National Agricultural Export Development Board

Ministry of Agriculture and Animal Resources

Rwanda Horticulture Development Authority (RHODA)

Business Plan, 2006-2010

1 INTRODUCTION

1.1 Background to the Horticulture Industry in Rwanda

Horticulture production and consumption dates far back in the pre colonial era during which native fruits and vegetables formed a considerable proportion of Rwandan’s diets. New horticultural crops such as avocados were however later introduced by missionaries during the colonial period. After independence in 1962, INEAC and Institute of Agricultural Science Research (ISAR) took over horticulture production and promotion. In 1964, the Service des Semences Selectionnée (SSS) began large-scale distributions of fruit and vegetable planting materials. The government initiated this Project because

• There was a need to address nutrient deficiencies common by then in typical Rwandan diets particularly deficiencies of vitamins, minerals and fats through promoting the consumption of fruits and vegetables.

• Fruits and vegetables were believed to generate more revenue as they yield more per unit area cultivated and earn higher prices per unit weight compared to the sale of staple crops.

• Fruits and Vegetables could be exported and serve as an important source of foreign currency.

Since then various attempts were made to promote the industry; but they were too inadequate to generate any meaningful development. For example it was only in late 1999 that the Ministry of Agriculture and Animal Resources created the Horticulture and Industrial Crops Division (HICD) in the Directorate of Agriculture which was tasked among other things to promote diversification into non-traditional cash crops (edible fruits, vegetables, flowers) for domestic consumption and export. Similarly, ISAR established a horticultural division only recently in 2001 and staffed with two horticulturalists and a few technicians. The extension services system has been of a general nature with the former provincial and district agricultural officers handling extension services with no specialised or particular horticultural programs. Even with the current restructuring of Ministry of Agriculture and Animal Resources that saw the creation of Rwanda Agricultural Development Authority (RADA) that is mandated to develop agriculture including horticulture, still no serious consideration was given to horticulture. RADA has five units excluding horticulture, employs about 32 professionals with only one horticulturalist.

The current arrangement therefore like the previous ones does not seem to offer any chance for the exploitation of horticulture potential. It is mainly due to the lack of serious consideration to its development that horticulture has largely remained under-developed, with current export receipts amounting to US $1.5 million. It is therefore against this background that the government of national unity recommended the creation of Rwanda Horticultural Development Authority that will facilitate the necessary actions and investments as well as act as a central hub for all needs related to the Horticulture industry, and serve as a champion of the national horticulture strategy in an attempt to unblock this potential.

1.2 Definition of horticulture

Since horticulture is new field in Rwanda, it would be imperative to clearly define it before going into details of the current situation, and the business plan. This is very important because stakeholders would have the same understanding of the subject and therefore a common vision. There are many definitions of horticulture but the generally accepted one is the art or science of growing flowers, fruits, vegetables and shrubs in gardens or orchards . To date horticulture definition has however been broadened and it includes the cultivation, processing and sale of fruits, nuts, vegetables, ornamental plants, and flowers and it includes four major divisions :

• Pomology –the science and practice of growing, harvesting, storing, processing and marketing tree fruits.

• Olericulture - the science and practice of growing, harvesting, storing, processing and marketing vegetables.

• Floriculture - the science and practice of growing, harvesting, storing, designing and marketing of flowering plants,

• Landscape and nursery industry - the science and practice of propagating, growing, installing, maintaining, using grasses, annual plants, shrubs, and trees in landscape. To the above divisions, William L George adds the following division;

• Post harvest physiology which involves maintaining quality and preventing spoilage of horticultural crops. Generally, horticulture implies the production and marketing of high value commodities and their products i.e. fruits, vegetables, flowers, ornamentals, essential oils, gums, resins and nuts. Chart I and II indicate major horticulture commodities traded globally. 1.3 Justification for the exploitation of Horticulture Potential in Rwanda

Horticulture industry offers considerable potential which may contribute significantly to poverty reduction and economic development if adequately exploited. Rwanda has a strong competitive base that hinges on its comparative advantages such as favourable climate, soils, abundant water resource, and abundant cheap labour force that can be exploited to produce quality and competitive horticulture products on the regional and international. Development of horticulture industry can play a leading role in the following priority areas: 1.3.1 Export diversification and post HIPC Financing To attain aspirations expressed in the vision 2020, our National Investment Strategy (NIS) proposes an increase in total Growth Domestic investment (GDI) from 17% in 2000 to 30% by 2020. Financial resources to realise the above objective are expected to be mobilised from domestic savings as well as from external funding. Post HIPC conditionality allows Rwanda to burrow only an amount proportion to export receipts. This is a very big challenge as we have a financing gap of over US $ 375 million that domestic resources can not cover and which has to be financed largely through grants that are donor driven, dependent and unpredictable. Horticulture development can therefore increase and diversify our export base, reduce dependence on coffee and tea whose prices continue to fall on international market hence help in post HIPC financing. Development of horticulture will also increase foreign currency hence improve our balance of payment which stood at US $ -38.9 million in 2003

1.3.2 Agriculture Intensification and Poverty Reduction.

Due to scarce land resource, the government has identified agriculture intensification as one of the strategies for agriculture transformation. This is expected to give more yields per unit area. Intensification is more applicable to horticulture commodities than to staple crops because.

• It gives more yields per unit area hence generating more revenue to rural populations. Horticulture yields 10 times higher than cereals and pulses and twice than roots and tubers

• It earns higher prices per unit weight as compared to staple crops. This can contribute to poverty reduction, economic development, and employment creation in urban and rural areas particularly to those involved in its processing.

• Horticulture development is also an ideal option in Rwanda because it is profitable on small pieces of land that most Rwandans rely on for survival. About 0.29 % of Rwandan families have less than 0.2 ha

1.3.3 Contribute to Millennium Goals

The development of horticulture means offering the population a means to earn some money on a regular basis as well as essential nutritional requirements. This will help them to afford complimenting government efforts to eradicate extreme poverty and hunger, achieve universal primary education, reduce child mortality and improve maternal health. These are critical issues as far as attaining millennium goals is concerned.

2.0 Overview of Horticulture Industry.

2.1 Global Size of Industry Horticulture is a multi billion dollar complex and highly competitive industry dominated by developed and developing countries of the world with Germany being both the largest importer of cut flowers and ornamentals and fruits and vegetables .

World fresh vegetables and fruits imports amounted to $63.6 billion (2004) while world imports of flower and ornamental imports were equivalent to US $ 7.0 billion (2004). In addition to being a large market, it is a diverse one with different horticulture products requirements, multiple segments, differences in purchase and distribution patterns, and differences in preferences and tastes . This diversity offers opportunities for every country including Rwanda to get what to produce and offer to such market.

The horticulture export market is growing mainly because of increased consumption demand and the development of technology to facilitate in fresh products. For example, the invention and adoption of new transportation and controlled atmosphere technologies has allowed fresh products to travel longer distances without losing freshness and quality.

2.2 Major requirements to enter the horticulture markets

Though world horticulture trade involves a huge and growing market, it is increasingly becoming difficult to penetrate by producers and exporters of fresh produce due to competition, change in consumers tastes and demands, and the regulatory issues of quality and standards emanating from concerns about food safety, ethical and environmental conditions under which food is produced and distributed.

This is particularly so with EU market that has a number of stringent regulatory measures and private codes of practice in response to above concerns. This is affecting imports of fresh products into EU markets. However with government support, private sector has ably exported to such markets despite the restriction. For example 58% of Roses exported to EU market come from Kenya in 2005 .

3.0 The Rwandan Horticulture Industry.

3.1 Nature and Size of Industry.

The Rwandan horticulture industry is still characterised as a smallholder traditional enterprise with

• Low capital and technology input

• Unselected seedling material

• Poor cultural practices in

• · Land cultivation/preparation
• · Fertilizer application practices
• · Weeding
• · Pest management
• · Water management

• Poor post harvest, marketing and processing practices

• Poor management practices. To date, the industry employs approximately 1.5 million unorganised smallholder farmers engaged in the production and marketing of horticulture products. The industry is getting organised with the coming up of few associations, co-operatives and small enterprises dealing in organised production and marketing as indicated in map

1 . Horticulture currently is estimated to occupy around 7.8% of the total arable area of the country and 9.5 % of total area under crop production . Fruits and vegetables constitute the largest proportion with 3.6% of the total area .

Source: Map 1 was adopted from National Horticulture Strategy and MINAGRI.

3.2 PRODUCTION TRENDS

Horticulture was not previously given much attention and this explains why farmers allocated a smaller proportion of their land as compared to other crops hence producing less tonnage. Only 1.3 % of the total surface area under crop production in 1986 was cultivated to horticulture. However, the area planted to horticultural crops increased to 9.5 % in 2005 with the recognition of the vital role it is playing in poverty reduction and economic development as indicated in the bar graph1.

The total area planted to horticulture production in 2005 was 78,010 hectares compared to 10,564 ha in 1986. Production was 975,125 tons in the former year while it was 91,830 tons in the latter. This is equivalent to an increase of 638% in the area cultivated and 962 % in production in the period 1986-2005. Rwanda is currently exporting small quantities of horticulture products including baby banana, cooking banana, avocado, pineapple, passion fruit, dried chill, egg plants, snap peas, French green beans, dracaena, and rose flower but most of them have high potential to turn into viable exports for the country generating considerable revenue.

3.3 Productivity

Yield per unit area planted to horticulture crops in Rwanda is estimated at 10 times higher than that of cereals and pulses and twice that of roots and tubers and cooking banana . The above together with the fact that they are offered higher prices per unit weight leads to significantly higher returns from them as compared to staple crops. This explains why probably productivity for horticulture crops has been increasing much faster than the traditional crops as indicated in figure below.

3.4 Marketing of horticulture produce

Farmers market their produce by either transporting them to markets/processing units or traders visiting farmers’ fields to source for the produce. In both cases traders/buyers dictate the price at which the produce is sold as there is neither any competition nor organised farmer groups to negotiate for better prices. This situation applies to domestic, regional and international markets and in all cases the middleman takes most of the profits leaving the farmers with little or none of the profit margin.

3.5.1 Domestic markets.

Although there are no market studies that have been carried out to determine domestic horticulture requirements, what is evident is that most Rwandans often use these commodities and in sufficient quantities. The coming up of some juice manufacturing plants has made domestic demand even higher. It is estimated that these processing unit require between 15-20 tons of passion fruits weekly. There is growing local demand for horticulture produce for both fresh and processed products gauging from the level of horticulture imports. Horticulture imports amounted to 15,600 tons equivalent to US $ 56 m . Domestic market for local horticulture products is constrained by irregular supply, and competition from regional products,

3.5.2 Regional markets.

The Common Market for East and Southern African (COMESA) is vast region with a large city population that utilises horticulture products on a daily basis. There is considerable demand for horticulture products in the region especially in Uganda that is currently a major importer of our passion fruits. This is because of the emergence of many juice manufacturing factories and supermarkets. Imports of passion fruits alone totalled to 8,000 tons in 2003. Although regional market is important, it should be transitional as arrangements are finalised for international market.

3.5.3 EU and other international markets.

The international community offer vast opportunities for our horticulture products. Market survey has indicated that a considerable number of people are interested in Rwandan horticulture products. Rwanda has favourable climate, good soils, cheap and labour that may allow her to produce competitive horticultural products for the international market. In addition her farmers apply little or no inorganic fertilizers and therefore can supply organic horticulture products that fetch price premiums on the international market. However due to several constraints, Rwandan horticulture exports to international markets are negligible. Currently Rwanda exports small quantities of cut flowers (roses), dried flowers(pyrethrum), ornamentals(dracaena), and some fruits and vegetables including baby bananas, dried chilli,

3.6 Extension Services

Countrywide, the agricultural extension services are of a general nature and handled by the district and sector agricultural officials. There are no specialised or particular horticultural programs and this has hampered horticulture development and needs reversing. 3.7 Research. Research into horticulture was previously almost none existent. ISAR established a horticultural division in 2001 , staffed it with two horticulturalists and a few technicians and currently is running only one horticultural program that is involved in the identification and evaluation of indigenous vegetables, such as pumpkin, egg plant, amaranths and spider flower, developing extension materials for passion fruit growers; training farmers in avocado and orange grafting techniques; and adaptability evaluation trials of 40 varieties of tomato, 20 varieties of sweet pepper and 20 varieties of hot pepper.

4. 0 SWOT

Analysis Understanding clearly the constraints and what future prospects the industry holds for the country, a swot analysis is essential.

4.1 Strengths

• Abundant cheap labour force will help in the production of cheaper products that are competitive both on regional and international market.

• Some knowledge for the growing of horticulture crops particularly fruits and vegetables already exist among some Rwandese.

• A considerable amount of financial and technical support is available from foreign aided projects such as RSSP, PDCRE,

• Favourable climate allows the production of a variety of high quality horticulture products that compensate for other weakness. For example our roses have the best colour in the region.

• Availability of plenty of water is an asset that can be utilised to produce throughout the year cheaply and ensure regularity which is a major requirement for export market.

• Stable government and security is an excellent strength for attracting FDI

• Strong political will

• The government is committed to Zero tolerance on corruption. Rwanda was ranked 1st among non corrupt countries in Africa

• Excellent investment climate

4.2 Weakness Horticulture industry in Rwanda faces numerous constraints; most which are directly or indirectly related to its nature, that is being a smallholder crop involving millions of unorganised farmers, with little capital, knowledge and contact which are prerequisite for the success of the industry. The major contraints include:

• The fact that it is involves too many suppliers, supplying too little, with unknown origin limits access to European markets due to their traceability requirement.

• Farmers lack clean planting materials either because they are expensive or business men may import them without confirming origin or quality and hence plant poor quality materials that produce less and susceptible to diseases.

• Farmers lack technical knowledge needed for the production of adequate and quality horticultural products. Knowledge also lacks among the technicians.

• Inadequate use of manure, fertiliser, or pesticides because they are either unavailable or costly leads to lower than average production.

• Dependence on rain fed with no irrigation systems is a major constraint as horticulture exports require regular and reliable supply which is not possible under rain fed conditions.

• Lack of clean planting materials, lack of strict control of their movement, and lack of farmers’ knowledge about disease and pest control has led to widespread infections hence reducing production.

• Horticulture is a capital and labour intensive activity that requires considerable capital for acquiring the appropriate equipment and technologies and farmers lack this as they lack access to financing.

• Horticultural producers are not organised that is important for marketing of their produce hence they are either exploited or their products are not sold.

• Most horticultural products are marketed without any value addition process mainly because of low tonnage and less domestic demand, lack of technology to produce for international standards, and lack of packaging materials. This results into less revenue to farmers and no incentive to develop the industry.

• Less effort has been put to horticulture research and most information is lacking on production, post harvest, pest and disease management, and varieties suitable for the differing agro-ecological zones and because of this extension does not any base to promote horticulture.

• Lack of horticulture post infrastructure such as pack houses, cold-storage facilities and refrigerated transport results into poor quality and unreliable products hence making it difficult access market to international

• Lack of market information particularly on prices, product

• Costly and inadequate airfreights to international market place makes most Rwanda Horticulture products non competitive.

• Using a scale of 1-5, obstacles to fruits and vegetables development have been ranked in the following manner

Source: OTF survey results

4.3 Opportunities

• Existence of potential export market in Europe and Middle East .

• Availability of a big regional market-Uganda, Tanzania, DRC,Burundi

• A considerable Domestic market will allow the consumption of what is not exported as export market targets best quality products.

• Abundant agricultural wastes can be utilised for production of liquid organic fertilizers which can be used to produce organic products that fetch high premium prices on international markets. It can also reduce cost of production and is environmentally friendly.

4.4 Threats

• Competition from the region as they produce similar products

• Land fragmentation may increase cost of certification.

• In some areas, bad roads may delay delivery of horticulture products hence affecting quality.

5.0 THE CREATION OF RHODA

5.1 Context In an effort to increase export diversification, horticulture has been declared one of the top government priorities. Although the industry offers considerable opportunities in terms of export receipts projected to reach over 12 US $million in 2010, it remains under-developed, with current exports around $1.5 million. In order to unblock this potential, significant intervention and coordination on the part of both the private sector and the public sector is required . It is for this reason that Cabinet on 27/01/06 constituted a horticulture task force that was among things tasked to formulate the legal framework for establishment of Rwanda Horticulture Development Authority and draft its business plan. RHODA will eventually act as a central hub for all needs related to the Horticulture industry, and serve as a champion of the national horticulture strategy 5.2. Mission

In collaboration with all stakeholders RHODA will promote the growth and development of horticulture products with export potential through the promotion of appropriate production and post harvest technology, out growers organisation, the necessary infrastructure, marketing information systems, export compliance mechanism and advisory and extension services in line with the Vision 2020, EDPRSP, the National Agricultural Policy (NAP), the Strategic Plan for the Agricultural Transformation (SPAT) and the National Horticulture Strategy(NHS) 5.3 Vision. To provide efficient and reliable services from one stop centre to all stakeholders in the horticulture industry with the aim of transforming the industry into viable and profitable business.

5.4. Strategies

To realise the above mission and vision, the following strategies have been adopted.

• Starting from a weak base, government will provide basic infrastructure, mobilise the private sector, help pioneers on soft loans and technical know how

• Developing an information system that avails all data/information to potential investors/farmers from one stop centre. Availing information on land issues, market prices, market access and potential buyers, profitable horticultural products, etc will reduce transaction costs, reduce duplication, and attract potential investors.

• Focusing on the production and export of horticultural products that already have market and in which Rwanda has comparative advantage and then expand to more diverse ones once established

• Taking advantage of niche market for organic products

• Putting in place an organisational structure that incorporates the private sector as much as possible but at the same time short enough to reduce bureaucracy.

5.5. Structure

• RHODA has been structured bearing in mind the constraints that exist in the horticulture industry with the aim of improving the current state of affairs. Similarly roles of other cooperating institutions were looked into to avoid duplicating responsibilities but instead ensure complementarity. The structural Organisation of RHODA:

Proposed RHODA Board Structure

5.6. Collaborating Institution

• To ensure efficient delivery of services to its clients in a complementary and non duplicating manner, RHODA will cooperate with all institutions that have a stake in the promotion of horticulture industry. The following coordination map shows how various institutions will jointly promote different aspects of industry.

6.0 THE RHODA BUSINESS PLAN

In her vision 2020 and Economic Development and Poverty Reduction Strategy Paper (EDPRSP), the Government of Rwanda (GoR) identified agriculture transformation as a high priority for the country’s economic development and rural transformation. The ministry of agriculture plans to achieve the above by diversifying and promoting non-traditional crops, namely horticultural products, for domestic, regional and international markets. This is in line with the general agricultural policy that it hopes to achieve sustainable development through transforming the agricultural sector into a high value and high productivity activity. It is for this reason that this business plan explores into and proposes ways and actions for developing horticulture into a viable and profitable market-orientated business enterprise benefiting thousands of Rwandans and private entrepreneurs engaged into it now and in future.

6.1. Global Objective:

To contribute to poverty alleviation and economic development by increasing production of horticulture products with export potential to enable generation of export revenue of over US $ 20 million in 2010 from the current US $ 1.5 million. 6.

2. Specific Objectives:

1. To coordinate, and serve as the centrally organized entity for horticulture development by

• Coordinating all horticulture development activities in order to avoid duplication of efforts, serving as a one stop centre for all information needs, and through which all horticulture efforts and activities are channelled.

• Continuously monitoring and evaluating horticulture development to ensure that the industry’s needs are met as well as responding to changing market demands.

• Championing and driving the implementation of the national horticulture strategy.

• Championing and directing necessary investment in key priority areas.

• Acting as a forum for the exchange of ideas and information between the private sector and the public sector.

2. To facilitate increased production of top quality horticultural produce for export and local markets in collaboration with institution involved in production through:

• Provision of advice to growers, exporters and processors to plan production in relation to market demand.

• Provision of advice to growers on the use of certified planting materials and seeds.

• Provision of advice to producers and exporters on appropriate post harvest handling techniques.

• Organising out growers for production and linking them with private entrepreneurs and processors for local and export markets.

• Provision of advice to farmers on the proper use of inputs particularly pesticides to adhere to Maximum Residue Levels (MRLs).

• Progressively promoting commercialisation of the extension service.

• Promote in collaboration with ISAR, Universities and RADA training, research, and awareness among producers and exporters to understand and adhere to international regulations and quality requirements, packaging and environmental regulations based upon the internationally recognized EUREPGAP standards.

• Promoting demonstrations and trials of technologies which are beneficial to the industry, in conjunction with ISAR and RADA.

3. To regulate and implement code of practice for the horticulture industry in collaboration with key players,

• Registering, screening and licensing horticultural crops’ nurseries, carrying out inspection of the planting materials for certification and training of nursery managers in order to promote healthy seedlings and profitable varieties.

• Licensing horticultural exporters.

• Participating in the prioritizing/utilization of various horticultural products.

4. To promote the marketing of horticulture products locally, regionally and internationally by

• Advocating for the provision of hygienic and secure facilities, including appropriate technology evaporative coolers at major collection centres.

• Monitoring and disseminating information on prices in the local and export markets to enable farmers and exporters plan effectively.

• Availing market information and market statistics to investors, exporters and producers for planning purposes. • Assisting the growers to identify local and export market outlets for their produce.

• Advising on packaging, transportation and distribution of horticultural produce in the local market.

• Designing, introducing and implementing standards for locally marketed produce.

5. To advise the government on policies, strategies and legal issues related to horticulture development 6.3. Strategy of implementation

The business plan will be implemented through the involvement of all our stakeholders- Private Sector, ISAR, RADA, RIEPA, and RBS who will work with decentralised institutions of the government such as business development centres, district and sectors. These institutions will at the beginning be involved mainly in mobilisation, information dissemination and simple technical assignments. For most of the technical work, RHODA will initially source from competent and qualified personnel from outside our institutions since there are few national horticulturalists. This will be done concurrently with building local capacities that will eventually drive horticulture development. 6.4 Priority Areas and Investment Plan Due to scarce resources, efforts will be directed to priority activities that are capable of generating maximum output using minimum resources. The following activities will be promoted and supported. 6.4.1 Enhance increased Production of quality horticulture products for export. The biggest challenges facing export of horticulture products is centred on small volume that can neither be exported profitably on passenger flight nor provide incentives to attract adequate air cargo. It also arises because of poor quality products which make it difficult to access international markets that require high quality standards. RHODA will tackle the above problems in following manner: 6.4.1.1 Encourage and Support Horticulture Production Efforts will be channeled to horticulture priority crops identified as marketable and profitable. This is particularly important in Rwandan situation where land is scarce. It will also help in concentrating the scarce resources available to only those products where we are competitive hence maximising benefits. Survey results indicated the following Rwanda fruits and vegetables to be competitive on the EU market .

Horticulture crop

Type Organic or Conventional

Min Quantities required

Other requirements Cut flowers Roses Organic Reliability, Certification Others* Organic Reliability, Certification Dried pyrethrum conventional Reliability, Certification Fruits Passion fruits Fresh organic/Fairtrade > 2 tons/week Reliability, Certification Baby Bananas Fresh organic/Fairtrade >2 tons/week Reliability, Certification and traceability Baby Pineaples Fresh organic/Fairtrade >2 tons/week Reliability, Certification and traceability Avocadoes Fresh organic/Fairtrade >1 container/week Reliability, Certification, relationship with re-exporters Tomatillos Fresh organic/Fairtrade > 1 container/week Reliability, Certification, relationship with re-exporters

Papaya Fresh organic/Fairtrade >1 container/week Reliability, Certification, relationship with re-exporters Gooseberries Fresh organic/Fairtrade > 1 container/week Reliability, Certification, relationship with re-exporters Vegetables* Snow peas Fresh organic 26 tons/week Reliability, Certification, relationship with re-exporters Baby carrots Fresh organic 5 tons/week Reliability, Certification, relationship with re-exporters Baby corn Fresh organic 5 tons/Week Reliability, Certification, relationship with re-exporters Chillies Fresh organic 2 tons/week Reliability and Certification Asparagus Fresh organic 2 tons /week Reliability, Certification, relationship with re-exporters Brussels sprouts Fresh organic 2 tons/week Reliability, Certification, relationship with re-exporters Essential oil Pachuri Processed organic Reliability, Certification Geranium Processed organic Reliability, Certification Source: OTF Group, 2006, and Minagri * These estimates are based on requests from East Africa Growers Association (EAGA) with whom we are negotiating re-exporting our horticulture products. Horticulture as a new field in Rwanda needs special attention in as far as technical expertise is concerned. Horticulture specialists will be trained to help in the production of sufficient and quality horticulture products. Equally important, extension services will be strengthened to enable farmers acquire production, disease and pest control as well as post harvest handling techniques and this will be done by concentrating all efforts in demonstrations farms for maximum impact. The above will ensure the production of quality products and in adequate quantities. Arrangements will be made to commercialise extension services to those who can manage but the service will remain free to ordinary farmers. Attempts will also be made to produce organic products as there is growing demand for such products and premium prices are offered on them. Seed quality will be ensured through restricting seed movement and by allowing use of only certified seeds/materials. To acquire adequate quantities for exports, sizeable commercial farms particularly for flowers will be encouraged where possible. However, because land is scarce in the country, adequate quantities will be raised through training and organising small farmers into out growers groups and link them with private exporters.

6.4.1.2 Advocate for increasing R&D in Horticulture Very little has been done in the area of horticulture research. RHODA will advocate for increasing ISAR’s capacity in horticulture research by training more of its staffs so that it is enabled

• To create a national databank of relevant production and climate information for use by potential investors.

• Acquire more information on adaptability of different horticulture crops to agro ecological zones, disease and pest resistant varieties, post harvest technology, and other appropriate technologies that will help a farmer to produce quality products that are able to meet international requirements.

• To develop a system for designating & introducing new priority crops in collaboration with relevant institutions.

6.4.1.3 Support Rural Organization for Horticulture Crops

Horticulture production is currently in millions of unorganized farmers. This is a very big disadvantage in terms of input distribution, marketing and above of all raises cost of certification. We have to overcome these constraints by organising horticulture farmers into strong cooperatives & producers associations using appropriate structural and organizational models that worked elsewhere with modification to suit local realities. It is through these cooperatives that farmers will consolidate land, link with markets for their produce, input and credit suppliers and access extension services. These cooperatives will also facilitate registration of groups engaged in horticulture production for linkage with investors. RHODA will encourage use of the following models as they can help to solve the land constraint, raise the right volumes for export as well as ensure traceability export requirement 6.4.1.3.1 The Outgrower model Outgrowers are commercial farmers that produce for specific large exporters. Under this model these farmers enter into contracts with large exporters for specific products. These exporters give contract farmers inputs, agronomic techniques in return for agricultural produce. This arrangement is preferred because exporters can easily raise large volume required for exports, ensure consistent production and regulatory compliance , and efficiently provide inputs and technical support to the outgrowers. Annex shows the details of the model and its SWOT analysis. 6.4.1.3.2 The Grower-Exporter Model This is where exporters are engaged in production themselves. The model helps to maximize profits, reduces risk of losing suppliers, and helps to abide by labour laws, pesticide regulation and safety compliance . Because of the land constraint this model is likely to be adapted on a small scale in fruit and vegetable production. However, as it is difficult to produce flowers under other production models, this will be the likely model for floriculture development in Rwanda. See details of the model and its SWOT analysis in annex 6.4.1.3.3 The Grower-Service Provider-Exporter Model. Under this model a service provider links farmers with exporters. Farmers are organised into groups of 30-50 members to form sizeable units of about 30 acres for horticulture production. The farmers employ a farm manager to run the farm on their behalf and reports to their management board. The service provider provides farmers with technical and business expertise, short term loans and advises the farmer management board and thus serves as a link between the farmers and exporters, and input suppliers. It also negotiates firm contracts with exporters and credit/inputs such as high quality seeds, fertilizers, irrigation equipment etc with input/credit suppliers. At harvest the exporter collects the produce directly from the farm on specific days, grades, packages the produce in his facilities and pays the service provider who in turn deducts all loans and costs of inputs prior to the paying farmers. The REAP production model in Kenya, Farmerpine cooperative of small holders in Ghana are examples of this model. See details of the REAP model implemented by Care Kenya in annex and its SWOT analysis.

6.4.1.4 Coordinate activities in Horticulture

Currently there are various initiatives going on in different ministries, NGOS, UN Agencies, Agri business centres but unfortunately, it seems none knows what the other is doing. This uncoordinated way of doing things is resulting into duplicating of efforts wasting resources, time and losing focus. Rwanda Horticulture Development Authority (RHODA) will try to coordinate these development attempts for the benefit of all. It will also strengthen partnerships and collaboration between relevant institutions such as RADA, ISAR, REIPA, RPSF, RBS, BDS, Projects, Banking institutions and funding agencies to ensure that necessary actions and investments are channelled into priority areas. 6.5 Investment mobilisation and promotion Making an investment decision requires a potential investor to have adequate information regarding any prospectus investment and he must be convinced that his business will be profitable. To attract investors, RHODA will ensure that all the information necessary for investment decision in the area of horticulture is available. This will be done by carrying out the following:

6.5.1 Develop Targeted Investment Promotion Activities Together with RIEPA, RHODA shall develop Horticulture Promotion Campaign aimed at FDI & domestic market. This will go hand in hand with conducting additional feasibility studies and business plans, especially in floriculture to facilitate investors in decision making. 6.5.2 Incentives for horticulture investors Rwanda already offers an attractive investment climate including a number of incentives such as those provided for in Rwandan Investment Incentive law No.14/98 indicated in annexes. However, horticulture needs additional incentives in order to attract investor into the sector. This is because the industry faces a number of constraints or risks such as high flight charges that it would be difficult to attract most investors without intervening in the above constraints. Moreover, regional countries especially Ethiopia and Kenya are offering the said incentives and it would be difficult to compete with them without similar facilitation. Provision of some incentives particularly intervening in air flight costs explains large why regional countries have been able to attract considerable private investments into horticulture. Annex indicates the incentives offered by regional countries.

6.5.3 Ensure Land Access & Availability

RHODA in collaboration will REIPA will identify and prioritize areas for horticulture production which may be given to serious investors as an incentive. To ensure that much revenue is generate from horticulture exports, emphasis will be put to the production of organically produced commodities as they fetch premium prices on the internationally market. Organic Production Zones will therefore be established to ensure that as many farmers as possible produce organic products as well as guarding against lose organic certificates those who have already acquired them. Use of land as a collateral will be promoted and producers will be sensitised to acquire land titles for eventual use in banks.

6.5.3 Improve Access to Financing

Horticulture is a capital and labour intensive industry and any investor including the small holder farmer will need a significant amount of money for investment. It is also a risky business that needs low interest rate financing. RHODA will mobilize all the stakeholders in the industry to work towards

• Developing an attractive financing package for horticulture investors

• Establishing horticulture specific financing tools for production and special equipment financing RHODA will lobby banks and donors to fund horticulture industry specifics and opportunities. It will also avail and publicise current sources of funding & assistance to the members of the public hence narrowing the information gap existing between service providers and beneficiaries.

6.5.4 Ensure Sound Processing Environment An enabling environment is one of key public services that government has pledged so that private sector can operate efficiently. Though the government has done much, there is need to continue creating an enabling environment. It is in this respect RHODA will support the establishment of a flexible packaging factory to avail packaging materials for horticulture exports. It will support Quality Control efforts in the processing industry particularly for juice & jam processors. This is very important because export of horticulture products need a strong local outlet for large proportion of products that do not meet international standards. Processing is one of the ways of ensuring that farmers do not lose what has not been exported.

6.5.5 Provide Technical Assistance to Entrepreneurs

Due to the fact that there is lack of skilled personnel in the horticulture industry both among the farmers and technicians, RHODA is proposing to establish a short term technical assistance fund to hire technical experts to help horticulture pioneers. These funds can be obtained through developing good relationships with technical assistance organizations and projects such as CBI, SIDA, and REAP that are helping countries in the region. It is for reason that RHODA has started contacts to ensure that the upcoming SPREAD project being sponsored by USAID includes priority horticulture crops. 6. 6. Improving Marketing Infrastructure 6. 6.1 Ensure Transport Competitiveness Transport is a limiting factor as far as horticulture development is concerned. Air flight is expensive and unreliable and this renders some Rwanda horticulture products uncompetitive on international market and reduces profit margin for the competitive ones. The fact that horticulture products are perishable, poor transport makes them lose quality and thus producers incur heavy loses in terms of revenue generation. This is true for both land and air transport. The RHODA working with relevant ministries will

• Build and run the cold store at the airport

• Organize Kigali Airport as an effective horticulture hub

• Intervene in airfreight costs

• Work to increase cargo volume leaving and entering Kigali Airport

• Increase overland transport competitiveness

6.6. 2 Develop Export Standards for horticulture products Accessing export markets requires stringent conditions that one needs to meet before being allowed into such markets. Rwanda Horticulture Development Authority will work with responsible instititutions to ensure such conditions are met in the most efficient way. We shall therefore collaborate with relevant institutions to

• Financially support horticulture export compliance

• Streamline phytosanitary processes for efficiency operation

• Train farmers on how they can qualify for export standards and compliance

• Develop and disseminate a code of practice for export standards 6. 6. 3 Improve Marketing and Market Linkages in Horticulture. Farmers quite often fail to sell their produce or earn meager share because they lack market information and are not linked to the real consumers of their products. They end up dealing with middle men who usually exploit farmers if they are not organized. To solve this problem, RHODA will serve as a central horticulture marketing body disseminating market information, and linking producers to exporters through business development centres , market access centres,and horticulture business centres (to be established) . This market linkage will be extended to both within the region and internationally Together with relevant institutions, RHODA will develop marketing strategies such as promotion campaigns including advertising and branding

6. 6. 4 Support High Value Added Horticulture Production Adding value to horticulture products is a key element of the national horticulture strategy. This is important because more value means more money and improved way of living. Value addition process will be enhanced by carrying out the following

• Support Premium, Organic, Fair-trade, Processed (Dried and Juice)

• Set up an Organic Center Point (OCP), including hiring an organic expert

• Sensitize actors and stakeholders about organic opportunities

• Support financing for organic certification

• Support emergence of organic associations & conduct diplomacy in region

• Support the establishment of packaging and branding of our products. 7.0 INVESTMENT PLAN

Investment Plan focuses on the core investments that will generate the take off of the industry with focus on priority areas for the industry. It is also based on private- public partnership where government will complement private and vice versa. The following chart provides a summary of key initiatives of the Action Plan, highlighting key investments. The details are indicated in annex

Priority area Priority Actions Estimated Budget Breakdown Responsible Increase horticulture production qualitatively and quantitatively Strengthen extension services in horticulture, centered around training & demonstration farms $1,275, 000 Govt: $350,000 Donor: $250,000 Private: $675,000 RHODA Increase horticulture technical expertise $720,000 Govt: $720,000 RHODA Increase ISAR’s capacity in Horticulture $310,000 Govt: $155,000 Donor: $155,000 ISAR Support organic production $281,250 Govt: $150,000 Private: $131,250 NCRE & OCP Investment mobilisation and promotion Intervene in airfreight costs and volumes $2,258,800 Govt: $ 1,129,400 Donor: $1,129,400 MINICOM Build the cold store at the airport; ensure proper management $577,600 Donor: $577,600 RHODA (Coordinator) Improve packaging options for horticulture $635,000 Govt: $35,000 Private: $600,000 RIEPA Establish a Short Term Technical Assistance Fund (STTAF) for horticulture pioneers $500,000 Govt: $500,000 RHODA Improve marketing infrastructure Configure Kigali Airport as an effective horticulture hub $250,000 Govt: $250,000 KCAA / RHODA Develop marketing activities and establish linkages in region and internationally $330,000 Govt: $295,000 Private: $35,000 RHODA / RIEPA Increase efficiency of phytosanitary processes $280,000 Donor: $280,000 RADA Support financing for organic certification $262,500 Donor: $262,500 OCP (NCRE) RBS Total Estimated Action Plan Budget: $9,950,000 over 5 years Government: $4,788,000 Donors: $3,571,500 Private Sector: $1,591,000 Estimated cumulative export receipts to 2010: $25, 000, 0000 Estimated cumulative private sector investment in export industries: $22,500,000

7.1 Government Role. 7.2 Private Sector Role

8.0 Projection/forecast Having done the above, RHODA hopes to achieve the following quantities of different horticulture products in the next four years: 9. Support to management. 9.1 Human resources In order to achieve the above issues highlighted in the business plan, RHODA will need both human and financial support. As has been indicated in previous chapters, RHODA is envisaged as a small sized structure, non bureaucratic but capable of delivering services to its client in the most efficient manner. It is in this respect that the following 12 member team is proposed to run the authority. Details of the qualifications and Job description are indicated on the attached annex I.