Rice farming and income distribution along the value chain in Rwanda

Abstract

Rice farming has become an integral part of the agricultural production in Rwanda and plays an important role in socio-economic development of thousands of farmers. The activities related to rice sub-sector provides investment opportunities for actors who want to invest in it. Due to its importance, transforming it will definitely contribute not only to the rural sub-sector development but also to national economic development and poverty alleviation for rice farmers and improve the income of other actors in rice value chain. Despite the importance of rice farming in Rwanda little is known how it affects farmers’ income and distribution of benefits between actors along the chain.

This study aims at analysing the rice value chain and the level of distribution of benefits between value chain actors. The primary data was collected in Huye, Nyanza, Gisagara, Bugesera and Rusizi Districts and the total sample for rice farmers was 322, cooperatives 17, processors 9 and traders 28. To achieve the overall objective of the study; mixed methods were used and these include structured questionnaire for survey, interviews with key informants and focus group discussion.

The research findings show that there are significant disparities in gains distribution along the value chain for two types of rice crop in surveyed areas; as margins range from 0.10 to 0.23 for Youan and from 0.12 to 0.25 for Watt. Farmers currently receive the highest margin while traders received the lowest.

Moreover, although there is a formalised paddy processing and rice market supply, for 70% of wholesalers part of rice is still supplied by informal groups of small millers and traders.

For a viable long-term rice value chain, it is required that paddy and rice are supplied through the formal trading system and the economic gains are fairly distributed among the various chain participants who should be linked through a shared objective to generate higher profits and create mutually beneficial outcomes.

Keywords: rice farming, value chain, value chain participant, income distribution