Benefits, Justifications and Risks

Risks and Risks Moderation Measures Included in the Component Design^[1]

Tea is one of the most important industries for Rwanda, employing the most number of people compared to any other industry, and as such its viability must be handled with great care. Like all agricultural undertakings, the tea component is potentially subject to a number of risks including low tea prices, unpredictable weather conditions, pest and disease out breaks, and lack of good planting materials. The risks are minimized through strengthening of research relevant to smallholder tea cultivation, production of high-quality planting materials, and provision of extension services to improve cultivation practices. The component will construct a new factory with modern technology and with experience management on tea production, which will improve the quality of tea produced, thus helping to maintain prices in the face of declining global tea prices. The extension services and support to the smallholder development associations will lead to increased productivity with subsequent income increases, making tea cultivation a more profitable venture attractive to the rural poor.

Rwandan tea production is predominantly of the CTC type and the marketing strategy should capture the changing in the consumer preferences in the traditional orthodox markets to CTC tea, which is used in tea bags such as Turkey, the Middle East, Russia and the Central Asia region which were the orthodox markets earlier. The component design calls for institutional reforms of tea smallholder organizations leading to greater autonomy and more effic