rely on imports. The Minister of Trade and Industry, Béata Habyarimana said that much of the sugar consumed in the country is imported as only about 10 percent is produced locally.
For cooking oil, Minister Habyarimana said that the country produces about 37 percent of its cooking oil demand, while the big portion is imported from countries including Egypt and [some] Asian countries.
Giving the context on why prices of imported commodities went up, the Ngirente said that the shipping cost soared. For instance, he said that a container that would be charged $1,500 [to transport goods] from China to Rwanda, currently costs between $8,000 and $10,000, observing that such a scenario has a negative impact on Rwanda as a landlocked country.
Efforts for food security
Ngirente said that climate change was one of the challenges to agricultural production.
This year, he said, Rwanda experienced disasters including drought in Eastern Province which reduced crop production such as maize and beans, as well as fodder for livestock.
The Eastern Province, he said, is Rwanda’s breadbasket especially for cereals mainly maize, and legumes such as beans.
Meanwhile, he said that the Government decided to develop a special irrigation mechanism in the province in a bid to ensure food security for the province dwellers and the country in general.
“We set up a special irrigation mechanism for about 7,000 hectares with the maize and bean plantations such that even though the production will drop, the decline is expected to be moderate – about 6 percent,” he said, indicating that it will move from 378,000 tonnes that were harvested last year to about 357,000 tonnes this year.
For beans grown in the Eastern Province, he said that production is expected to drop by 2 percent.
In December 2021, the Ministry of Agriculture and Animal Resources said it launched an exercise to distribute food relief to over 36,000 households comprising over 156,000 members that were affected by prolonged drought in Eastern Province.
An assessment by Rwanda Agriculture and Animal Resources Development Board found that over 37,000 hectares needed urgent irrigation intervention to help farmers offset potential losses.
However, Ngirente said that there were crops grown in other parts of the country [not the Eastern Province] whose production went up, citing cassava with 23 percent, rice by 8 percent, and wheat by 29 percent.
“As the invested efforts have yielded results, we will not suffer from food insecurity,” he said.
“This offers us hope that the investments we made into agriculture in partnership with farmers are reaping off,” he said.
Talking about the Government’s financial support to farmers on chemical fertilizers amid the soaring costs in order to boost food production, he said that it subsidized them which offered some relief to farmers.
“If the Government did not subsidize the prices [of fertilizers], a farmer would pay Rwf1,357 for a kilogram of NPK, but they have to pay Rwf882,” he said.
Gerardine Mukeshimana, Minister of Agriculture and Animal Resources said that the Government increased fertilizer subsidy from 15 percent last year to about 40 percent this year in order to ease farmers’ access to fertilizers during the rising prices.
According to data from the Rwanda Agriculture and Animal Resources Development Board (RAB), the Government targets to spend over Rwf26 billion on subsidizing seeds and fertilizers for seasons B and C of the 2022 farming year.
They include over Rwf20.7 billion financial support on over 40,549 tonnes of fertilizers including DAP, urea, NPK 17- 17- 17, among others, and over Rwf5.4 billion on over 3,466 tonnes of seeds including maize, soya, and wheat for farmers.