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Amendment > Reformulation Mission of the Tea Component




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  • Overview of the Tea Component

    Potentialities and Constraints in the Tea Sector

    The main factor of agricultural development in general, and of tea development in particular, is the will of people to overcome the vicious circle of poverty, and their capacity to adapt the farming system and practices within the constraints imposed by the economic and natural environment. Rwanda has considerable agricultural potential, despite the threat of overpopulation. There are large areas with fertile soils suitable for growing many crops with international market potential, including soils with the right pH for tea and coffee, and high altitude locations with adequate rainfall where production of top quality tea and coffee is possible. The quality of the Rwanda green tea leaves is among the best in the world and this excellent reputation is still acknowledged by the international market, despite the deterioration of the processed products which occurred after 1994.

    Another important favorable factor for the development of tea is the peoples’ willingness to face the challenge of the future jointly, and in an organized manner, even though most of the current farmers’ organizations have little financial resources. The GoR decentralization policy with its focus on the lower levels of the local government is an important factor of political and social dynamics that can be instrumental in backing up the spontaneous structuring of the rural people.

    Finally, the liberalization and privatization policy of the GoR is slowly beginning to bear fruit. This is evident in the very significant increase of tea yields connected with the management of the only processing factory that has been privatized.

    However, Rwanda is a landlocked country. High costs of transport affect the cost of fixed assets and of inputs, which must be imported, and the cost of transporting finished products to foreign buyers. The general underdevelopment of the rural areas increases the cost of any ancillary service that economic operators require. Tea yields are low by comparison with other producing countries. As a result, despite very low labor costs and grower remunerations significantly lower than elsewhere, Rwanda is a high cost producer. Other constraints stem from the lack of up-to-date research, which affects agronomic practices of traditional crops. To survive in export markets, Rwanda needs to produce high quality products, cashing in the opportunities offered by the natural conditions, and by the skills already developed among growers and in the processing industry, and to market them in new and innovative ways. A major constraint faced by poor smallholder cash crop producers is the low level of farm gate prices resulting in a lower share of the price of the processed products by comparison with other exporting countries, including nearby Kenya. This can only be partly explained by the high cost of processing and marketing mentioned above, some of which also affect Rwanda’s neighbors. Participation of smallholder growers associations in tea factories/companies is a key to seriously address this constraint.




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