7th Edition of the World Bank's Rwanda Economic Update : Focus on Risks to the Rwanda Agriculture Sector
The 7th Edition of the World Bank's Rwanda Economic Update was launched in Kigali, Rwanda on February 25, 2015. Entitled "Managing Uncertainty for Growth and Poverty Reduction: Agriculture Sector Risk Management," the report reveals that growth projections in Rwanda depend heavily on the performance of the agriculture sector. The special focus section assesses the different risks to Rwanda's agriculture sector, prioritizes them according to their frequency and severity of impact, and identifies areas of risk management solutions that need deeper specialized attention.
While systemic risks to the agricultural sector are limited in Rwanda, local and commodity risks remain, preventing the sector from reaching its potential. Based on frequency and severity, the main risks to the agriculture sector are: 1) pests and diseases for crops and livestock, 2) droughts and irregular rainfall for crops and livestock, and 3) price volatility for export crops and dairy producers.
Agricultural risks have important consequences for productivity, growth, and the government's effort to transform the sector with the Strategic Plan for the Transformation of the Agriculture (PSTA) III. Long-term trends, particularly climate change, and the structural changes that the government is promoting to increase productivity, will alter Rwanda's exposure to risks. For instance, while larger fields allow for much needed mechanization, land consolidation and mono-cropping will facilitate the spread of pests and diseases, and increase exposure to weather-related risks. Similarly, integrated supply chains, for example for livestock products, provide good opportunities for farmers and value addition to the sector, but any contamination in the chain will have consequences for many more consumers than when a farmer sells directly to a limited number of consumers.
Risk management approaches that take into account the evolving nature of risk can support productivity and competitveness as the sector develops and markets evolve. Mitigting for risks is often win-win because it imnvolves promoting good agricultural practices and good livestock management on the farm, and good hygene practices throughout the supply chain. Decreasing volatilities implies improved predictability in the sector and thus encourages investments. Finally, approachig risk management comprehensively rather than managing risks ad hoc and only ex-post, allows for more efficient use of public and private resources.
Creating resilience would benefit the sector. While the Rwandan government is already acting to manage risks, there is room to further strengthen risk management efforts given the risks identified in the analysis and the objectives of the PSTA. The report recommends a series of measures with this purpose.
>> Download the presentation given by Åsa Giertz (Agriculture Specialist with the Agricultural Risk Management Unit, Agriculture Global Practice at The World Bank ) on February 25, 2015 in Kigali.
7th Edition of the Rwanda Economic Update in the Media
- Can agriculture deliver Rwanda's development targets?, published in The New Times on February 25, 2015
- Government moves to curb agriculture losses, published in The New Times on February, 27, 2015
- Rural infrastructure development will attract youth to agric - say expert, published in The New Times, on March 9, 2015