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 efficient provision of services at lower cost. The streamlining of these organizations with a broad-based constitution, orientation, relevant training, demonstrations and exchange of tea growers to other tea growing areas and countries for its members will enable strengthening the smallholders in Rwanda who would continue to play a major role in the future tea industry.

The tea development component faces the risks that farmers/smallholders may use “shortcuts” when it comes to proper use of tea cultural best practices. These shortcuts may be as follows:

• Selling fertilizer or using it for vegetables and other crops in their home gardens;
• Not applying proper formula of NPK fertilizer. The soil conditions defer from place to place. Hence an analysis of the soil should be done to compensate for deficiencies;
• Not ensuring that twigs and branches from pruning are allowed to become compost. It may be taken for firewood;
• Anti-erosion measures for hill tea/drainage for swamp tea.

Setting up of a duly trained extension service staff for the tea programme and establishment of demonstration plots in the smallholders’ home gardens tea plantation will minimize the above-mentioned risks.

^[1]Risks associated with the PI and his proposal are developed in section VII.