Why Rwanda tea should go organic

Cow dung is the answer to making Rwanda’s teas more competitive. Sounds strange, but it is true. Cow dung in the form of fertilizer is the next step in the development of one of Rwanda’s key industries. The global tea market is fiercely competitive. Rwanda must carve its niche within this market – which could be organic tea by using cow manure as the main fertilizer. Tea is an essential cash crop for Rwanda. The industry, one of the primary sources of export revenues ($56M in 2009), employs 53,000 people and contributes to the income of 1 million. However, such are the challenges of the global market that Rwanda will have to do a lot to meet its export target of $90M worth of sales by 2012. Achieving such targets are essential if Rwanda is to deliver on the Vision 2020 goal of moving farmers away from subsistence agriculture, raise incomes, and create off-farm jobs. It will always be a challenge for the Rwandan tea industry to be competitive, relative to larger producers. The projected decline in tea prices as supply overtakes demand makes this challenge even greater. Rwanda cannot significantly increase production. Therefore it must compete on quality. Improving yields and the quality of tea through better farming practices (like plucking and applying fertilizer), processing (use of quality machinery) and transport (to reduce damage to the leaf) are an important part of this. But the Rwandan tea industry needs to do more. The range of teas produced must diversify. The value added to the products must be increased. Going organic is an important part of this process.. Producing organic teas – using organic fertilizers – would improve yields, reduce the cost of production and lift Rwanda into the specialty tea market where prices will continue to rise. The current prices for other diversified products prove this. Organic Branded green teas receive US$63 per kilogram. White tea fetches as much as US$240 per kilogram. Orthodox tea (the result of a different processing technique) fetches a premium of approximately 75% over CTC tea (almost 100% of Rwandan teas currently) and organic orthodox approximately 600% more. Thus, going organic alone will make a huge difference for Rwanda. Organic tea is good for factories because it can fetch higher prices. In January, Sorwathe converted 100 hectares of its plantations to produce its first organic tea, which have already garnered interest from international buyers. Sorwathe has stated that it will give a percentage of its organic tea profits back to farmers’ cooperatives. Other factories may follow suit. Organic tea is also good for the government and farmers. The price of chemical fertilizer has risen 300% since 2008. Land-locked Rwanda’s additional transport costs are twice those of Kenya. The government is forced to use its valuable foreign exchange to purchase large quantities of expensive fertilizer in order to subsidize use. The cost of chemical fertilizer is 20-30% per Kg of green leaf tea. As the Government plans on exiting out of this strategy, farmers will have difficulty in accessing fertilizer as they have little purchasing power for buying in bulk. Organic fertilizer in the form of cow manure can have an equalizing effect in terms of costs. It is more accessible to farmers who can purchase small amounts of cow manure without subsidies. They can thus increase their revenues through improved yields and quality but also save money by not buying chemical fertilizer. Organic tea is also good for the environment. Chemical fertilizers degrade the soil. Composted cattle manure does the opposite. It improves the carbon content, which increases yields and helps keep the soil healthy. Going organic also allows development of other sectors in the economy. The Sorwathe factory’s demand for cattle manure has resulted in a manure cottage industry and additional jobs in the area. It creates jobs and entrepreneurship opportunities for manure distributors and it increases cattle farmers’ income allowing them to reinvest in their industry. Having lived and worked in Rwanda on and off since the age of four, I have a unique concern for this country, its land, its future and its people. Rwanda’s beautiful rolling hills are densely populated and over cultivated. With close to 80% of the population dependent on agriculture, how land is used and treated is vital for the prosperity of this landlocked nation. Diversifying while improving yield and quality is vital to the success of the Rwandan tea industry. The question is how? The best evidence shows that a major change into producing organic tea within Rwanda is a great way forward, not only for the tea industry, but for wider communities, and indeed for Rwandan itself. aalles@otfgroup.com Ashani Alles is a manager at OTF Group, a Strategy and Competitiveness consultant firm