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Rwanda: Coffee Authority Devising Incentives to Encourage
Specialty Coffee
By Magnus Mazimpaka
The Independent
July 16, 2008
main export and the primary cash crop of Rwanda.
In 1990, Rwanda exported close to 45,000 tons of coffee per year, but this number fell to approximately 16,000
by 2007. Rwandan coffee growers have been hard hit by falling prices on the international market.
to meet international standards.
The Rwandan government has stepped up marketing and branding strategies, from the farm to the exporters,
to respond to the dire conditions and make a concerted effort to turn the situation around.
Qn: How do you position the Rwandan coffee and how do you consider the coffee sector
today?
Karega: Coffee is a big niche for economic change in Rwanda. We have not fully tapped this resource but a
lot of efforts have been make in marketing our coffee worldwide we are also starting to sell it as a finished
product in coffee shops in our country. It is a new culture of consuming coffee and promoting it. Producers and
users have emerged. At the same time, the specialty that goes to different markets like Starbucks, is building
up and creating knowledge by Rwandans and cooperatives and investors who are constructing washing
stations to deal with international market qualities and so on. But we are still challenged by the quantity and
the valued addition in this sector. We are aiming at increasing productivity, per tree per square meter per
hectare by investing a lot in fertilizers, rejuvenations of trees and other techniques, cutting the cost of washing,
cutting the cost as a producer and stimulating the whole chain and also having value addition like roasting
and packaging as a way of stimulating high prices at the farmer level. This is a bit complicated but we are
working with different partners in this regard and we are working out the system. At the local level, we are
helping exporters to get organized with our support and the Rwanda Coffee Authority (OCIR-CAFÉ) to put up a
mechanism called “Coffee Alliance Marketing, an association of the private sector. They all come together
and play a joint role in marketing and branding Rwanda coffee. They will also be networking with external
markets and looking into how to promote value addition in Rwanda for international markets. The government
cannot analyze all the niches, client taste, customer care issues; which are all private business oriented
activities. The government only looks at the bigger things like fertilizers, seedlings, distribution and standards,
but the marketing should be owned and managed by the business investors themselves, and should
understand the market much better than anyone else. Then they can invest according to market relevancy.
You mentioned investors like Starbucks, how are they exclusively promoting the Rwandan
coffee?
Starbucks started with marketing Rwandan coffee in its own shops by packaging green coffee beans on their
shelves. This sent a signal to the world that we are part of their specialty coffee, because Starbucks deals
only with specialty coffee. And there was a time when Rwanda was number one in providing the best coffee,
yet we know that there are countries like Costa Rica that have been in this sector for many years and have
developed capacities and technicalities to deal with the specialty market, but Rwanda ended up being on the
top for providing good quality coffee. So, we need to build on this particular aspect to give coffee the right
output to get the right outcome from coffee.
What atmosphere is the government creating to attract investors to put their cash into the
sector, and what is the government policy as far as coffee and its export is concerned?
First of all, our policy is to make sure that we increase productivity and the quality of the coffee. And the
second policy is to add value to the coffee. The third one is to move in specialty coffee from maximum
ordinary coffee, which is easy to make, easy to sell which does not bring value for money.
Who are the direct beneficiaries of this coffee?
Beneficiaries are on different levels. The growers, those trading in coffee, transporters and the consumers are
all beneficiaries of Rwandan coffee. It’s the whole chain, but it is important to ensure that in this chain, the
grower is changing in the living condition. And that is where many Rwandans play a role. We are helping the
grower to increase quantity and quality, and helping the same grower to sell the coffee to the right person, not
to the intermediaries. Because when they sell to intermediaries, they do so at very low prices.
Coffee prices on the world market have been fluctuating every year. Has this affected coffee
production in Rwanda?
Price fluctuations affected Rwanda coffee, especially ordinary coffee. But there is no price fluctuation on the
specialty coffee. The specialty coffee requires taking it through a state of processing. People avoiding all the
processes end up having ordinary coffee which is very fragile to external shops, including the fluctuation of its
price on the international market. But the demand of the specialty coffee is growing every day. There are a lot
of shops worldwide who all want the specialty coffee, and that niche is growing. That is where the Rwandan
coffee point is focusing. But we still have the legacy of being producers of ordinary coffee, as it is simple to do
than specialty coffee. The coffee authority (OCIR-CAFÉ) is devising different incentives for encouraging
specialty coffee and discouraging ordinary coffee producers.
How is that done?
The fees which exporters pay to export ordinary coffee have been increased, but have been almost
abolished on exporting specialty coffee. We are now looking at a strategy of giving a better price to farmers
who know how to identify specialty coffee from the farming area, because it is hard to differentiate it when it is
still fresh until it is taken into the washing process. We are, however, planning at the same time, to install
laboratories which will be identifying specialty coffee when farmers come to sell their coffee and get paid
immediately, but not to wait until the exporters sell it to international markets.
You speak of the Rwandan coffee at the world level, how is it performing at the regional level?
Rwanda is now ranking at the top in East Africa. If I may refer to last year’s exhibition in Addis Ababa, Ethiopia.
Rwanda coffee was the best and this is very encouraging.
Can you put figures on the production and money matters as far as coffee is concerned?
Last year, we exported about 16,000 tones and the total revenue was close to US$35 million. It was the lowest
yield in Rwandan history. Coffee has got cycles and also harvesting without investing in the input has led to
the mentioned circumstances. But from the last three years, a lot of new plantations have come up with
enough fertilizers. We are expecting to harvest, by this year, about 25,000 tones and we are expecting more
than US$40 million. Probably we will even start harvesting more in the forth coming years and getting more
money.
Last word
We believe by 2012, we want to have doubled the income that we are getting from coffee. We are giving
private people support to promote coffee and study the market and analyze different opportunities in the
world.
Specialty Coffee
By Magnus Mazimpaka
The Independent
July 16, 2008
- Our Correspondent in
Kigali, Magnus Mazimpaka
spoke to Rwanda’s State
Minister in the Ministry of
Commerce Trade and
Industry, Vicent Karega,
about the current situation
of the Rwandan coffee and
its potential, both on the
regional and international
market. Below are the
excerpts.
Rwanda is one of the
African countries struggling
to overcome poverty. It is
also trying to rebuild an
economy brought to its
knees by the 1994
genocide.
The Rwandan economy is
primarily defined by
main export and the primary cash crop of Rwanda.
In 1990, Rwanda exported close to 45,000 tons of coffee per year, but this number fell to approximately 16,000
by 2007. Rwandan coffee growers have been hard hit by falling prices on the international market.
to meet international standards.
The Rwandan government has stepped up marketing and branding strategies, from the farm to the exporters,
to respond to the dire conditions and make a concerted effort to turn the situation around.
Qn: How do you position the Rwandan coffee and how do you consider the coffee sector
today?
Karega: Coffee is a big niche for economic change in Rwanda. We have not fully tapped this resource but a
lot of efforts have been make in marketing our coffee worldwide we are also starting to sell it as a finished
product in coffee shops in our country. It is a new culture of consuming coffee and promoting it. Producers and
users have emerged. At the same time, the specialty that goes to different markets like Starbucks, is building
up and creating knowledge by Rwandans and cooperatives and investors who are constructing washing
stations to deal with international market qualities and so on. But we are still challenged by the quantity and
the valued addition in this sector. We are aiming at increasing productivity, per tree per square meter per
hectare by investing a lot in fertilizers, rejuvenations of trees and other techniques, cutting the cost of washing,
cutting the cost as a producer and stimulating the whole chain and also having value addition like roasting
and packaging as a way of stimulating high prices at the farmer level. This is a bit complicated but we are
working with different partners in this regard and we are working out the system. At the local level, we are
helping exporters to get organized with our support and the Rwanda Coffee Authority (OCIR-CAFÉ) to put up a
mechanism called “Coffee Alliance Marketing, an association of the private sector. They all come together
and play a joint role in marketing and branding Rwanda coffee. They will also be networking with external
markets and looking into how to promote value addition in Rwanda for international markets. The government
cannot analyze all the niches, client taste, customer care issues; which are all private business oriented
activities. The government only looks at the bigger things like fertilizers, seedlings, distribution and standards,
but the marketing should be owned and managed by the business investors themselves, and should
understand the market much better than anyone else. Then they can invest according to market relevancy.
You mentioned investors like Starbucks, how are they exclusively promoting the Rwandan
coffee?
Starbucks started with marketing Rwandan coffee in its own shops by packaging green coffee beans on their
shelves. This sent a signal to the world that we are part of their specialty coffee, because Starbucks deals
only with specialty coffee. And there was a time when Rwanda was number one in providing the best coffee,
yet we know that there are countries like Costa Rica that have been in this sector for many years and have
developed capacities and technicalities to deal with the specialty market, but Rwanda ended up being on the
top for providing good quality coffee. So, we need to build on this particular aspect to give coffee the right
output to get the right outcome from coffee.
What atmosphere is the government creating to attract investors to put their cash into the
sector, and what is the government policy as far as coffee and its export is concerned?
First of all, our policy is to make sure that we increase productivity and the quality of the coffee. And the
second policy is to add value to the coffee. The third one is to move in specialty coffee from maximum
ordinary coffee, which is easy to make, easy to sell which does not bring value for money.
Who are the direct beneficiaries of this coffee?
Beneficiaries are on different levels. The growers, those trading in coffee, transporters and the consumers are
all beneficiaries of Rwandan coffee. It’s the whole chain, but it is important to ensure that in this chain, the
grower is changing in the living condition. And that is where many Rwandans play a role. We are helping the
grower to increase quantity and quality, and helping the same grower to sell the coffee to the right person, not
to the intermediaries. Because when they sell to intermediaries, they do so at very low prices.
Coffee prices on the world market have been fluctuating every year. Has this affected coffee
production in Rwanda?
Price fluctuations affected Rwanda coffee, especially ordinary coffee. But there is no price fluctuation on the
specialty coffee. The specialty coffee requires taking it through a state of processing. People avoiding all the
processes end up having ordinary coffee which is very fragile to external shops, including the fluctuation of its
price on the international market. But the demand of the specialty coffee is growing every day. There are a lot
of shops worldwide who all want the specialty coffee, and that niche is growing. That is where the Rwandan
coffee point is focusing. But we still have the legacy of being producers of ordinary coffee, as it is simple to do
than specialty coffee. The coffee authority (OCIR-CAFÉ) is devising different incentives for encouraging
specialty coffee and discouraging ordinary coffee producers.
How is that done?
The fees which exporters pay to export ordinary coffee have been increased, but have been almost
abolished on exporting specialty coffee. We are now looking at a strategy of giving a better price to farmers
who know how to identify specialty coffee from the farming area, because it is hard to differentiate it when it is
still fresh until it is taken into the washing process. We are, however, planning at the same time, to install
laboratories which will be identifying specialty coffee when farmers come to sell their coffee and get paid
immediately, but not to wait until the exporters sell it to international markets.
You speak of the Rwandan coffee at the world level, how is it performing at the regional level?
Rwanda is now ranking at the top in East Africa. If I may refer to last year’s exhibition in Addis Ababa, Ethiopia.
Rwanda coffee was the best and this is very encouraging.
Can you put figures on the production and money matters as far as coffee is concerned?
Last year, we exported about 16,000 tones and the total revenue was close to US$35 million. It was the lowest
yield in Rwandan history. Coffee has got cycles and also harvesting without investing in the input has led to
the mentioned circumstances. But from the last three years, a lot of new plantations have come up with
enough fertilizers. We are expecting to harvest, by this year, about 25,000 tones and we are expecting more
than US$40 million. Probably we will even start harvesting more in the forth coming years and getting more
money.
Last word
We believe by 2012, we want to have doubled the income that we are getting from coffee. We are giving
private people support to promote coffee and study the market and analyze different opportunities in the
world.
Rwanda’s State Minister in the Ministry of Commerce Trade and Industry, Vicent Karega. Photo:
Courtesy of The Independent
Courtesy of The Independent