The profitability of rural Agricultural Cooperatives in Rwanda. A comparative study of two selected cooperatives.

Abstract

„The profitability of rural agricultural cooperatives in Rwanda. A comparative study of two selected cooperatives’ is a study that examined two agricultural cooperative members of UNICOOPAGI ( Union des Coopératives agricoles Intégrés ) in Nyamagabe and Nyaruguru districts especially Urumuri and KIAKI operating in administrative sectors of Kibirizi and Kivu. This study was based on the problem statement of determining whether wheat which can be stored for great length of time but is less valuable, or potatoes which can not be stored long, but are of great value, create greater profitability for cooperative members. The research questions were: What is the profitability of agricultural cooperatives growing Irish potatoes versus those growing wheat? What are the factors that cause differential profitability? What are the challenges encountered by agricultural cooperatives members of UNICOOPAGI in improving the profitability of their cooperatives? It was also based on the following objectives: 1) To compare the profitability of two agricultural cooperatives of UNICOOPAGI growing Irish potatoes and wheat in rural areas of Nyamagabe and Nyaruguru district. 2) To find out the factors which cause differences in profitability between Urumuri and KIAKI. 3) To highlight the challenges faced by the two agricultural cooperatives of UNICOOPAGI in rural areas of Nyamagabe and Nyaruguru districts. Data was obtained using a questionnaire administered to 131 respondents including 66 male and 65 female members of Urumuri and KIAKI cooperatives and interview administered to 8 staff from UNICOOPAGI, agronomist in Kivu and Kibirizi sectors and cooperative presidents and secretaries. The findings from the research showed that during the agricultural year of 2012-2013 irish potatoes in KIAKI was more profitable with the gross profit margin of 53% whereby members of KIAKI cooperative had much returns of 26,188Rwf in growing irish potatoes compared to those from Urumuri cooperative that grew wheat with a gross profit margin of 51% and a return to members of 7,834 Rwf. Lastly, the research findings highlight that agricultural cooperative members face some challenges in growing irish potatoes and wheat such as lack of good variety of irish potato seeds and expensive fertilizers, insufficient quantity of wheat seeds for Urumuri cooperative, lack of capital, diseases and post harvest losses and recommends to increase multiplication sites for wheat and irish potatoes in order to facilitate farmers get good variety of seeds, to improve transport and communication networks, sensitize financial institutions (banks) to facilitate farmers get access to credit and increase the number of field studies on the side of UNICOOPAGI.