Agriculture an important policy priority for Rwanda
Agriculture an important policy priority for Rwanda21 September, 2022 •
Agriculture plays a major role in the Rwandan economy: close to 75% of the population’s livelihood depends on farming. However, the majority of these farmers do not sell their produce. The high rate of subsistence farming is a symptom of structural challenges rural farmers face in accessing markets.
In its vision 2050, Rwanda lists increasing agriculture and livestock quality, productivity, and production as a key priority. Agriculture also features in the SMART Rwanda Masterplan, where the objective is to transform agricultural practices to enhance productivity and increase commercialisation and industrialisation. Many implementation activities that leverage digitalisation for productivity growth have been initiated, such as the Smart Nkunganire System (SNS) and the Smart Kuhangara System (SKS).
Digitalising agriculture payments can help to achieve government priorities
One of the ways to foster the development of agriculture is to digitalise the payments made by and to those in the sector. Digitalising payments can:
- Increase the accessibility of agriculture markets: The top two tea factories, Rwandan Mountain Tea and Woods Foundation, are examples of how large organisations can use digital means to reach new suppliers. They have both undertaken payment digitalisation efforts, such as the distribution of smartphones to farmers and opening bank accounts for farmers.
- Increase the share of credit extended to farmers: Small-scale and subsistence farmers rarely have access to formal credit when they need it. By digitalising their agricultural payments, the farmer creates a transaction history that can be utilised for credit scoring.
- Enable input subsidy schemes: The SNS and SKS input subsidy schemes are strongly driven by digital technologies and payments. This includes the extension of inputs on credit.
- Increase overall connectivity to farmers: Our analysis has shown that digital payments are significant drivers of mobile technology adoption by farmers in Rwanda.
Leveraging data to drive the policy agenda
Data insights are core to effective policy implementation. Basing decisions on data-driven insights can dramatically increase the efficiency of policy implementation. Through our Rwanda Economy digitalisation programme, we share insights with the Ministry of Agriculture to demonstrate how data analysis can help steer interventions for achieving key policy objectives. Data insights can help in several ways:
- Profiling the farmer population: Data allows us to create a digital profile of farmers in terms of their connectivity, device ownership and usage, by district and gender.
- Understanding the impact of the input subsidy schemes. Digital payments data on input schemes, mapped against farmer productivity data, can render valuable insights on the impact of these input subsidy schemes. The data can also yield essential insights like how many farmers actually receive benefits from the program, their location and which benefits are the most useful to them, to highlight gaps.
- Highlighting trends in and limitations to payments digitalisation: Data allows us to take stock of the state and nature of digital payments among farmers, as well as the underlying infrastructure supporting payments digitalisation.
- Directly informing the agricultural policy agenda. Beyond the payments digitalisation angle there are several indicators that, if systematically tracked, can help to gauge progress against direct agricultural objectives. For example, insights on the number of farmers accessing commodity prices on the eSoko platform can help to understand the effectiveness of digital access to information to help make markets more efficient, while several indicators can help to assess the extent to which credit is helping to build an inclusive market that supports value addition.
Better measurement enables better management. Government already holds several datasets that can render measurable indicators on these various angles. Integrating these data sources to systematically track all relevant indicators will help to inform policy decisions and interventions that will serve the agricultural policy agenda as well as the Government of Rwanda’s broader payments digitalisation priorities.
Our Agriculture Data4Policy Framework provides more detail on the power of data to help drive the agricultural policy agenda in Rwanda, the relevant indicators that can be derived from existing datasets, and what is needed to unlock data-driven insights.
If you are interested in working with us on payments digitalisation or evidence-based decision making you can contact Fiacre Mushimire.