Rwanda warrantage pilot takes off
19 December 2010

RIU Rwanda, NYAMIG (the commercial arm of the RIU Rwanda-backed Maize Innovation Platform) and Duterimbere IMF (a local bank) have completed the first pilot phase of the warrantage programme in Nyagatare District, Eastern Province, Rwanda.

Key facts from the pilot:

• The pilot scheme worked with six farmer's cooperatives representing 210 members plus 81 individual farmers
• On delivery of their maize harvests to the warrantage warehouse, Duterimbere advanced loans totaling Rwandan Francs 9.3 million (US $15,775) to farmers, which represented 60% of the value of their crops. The second payment (40%), less interest and warehouse charges, will be effected in January 2011. Beneficiaries decided on that particular period for second payment as they will be in need for cash for critical family expenses such as school fees for their children, labour for the next maize harvest or contribution to medical insurance schemes
• The RIU-backed warrantage scheme was presented to the national workshop organized in November 2010 by the Ministry of Agriculture and Animal Resources, where participants from various micro-finance institutions and maize farmer's cooperatives discussed promoting a large-scale warrantage programme in Rwanda
• Following the high levels of interest raised by the RIU-backed warrantage scheme during the World Food Day, NYAMIG was invited by World Food Programme to make a presentation on the warrantage pilot to a national workshop with its donors and partners in November 2010
• NYAMIG has received a contract to supply 825 tonnes of maize to the World Food Programme - Purchase For Progress Programme (P4P). The new contract runs from November to January 2011 and this follows on from the first order for 400 tonnes (signed in May 2010) which it successfully fulfilled

Future developments

• Ten new maize collection sites have been identified in Nyagatare District, in order to localize warrantage operations and reach an additional 5000 farmers by May 2011.
• RIU Rwanda with its banking partner has developed a mechanism that will enable more farmers to access fertilizers using their projected maize harvest as collateral through the warrantage scheme in time for the 2011 harvest. In 2010 it had emerged that some 120 farmers had not repaid their fertilizer loans because the traders involved in the scheme were offering very low payments for the maize grown. So, NYAMIG and Duterimbere IMF intervened and bought the maize at nearly twice the price offered by the local traders and paid off the fertilizer loans.
• 50 people from Kayonza, Gatsibo and Kirehe districts (Rwanda) came on a study tour to the RIU-backed warrantage site in December 2010 and practical arrangements for scaling up the experiment to these new districts were agreed upon.
• Meanwhile, RIU management has contracted H2O, an Oxford, UK based investment firm which specializes in early stage technology commercialization, to explore possibility for scaling up warrantage in East Africa as part of a broader programme looking at a package of crop storage technologies and business models.