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New model to get fertiliser to Rwanda farmers

Saturday September 24 2016
farm

Rwanda farmers will now buy subsidised fertilisers from agro-dealers who work with Agro Processing Trust Corporation. PHOTO | CYRIL NDEGEYA

The Cabinet has approved a new fertiliser distribution model to replace the old one that was beset with fraud and related malpractices.

The Ministry of Agriculture has now selected eight importers and one distributor — Agro-Processing Trust Corporation Ltd (APTC).

While officials hope to solve the fertiliser supply and distribution issues, some insiders say this is a temporary measure.

“It will be interesting to see if indeed the distribution to the farmers works well,” said one person, who is familiar with fertiliser distribution on condition of anonymity, adding that “privatisation is likely to be jeopardised in the near future.”

APTC, a parastatal, will also do the controls at farmers' level. According to a new directive, in Agriculture season A&B 2017, farmers will buy subsidised fertiliser in their sectors from agro-dealers who work with APTC. Season A started at the beginning of September and ends in February.

According to Albert Habimana, fertiliser manager at SOPAV Ltd, a distributor with experience in the field since 2008, the right time to evaluate the success or otherwise of the new model would be at the end of the season.

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“The reason why some may doubt the new distribution model is that the distribution company is new and previously the role had been carried out by many players,” he explained in a phone interview, adding that it may work well.

According to information obtained from a working group, the Ministry of Agriculture says everything is moving fine and fertiliser for rice has already been distributed.

Farmers used to get fertiliser on loan and pay at the harvest season, when they would get money. But distributors and the government have made losses as many farmers did not pay.

“It is not easy to get our money; some farmers cannot be traced, others refused to pay, while our partners such as agronomists are no longer working in the same areas we distributed products,” said Mr Habimana.

He said the loss is estimated at Rwf6 billion for distributors and the government. The ministry did not confirm nor deny the amount by the time of going to press.

In 2008 and the years that followed, Minagri would import fertiliser and give distributors on loan. The distributors would in turn pay after farmers had paid at the harvest.

The minister has not revealed the amount of money lost due to unpaid or un-imported fertiliser distributed, which government may have subsidised.

Fertiliser contains nutrients that play a key role in agriculture productivity, which explain the importance of their timely availability in farming seasons.

According to GDP statistics released this week, agriculture’s contribution to GDP in 2016 Q2 was 33 per cent, while in recent years it has been flat.

“The biggest problem in fertilizer distribution channel was fraud,” said Mukeshima.

Past challenges

The fertiliser distribution scheme faced many challenges in the past but the most recent is one at all levels of distribution and sub-standard fertiliser that was discovered following an audit on the distribution channel.

“We have identified many issues, including sub-standard fertiliser, payment claims for undelivered fertiliser or unimported products,” said Ms Geraldine Mukeshimana, the Minister of Agriculture.

The main importer and distributor called Top Service Ltd has been involved in malpractices, where it is said the company had fake lists of clients for delivered fertiliser; a list it used to make false payment claims to Ministry of Agriculture for over Rwf400 million on undelivered fertiliser, according to people familiar with the issue.

The company worked with 200 agro-dealers who are currently under investigations while the director of main distribution company was recently jailed and charged in court.

“Someone may say that he has received 5kg of fertiliser and later puts in a payment claim that he/she received 500kg, then government pays subsidies on 500kg, this was a problem,” noted the Minister of Agriculture.