The National Post-harvest Staple Crop Strategy (PHSCS) aims to develop an efficient post-harvest system driven by the private sector to reduce post-harvest losses and ensure food security of staple crops. It seeks increased competitiveness by decreasing marketing costs along the value and supply chains, and enhancing farmers‘ access to and strengthening their linkages with markets. The Climate Resilient Post-harvest and Agribusiness Support Project (PASP) has been formulated as an instrument for implementation of the PHSCS with the Post-harvest and Handling Task Force (PHHTF) as key counterpart.
Post-harvest losses are recognized in Rwanda as one of the greatest sources of inefficiency in agricultural production in the country; and therefore, one of the best ‗no-regrets‘ opportunities for effectively improving crop productivity and resilience in more uncertain climatic and economic conditions. As discussed in Appendix (Attachment 3), current losses for key commodities amount to about 30% of harvested products, but these losses are likely to increase given the country‘s reliance on rain fed agriculture and its vulnerability to climate change. Because CIP has focused on increasing productivity with limited concern for post-harvest management, there is urgent need to improve post-harvest handling and infrastructure (harvesting, cleaning, drying and storing) as the infrastructure developed for the traditional cropping practices is insufficient for the current volumes of production.
Reducing post-harvest losses is expected to generate additional income and off-farm employment in activities such as product storing, processing, packaging and marketing. However, at present there is a low level of engagement of private sector in processing, marketing and trading of farm outputs.
PASP will facilitate and support organized smallholders and SMEs to set up and manage aggregation and post-harvest market chain businesses (e.g., grain drying and handling facilities, potato cleaning/packaging, cassava preparation or milk collection centres) and partnerships with private sector, MFIs and other service providers in the priority CIP crops and dairy development.
As farmers organizations, cooperatives or privately owned businesses develop their management, technical, marketing and financial capacity, some will build their capacity to move into value adding through more sophisticated processing and packaging, distribution and market development.
II. PASP GOAL
PASP overall project goal is to alleviate poverty, increase rural income and contribute to the overall economic development of Rwanda.
PASP development objective is to increase smallholder and rural laborer incomes (including women, youth and vulnerable groups) from CIP crop and dairy businesses, especially those related to aggregating production for markets, supporting transformation, and creating value-added to enable smallholders to capture a higher share of the value.
IV. PASP TARGETING
IV.1. TARGETED GROUP
PASP will target 32,400 rural households direct beneficiaries in 11 districts where the project will be intervening.
IV.2. PASP Targeted commodities
Based on a review of existing value chain studies and market 10.information available on the CIP crops and dairy sector, MINAGRI has decided to initially focus PASP on maize, beans, cassava, Irish potato and dairy. The five selected commodities4 were ranked according to: (i) competitiveness, including potential domestic and regional demand, as well as value addition opportunities; (ii) potential impact, including number of rural households benefiting or participating in the product chain and potential to increase income; (iii) harmonization, including synergies with government and other development partners strategies and programmes; and (iv) potential to increase household food security, women's income, and economic inclusion of the rural poor
IV.3. Geographical targeting.
While most targeted commodities are found nationwide, initially project support will focus on three geographical areas determined using three main criteria:
√ Land area dedicated to individual crops, according to the 2011-2012 MINAGRI Crop Intensification data;
√ province population engaged in small-scale farming and agricultural wage labor (respectively, the poorest and the poor) and incidence of province households headed by the vulnerable;
√ Potential for value chain development and growth based on current and prospective processing facilities.
Project components and their respective outcomes:
PASP will be implemented over a five-year period and comprises the following three mutually reinforcing components: (i) HUB capacity development programme and business coaching; (ii) Post-harvest climate resilient agri-business investment support; and (iii) Project management and coordination.
Component 1: HUB capacity development programme and business coaching (US$12.57 million, including US$6.3 million IFAD loan/grant, US$2.5 million ASAP grant, US$1,03 million government counterpart funds, and US$2.7 million project beneficiaries/value chain actors contribution).
The main outcome from component 1 will be:
Cooperatives, farmers organizations or SMEs associated with participating HUBs have the skills and knowledge, as well as access to specialized service providers, to create viable and competitive businesses capable of delivering larger volumes of improved produce to the market chain and provide climate resilient and low carbon value adding to an expanding number of clients.
The first component will assist HUBs in each selected commodity to identify and address their business management and financial skill gaps and produce bankable business plans (BPs) to develop and manage their services more profitably with stronger linkages to supplying farmers and integrating low carbon and climate resilience activities.
Post-harvest climate resilient agri-business investment support (US$69.42 million, including US$18.07 million IFAD loan/grant, US$4.17 million ASAP grant, US$10.39 million government counterpart funds in the form of foregone taxes and duties, US$7.35 million from project beneficiaries/value chain actors, and US$29.42 million leveraged from financial sector).
The main outcome from component 2 will be: HUB business investments in improved climate resilient and low carbon post-harvesting procedures, drying, processing and value addition, storage, logistics and distribution generate reductions in product losses and increase smallholder and rural labourer incomes.
Based on viable BPs generated with component 1 support, component 2 will facilitate business activities that can thrive on agricultural production from CIP crops and dairy development by leveraging commercial loans-funded post-harvest investments that contribute to improving market access and linkages, HUB operational and management efficiency, and sustainability based on climate resilience and adaptability and water and energy use efficiency. ASAP funds will be allocated to support the incremental costs related to BPs-identified investments in low carbon energy supplies, and post-harvest equipment, infrastructure, climate resilient buildings and associated training to develop the capacity of the HUB to establish and operate such investments and improve their efficiency.
• Parent Ministry : Ministry of Agriculture and Animal Resources (MINAGRI)
• Rwanda Agriculture Board
• Agricultural Extension, Animal Resources Extension and, Infrastructures and Mechanization
• Rwanda Cooperative Agency
• Confederation of Cooperatives, each of the crop farmer organizations, the national dairy farmers union and, once in place, of the Federation of SACCOs
• RDB Development Fund (BDF), the Private Sector Federation (PSF), Access to Finance Rwanda and the Building an Inclusive Financial Sector in Rwanda (BIFSIR) project in MINECOFIN
• Grain traders and commercial users
• Dairy processors and traders
• Participating financial institutions
• Farmers around cassava, maize, beans, Irish potatoes and diary
• IFAD loan and grant :US$26.9 million (representing 31.4% of total project costs);
• IFAD Adaptation for Smallholder Agriculture Programme (ASAP):US$7 million (8.2%) grant,
• GoR counterpart funds: US$12.35 million (14.4%);
• Beneficiaries and other value chain actors: US$10.17 (12%); and
• Financial institutions: US$29.4 million (34.3%).
Total project cost : US$83.35 million,