Introduction

The Tea Industry in Rwanda

Tea growing in Rwanda started in 1952. Since its introduction, tea production has increased steadily, from 60 tons of black tea in 1958, to 1,900 tons in 1990, to 14,500 tons in 2000, reaching a peak of 17,800 tons in 2001. Over 90% of the production is exported, but represents only a small share of the total volume traded in the international market, which is about 1.4 million tons.

Rwanda tea is planted on hillsides at high altitude (between 1,900 and 2,500 m), and on well drained marshes at an altitude of between 1,550 and 1,800 m. Tea is grown on 11 estates. A total area of approximately 12,500 ha is planted in the provinces of Byumba, Cyangugu, Gikongoro, Gisenyi and Kibuye. Tea plantations must be located near a tea factory because the harvest must be processed within a few hours of picking. There are five forms of tea plantations:

• Industrial blocks (a total of 4,002 ha in the country) integrated to a processing plant. Industrial blocs are large plantations, sized between 300 and 500 ha. One of the industrial estates, the Nshili plantation in southern Gikongoro, is almost 1,000 ha. Industrial estates employ wage labor;
• Tea growers co-operatives (1,895 ha) in the provinces of Cyangugu (Shagasha and Gisakura plantations) and Byumba (Mulindi plantation). The cooperative plantations are also blocks of large size and employ a mixture of family and wage labor;
• Tea growers association (ASSOPTHE - 852 ha) in the province of Byumba (Cyohoha-Rukeri plantation the production of which is processed by the tea factory owned by SORWATHE). Each member cultivates a 0.23 ha tea plot under his/her responsibility contrary to the situation in cooperatives in which members cultivate the plantations collectively;
• Private investment (SORWATHE - 252 ha);
• Smallholder (thé villageois) tea plots (5,540 ha). Smallholders have 0.2 - 0.25 ha of tea plots in their family holdings and have essentially recourse to family labor.

Yields are low by comparison with other producing countries in Asia and also in nearby African countries. Public sector plantations produce on average the equivalent of 1,400 kg/ha and smallholder plots about 1,200 kg/ha. Private sector managed plantations and cooperative blocks, by contrast, have recently recorded as much as 3,500 and 2,600 kg/ha, respectively, essentially due to applying adequate doses of chemical fertilizers. The green leaves of the tea bushes are harvested all through the year but production peaks during the rainy seasons and is less during the dry seasons. This provides a smallholder tea planter with a regular cash income. Smallholder tea is generally picked by women, who receive payment in small amounts every two weeks.

Tea is processed in 10 factories, 2 are private companies (SORWATHE and PFUNDA) and 8 are still managed by OCIR-Thé. OCIR-Thé is a State agency in charge of the tea sector. It was originally set up as a parastatal directly responsible for the production processing and marketing of Rwanda tea. Since the war, Government policy has changed and a new role is now envisaged for OCIR-Thé as a promotion regulation and monitoring agency. Processing capacity of OCIR-Thé managed factories is a constraint, and most of them had considerable difficulties in handling the 2001 bumper tea crop. There is no factory near the OCIR-Thé estate established since 1983 in southern Gikongoro (Nshili district) with African Development Bank funding. The failure to build a factory at Nshili means that Nshili green leaves have to be transported to the nearest factory at Mata over a distance of 60 km on poor roads. This seriously reduces the quality of the tea. Due to the time required to evacuate the crop to Mata, the harvesting time at the plantation is reduced to no more than four hours a day, which also limits the production from the Nshili plantation. In addition, large quantities of tea leaves that arrive in Mata too late in the day for processing are actually thrown away (40% losses on average).

The quality of the Rwanda green tea leaves is among the best in the world, although a difference is noted between tea grown on the hillside and that grown in the marais. This excellent reputation is still acknowledged by the international market, despite the deterioration of the processed products which occurred after 1994. The state of uncertainty among the staff of OCIR-Thé regarding the privatization programme is partly responsible for the deterioration. Sub-optimal delivery of fertilizers for both the OCIR-Thé industrial estates and the smallholder growers affect both quantity and quality of the green leaves produced. OCIR-Thé uniform green leaves price nation-wide is no incentive to increase production and ensure quality. Low prices for the green leaves have a negative impact on the way smallholder growers handle the pruning and harvesting of their tea bushes.

World demand for tea has expanded steadily at 2% per annum, sustained by the expansion of consumption in the main producing countries, such as India and Sri Lanka, until the end of the 1990s, when the increase in demand ceased. Subsequently, a world surplus occurred, causing a drop in price of about 25%. Since overall supply is expected to continue growing at a faster rate than total consumption, low prices are also expected to continue for some time. However, as in the case of coffee, the price decrease has affected essentially producers of low quality teas. Demand for good quality teas, such as Darjeeling and Assam teas in India and some Sri Lanka and Kenya teas, has continued to expand, and their prices have commanded a good premium over the price of average or inferior quality teas. From this point of view, Rwanda has a distinct opportunity to exploit, since Rwanda CTC tea is considered among the very best in the world. This reputation, which is a critical factor for the financial viability of new investments in the sub-sector, must be restored after the decline in the quality of OCIR-Thé products occurred after the 1994 war. Currently, not all tea factories in Rwanda are back to the pre-1994 performance in this respect. The view of experts and traders coincides with the view of the GoR in that, provided the country production is brought back to the pre-war level of quality, Rwanda tea can obtain prices. Some traders feel that most Rwanda CTC teas can fetch higher prices than the best Kenya teas. The Nshili area, in particular, has the potential to be among those, provided growers apply the correct pruning and harvesting practices, fresh green leaves are delivered quickly to a nearby factory, and adequate processing immediately follows.

The situation is different for smallholder tea growers. A poor family with a plot of 0.2-0.25 ha of tea has a relatively reasonable and regular cash income all the year around even at the current low price paid by OCIR-Thé. Women often retain this income, since they do the picking and delivery of the green leaves, and this generally helps to improve the livelihood of the family. In tea, the smallholder problem is how to get better prices for the excellent quality of green leaves they produce.

A good deal of work is still required to formulate an adequate programme for the development of the tea sector, combined with a coherent policy aimed at providing incentives to private investors and at securing adequate income for smallholder tea growers. These ought to include at least the general strategic lines of development of new tea planting and processing capacity, going beyond the statement of principles of the current privatization policy, the implementation of which also needs to be very significantly accelerated. The lack of progress on privatization has indeed been a stumbling block for several years. Donors are reluctant to assist the sub-sector, pending evidence of concrete progress under the privatization policy.

Priorities for the medium term are not difficult to identify. The construction of a factory at Nshili is by far the top priority. Most existing factories in Rwanda must be expanded so that they can adequately handle even the currently available green leaves in case of a bumper crop, and the potential production that can be attained if measures are taken to increase yields towards levels more in line with comparable areas elsewhere in the world. New areas can also be planted, with careful attention to producing top quality products, to introducing organic tea with all the related measures aimed at increasing the use of farm yard manure and at strengthening land conservation, and to secure timely construction of new factories, which is essential for the financial survival of such initiatives.