Project description and activities

Development of new cash and export crops

Under this component (USD 1. 585 million), the project will:

• support the search for new market outlets and the creation of market linkages for Rwanda enterprises investing in new cash crop production, processing, and marketing. To this effect, the project will strengthen the capacity of the Rwandese Federation of the Private Sector, who will contract the services of an international specialized consulting firm that has access to information and specialists around the World. Such information will be made available to Rwanda entrepreneurs and leaders of farmer groups. The project would also fund experimental shipments of test products to foreign markets, participation in International Fairs and exhibitions of Rwanda products, diffusion of market information, and legal advice for Rwanda entrepreneurs entering agreements with foreign buyers. The service provider will supply advice and technical assistance on specific subjects as required, investigate local opportunities and constraints, and assist to develop adequate contacts between interested Rwanda SME/farmer groups and potential buyers in the domestic market and abroad;
• support farmer groups, formal cooperatives, and private sector SMEs for the preparation of the project documents required to obtain project funding though the RDB or other banks. To this effect a unit will be created in the Ministry of Agriculture, staffed by one agro-economist who will help farmer groups and small entrepreneurs in following the procedures required by the bank, and will verify the technical and financial projections used by the sponsors of the projects. The agro-economist will draw on the technical expertise of MINAGRI and on the services of local consultants using funds made available by the PCU to the MINAGRI unit;
• extend a credit line of a total amount of USD 0.6 million to the RDB/or other local banks for financing projects aimed at developing new cash and export crops. SME and private individual projects must provide significant employment and net income farmers that qualify as IFAD target group. Costs incurred by a project sponsor for establishing market access for a product, costs incurred in organizing smallholder production around a processing or packing unit, cost incurred in transferring know-how to the farmers who supply the raw material to a processing or packing plant, etc. will be eligible for funding, along with the cost of processing plants, buildings, equipment, vehicles, and working capital;
• specific support to poor farmer groups (women, gender mixed, or men groups) that wish to participate in the development of new cash/export crops, and to be trained in the fields related to establishing associations or formal cooperative organizations, management, accounting, contracting etc. Such support will be extended by contracting national service providers and/or NGOs; and
• support agricultural research on new and existing cash and export crops. This would be done though a contract with ISAR, or other research institutes in or outside of Rwanda. The PCU will ensure that research activities are carried out on themes requested or approved by entrepreneurs willing to make use of the results for an immediate production objectives.

The PCU will coordinate the activities of the RFPS, MINAGRI, RDB, Local Banks, NGOs and research institutes through a series of contracts and will monitor performance.

To facilitate the design of the implementation arrangement, the project implementation will begin by funding a special pilot operation connected with the recent successful experience of Cape gooseberry production in Byumba province. This initiative is an interesting example of a successful women entrepreneur in Rwanda. There is room for considerable expansion of this activity in the project area, but much needs to be understood about technical, marketing, infrastructure and other requirements to support successful expansion. The pilot project, costing about USD 35 000 would also provide answers as to the problem that small emerging entrepreneurs meet in obtaining access to advice, and also access to credit. Such information would guide the structuring of the implementation arrangements of the new cash and export crop component.

Structure of the component cost. To summarize, the cost of the component is structured as in the following table:

Table 9: Cost of the new cash and export crop component