Coffee farmers have welcomed the new farm gate prices set by the government, saying they will boost farmers’ morale and attract more investors and farmers into the sector. Last week, the government, through the National Agricultural Export Board (NAEB), increased the coffee farm gate price to Rwf246, up from Rwf150.

Patrick Munyaneza, a coffee farmer in Rulindo District, said the new price will help improve production and attract more people into coffee growing.

"This will enhance the competitiveness of the sectors and help increase household income of farmers,” he added.

According to NAEB’s head of communications and public relations, Pie Ntwari, the new prices will encourage farmers increase production and quality along value chain of supply.

"This will eventually boost further the sector’s export and drive economic growth,” Ntwari told The New Times.

Rwanda produced 1,762,630 kilogrammes of green coffee in December 2016, an increase from 1,569,075 kilogrammes during the same period in the previous year, according to figures from NAEB. This represented a growth of almost 12 per cent.

Overall, Rwanda produced more than 22 million kilogrammes of coffee in 2016 compared to 21.8 million kilos in 2015. The agro-export body attributed the increase to a conducive weather and adoption of modern farming skills by farmers, which has helped improve coffee handling and quality along the value chain.

NAEB has been emphasising value addition and encouraging farmers and co-operatives to take advantage of coffee washing stations to enhance the quality of coffee exports, the statement from NAEB indicated. More than 400,000 farmers depend on coffee farming for their livelihood.

Declining revenues

However, despite the increase in output, coffee export receipts declined to about $58.5 million in 2016 compared to $62.04 million the previous year.

This represented a decline in revenue of almost 5.72 per cent, which NAEB attributed to less volumes of coffee sold during the year.

According to a statement from the body, Rwanda sold over 18.6 million kilogrammes of coffee in 2016 compared to about 18.79 million kilogrammes sold in 2015. In addition, coffee prices declined marginally in 2016 to $2.97 per kilo compared to $3.24 a kilogramme over the same period in 2015.

Rwanda exports 42 per cent of its coffee to Switzerland, 12.4 per cent to United Kingdom, 20.9 per cent to the United States, 5.8 per cent to South Africa, 0.5 per cent Germany and 1.5 per cent to South Korea, among others.