Rwandan farmers have struggled with market prices for decades. Middlemen try their best to give the lowest prices possible.
Many farmers have made losses and others abandoned their farms to seek jobs in urban areas.
This was a classic ordeal for every Rwandan farmer until mid-July, 2014. At the time, former US Assistant-Secretary-of-State Dr. Jendayi Frazer, together with Nigerian millionaires-Tony Elumelu and Nicolas Berggruen, ventured into a $10m East Africa Commodities Exchange (EAX) to allow Rwandan farmers sell at relatively higher prices.
EAX has installed tens of state-of-the-art storage facilities across the country allowing farmers to avoid post-harvest losses.
Studies have shown that previously, grain harvested at 23% moisture, subsequently dried and sold at 13% moisture.
At these large facilities, farmers bring in maize, beans and soybeans for the moment.
Pyrethrum, coffee and tea farmers will start selling this year. With good storage facilities, their value skyrocketed.
For the first time ever, a kilogram of maize, during the harvest period, can sell at Rwf185 ($0.26) (more than double Rwf90 ($0.1) paid by middlemen).
When maize is scarce, the price can go up to Rwf255 ($0.36). Middlemen offer Rwf170 ($0.2).
The exchange now links small-scale farmers to agriculture and financial markets in the East African region to get competitive prices.
Farmers can also access real time price information and increased profits.
Manasseh Mpagazehe, a farmer and member of Impabaruta Cooperative in Kamonyi District in Southern Rwanda, says EAX has helped them access regional and international markets.
“We are negotiating with financial institutions to sign an agreement that will allow ordinary farmers to access loans through their cooperatives,” said Dr. Alfah Kadri, the EAX Country Manager.
Most commodities exchanges in Africa have struggled with fraud. “It largely operates on trust,” says Dr. Kadri. “But Rwandans are more sincere,” he says.
Meanwhile, the exchange is rolling out a nation-wide campaign to attract farmers.
It has so far recruited 17 cooperatives, representing over 15,000 farmers.
The grouping will be buying 10,000 metric tons of maize annually.
The agriculture ministry says farmers can produce 500,000 metric tons of maize and beans per season. Officials at the exchange say demand has overtaken supply.
Jean Paul Mutarikanwa, Director General of ProDev Group Holdings, which owns MINIMEX-Rwanda’s largest miller, has purchased over 500metric tons of maize from the exchange.
By: Dan Ngabonziza