Why hotels and supermarkets continue to import fresh food

16Dec 2016
The Guardian Reporter
The Guardian
Why hotels and supermarkets continue to import fresh food

RWANDA, like many African countries, has devised strategies and policies to boost agriculture production over the past year, with the recent being a plan to recapture the domestic market and ease trade deficit.

However, the country continues to spend millions of dollars on agro-related imports, especially foodstuffs, from across the world.

Walk into any of the supermarket chains in town, imported items, like chicken and eggs, fruits, beef and 'fresh' maize, and apples, occupy huge spaces in their shelves. These items would ideally be sourced locally to support Rwandan farmers and the economy.

There were, for instance, some 50,000 tonnes of chicken exported in 2015 in Africa compared to 1.5 million tonnes of chicken imported during the same year, almost 30 times more than what the exports were, research indicates.

Many have wondered why Africa would import tonnes of poultry products with all resources at her disposal to stop this foreign exchange hemorrhage caused by such avoidable imports.

Francis Shyaka, the proprietor of Rwa-Chicks, a poultry firm that sells day-old chicks, believes everything goes down to the high cost involved in running a poultry enterprise. He says the high cost, and work involved scare away entrepreneurs from investing in poultry businesses.

"Production and maintenance costs involved in raising chicken are quite high, just like any other poultry-related activity. Their demand is always huge, but the problem is that most of customers prefer imported chicken because it is cheap," he says.

Shyaka, who also sells chicken to the Republic of Congo and Burundi, explains that there are many reasons, including low cost and unsustainable agro-production, forcing local wholesalers and big supermarkets and hotels to import chicken or fruits from Brazil or South Africa.

"There is a big challenge of low and unsustainable output for most of those items that are imported from abroad, like eggs, chicken and fruits. That's why Rwandan farmers should rethink and devise means to enhance production and quality to tap into this huge market," he notes.

Shyaka says increasing production and ensuring quality are essential to efforts geared towards reducing the huge volumes of agro-related imports.He adds that the cost of local produce is at times pushed up by "expensive raw materials we get from outside".

He says, for instance, feeds are costly, noting that such pushes up the price of local chicken and eggs and, hence turns away buyers.

According to Bruce E. Smith, an agricultural economist, Rwanda needs to first solve the challenge of high-cost feeds to increase poultry production in the country.

"This means increasing soya bean and sorghum production, but it is too early to know if Rwanda is competitive in soya production but early indications are positive. Rwanda can probably compete in sorghum production because it does well in areas of low rainfall," Smith notes.

Daniel Clay, a director at Global Programmes in Sustainable Agri-food Systems in the US, says Rwanda as a mountainous country is limited by topography on what it can produce competitively in the region (and for global markets).

Clay suggests that the country could put its numerous valleys to crop production, saying they are suitable for "competitive, mechanised and consolidated crop production".

Adan Ramata, the country manager of Nakumatt, a regional supermarket chain, says some of the hotel and supermarket operators prefer to import foodstuffs, like chicken or beef and fruits, because of they already have attractive agreements with outside companies to supply them."They can, for instance, give us long credit terms, which local companies don't easily afford."

Arnaud de Vanssay, the head of rural development unit at the European Union Mission in Rwanda, notes that it is critical to promote agriculture through empowering farmers given the aptitude the sector has to significantly contribute to reduction of imports of many products.

"It is crucial to invest more in the agriculture sector... Besides, many of the agro-imports can be produced locally if farmers are empowered," he explains.

"Farmers need access to information and markets, and should be trained on how to increase production, as well as encouraged to work under co-operatives through which they can benefit from informed decision-making."

Embracing agricultural mechanisation and other modern farming methods has the potential to, not only reduce the importation of agricultural products, but also reduce poverty in Rwanda and Africa, according to Arnaud.

"Technology has the potential of turning around the sector, farmers must first be trained to learn how to use these advanced methods... knowledge is instrumental," he adds.

According to Smith, Rwanda may be a net importer of beans due to low volumes of surplus at certain times of the year, but says that is cost-effective. "I studied some 40 regional markets for a year, and Rwandan beans were competitive on almost all market days in all markets.

This would increase dramatically if exporters used optical colour sorters to sell single colour beans. So, there is a lot of reasons for optimism," he says.

Strategy to recapture local market
According to the Ministry of Trade, Industry and EAC Affairs, Rwanda designed the domestic market recapturing strategy ... geared at helping the country reduce the growing trade deficit, by promoting production and consumption of locally-made products.

The ministry also identified priority sectors that can quickly contribute to Rwanda's domestic market recapturing, including floriculture and horticulture production.

The ministry says the domestic market recapturing strategy study could enable the country to save almost $450 million per year or 17.8 per cent reduction on the current import bill.

Agro-processing, light manufacturing and the construction materials are the key priority sectors identified by government in its push to reduce the country's widening import bill.

Under the Domestic Market Recapture Strategy implemented by the Ministry of Trade, Industry and EAC Affairs, it is hoped Rwanda can save up to $450 million annually.

According to a report released on Friday, agro-processing, focusing on sugar, fertilisers, edible oil, dried fish, maize and rice, would rake in $112 million, and light manufacturing could help save $124 million worth of imports. This is mainly from textiles and garments, pharmaceuticals, soaps and detergents, reagents, packaging materials, wooden furniture and insecticides.

Making of construction materials, including cement, iron and steel, aluminium products, paints and varnishes, plastic tubes, ceramics and granite tiles, would help recapture $206 million, according to findings of the Domestic Market Recapture Strategy 2015.

While presenting the highlights of the findings of the strategy on Friday last week, Annette Karenzi, the director general for industry and entrepreneurship development at the Ministry of Trade, Industry and EAC Affairs, challenged industrialists to enhance standards and quality to make local goods more competitive.

"We still spend a lot of money on imports of items that can be produced in the country. So, let's encourage and mobilise Rwandans to buy the locally-made products under the Made-in-Rwanda drive," she said.