Rome-Kigali, 29 September 2011 – A US$39.8 million loan and grant from the International Fund for Agricultural Development (IFAD) to the Republic of Rwanda will help to improve the livelihoods of poor smallholder producers and increase economic growth in partnership with private operators, the UN rural poverty agency has announced.

The loan and grant agreements for the Project for Rural Income through Exports (PRICE) and the Support Project for the Strategic Plan for the Transformation of Agriculture (PAPSTA) were signed today in Kigali by John Rwangombwa, Minister of Finance and Economic Planning of the Republic of Rwanda, and Yukiko Omura, Vice-President of IFAD.

Agriculture is a significant driver of Rwanda’s economy. Agriculture accounts for 32 per cent of the GDP and employs more than 70 per cent of the country’s population. But Rwandan agriculture is still very fragile. Rough terrain, erosion and climatic hazards combined with the lack of modern technology create serious constraints to agricultural development.  

Through PRICE and a supplementary grant for the ongoing PAPSTA project, the Government of Rwanda and IFAD will work with the project beneficiaries and the private sector to boost the potential of the agriculture sector to move from subsistence agriculture to market-based farming.

“With its focus on enabling smallholder farmers and vulnerable groups to participate in export value chains for coffee, tea, silk and horticulture, PRICE is a flagship project in terms of public-private partnership,” said Yukiko Omura.  

PRICE aims to promote sustainable increased returns to smallholder farmers from the coffee, tea, silk and horticulture value chains by helping farmers to increase the volume and improve the quality of production. The project will support 170 farmers’ cooperatives nationwide, and will push for a high share of the export price to reach the smallholder producers. More than 125,000 vulnerable households, particularly households headed by women and young people, will benefit from PRICE.

Newly available funding for PAPSTA, which works in the six districts of Bugesera, Kirehe, Gakenke, Ngororero, Nyamagabe and Nyanza, will help to continue rehabilitating an additional 150 hectares of marshland for rice production. The project will also increase its activities in the areas of agricultural strategy formulation, soil and water conservation and marketing support structures.

With this new Project for Rural Income through Exports, IFAD will have financed 14 programmes and projects in Rwanda for a total investment of US$189.8 million benefiting 500,000 households.

---

Press release No.: IFAD/64/2011

The International Fund for Agricultural Development (IFAD) works with poor rural people to enable them to grow and sell more food, increase their incomes and determine the direction of their own lives. Since 1978, IFAD has invested about US$13.2 billion in grants and low-interest loans to developing countries through projects empowering about 400 million people to break out of poverty, thereby helping to create vibrant rural communities. IFAD is an international financial institution and a specialized UN agency based in Rome – the United Nation’s food and agricultural hub. It is a unique partnership of 166 members from the Organization of the Petroleum Exporting Countries (OPEC), other developing countries and the Organisation for Economic Co-operation and Development (OECD).