Africa (Commonwealth Union) – Rwanda has ended its long-standing practice of officially setting prices for agricultural products, which allows farmers and traders to negotiate prices among themselves. Officials say the reform will open up farm markets to more free-market competition, boost competitiveness, and empower farmers to make their own choices on how they make their money.
Trade and Industry Minister Prudence Sebahizi confirmed the policy shift in an interview on Oct. 7, adding that “farmers and buyers now meet and negotiate prices they find fair.”
Earlier, the government had set minimum prices for staple crops like maize, beans, and Irish potatoes to protect farmers from exploitation. Under the new market-orientated regime, prices are determined by availability, demand, and quality rather than government rates.
The reform came after sustained protests from farmers who claimed that fixed prices below the actual value of their produce contributed to losses. MP Alice Muzana, parliamentary agriculture committee chairperson, claimed the transformation formed part of a sustained strategy to render the sector sensitive to market conditions.
To allow the adaptation, investments in new warehouses are being made by the government and stimulation of usage of the East Africa Exchange (EAX) to help farmers sell at the best time. “We also plan to enhance price information systems by districts,” Muzana added.
Jean Paul Munyakazi, president of Imbaraga Farmers’ Organisation with 32,000 members, termed the liberalisation a “welcome step.” It has brought more flexibility and eliminated former zoning restrictions that limited business between provinces, he said. “Now we can have a Ugandan buyer coming to Rwanda to purchase maize or beans, or we can sell directly,” he added.
However, Munyakazi cautioned that the lack of credit remains a significant challenge, leaving farmers susceptible to intermediaries during periods of scarcity. He asked for a credit guarantee fund to help farmers sell products after a proper amount of time to allow market prices to rise.
The policy extends beyond food crops. Cooperatives such as Dukundekawa in Gakenke District report that lifting zoning has raised competition, quality, and international partnerships.
Economist Richard Karasira noted that, even though liberalisation is able to serve consumers through fair price competition, it exposes farmers to the volatility of the market. “In the absence of protection in terms of cheap credit and good storage, farmers might suffer from price shocks,” he cautioned.
As Rwanda implements this market-driven system, specialists are noting that success will depend on building strong cooperatives, financial access, and effective market information systems to ensure freedom and equity among farmers.
