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Cedric Stephens | Can Jamaica emulate Rwanda’s success in agriculture? Yes, we can!

“Timing is every-thing. If it is meant to happen, it will, at the right time, for the right reasons.”

This quotation from an unknown author is appropriate for today’s essay. Now is the right time to write it, after months of thought. The topic is what this newspaper, last Friday, called the secrets to Rwanda’s ‘agricultural success’. Implicit in those words is the idea that Jamaica can benefit from the experiences of that country.

Earlier that week, Minister of Agriculture and Fisheries Pearnel Charles made his contribution to the 2022-23 sectoral debate in Parliament. The Jamaica Information Service reported him as “calling for more investments” in the agriculture and fisheries sector to support the Government’s efforts to increase local food production.

“Increased investments from the private sector will multiply the Government’s efforts to boost Jamaica’s food security. The pandemic and the political unrest between Russia and Ukraine have made it even more urgent for Jamaica to be self-sufficient,” the report said.

“The message is this: production over importation, and we are encouraging our investors, as we support boosting production, to meet our local needs.”

Risks are one of the by-products of investment.

The CEO of the Rwanda Development Board, Clare Akamanzi, in a discussion with this newspaper last week, named four things that her country had done to become an exporter of agricultural products throughout Africa. The concepts she shared – by accident or design – were linked to Minister Charles’ statement to Parliament and are summarised as follows:

o A crop-intensification programme where farmers merged their farms to make larger holdings to ensure optimal land usage and plant crops appropriate for the weather and soil type.

o The provision of government subsidies for inputs like seedlings and seeds, bulk purchasing of other inputs like feeds and fertilisers.

o Facilitating access to credit. The RDB CEO described this strategy as the ‘most seminal reform’ that country’s government introduced.

o The creation of agricultural co-operatives.

Lender’s perspective

The Gleaner, for some reason, inserted a few lines in the article about Rwanda’s secrets from the CEO of Jamaica’s biggest lender, National Commercial Bank. Septimus Blake was quoted as saying: “You have praedial larceny, you have weather-related risks. Institutions have to find a way to mitigate against those risks … agriculture will have a challenge accessing financing.” True. Lending decisions in banks are made only after the careful assessment of risks.

NCB Financial Group Limited (NCBFG) is a Caribbean financial services conglomerate. It is the parent of National Commercial Bank. Guardian Holdings Limited, (GHL) is also one of its NCBFG’s offspring. GHL owns and operates insurance and reinsurance companies. Policyholders, lenders, and insurers transfer risks to these entities.

The NCB CEO does not appear to read this newspaper. He should. Had he read the piece that I wrote on March 6 – ‘Hi-tech Insurance Solution for Local Farmers Shows Promise’ – and exploited the banking and insurance knowledge base in NCBFG, he would have offered a more persuasive response to the Gleaner’s request for comments in the context of ‘the most seminal reform’ measure that the Rwandan government had introduced in that country’s agricultural sector.

Also, he should have been aware that two months ago, I wrote that if the pilot project is successful and insurance coverage becomes available, banks and other lenders should have one less excuse not to make loans to the farming sector. That was, and still is, an informed opinion; it is not speculation. It is founded on many years of study.

Rwanda is in East Africa and is located to the east of the Democratic Republic of the Congo. It covers an area of 26,338 square kilometres or 10,169 square miles. It is about 2.5 times Jamaica’s size while its population of 13.2 million is over four times that of Jamaica.

Rwanda’s gross domestic product grew between 2010 and 2020 from US$6.12 billion to $10.83 billion, or 76.9 per cent. In contrast, Jamaica’s GDP barely moved from US$13.2 to US$13.8 billion, or 4.5 per cent. Agriculture was one of the main factors behind Rwanda’s GDP growth.

The reasons for Rwanda’s decade-long economic success are many. How are some of the risks associated with its agricultural ventures being managed by its insurance market? Loans and insurance work together. NCBFG’s structure confirms this. JAMPRO officials recognise that the absence of credit and an effective risk-transfer mechanism is an obstacle to farming investment.

Value chain

The first ‘port of call’ for information was The World Food Program. It is the world’s largest humanitarian organisation. Its mission is to ‘save lives in emergencies and use food assistance to build a pathway to peace, stability and prosperity for people recovering from conflict, disasters, and the impact of climate change’.

WFP Insight gave details on February 19, 2021, about the Rwandan programme in a piece titled ‘Crop Insurance Increases Food Security and Productivity’. The article said that “the effects of climate change are threatening the livelihoods of smallholder farmers. Climate shocks such as heavy rains, droughts, hail, and destructive winds have damaged crops and reduced food security”. The same can be said about local farming conditions

The Rwandan government, working in partnership with some of the country’s private insurers, has promoted the adoption of crop insurance by smallholder farmers to mitigate against the effects of climate change. The plan has been in existence for over ten years. The government pays 40 per cent of the premium and the cooperatives cover the remainder. The value chain covered under the insurance scheme is maize, rice, chilli peppers, French beans, and Irish potatoes. There are plans to include banana, soya beans, and cassava.

One Rwandan farmer was quoted as saying: “Before we had crop insurance, we would go hungry when crops were damaged. With the compensation I received, I was able to continue buying food for my family.” Initially, mistrust of insurance companies led to scepticism of the scheme by many farmers, but mobilising and educating farmers and ensuring that compensation was paid on time has led to an increase in trust and increased uptake of the scheme.

Farmers can expect to receive up to 85 per cent compensation on the cost of their investment and their expected yield based on the average produced by their farms. The calculation factors in the cost of seed and inputs such as fertilisers in addition to historic levels of productivity.

In stark contrast, when Jamaican farmers suffer losses due to weather events, the Government acts as the insurer of last resort. Farmers lack access to insurance. Losses to the sector, on average, have historically amounted to two per cent of GDP per annum. Estimated crop losses from extreme events between 1994 and 2010 amounted to $12.6 billion.

Government assistance to farmers comes from the Consolidated Fund. Disbursements from the fund between 2007 and 2012, according to Ministry of Finance & the Public Service data, amounted to $710 million. These funds are usually not paid on time.

Progress on crop insurance

The NCB CEO conceded that “continued formalisation of the local agricultural sector and the provision of insurance were measures that could be useful in promoting Jamaica’s development. However, historically, there has been limited progress”. The second part of that statement, in my view, is wrong.

Substantial progress has been made on the insurance front during the past 12 months. The results of the first phase of the pilot project referred to in my March 6 article, which could be a precursor to a local insurance scheme, were presented recently to the Ministry of Agriculture and Fisheries.

Many of the design features of the Rwandan Crop insurance plan are likely to be included in the proposed Jamaican plan. Prospective local and overseas partners, from India, Switzerland, and France, are now awaiting a response from the ministry before the next phase of the free proof of concept, which started late last year, can begin.

For the first time in over a decade, most of the key elements are in place to reduce many of the risks facing the local farming community, prevent access to credit and curb investment, which the minister encouraged in his recent address. Such an insurance scheme would also be consistent with the prime minister’s statement to the outreach session of the G7 summit in Canada in 2018, and the strategy the World Bank Group recently recommended to increase Jamaica’s employment, production, trade, and economic growth.

“The latter is focused on greater investments in the higher-end, value-added categories … as well as niche farming of certain fruits, vegetables, and spices.”

These measures, plus access to credit and crop insurance, would foster ‘seminal reform’ in the country’s agricultural sector and improve the lives and livelihoods of thousands of farmers.

– Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: or

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