By Johnson Kanamugire

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Irish potato farmers in Rwanda continue to face hurdles as efforts to eliminate middlemen fail.

The government had restructured the potato market value chain by setting up a potato wholesale hub in Kigali. The wholesale market owned by Regional Potatoes Trading Ltd, was linked to 123 collection centres across the country.

The facility was meant to protect farmers from exploitation by middlemen; make prices more predictable and ensure fair returns for producers.

However, it failed to meet expectations, leading to the suspension of Regional Potatoes Trading Ltd’s franchise earlier this year.

Farmers told Rwanda Today they are still exposed to losses along the value chain after the Trade Ministry failed to enable them to control the collection centres.
“Up to now, we don’t have a consistent market for our produce and we are incurring losses because there is still a lot of speculative pricing by unscrupulous buyers,” said a grower from Musanze District in northern Rwanda.

READ: Middlemen out in new distribution chain

Rwanda Today understands that efforts to give farmers a say in the operations of collection centres, which would have given them an opportunity to directly deal with the buyers, was frustrated after the owners of the facilities demanded high capital investment.

“There is a need to carry out an audit of the finances to determine the real value of investments made to arrive at a fair value of how much the farmers need to contribute to become shareholders,” said Vincent Havugimana whochairs the potato growers federation in Rwanda.

“The whole arrangement was bound to be problematic from the beginning because the people who put up the facilities were not farmers.

"When we sought to become shareholders they claimed they invested millions even when we know that their job was to deal with buyers and pay the farmers. That is why we need an audit,” added Mr Havugimana.

There are 123 collection centres distributed across the districts of Burera, Gicumbi, Musanze, Rubavu and Nyabihu.

A recent inquiry by the Ministry of Trade into the problems facing the centres found that operators focus on their profits at any cost, there is poor management of the centres and lack of capacity to fulfil their obligations.

Under the current structure, prices are jointly determined by the farmers’ representatives, the collection centre operators and the local authorities the in districts.

The farm gate price for for a kilogram of potatoes ranges between Rwf180 ($0.21) and Rwf220 ($0.26) while the wholesale price is typically Rwf250 ($0.30).
This price was based on the assumption that a farmer incurred approximately Rwf145 ($0.17) in input costs — seeds, fertiliser, leasing land and manpower, among others — to produce one kilo of potatoes.

READ: New trade model empowers Rwanda potato farmers

However, the farmers argue that the current market system only benefits those who produce large volumes, leaving out smallholder farmers who are the majority.

Large producers are able to bypass the centres and sell directly to buyers in Kigali earning higher margins.

Mr Havugimana said other than looking to own a stake in the collection centres, farmers want to deploy their own agents along the value chain to keep a watch on market trends especially the demand and supply on a daily basis.