Improving Business for Irish Potato Aggregators in Rwanda

Rwanda is the sixth largest producer of Irish potatoes in Africa. However, its competitiveness is challenged by low quality agro-inputs, poor storage capacity, and weak coordination between farmer groups and potential buyers, according to the Food and Agriculture Organization. Consequently, this leads to low yield, high post-harvest losses and, subsequently, low prices on the market.

However, the difficult situation has turned into a business opportunity for some who are frustrated by the challenges.  Enias Hangiyaremye is an Irish potato aggregator near Kavumu sector in the western district of Ngororero. He started the business in 2014 and it was initially performing well, but, unfortunately, it did not go as well as anticipated due to poor business management, lack of markets, and bad debtors.

Irish potato aggregator Enias Hangiyaremye loading up produce for the market.

In 2018, Hangiyaremye engaged with HW to benefit from a series of trainings for aggregators and suppliers. Funded by USAID, HW is promoting the production, marketing, and consumption of Irish potatoes together with other value chains – HIB, OFSP, maize, and horticulture – for 560,000 farmers across 10 districts. The aims is to increase farmers’ income, improve the nutritional status of women and children, and increase the resilience of agricultural and food systems to a changing climate.

Together with 32 other aggregators, Hangiyaremye gained skills in business management -– including quality assurance, record keeping, and contract farming – to grow his Irish potato business. He now sells 20 MT, up from 15 MT when he started with HW, and he is able to buy in bulk at the time of harvest, manage stock, and deliver to clients on time, thereby sustaining the market for farmers. Hangiyaremye has also diversified the business and is now managing an input credit scheme worth 27.4 million ($31.3million) for 160 Irish potato farmers. “I help farmers to access agro inputs like Irish potato seeds, lime, and fertilizers on credit and they pay back after harvest,” observed Hangiyaremye.

To promote all HW value chains, Hangiyaremye, and 11 other aggregators were assisted to sign 68 contracts for the supply of 164 MT of Irish potatoes, 5,212 MT of maize, 150 MT of high iron beans, 8,472 MT of horticulture crops and 929 KG of OFSP. Sales are now worth USD $3,876,427 and farmers are able to access finance worth 1.416 billion RWF (USD $1.62 M).

Managing business is no easy task, but, through HW, aggregators are finding a niche in the unpredictable Irish potato market.

Agrodealers are an essential part of the agricultural value chain system, but their business can be lucrative or daunting depending on which side of the coin you flip. Pacifique Uwayisaba, and mother of two, has experienced the downside of this. She has been an agrodealer in Ngororero District for the last 9 years since 2009, and her business first registered growth, but later slowed down, making losses due to low profits and delays in the delivery of goods.

“I had to close 20 out of my 25 outlets to cut on losses and stay afloat. I used to stock 2,500 tons per year, now this has shrunk to 700 tons,” she explained. Her woes resulted from operating in a disorganized business environment with no clear guidelines to follow.

The introduction of (APTC), Agro Processing Trust Corporation, as a one distribution agency also meant that the 100Rwf per kilogram that agrodealers gained had to reduce to 30 Rwf. The arrangement also had other side-effects. Agrodealers in a particular locality were required to wait for others to place their orders, making some run out of stock and fail to deliver on time what smallholder farmer what to buy in time for a particular season.

Pacifique Uwayisaba makes inventory of fertilizers before distribution

“My clients would find when I have run out of stock while waiting for other agrodealers to make their order to have a single delivery. This was hurting my business and I lost many clients to my rivals,” Uwayisaba observed.

Not out of options, Uwayisaba joined agrodealers being organized by Hinga Weze in ten districts of Gatsibo, Bugesera, Rutsiro, Nyabihu, Karongi, Nyamasheke, Nyamagabe, Kayonza, Ngoma, and Ngororero. With funding from USAID and Feed the Future, Hinga Weze is mobilizing Agro-Dealers to provide affordable and easily accessible inputs as one of the mechanisms to sustainably increase smallholder farmers’ income and increase the resilience of Rwanda’s agricultural and food to a changing climate.

The first step for Hinga Weze was to arrange for agrodealers to get certified. Uwayisaba has been sensitized on the 2012 Organic Law governing agrochemicals as well as the Ministerial Order of 2016 regulating agrochemicals and is now sensitizing others. So far Hinga Weze has assisted 212 agrodealers to comply with the agrochemical law out of 240 Agro-Dealers that operating in the 10 districts. Uwayisaba is among the 7 agrodealers already certificated in April 2018 by the regulating body RALIS (Rwanda Agriculture Livestock Inspection and Certification Services).

To improve on profit margin, Hinga Weze carried out an assessment on the fertilizer subsidies and pricing impact that established losses agrodealers incur in business. Lobbying on their behalf, profits on agro inputs have been revised, increasing the profit margin by 10Rwf per kg from 30Rwf francs to 40Rwf.  This includes 2Rwf for the farmer promoter.

“1 felt empowered when I was given the certificate, and this new profit margin means I can increase my annual stock up again to 1,000 tons,” observed Uwayisaba.

Hinga Weze is mobilizing agrodealers to form cooperatives, building on 30 already registered countrywide. As head of agrodealers in Ngororero, Uwayisaba is borrowing a leaf from Nyamagabe Agro-Dealers’ cooperative that now has distribution rights around the district. Her group is now requesting to have the same distribution rights, thereby increasing the profit margin by 3Rwf per kg allocated as distribution fee.  The sky is the limit for this enterprising woman.

While agrodealers have potential to drive smallholder farming and transform agriculture, their business is often impeded by the limitations in purchasing power of their poor clientele because of low purchase power among, who are typically poor, rural farmers. The consequence has been dire on the quality of yield since most Most rural farmers are unable to access agro-chemicals and equipment, which negatively impacts the quality and size of their yields. To overcome this, agrodealers are assisting farmers to access credit.

Patricie Kantarama is an agrodealer who is changing improving farmers; experiences in Rurembo sector, Nyabihu district. To sustain her business, she needed to build client confidence among farmers and farmer promoters (FPs), who in turn support improved access to affordable products. Kantarama’s opportunity came when she was mobilized by HW to join an input credit scheme, a model that links farmers to agrodealers for business on credit. The result has been promising. She has already registered enough profits where, this season alone, she has extended credit to 42 farmers (32 males and 10 females).

Kantarama is one of the agrodealers being assisted by Hinga Weze to join the scheme. With funding USAID and Feed the Future, HW is supporting agrodealers to use the input credit scheme model where farmers access products on credit to use on credit and are and they are able to repay the loan after harvest or sale of produce. The arrangement is part of the project’s wider mandate to sustainably increase smallholder farmers’ income, improve the nutritional status of women and children, and increase the resilience of Rwanda’s agricultural and food systems to a changing climate.

Now with this possibility of accessing inputs on credit, farmers are reaping from improved yield and better the benefits of improved yields and productivity. Through the input credit scheme, a total of 1,346 farmers in four districts have accessed input with a credit value of 26.1 million RWF. In Kayonza alone, 260 farmers accessed credit worth 2.13 million RWF. In Rutsiro (KOABUNYA Cooperative farmers), 972 farmers accessed input worth 2.8 million, in RWF. In Ngororero, an aggregator. called Anias, provided input credit worth 20.6 Million RWF to 72 farmers, while an aggregator in Nyabihu, Patrice, provided with Patricie, 42 farmers were assisted to with 604,400 RWF worth of input credit.

Kantarama alone was able to supply on creditsupplied 204 KGg of maize seed, H629, 500KGkg of DAP, Urea (289.5KGkg), NPK (140KGkg), Dethane (15KGkg), Ridomil (1KGg) and Rocket (five5 liters equivalent to Rwf 604,400 RWF to farmers on credit.

“I decided to provide inputs on credit to these farmers because HW built their capacity through training on financial literacy,” stated Patricie said. One of her clients, Sebageni Tharcisse, a farmer in Rurembo sector, says he was able to acquire products on credit ranging from NPK (90 KG), Urea (45KG), Dethane (10 KG), Ridomil (KG) and Rocket – two2 bottles) worth 110,000 RWF.

“I’m happy that I don’t have to sell off my sheep to be able to pay the agrodealer, I can now pay back after harvest,” observed a visibly excited Sebageni.  With easy access to agro-inputs, farmers are set to improve their yield while agrodealers gain vital clients and market for agrochemicals.

Rwanda has registered commendable expansion in the financial sector in the recent past, enabling players in the sector to grow as well. Despite this positive trend, most women continue to miss out, are excluded or underserved. Their worst ordeal is the existence of non-financial barriers like operating in rural settings, low financial literacy and bias towards women as not being bankable enough But there is now hope for women venturing in.

Phoebe Nyirafeza proudly stands at the entrance of her business shop in Karongi

Like most women, Phoebe Nyirafeza, a resident of Karongi District, has faced the lows and highs of succeeding ins usually reserved for men. Faced with the pressure of fending for the family after her husband retired in 2011, Phoebe started a small factory called DAZI that processed maize flour locally known as Kawunga. Maize is abundantly produced in Karongi and this seemed an opportunity to add value to a commodity that was readily available and had market locally She produces a mixture of porridge products, of mixed cereals and cracked corn to feed domestic animals.

However, all was not smooth since her business depended on the quality of yield and seasonal hazards, and this made high quality maize scarce. Being credit-shy worsened her situation, making it hard to raise enough capital to maintain keep her business afloat Suddenly her prominence as a shrewd business woman around Rubengera Sector where she resides started to fade as business went decreased.

“This business has been challenging because I needed money to pay suppliers and to buy the best maize grades, yet prices have shot up,” Nyirafeza says with a frown on her face. The hard fact of seeing her business worth 28 million in capita lgo down was a rude awakening, Opportunity came when Hinga Weze assessed her business, offered training on record keeping, and linked her to INKUNGA Micro- Finance that provided credit worth 106,000,000 million RWF in September2018. “From the first installment of 20 million RWF, I managed to restock raw materials and repair machines. Production has already improved.”

As a USAID/Feed the Future-funded project, HW facilitates farmers to access finance, linking them to financial service providers. This is part of its wider goal of sustainably increasing smallholder farmers’ income, improving the nutritional status of women and children, and increasing the resilience of Rwanda’s agricultural and food systems to a changing climate. Hinga Weze intends to transform 560,000 smallholder farmers in ten districts.

Phoebe Nyirafeza proudly displays her improved stock in the rented warehouse

By providing technical assistance to lenders to develop farmer-friendly loan products and build capacity for Savings and Credit Cooperatives (SACCOs), Hinga Weze has enabled agribusinesses to thrive. In Karongi alone, 155 women have been assisted to receive loans worth 127,417,000 RWF. Like Nyirafeza, they are encouraging other women in agribusiness to improve on business record keeping, apply for credit and make their businesses thrive.

Overview:

The USAID-funded John Ogonowski and Doug Bereuter Farmer-to-Farmer (F2F) Program (2018-2023) is implemented by Cultivating New Frontiers in Agriculture (CNFA) in Southern Africa (Madagascar, Malawi, Mozambique, Zambia and Zimbabwe) and the Eastern European country of Moldova. CNFA’s current F2F program aims to connect 394 mid-to senior-level U.S. volunteer experts with farmer groups, agribusinesses, trade associations, agricultural finance providers and other agriculture sector institutions to facilitate sustainable improvements in food security and agricultural processing, production and marketing.

The F2F Program was initially authorized in the 1985 Farm Bill with the primary goal of generating sustainable, broad-based economic growth in the agricultural sector through voluntary technical assistance. A secondary goal is to increase the U.S. public’s understanding of international development issues and programs as well as international understanding of U.S.-sponsored development programs. For more information on the activities of the program worldwide, please visit https://farmer-to-farmer.org.

Volunteers:

CNFA recruits highly-trained, exceptionally qualified volunteers — with years of experience in their respective fields — who offer their time and energy to provide technical assistance to farmers and entrepreneurs. Volunteers should be U.S. citizens or permanent residents. See our Volunteer Page for more information on how to become a volunteer.

Program Approach:

CNFA’s approach builds on USAID’s continuous learning from the F2F program since its 1985 inception and CNFA’s decades of experience in F2F implementation. In each country, focal value chains are analyzed to identify critical leverage points for improvements in incomes and food security through volunteer technical assignments.

1. Increase Agricultural Sector Market-Driven Productivity and Profitability: The Program promotes the adoption of innovative agricultural techniques and technologies and supports improved marketing and business skills.
2. Improve Conservation and Sustainable Use of Environmental and Natural Resources: The Program leverages conservation agriculture and other practices to produce higher and more stable yields while reducing environmental degradation.
3. Expand Agricultural Sector Access to Financial Services: The Program’s efforts strengthen the financial management and business-planning skills of farmer organizations and agribusinesses.
4. Private Sector Engagement: The Program also partners with government and private sector stakeholders and supports organizational development by building local markets and networks.

Overview:

The $8.5 million, four-year (2014 to 2018) Agricultural Support to Azerbaijan Project (ASAP) increased the incomes of agribusinesses and agricultural producers to accelerate the development of Azerbaijan’s non-oil economy. To accomplish this, CNFA increased access to finance using local Business Services Providers (BSPs) to grow and expand exports of agricultural entrepreneurs, promoted improved production practices through strengthened extension services, facilitated a favorable business enabling environment and expanded dialogue and the use of analytical tools and training.

Approach:

ASAP was built on the successes of USAID’s support to agricultural producers and processors in Azerbaijan over the last 15 years. Various activities strengthened the ability of domestic producers to meet international quality standards, increase exports and yield better supply and domestic market demand, in turn boosting employment and incomes. ASAP targeted value chains with the highest economic potential including hazelnuts, pomegranates, orchard crops and vegetables. Activities specifically yielded these results:

1. Increased Technology Adoption: ASAP assisted growers and processors to adopt new technologies and techniques to increase the quality and quantity of production.
2. Supported Increased Sales: Through ASAP, CNFA facilitated increased exports and enhanced domestic marketing through more rigorous food safety systems, packing and post-harvest methods.
3. Facilitated Business Connections: ASAP’s activities strengthened the linkages among actors in the respective value chains and fostered cooperation through strengthened industry associations.
4. Bolstered the Quality of Services Provision: The project built the availability, quality, capacity and sustainability of BSPs and public and private extension services.

Overview:

The USAID/Georgia Restoring Efficiency to Agriculture Production (REAP) activity was a five-year (2013-2018), $19.5 million enterprise development activity that increased income and employment in rural areas by delivering firm-level investment and tailored technical assistance to Georgian agribusinesses. Since October 2013, REAP increased private investment and commercial finance in the agriculture sector by $37.5 million, mitigated risks for rural agribusinesses, upgraded farmers’ agricultural and technical skills and expanded commercially sustainable linkages between service providers, producers and processors.

Approach:

1. Small and Medium Enterprise (SME) Development in the Agriculture Sector: By utilizing its $6 million grant fund, REAP partnered with 70 agribusinesses to launch profit centers that provide input supply, services, technical trainings and commercial markets to smallholders. REAP’s investment portfolio, consisting primarily of Farm Service Centers (FSCs) and Machinery Service Centers (MSCs), created over 2,000 new rural jobs, provided over $18 million in new cash markets, trained over 200,000 smallholders and generated new gross sales of over $182 million.
2. Implemented Technical Assistance Program: To ensure the sustainability of REAP investments and bolster the capacity of Georgia’s agriculture sector, the activity worked closely with its partners to deliver demand-driven, customized technical assistance in collaboration with the private sector to improve competitiveness, increase sales and foster professional development. REAP also supported non-grantees—enterprises that did not meet the competitive benchmarks to receive matching grants—by providing capacity-building consulting through local BSPs and International STTA on a 50-50 cost-shared basis to increase access to funding.
3. Focused on Gender: REAP ensured inclusive enterprise development and involved men, women and youth in its activities. All C1 grant applicants were required to present a gender integration strategy as part of their proposals. REAP expected at least 15% of grantees and 25% of trainees to be women.
4. Improved Access to Finance: REAP stimulated affordable financing by working with both financial institutions and agribusinesses, providing technical assistance to improve supply and demand. Through business plans, agriculture lending strategies and training for loan officers, REAP increased the volume of lending to the agriculture sector.
5. Improved Workforce Development: REAP had a robust internship program that allowed over 120 students to work in fields that support REAP’s implementation, including administration and finance, monitoring and evaluation, environment, access to finance and technical assistance. REAP also offered 11 research grants for students committed to addressing constraints faced in Georgia’s agriculture sector, including an additional nine who focused on Brown Marmorated Stinkbug (BMSB) research.
6. Focused on the Environment: All grant applicants were visited by REAP’s Environmental Specialist and provided with environmental review checklists and guidance on environmental compliance.

Overview:

The six-year (2012-2018), $41.1 million Agricultural Growth Program-Livestock Market Development (AGP-LMD) project was a livestock market development project funded by USAID, as part of the U.S. Government’s Feed the Future Initiative. AGP-LMD fostered growth, created jobs for rural households and reduced hunger and malnutrition by increasing the competitiveness of livestock value chains, including meat and dairy.

The project was part of USAID’s broader contribution to the Government of Ethiopia’s Agricultural Growth Program, which increased agricultural productivity and market access for crop and livestock products in targeted areas while bolstering the participation of women and youth. Additionally, CNFA supported local partner organizations to lead interventions through existing cooperatives, associations, government agencies and private firms, spurring sustainable economic growth in Ethiopia.

Approach:

1. Increased Productivity and Competitiveness of Selected Livestock Value Chains: AGP-LMD provided training to livestock producers, enabling them to improve their production and increase their competitiveness in domestic and international markets. They also built the capacity of agro-input retailers and private farm suppliers to expand their businesses and offer improved commercial farm inputs and services.
2. Improved Enabling Environment for Livestock Value Chains: The AGP-LMD team facilitated policy discussions to reform bottlenecks and involved a variety of stakeholders in project workshops and platforms. The project also built capacity for public and private sector actors, coordinated linkages with other USAID programs and applied research to yield successful interventions. Over the life of the project, AGP-LMD developed and supported 11 livestock-related policies, regulations and administrative procedures.
3. Improved Quality and Diversity of Household Diets: AGP-LMD integrated communications and community mobilization efforts related to nutritional practices throughout its activities, targeting improvements in quality and dietary diversity for children under two and people living with HIV/AIDS. Through development agents and health extension workers, AGP-LMD reached more than 160,000 people with nutrition messaging.
4. Facilitated Women’s Empowerment: AGP-LMD trained more than 400 women entrepreneurs in business and leadership, equipping them with skills like time management, strategic planning, business relationship management and information and communications technology (ICT) to help them participate more formally in the marketplace, increase their savings, improve the quality of their products and strengthen their household decision-making power.

Partners:

• Netherlands Development Organization
• International Medical Corps
• Self-Help Africa- Ethiopia
• Organization for Rehabilitation and Development in Amhara
• Relief Society of Tigray
• Institute for International Education
• The Oromo Grassroots Development Initiative

Overview:

Côte d’Ivoire’s cocoa sector is valued at $4 billion annually. As the country’s number-one export and foreign exchange earner, it also represents more than 40 percent of the world’s cocoa supply. As a whole, the crop contributes to roughly 15 percent of the West African nation’s gross domestic product.

Earnings from the cultivation and sale of cocoa support five million people in Côte d’Ivoire, including an estimated one million smallholder farmers and their families. On average, these farmers live on less than $2.00 per day and grow cocoa on small plots of between two to five hectares with low or declining productivity.

These smallholder cocoa farmers have limited capacity to increase the amount of quality beans they can sell, which would otherwise be a viable means of increasing their incomes and improving their livelihoods. This is of great concern to the Government of Côte d’Ivoire, which is engaged in its own efforts to strengthen the country-wide capacity to meet rising global demand and improve domestic processing operations. The Government currently maintains a goal of keeping 50 percent of cocoa processing in-country.

To support the cocoa sector in addressing these and other challenges, CNFA is implementing the three-year Maximizing Opportunities in Cocoa Activity (MOCA) from 2017 to 2021.

This $14.6 million USDA Food for Progress activity focuses on increasing the productivity and efficiency of actors in the cocoa value chain. It also seeks to expand the trade of cocoa and cocoa products by improving the quality of crops on existing Government-designated farmland, all towards boosting farmer incomes from these high-value commodities.

Program Approach:

MOCA increases the productivity and efficiency of actors in the cocoa value chain by strengthening the capacity of producers, cooperatives, producer groups, input suppliers and processors of cocoa.

Activities to improve and expand the trade of cocoa and cocoa products focus on reducing losses during production, harvest and post-harvest by increasing access to quality inputs and services; enhancing production, harvest and post-harvest handling techniques; strengthening market linkages; and facilitating access to finance and financial services for producers and cooperatives to more adequately meet existing market opportunities.

These activities occur primarily in the cocoa belt regions of Côte d’Ivoire, where MOCA works with 24 cooperatives and 9,000 producers, input service providers, local processors, financial service providers, exporters and U.S.-based chocolatiers.

1. Supporting Producer Groups & Cooperatives: MOCA supported farmer cooperatives in areas such as cooperative governance, general and financial management practices and systems, human resources management, access to finance, service delivery, external relations with input and service suppliers and buyers, gender integration and sustainability.
2. Working with Government & Institutions: MOCA closely coordinated its activities with the Conseil Café et Cacao (CCC) and used the expertise of Côte d’Ivoire’s Agence Nationale d’Appui au Développement Rural (ANADER) and Centre National de Recherche Agronomique (CNRA) to provide services to farmers and cooperatives.
3. Providing Business Development Services (BDS): MOCA delivered BDS support to over 30 cocoa entrepreneurs and cooperatives in rural and urban areas in business planning, market linkages, capacity building, environmental awareness and the establishment of businesses and business infrastructure.
4. Facilitating Agricultural Lending: The Activity partnered with six banks, micro-finance institutions (MFIs) and financial service providers to increase over 3,500 producers’ access to and benefit from the use of mobile money, insurances and credit services to pilot new financial services such as crop insurance.
5. Providing In-Kind Grants for Equipment and Inputs: MOCA awarded 12 in-kind grants valued at $350,000 to entrepreneurs and cooperatives throughout the cocoa value chain in the form of agricultural inputs and equipment.
6. Developing Agrodealers & Input Suppliers: In collaboration with OLAM, the German Corporation for International Cooperation (GIZ) and the Jacobs Foundation, MOCA established five spray-service professionals’ units (SSPUs). These SSPU’s provide 125 mostly male rural youth opportunities to engage in cocoa service provision. They also provide affordable fee-based services facilitated by cooperatives for other producers. MOCA also established a network of Farm Service Centers (FSCs) in partnership with Callivoire/UPL. These FSCs improve smallholder access to quality inputs and equipment in MOCA’s zones of intervention and further develop collaboration between producers and agrodealers through improved training and training spaces by these input suppliers.
7. Training on Improved Production Techniques: MOCA provided training and pruning tools to 9,000 producers through a network of 170 lead farmers from over 20 supported cooperatives with the objective of increasing production and reducing losses due to black pod disease. MOCA also worked in close collaboration with Guittard Chocolate and producers from two cooperatives to produce quality flavor cacao. The first container of quality flavor cacao beans resulting from this initiative was exported in February 2021.
8. Facilitating Market Relationships: The Activity partnered with the Fine Chocolate Industry Association (FCIA) to increase awareness around quality flavor cacao opportunities in Cote d’Ivoire. MOCA also supported the ambitions of two cooperatives to access new market parties and directly export their products.

Partners:

1. SOCODEVI