Technology adoption and market access: On-farm agribusinesses in Rwanda

Project Active from to Firms and Trade

There are mechanisms and constraints that prevent subsistence farmers in Rwanda's large-scale hillside irrigation sites from transitioning to “farming-as-a-business" — producing high-value, export-oriented crops. Thus, in line with Rwanda's Ministry of Agriculture (MINAGRI), this research study is focused on finding pathways that ensure the sustainability of irrigation investments with increased productivity and linkage to markets. The study in this proposal builds on an ongoing partnership with MINAGRI supported by IGC. This partnership generated research products that directly fed into the policy dialogue within the sector. These include a direct reference to the most recent sector-wide strategy (PSTA IV) during the 2019 National Leadership Retreat.

In this context, the government of Rwanda has made significant investments in productivity-enhancing infrastructure to modernise the agriculture sector. These include hillside irrigation and terracing, complimented by extension and rural finance. Rigorous evaluations under the ongoing partnership in 4 of Rwanda's irrigation sites show that irrigation take-up is moderate and stagnant despite high productivity gains and increased cash profits for farmers (Jones et al. 2020). Experimentation and structural estimates point at labour being the binding constraint in this context. Findings from this evaluation, qualitative evidence through a series of focus group discussions, and dialogue with senior management and MINAGRI indicate the potential for the provision of labour-substituting capital and connection to markets to lift those constraints.