Nature of maize value chain in Rwanda and its implication on agribusiness performance

Abstract

Rwanda introduced a Farm Input Subsidy Program as a pilot test with the aim to increase maize production and reduce import dependency. The research has shown that the most important issue that retarded Rwanda’s agriculture development was not land size, but low productivity which was associated with traditional peasant-based subsistence farming. The formulation and adaptation of policies such as Crop Intensification Program (CIP) was intended to raise productivity of priority crops, increase the revenue in small holder farms and thereby ensure food security through sustainable intensification process and eventually improve the agriculture performance. One of the key strategies underlying the implementation of these policies was to promote commodity chains and agribusiness development. Since the implementation of these policies, there is a knowledge gap on whether this ultimate goal is being achieved and what would be the implication for smallholder farmers who constitute the majority of the farming community in Rwanda. The objective of piloting this research was to analyze the effect of maize value chain on agribusiness performance in Eastern Province in Nyagatare District. It wanted to examine the effect of maize value chain on production increment, investigate the effect of maize value chain on quality of output, determine the effect of maize value chain on profitability of COMARU and evaluate the joint effect of maize value chain on agribusiness performance in COMARU. The study used descriptive statistics including frequency and percentage for the profile of the respondents, mean and standard deviation to measure the perceptions of the respondents on each component of the study, while multiple regressions analyzes were performed to test each null hypothesis. The study population was composed of 10 cooperatives (KABOKU, RUDEMACO, KOHIIKA, CODAR, COPAMA, KOTEBARU, COAMN, KOTUKA, COMARU, CODEMACO) with 1000 members (farmers) supported by other actors including the government, Clinton Health Access Initiative (CHAI) and Africa Improved Foods (AIF). The results showed that maize value chain (input, production process, postharvest handling, and distribution process) had positive effect on production increment in agribusiness in COMARU. Production process also had positive and significant effect on quality output in COMARU agribusiness (β2= 0.334; t= 2.959; p-value= 0.004). This means that 1 unit increase in production process led to 0.334 increase in profitability of COMARU agribusiness. Postharvest handling also had a positive and significant effect on profitability of COMARU agribusiness. Finally, the results in table 4.24 indicated that maize value chain as a whole had positive and significant effect on the whole performance of COMARU agribusiness (β1= 0.619; t=6.867.083; p-value= 0.000). This means that 1 unit increase in maize value chain lead to 0.619 increase in the whole performance of COMARU agribusiness. The research conclude that the consolidation of the land by farmers, training on new farming skills, use of proper inputs with support from other actors including Government, CHAI and AIF contributed significantly to shift from substance to business oriented agriculture. The research recommended that training of farmers be emphasized, land consolidation be encouraged and markets search be enhanced