Authorities in Rwanda are fine-tuning regulation of the coffee sector to lift output, quality, and exports. The biggest move is repeal of a 2016 policy that required coffee farmers to sell cherries only to the miller designated as buyer within their district. At the same time, officials are increasing their efforts to incentivize adoption of fully washed processing and production of specialty coffee.
The National Agricultural Export Development Board (NAEDB) said in June that the revisions are intended to “enhance quality, increase the volume of coffee, and strengthen collaboration between farmers and coffee exporters.” If successful, this will help boost investment by growers and better enable them to reach international markets that require high quality coffee, thereby improving farm profits.
Rwanda is one of Africa's top 10 coffee producers, with nearly 400,000 coffee farmers. About 20% of them are affiliated with a cooperative society. There are approximately 310 coffee millers, many of which are owned in part or in full by cooperatives. Coffee is the nation's second-leading export by value.
The sector has stumbled in its march to increase output to 24.4 million kg by 2024 under the government's 2019–2024 strategic plan. That target is some 31% above the 18.6 million kg produced in the 2021/22 marketing year, when output suffered from reduced application of agricultural chemicals and low yields by aging bushes. The 2021/22 crop was down by 11.4% from the previous year. On the other hand, export earnings from coffee have risen in recent years thanks to sharply higher prices. Revenues in 2021/22 were $75.6 million, up nearly 23% from the prior year. That trend continues.
Rwanda liberalized its coffee sector in 1999, which allowed exporters and mills to buy from their sellers of choice. The zoning policy was instituted in 2016 to cushion millers from losses after coffee cherry suppliers shifted allegiance to competing mills without repaying advances. Per standard practice, mills provide growers with farm inputs, advance payments, and extension services before and during each growing season, then deduct these costs from payment for cherries delivered.
The Board announced that with the repeal of the policy “purchasing and trading of coffee cherries is permitted throughout the country without any restriction.”
As for quality, the Board is stepping up its push to ensure adoption of fully washed processing throughout the sector. To process coffee that is not fully washed, dealers will be required to obtain a permit.
Moreover, these licensed dealers of semi-washed coffee will be required to pay a fee of 5% of the value of the coffee. The tariff on fully washed coffee, however, will be just 3%. In 2017, just 54% of Rwanda's coffee was fully washed. The NAEB's plan aims to increase the share to 80% by 2024.
Specialty coffee — beans that score 80 and above — will be exempt from the tariff, a significant incentive for growers.
Other policies will remain in place. For example, NAEB will continue to set minimum prices for cherries.
Approximately 39,800 hectares are under cultivation of coffee in Rwanda, mainly the Caturra, Catuai, Bourbon arabica types. About 60% of exports are shipped to the European Union, while the United States buys another 20% of the total, with the rest going to markets in the Asia-Pacific region.
In Rwanda, cherries are harvested between March and July, preceded by flowering in September and October. Coffee farmers are concentrated along the shore of Lake Kivu in the western part of Rwanda with others in the eastern, central, and southern regions of this landlocked country of more than 13 million people. NAEB is mandated to develop and enhance Rwanda's agricultural exports, particularly coffee, tea, and horticultural products.