Revenue sharing plan to increase tea production

Sunday March 11 2018

Farmers take tea to a tea factory in Western Province, Rwanda.

Farmers take tea to a tea factory in Western Province, Rwanda. Tea farmers in the country plan to increase production as the sector continues to benefit from reforms. PHOTO | CYRIL NDEGEYA | NATION 

By MOSES K. GAHIGI
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Tea farmers in Rwanda plan to increase production as the sector continues to benefit from reforms such as a revenue sharing scheme in the tea value chain, which has seen processors take 60 per cent while farmers take 40 per cent.

Prices for Rwandan tea increased from $2.60 per kg in 2016 to $3.21 per kg in 2017 fetching up to $84.3 million in revenues, a 32.87 per cent increase from the $63.4 million generated in 2016.

“We established a formula where 40 per cent of all generated revenue goes to farmers and 60 per cent goes to processors. This has seen all parties motivated to put in more effort,” said Karamaga Francois, the president of the tea growers association.

He said acreage for tea farming has also increased and farmers are now working with banks, which should grow their capacities more.

“The price increased because everyone has done what they are supposed to do, quality from the garden and the final processors,” he noted.

The CEO of the National Agriculture Export Development Board (NAEB), Bill Kayonga, said the farmer field school they have been running has helped to improve farmers’ tea plucking techniques and thus boosting the value of the tea. He added that they have also seen a decrease in post-harvest losses because of better feeder roads.

Rwanda sells most of its tea at the Mombasa auction, with sales revenue soaring up to 71 per cent of total values, while direct sales revenue accounted for 29 per cent.

A report released by NAEB shows that total revenues from the Mombasa auction increased to nearly $59.7 million from 18,731,954kgs sold at an average of $3.18 per kg. Over $24.6 million was generated through direct sales of 7,510,755kgs of tea at $3.28 per kg.

Rwanda’s total “made tea” production rose by nine per cent from 25,628,412kgs in 2016 to 27,886,765kgs last year.

However, there are still challenges in weighting, loading, transporting and offloading tea leaves.

Tea grades produced include primary grades at 83.33 per cent, secondary grades at 14.69 per cent, Orthodox tea at five per cent, green tea and special tea 0.10 per cent.

It is recommended that the country diversifies its tea products by increasing orthodox and green tea, which generate better prices at the international market.

Mr Karamaga said the only challenge tea farmers face now is not having enough seeds, because there are currently few nursery beds.

“Generally the sector is doing well, we expect volumes to grow further, from 72000MT in 2017 to 80,000MT this year and 100,000MT by 2020.” he said.