SMALLHOLDER CASH
AND EXPORT CROP DEVELOPMENT PROJECT

PROJECT BRIEF

Who are the beneficiaries?

The intended beneficiaries of the Smallholder Cash and Export Crops Development Project are about 28 000 cash crop producer families in selected rural districts of four Rwanda provinces. They are all very poor people who live below the poverty line and work small plots or produce cash crops to supplement staple production and thus achieve basic food security.

Why are they poor?

Cash crops make a significant contribution to smallholder households in Rwanda inasmuch as they are often their major source of cash income. However, the smallholder coffee growers receive extremely poor returns on their production owing to inadequate processing facilities, which makes it difficult to control the quality of their output, and very low prices on the international coffee market. Remunerative prices can be obtained only in the event the quality of the coffee improves significantly and innovative marketing strategies are adopted. Smallholder tea producers receive only a fraction of the price paid in neighbouring countries, despite the fact that the quality of the green tea leaves produced in Rwanda is among the best in world.

What will the project do for them?

The project will assist smallholder coffee growers to establish primary cooperative societies and produce high-quality arabica coffee. It will also support the development of modern coffee processing facilities by cooperative companies, which, over time, will be taken over by primary cooperative societies of poor smallholder growers. With respect to tea, the project will help to privatize a large government industrial estate by sharing it out among 4 000 poor smallholders, of whom about 2 000 will be women heads of households; establish and train primary cooperative societies formed by beneficiaries of the land distribution; and finance the construction of a factory to process the tea produced by them. Here again, in the course of time, the new tea factory will be taken over by primary societies of smallholder tea producers. The involvement of the Fair Trade (FT) organization, Twin Trading Ltd. (TWIN) in project implementation will provide the cooperative companies with training, information, management support and access to special FT market niches that reward production of high-quality arabica coffee and tea at remunerative prices. TWIN assistance will continue after project completion to ensure the sustainability of production and marketing activities funded by it. It is estimated that the processing cooperative companies will be in a position to increase the prices paid to growers for raw crops by 100% for tea and 30% for coffee, once the companies have fully reimbursed the resources received under the project to finance the industrial facilities.

How will the beneficiaries participate in the project?

Individual beneficiaries of the distribution of the tea estate will be entitled to use plots of public land planted to tea, subject to sustained good management of the plots received. All members of the coffee and tea growers’ primary cooperatives holding shares in the processing enterprises will participate in managing them. Membership in primary societies will be voluntary but subject to conditions regarding the democratic nature of the societies and commitment to producing top-quality crops for processing. The introduction of new cash crop initiatives will depend on the demand of farmer group cooperatives or small and medium enterprises.