Invest more in agric performance to reap from its multiplier effect: experts

A single percentage increase in agricultural productivity raises other sectors’ productivity by 0.1 per cent, according to experts. Put another way, perhaps no other sector can cause as much impact like agriculture. Sally Murray, the International Growth Centre Country (IGC) economist for Rwanda, said good agriculture performance offers direct GDP contribution, moderates inflation, raises productivity of other sectors, reduces imports, benefits foreign exchange or trade balance and boosts job creation. He was making a presentation on macro-economic potential impact of agriculture and how to improve it; trade opportunities at internal, regional and international level; and inflation impact of agriculture, at a meeting in Kigali this week. The topic was one of the subjects for the third EU discussion on “Agriculture Transformation in Rwanda From Vision to Results.” Speaking to Saturday Times, Murray said agricultural productivity pushes labour productivity in other sectors through wages and health of workers. Elaborating on agricultural performance impact on inflation and productivity of other sectors, she said the prolonged dry season last year reduced food production, resulted in large increase in defaults against agricultural loans and large food price inflation, including 20 per cent vegetable inflation. According to Murray, overall inflation rate rose to 5.7 per cent in 2016, from 2.5 per cent in 2015, with food inflation as the major cause as per the National Bank of Rwanda. “High food prices raise wage expectations and hunger, reducing labour productivity,” she said. “When there is poor performance in agriculture sector, all the foodstuff in the country obviously becomes more expensive. So, you have inflation; it’s hard for the people to buy the food they need so they can either demand more money from employers so it becomes more expensive to employ people or they become less productive if they are not properly nourished,” Murray said. She noted that “boosting overall food production is actually important for off-farm jobs in non-agriculture sectors.” According to Joseph Gafaranga, the secretary-general of Imbaraga Farmers’ Organisation, a Musanze District-based association of Irish potatoes growers, there is need for farmers’ support to increase food production. He produces between 25 to 30 tonnes per hectare yet some farmers produce even less than 15 tonnes per hectare while the production potential for the crop can go up to even 100 tonnes per hectare, he told Saturday Times. Arnaud De Vanssay, team leader for rural development at EU Delegation to Rwanda, also observed that agriculture has a huge impact on macroeconomics in Rwanda as it accounts for 33 per cent of the GDP. He called for sustainable agricultural growth. Abdul Rahim Siddiqui, the World Food Programme deputy country director, said good agriculture sector performance impacts other sectors. Focusing on high value crops Dr Charles Murekezi, the director-general for agriculture at the Ministry of Agriculture and Animal Resources, called for value addition as one of the important strategies to get more people into off-farm employment. Agriculture currently employs about 70 per cent of Rwanda’s population, mostly women. Production of main food crops, which include maize, beans, wheat, banana, cassava, and Irish potato, was over 6.7 million tonnes in 2016 down from over 6.8 million tonnes in 2015 and over seven million tonnes in 2014, according to figures from the National Institute of Statistics of Rwanda. Agriculture revenues increased from Rwf987 billion in 2007/2008 to Rwf1,512 billion in 2015/2016 with an average annual growth rate of 5.5 percent, according to the ministry. Export crops generated Rwf61 billion in 2007/8 and Rwf90 billion in 2015/16, with an average growth rate of 5.0 per cent per year. Agriculture sector has been growing at about 5 per cent annually, while output is expected to grow at 8.5 per cent per annum by 2018. The experts contended that improvement in agricultural produce, agro-processing, certification and, transport and storage, packaging of agricultural produce are areas that should be developed further to benefit farmers and the country’s economy. editorial@newtimes.co.rw

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Invest more in agric performance to reap from its multiplier effect: experts