pg. 1

Policies, Institutional Framework and International Development Interventions in Policies, Institutional Framework and International Development Interventions in Policies, Institutional Framework and International Development Interventions in Policies, Institutional Framework and International Development Interventions in Eastern African CommunityEastern African CommunityEastern African CommunityEastern African Community

J.J. Mbonigaba Muhinda1 and Alfred R. Bizoza2 1 Rwanda Agriculture Board (RAB)

2University Rwanda (UR)

Paper presented for the Symposium on Agricultural Development in the East African Community (EAC):

lessons from the past 50 years and prospects for the next 50 years

Kampala Uganda on 05 – 07 November, 2013

AbstractAbstractAbstractAbstract

During the last 50 years, agriculture remained the most dominant sector in the economies of the

five East African Countries namely Kenya, Uganda, Rwanda, Tanzania and Burundi. Several

policies and institutional frameworks have accelerated or hindered agricultural development in

those countries. However, such data is limited and few studies had been conducted in this area.

This paper builds on the existing data to explore the policies, institutions and agricultural

development interventions in Africa with a particular attention to the EAC sub-region. It provides

preliminary contribution to the debate on agricultural policy processes by focusing on lessons

learnt from the independence period to date. From a historical perspective, the article unpacks the

role of the state and the extent to which the private sector, civil society organizations and

community are involved in policy design and implementation. Furthermore, it shows the

limitations of the public sector investment in agriculture development and the potentials for the

private sector involvement. Other findings of the analysis show that so far the institutional

integration has enabled economic integration in the EAC region, which in turn is evidenced by

improved trade openness, real GDP per capita, inflation and exchange rates. The analysis of

export and import statistics have showed positive trends of exports and imports in praise of the

regional and economic integration. The paper demonstrates the disconnection between policy

papers (many and well elaborated) and their respective implementation processes. It also identifies

that policy design in the EAC countries draws less on evidence-based analysis which affects

investment and policy targeting. Similarly, the analysis of the bilateral Official Development

Assistance (ODA) commitments in the most recent period show that agriculture received much

attention (an average of 82.5 %) in the production sector than industry, mining, construction, trade

and tourism. From the Rwandan experience on policy processes and the on-going agricultural

transformation, the paper demonstrates how effective agricultural policies can reduce poverty and

ensure food security. Finally, specific lessons and prospects for the next 50 years were drawn from

the discussions to guide future agriculture development in EAC region.

Key wordsKey wordsKey wordsKey words: Policies and institutions, Agricultural Development, EAC Countries.

pg. 2

1. 1. 1. 1. BackgroundBackgroundBackgroundBackground

After decades of decline of per capita food production, the current era is looking optimistic about

the prospects for Africa and for African agriculture in particular. For Africa as a whole, economic

growth was well above 5% until 2008, whereas for sub-Saharan Africa (SSA) it was above 5.5% and

5.8% for the East Africa in 2011. Estimate of the African Development Bank (AfDB, 2012) shows

that the real GDP growth is generally declining in Africa as well as in East Africa, indicating

unstable economic growth (table 1). The agricultural growth in sub-Saharan Africa has been above

3.5% and 4.0 % in the East African Community (EAC), well above the population growth rate of

about 2% (FAO, 2009; Africa Progress Report, 2012).

TTTTableableableable 1111. . . . Real GDP growth by Region (%)Real GDP growth by Region (%)Real GDP growth by Region (%)Real GDP growth by Region (%)

RegionRegionRegionRegion 2010201020102010 2011201120112011 2012201220122012 2013201320132013

Africa 5.0 3.4 4.5 4.8

Central Africa 5.7 5.1 4.9 4.8

Eastern Africa 7.1 6.0 5.1 5.6

Northern Africa 4.1 0.5 3.1 4.0

Southern Africa 3.5 3.5 4.0 4.4

Western Africa 6.9 6.3 6.9 6.4

Oil-exporting countries 5.3 2.9 4.7 5.0

Oil-importing countries 4.5 4.1 4.2 4.7

Source:Source:Source:Source: Adapted from African Development Bank, 2012

In the EAC, policies, institutional frameworks, support and prescriptions of donors, and the public

sector investments influenced positively or negatively the progress during the last five decades.

EAC is a regional intergovernmental organisation of the Republics of Burundi, Kenya, Rwanda,

Tanzania, and Uganda. During the colonial era and after independance, each of these countries

tried to develop but in an isolate manner. However, Kenya, Uganda and the United Republic of

Tanzania have enjoyed close historical, commercial, industrial, cultural and other ties for many

years due to their common British colonial background among others. The same applies to

Burundi and Rwanda which shares a common background as Belgian colonies. Efforts to initiate

an East African Community were progressively made with plenty pitfalls. In 1967, Uganda, Kenya

and Tanzania signed a Treaty for East African Cooperation and established respectively the East

Africa High Commission, the East African Common Services Organisation and the East African

Community as successive joint organisations of the said countries. In 1977 the Treaty establishing

the East African Community was officially dissolved due to several reasons including lack of strong

political will, lack of strong participation of the private sector and civil society in the cooperation

activities, continued disproportionate sharing of benefits of the Community among the Partner

States due to their development differentials and lack of adequate policies to accommodate each

one's interest. Other mediation agreements followed in the 1980s without much successes. In

pg. 3

1994, provision was made by the protocol on the establishment of a Secretariat of the Permanent

Tripartite Commission.

The Treaty for establishment the East African Community was signed on 30 November 1999 and

entered into force on 7 July 2000 following its ratification by the original three Partner States –

Kenya, Tanzania and Uganda. Rwanda and Burundi, the two tiny landlocked East African

countries joined the EAC on 1 July 2007. The five countries agreed to cooperate at the sub-

regional and regional levels in all fields of human endeavours to raise the standards of living of East

African peoples. To this extent the EAC countries established a Customs Union in 2005 and a

Common Market in 2010. The regional integration process is at a high pitch at the moment

(Richard Ndereyahaga, 2010). The next phase of the integration will see the bloc enter into a

Monetary Union and ultimately become a Political Federation of the East African States.

The purpose of the Treaty is to deepen and accelerate integration, have one nation, one people

and one destiny. The Mission is to “widen and deepen Economic, Political, Social and Culture

integration in order to improve the quality of life of the people of East Africa through increased

competitiveness, value added production, trade and investments”(EAC, 2007). Hence, the treaty

aims at realising a fast and balanced regional development with a particular focus on agriculture

sector. In fact, food production, processing and marketing remain the most important in the

development areas of EAC economies. For example, it is estimated that 70% to 80% of the labour

force of the EAC is employed in the food sector in one way or another. On average, the agriculture

sector contributes to around 36% of the GDP (EAC Secretariat, 2010). Agriculture constitutes the

backbone of the EAC economies by contributing to foreign exchange earnings, employment and

provides raw material for agro-based industries. Furthermore, about 80% of the population of the

EAC Partner States live in the rural areas and depend largely on agriculture for their livelihood.

About 40-46% of them remain under the poverty line, making poverty predominantly a rural

phenomenon (Kakande 2010). Since agriculture employs over 75% of the rural population,

development of the sector presents a great opportunity for poverty reduction in a sustainable

manner. In addition to agriculture, artisanal activities, tourism, mining, forestry, fishing and small-

scale manifacturing contribute substancially to the rural economy of EAC countries.

The economies of the EAC Partner countries depend heavily on agriculture for growth and

development as largely explained above. It is in this line that the East African Community

Agriculture and Rural Development Policy (EAC- ARDP) has been developped to implement the

provisions of the EAC Treaty as set out in 18 Articles 105-110 (EAC, 2006). The development of

the EAC Agriculture and Rural Development is therefore a deliberate move by the Partner States

to achieve the goals and aspirations set out by the Treaty. It also provides a pillar for development

of a shared regional vision for sustainable development and takes advantages of the opportunities

arising from globalisation and regional integration. The Policy highlights the performance of

agricultural sector and Policy reforms undertaken in the Partner States. Out of goals and

pg. 4

objectives, it provides details on policy statements and gives provision for implementation, financial

arrangements, roles of stakeholders, monitoring, coordination and evaluation.

Currently, the overall objectives of the EAC under agricultural sector as set in the Treaty are to

achieve food security and rational agricultural production (EAC, 2006). The EAC Policies target

the Rural development and Food security in the five African countries through various agricultural

institutions such as EAC-ARDP and EAC-FSAP.

The EAC Agriculture and Rural Development Policy (EAC ARDP) aims at attaining food security

through increased agricultural production, processing, storage and marketing. The EAC-ARDP

recognizes the importance of eliminating hunger and ensuring sustainable food security within the

region as a necessary first step towards poverty reducation and consequently a stimulus for rational

agricultural development and realization of the aspirations of the EAC Treaty. The EAC is aware of

the potential regional agricultural value chains supported by agribusiness and agro-processing as a

basis for linking especially the smallholder producers to markets for food and other agricultural

products. Therefore, the East African Common Market (EACM) provides the best opportunity for

building such value chains, because it provides a framework for exploiting options of economies of

scale in the production and supply of food. The realisation of a large regional economic bloc

encompassing five countries leading to a combined population of more than 130 million people,

land area of 1.82 million sq kilometres and a combined Gross Domestic Product of $74.5 billion,

bears great strategic and geopolitical significance (EAC, 2010). It is an opportunity for enhancing

food security that should be used with all the priority it deserves.

However, before and since the signing of the Treaty, the ability of the Partner States to achieve

individual and collective durable food security status has been elusive. This has been further

hampered by the negative impacts of Climate Change. In this connection EAC Head of States

directed that the EAC Food Security Action plan and EAC Climate Change Policy be developed

to address food insecurity and adverse effects of climate change in the all region.

The EAC Food Security Action Plan (2010-2015) grounds its assumption that the ‘EAC region is

frequently affected by food shortages and pockets of hunger although the region as a whole has a

huge potential and capacity to produce enough food for regional consumption and a large surplus for

export to the world market’. There are many factors explaining this situation and the most critical

are: (i) inadequate food exchange/trade between times and/or places of abundant harvest on one

hand, and those with deficit on the other hand; and (ii) high variability in production caused by high

variability of weather which is becoming worse due to climate change (EAC, 2010). Hence, the East

African Community Food Security Action Plan has been developed to address food insecurity and

climate change. It forms the initial step of implementing the provisions of the EAC Treaty as set out

in Chapter 18 Articles 105 -110.

pg. 5

Driven by achieving food securty and ensuring rational agriculture production, the EAC- Food

Security Action Plan will guide coordination and implementation of the joint programmes and

projects emanating from this plan over a period of 5 years (2010 to 2015). The Sectoral Council

of Ministers Responsible for Agriculture and Food Security will guide its implementation. For its

effective and efficient implementation, this calls for strengthened capacities of the EAC Secretariat

to coordinate the implementation of the joint programmes and projects emanating from this plan.

The EAC Secretariat in collaboration with Partner States has drawn up a detailed annual work plan

indicating financial requirements based on objectives identified in the Action Plan. The

implementation of the plan was phased starting with the crucial strategic interventions. The plans

are financed by the Community, Development Partners and Investors.

In view of the above, this 2013 International Symposium on Agriculture Development in East

Africa is designed to facilitate deeper regional integration needed to accelerate agricultural

development through harnessing of the increased opportunities made possible by the East African

Common Market. The International Symposium will put together different actors from EAC

countries who will share past experiences and strategise for the future of the Community. This

paper comes in as a contribution to the central theme "Agricultural development in the East

African Community – lessons from the 50 years and prospects for the next 50 years".

The remained part of the article is organized as follows: the second section provides the overall

objective and research materials of the paper. Section three discusses some of key policies,

institutions, and agricultural strategies in Africa with focus to Eastern African Countries. The paper

materializes some of the lessons learnt in the past through a case study of Rwanda in section four,

followed with some policy recommendations.

2. 2. 2. 2. Overall OOverall OOverall OOverall Objective bjective bjective bjective and Research Materials and Research Materials and Research Materials and Research Materials

The overall objective of this study is to investigate the way policies, institutional frameworks,

support and prescriptions of donors, and the public sector investments have changed, been

changed, accelerated progress and positive results, or have hindered or reversed progress towards

economic development, with focus to the agriculture sector in the EAC region.

Materials of this study were collected from existing secondary data about the agriculture

development in Africa and particularly in the EAC sub-region. The agricultural and related policies

in EAC were identified from key documents including strategic plans, annual reports, program

plans and implementation progress reviews. Sources of these documents include websites of EAC

secretariat, relevant ministries and line institutions of particpating countries and development

partner organizations. Rwanda is given some particular attention to contextualize some of the

lessons learnt and see ways to upscale some in the region. Methods of analysis are mainly

qualitative and include content analysis....

pg. 6

3.3.3.3. Discussion on Policies, Discussion on Policies, Discussion on Policies, Discussion on Policies, InstitutionInstitutionInstitutionInstitutionssss and International and International and International and International Development IDevelopment IDevelopment IDevelopment Interventions nterventions nterventions nterventions in the EACin the EACin the EACin the EAC

The economic, social and political development for the EAC Partner States is supported by their

strategic visions and implementation strategies prepared independently. Those strategies are in line

with the objectives of the Community which is meant to develop policies and programmes aimed

at widening and deepening economic, political, social and cultural integration at regional and global

levels (EAC, 2011). All the Partner States share in the dream of achieving a middle income status

by 2030. The emphasis in this section is on policies and institutions pertaining agricultural

development, state and markets relations, effect of globalization and liberalized economies, puplic-

private partnerships and intra-trade within the EAC.

3.1.3.1.3.1.3.1. InstitutionsInstitutionsInstitutionsInstitutions, Policies, Policies, Policies, Policies and the Agricultural Development Challengeand the Agricultural Development Challengeand the Agricultural Development Challengeand the Agricultural Development Challengessss in in in in the EACthe EACthe EACthe EAC

This sub-section entails the relevancy of institutional environment and policies in the agriculture

sector. It indicates how these have evolved over time and what benefits and enablers obtained from

the development of institutions, with particular attention to EAC countries.

Agricultural policies and frameworks are normally pushed by different actors in the policy process.

What kind of Ministry of Agriculture is envisaged, either implicitly or explicitly? Three schools of

sought emerge from the discussion about the role of the Ministry of Agriculture. One sees the

sectoral ministry with capacity and policy clout – to address the major constraints of agriculture. It

is argued, what is required is a strong, well-funded line ministry, and the challenge today is to

rebuild such an organisation. A second – at the other extreme – sees such sectoral ministry taking

on a minimal role, focused on oversight and regulation, as the private sector takes on a more

substantive role in a ‘free-market’ environment. A third- sees an important role for the state and

the Ministry of Agriculture, together with other state agencies in addressing the coordination and

intermediation roles of getting markets to work effectively, while ensuring at the same time public

efforts are targeted to poverty reduction.

The current status of agricultural institutional development in the EAC partner states is somewhat

close to the first and the third options where the Ministry of Agriculture and the State are more

responsible for agriculture development. Yet, the FAO report on challenges and opportunities for

African agriculture and food security (2010) show that sector institutions specifically associated with

agriculture and natural resources have often performed particularly badly and were not able to

address the challenges of the rural development. For example, agricultural credit institutions not

only achieved little for small farmers, they also were fiscal black holes benefiting primarily the

better off farmers, decentralized institutions that are ineffective and poor providers of small farmer

services. However, there is an increasing willingness by the states to delegate some roles to the

private sector in the agriculture development.

pg. 7

With respect to agriculture policies, EAC policies have evolved over time similar to other African

nations. During the post-colonial period till 1980s, he policy design was much informed by the

colonial believe attributing much space to the state in policy formulation as well as implementation.

During the period 1980 to 2000, the policy development started to acknowledge the role of the

private sector, civil society and local government in shaping the growth and development of the

agriculture due to improvement in macro-economic and sector policies. The current agriculture

development is driven by the majority of policies developed during the last decade (2003 to

2013) of which some commons in the design can be observed accross the five partner states ( see

annex 1). However, there is evidence of disconnect between policy papers and their

implementation which reflect to some extent the failure to address the agriculture development

challenges in an effective and efficient manner.

Furthermore, the policy design is more or less based on particular actors and networks with

particular interests. Grindle and Thomas (1991) argue that 'different groups of institutions and

actors– academics, think-tanks, donors, government agencies and others- therefore promote a

particular policy framing, and in doing so link different groups together in networks. Such

networks may represent particular interests, and be associated with particular political positions.

Policies are thus inevitably political and the policy process is less of a linear, technical sequence,

but more a political process, driven by particular actors and networks associated with different

interests. These actors therefore interact to create (or decrease) ‘policy space’ and so the options

for policy change.

The framing of policies in EAC countries draws less on evidence-based analysis. This calls for

relevant, timely, and quality of evidences or evaluations that feed into the policy design and policy

targeting (Holland and Mertz, 2012). Basing policy on evidences allows policy makers and the

general public to understand the issue, identify the most appropriate policy direction and influence

policy thinking and giving policy makers the necessary tools to communicate and defend their

policy decisions (GSR, 2007). Types of information needed for this purpose include raw data,

numbers of trends, evaluation evidences with qualitative and quantitative outcomes, and academic

research. Yet, there is also a general consensus seeking how to improve the methodology that

provides timely and accurate agricultural data on a regular basis. In addition, the linkage between

research outputs and the policy reform process is not easy to appreciate, especially in the

agriculture sector. There is no better mechanism that enables tracking how research outputs

influence the policy reform; hence an area that needs ample consideration. Finally, looking at this

policy-evidence, this brings the notion of the role that the socio-economic research could play to

support the policy design and how this role can be strengthening in the future (Burruss and Bizoza,

2013).

Although it's difficult to measure the differential contribution of institutions and policies in

agricultural growth due to inadequate data, but benefits of these can be captured through their

pg. 8

facilitation effect, such as creating an enabling environment for the private sector and civil society

involvement, more participation of rural communities, capitalizing on social capital (collective

actions), land reforms and decentralization of certain agriculture services.

3.23.23.23.2.... Overview of Overview of Overview of Overview of ConstraintsConstraintsConstraintsConstraints of of of of SSSSmallmallmallmall----holder holder holder holder FFFFarmers armers armers armers in the EACin the EACin the EACin the EAC

Agricultural production in developing countries takes place largely in small farms, with land

holding size declining and becoming more and more fragmented (Lipton, 2005). Smallholder

agriculture in the East African countries is common and has been facing numerous constraints.

While some are unique to each of the countries, most are of a similar nature, implying that

harmonized policies would address them across countries. Consistent with the AfDB report

(2010), key constraints that shape the policy and institutions development in agriculture include- (i)

land tenure, access rights and management, (ii) agricultural financing and access to credits, (iii)

access to input and output markets, (iv) poor infrastructure, (v) limited agricultural extension

services and innovations, (vi) low agriculture productivity, (vii) enfant agriculture-based enterprises

and cooperatives, and (viii) high transaction costs within the sector). However, looking at these

constraints, many are not new, but rather long-standing and perhaps even chronic. Although we do

not intend to give a detailed description of each of these constraints, we provide an overview of

how they impend on the overall agriculture development.

In the Eastern Africa, 90 percent of farms are smaller than five hectares (two thirds of which having

less than 1.5 hectares) and account for 80 percent of agricultural production (Molua and Rajab,

2002). Smallholder households are typically food-insecure, farming low productivity lands, with

weak access to input and output markets and high exposure to production and price fluctuations.

Land holdings are commonly not formalised and tenure arrangements are still often determined

by customary rules and practices in most countries, despite on-going land registration and

regularization efforts. The small scale of production and the high levels of risk exposure, together

with low-input agricultural production and market underdevelopment, produce very high costs of

transaction which constrain the expansion of agricultural supply chains.

Financial markets fail to develop because of demand scarcity (small scale, high risk exposure and

lack of collateral constrain farmers’ access to financial services) and farmers’ productive investment

in land is inhibited by lack of financial capital to purchase agricultural inputs. Investment

coordination along the supply chain in poor rural areas is therefore particularly difficult to strike.

The investment decision of an agricultural input supplier is likely to be constrained by the

availability of financial services which allow farmers to access financial capital to purchase

agricultural inputs. This is partly explained by the fact that most of commercial banks and micro-

finance institutions have products that have limitations to accommodate the investments risks in

the agriculture sector. Thus, agricultural financing will remain a constraining factor if policies and

pg. 9

regulations are not tailored to it. The insurance of agricultural loans that is being introduced in the

agriculture financing sector may be necessary but needs extra measures to sustain it.

The investment in marketing systems is determined by the existence of input markets supporting

the production activity. When transaction risks and costs are high, markets are unable to produce

an efficient allocation of resources, and agricultural activity can get caught in a ‘low level

equilibrium trap’ (Poulton et al., 2004). High costs lead to underinvestment which depresses the

level of economic activity, increasing further the risks and costs of transaction and generating a

vicious circle of underdevelopment. This ‘low level equilibrium’ is argued to be particularly

significant in food crop production – given the marketing characteristics of food crops there are no

incentives for the private sector to provide the required coordination of investment, making it very

difficult to break out of the trap.

It is under these circumstances that markets (i.e. private sector operators) fail to provide an

efficient outcome and therefore an exogenous push is required to set market mechanisms in

motion. But the recognition of a market failure and the identification of correcting measures are

far from straightforward. Wiggins (2005) notes that, beyond the provision of public goods and

regulation of externalities, we know too little of how much failure there is and how to go about

correcting it. Are these failures a justification for direct state provision of inputs to small farmers,

for example? Or would this further undermine the development of a market for agricultural

inputs, while carrying the costs of an ineffective and inefficient government intervention? As Petit

(1995) noted defining what policies we should recommend is very often a matter of judgement

between the conflicting pressures arising from the existence of market failures and government

failures. In the context of debates about agriculture in Africa, such judgements most likely emerge

from deep-seated ideological and political commitments dominating particular policy positions by

different groups.

3.3. 3.3. 3.3. 3.3. Impact of the GlobalizationImpact of the GlobalizationImpact of the GlobalizationImpact of the Globalization: Institutional and Economic: Institutional and Economic: Institutional and Economic: Institutional and Economic integration integration integration integration

Agricultural activity in the East African countries has been greatly influenced by those countries’

long relationship with the rest of the world. Many of the structures used to assist producers and to

distribute market products have been inherited from the colonial era. The pressure to liberalize

agricultural production and marketing in the African fashion began back in the 1980s.

East African countries have recognized the importance of striving to increase their role in the

international economy and have, over the last two decades, adopted appropriate economic

measures. These measures have resulted in benefits to the EAC countries including the stimulation

of private-sector investment in production and processing, inputs supply, agricultural marketing

and enhance community participation. However, the risks associated with adopting a more

exposed position in a highly competitive global agricultural market have presented these countries

pg. 10

with some serious difficulties (Robbins and Ferris, 2003). The African Economic outlook report of

2012 sustains that Africa´s economic prospects depend on many unpredictable factors. The same

report estimates that a one-percentage point decline of GDP in OECD member countries causes

African GDP to decline by about 0.5% and Africa´s export earnings by about 10% (AfDB at al.,

2012).

The influence of Globalization in most EAC member countries started mid-1980s to 1990s,

starting with market liberalization and privatization fueled by the structural adjustment policy

reforms under the auspices of the Breton Wood Institutions namely WB and IMF. These two

institutions have facilitated of the initiation process of the economic recovery programs across the

EAC countries. Consequently, , substantial structural reforms have taken place in their respective

economies in areas of price liberalization, exchange in payment liberalization, public enterprise

reform and financial sector reform, and civil service reform (Mubiru, 2003).

Furthermore, more policy reforms were crafted in tune of trade liberalization, increasing and

changing patterns of financial flows, cheap and quicker transport, the growth in size and power of

corporations and advances in Information and Communication Technologies. The following

Figure (1) shows competitive scores of the EAC member states in some of the above areas.

Rwanda is ranked relatively the first with well-functioning institutions, low levels of corruption, and

relatively high personal security which combine to build confidence in investors (Ministry of Trade

and Industry, 2012). Accordingly, these areas form the most interest of EAC governments to see

how to get policy and institutional reforms right, seeing the role of the state creating base

conditions for market development, and enhancing institutional and regional integration in the

name of Eastern African Community Secretariat.

pg. 11

FigureFigureFigureFigure 1.1.1.1. Competitiveness of Selected EAC Member States (2011)Competitiveness of Selected EAC Member States (2011)Competitiveness of Selected EAC Member States (2011)Competitiveness of Selected EAC Member States (2011)

Source: WEF, 2012, Cited in Minitry of Trade and Industry ( 2012).

Institutional integration is the major outcome of the institutional reforms of the EAC partner states.

A study by World Bank (2012) analyses whether institutional integration leads to economic

integration in the East Africa. The analysis confirms that institutional, economic and trade

integration mutually work to deepen regional integration. The degree of institutional integration in

EAC partner states was quantified by assigning the scores to the level of integration achieved for

each of the five stages of regional integration namely free trade area (FTA), customs unions (CU),

Common Market (CM) , Economic Union ( EU) and Total Economic Integration ( TEI). The

following Figure (2) exhibits the evolution of the composite index of institutional integration for the

EAC from 1993 to 2010. The process of institutional integration is faster in the last few years

starting from 2005. This pick period is consistent with the period when the EAC developed the

customs union and is moving towards common market by removing the non-tariff barriers and

restrictions on capital and labor mobility (World Bank 2012; MINEAC, 2013).

pg. 12

Figure (2).Figure (2).Figure (2).Figure (2). Institutional Integration in the EAC Institutional Integration in the EAC Institutional Integration in the EAC Institutional Integration in the EAC

Source: World Bank (2012).

Economic integration is part of globalization and regional integration. In the theory of economic

integration a three-stage procedure is followed namely a Preferential Trade Area, a Free Trade

Area, and a Customs Union. In the EAC, the process of economic integration started with a

Customs Union in 2005 by Kenya, Tanzania, and Uganda. Later Rwanda and Burundi started

implementing the Customs Unions in 2009. The aim is to liberalize intra-regional trade in goods

among partner states, promote efficiency in production within the community, enhance domestic

cross border and foreign investment in the community, and promote economic development and

diversification in industrialization in the Community (MINEAC, 2013).

The same study by the World Bank (2013) shows how institutional integration reflects or translates

into economic integration. Five indicators of economic integration namely real GDP per capita,

inflation rate, real interest rate, exchange rate and trade openness were considered. A study by

Kigabo (2010) in Rwanda also confirms that attempts for regional integration within EAC reflect

the desire to deal with the structure of the Rwandan economy namely its small size, landlocked

status, and country’s poor infrastructure. Table (2) bellow shows the status of these indicators

following the three sub-periods characterizing the main stages of EAC’s economic integration while

Figure (3) shows the dynamics of economic integration.

pg. 13

Table (Table (Table (Table (2222)))).... Indicators of Economic Integration in the EAC Indicators of Economic Integration in the EAC Indicators of Economic Integration in the EAC Indicators of Economic Integration in the EAC

Real GDP

per capita

Inflation

Rate

Real Interest

Rate

Exchange rate Trade

openness

Jan 1982 – Oct. 1993 0.327 56.00 0.471 0.467 3.100

Nov. 1993- June 2000 0.293 13.71 0.445 0.527 8.403

July 2000 onwards 0.286 4.91 0.483 0.559 7.893

Figure 4:Figure 4:Figure 4:Figure 4: Dynamics of Economic Integration Dynamics of Economic Integration Dynamics of Economic Integration Dynamics of Economic Integration SouSouSouSource: World Bank (2012). rce: World Bank (2012). rce: World Bank (2012). rce: World Bank (2012).

3.43.43.43.4. The Intra. The Intra. The Intra. The Intra----EAC trade for each Partner StateEAC trade for each Partner StateEAC trade for each Partner StateEAC trade for each Partner State

It is assumed that the institutional and economic integration would enhance regional trade among

member countries. The new membership of Burundi and Rwanda in the EAC trade integration

process has come to further widen the market up to 135.5 million people in 2010. The expanded

trade and investment among the EAC Partner States has increased economic growth and

development prospects in the region, with regional GDP (at constant 2000 levels) increasing from

pg. 14

US$42.4 billion in 2006 to 74.5 billion in 2009 and is expected to reach $ 80 billion in 2012.

Uganda, Rwanda and Tanzania sustained incremental growth trends between 2006 and 2008.

The decline in 2009 was in part caused by the effects of the global financial crisis, high fuel prices,

draught among others. The Kenyan economy in addition suffered from the effects of the 2007

post election crisis. Burundi despite her political challenges continues to experience positive

growth rates. The projections for 2010 generally indicate the economies are on re-bound. Kenya’s

economy remains relatively large at about 35.7% compared to that of the other EAC partner states.

The prospects are high for all partner states to achieve an economic growth rates averaging over 7

per cent that can ensure realization of economic and human development in the long term. The

per capita incomes, though generally low, depict steady increase over time but way below the

benchmark of US$ 3,000 of a middle income status. The per capita levels of the EAC partner

states are consistent with low income.

Burundi’s leading exports include gold, tea and mate, sugar, coffee, hides and skin. Kenya is a

leading importer of Burundi’s commodities except sugar, molasses and honey which Rwanda is

a leading importer. Further, Burundi’s coffee exports are destined to all the EAC partner states,

but Tanzania and Uganda are leading recipients. Kenya’s trade with the rest of the EAC partner

states is based on petroleum products, articles of apparel, construction materials (lime and

cement), steel and soaps, cleansers and polishes.

The leading market destination in EAC is Uganda. However, all the EAC partner states are

leading recipients of Kenya’s exports particularly on petroleum products. Rwanda’s trading

commodities include tea, coffee, ores and concentrates, hides and skins and petroleum

products. From 2010, it is evident that Rwanda’s exports destinations are Kenya, Tanzania and

Uganda. Burundi’s leading imports from Rwanda is petroleum products.

Fish, tea, cotton, halogen salt, maize and textile products are Tanzania’s leading trade

commodities in EAC. Most of Tanzania’s exports are destined to Kenya, then to the rest of the

EAC member states. Kenya is a leading importer of Tanzania’s trade commodities except

elements/oxides/halogen salt to which Burundi is a leading importer. Of all Tanzania’s trade

commodities, Kenya imports mostly tea, fish and cotton which constitute over 90 per cent of

total Tanzania’s exports each. Uganda’s leading trading commodities are destined to all the

EAC partner states with vegetables, steel, maize and tobacco being imported by all the countries

in EAC. Most of Uganda’s tea exports are destined to Kenya and while electric current is

supplied to Kenya, Rwanda and Tanzania. The following Table (…) generally positive trends for

all EAC countries in terms of exports and imports as also depicted in Figure (4) bellow.

pg. 15

Table Table Table Table 3333.... IntraIntraIntraIntra----EAC EAC EAC EAC Trade (Trade (Trade (Trade (USD millionUSD millionUSD millionUSD million

Country Country Country Country Flow Flow Flow Flow 2005200520052005 2006200620062006 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

Burundi Export 4 5.5 5.3 6.6 6 12.6 24.4

Import 59.1 60.9 79.5 84.7 129.2 89.4 267.1

Balance (55.1) (55.4) (74.2) (78.1) (123.2) (76.8) (242.7)

Rwanda Export 34.9 33 40 46.2 47.3 54.2 70.8

Import 99.1 143.4 207.1 394.2 449.7 503.6 589.3

Balance (64.2) (110.4) (167.1) (348) (402.4) (449.4) (518.5)

Kenya Export 974.3 735.8 952.2 1,213.40 1,167.20 1,278.70 1,544.40

Import 61.5 84.1 191.6 182 162.2 256.8 302.9

Balance 912.8 651.7 760.6 1031.4 1005 1021.9 1241.5 Tanzania Export 128.9 157.8 205.9 259.9 323.5 394.3 416.8

Import 160.5 175.5 110.1 205 316.9 295.5 378

Balance (31.6) (17.7) 95.8 54.9 6.6 98.8 38.8

Uganda Export 144.7 296.3 476.9 654.7 666.2 616.9 649.7

Import 551.5 499 560.6 617.4 597.4 619.5 721.5

Balance (406.8) (202.7) (83.7) 37.3 68.8 (2.6) (71.8)

Figure 5: Figure 5: Figure 5: Figure 5: Trends of IntraTrends of IntraTrends of IntraTrends of Intra----EAC tradeEAC tradeEAC tradeEAC trade

Source: Eastern African Community Facts and Figures, 2012

The analysis of formal cross-border trade in agricultural products along EAC countries by the

Nile Bassin Initiative (2012) shows some strong inter-dependence among the EAC countries.

The report demonstrates that the boarder Kenya-Uganda is very active and accounts for about

51% of the trade commodities; Uganda-Rwanda flow accounts for 24% of the total trade. The

least volume of trade observed in all borders monitored was from Kenya to Tanzania. The

largest trade flow of Irish potatoes was from Rwanda to Burundi, Banana on the hand were

mainly from DRC to Uganda. A detailed account of trade flows of the corridor commodities is

provided in the following table.

pg. 16

Table Table Table Table 4444: Total : Total : Total : Total Formal Formal Formal Formal Commodity Trade between EAC countries Commodity Trade between EAC countries Commodity Trade between EAC countries Commodity Trade between EAC countries

Kenya Uganda

Uganda Kenya

Uganda Rwanda

Rwanda Uganda

Rwanda Burundi

Burundi Rwanda

Tanzania Burundi

Tanzania Kenya

Kenya Tanzania

Burundi Rwanda

Rwanda Burundi Total Percent

Maize 950 119049 69427 793 134 581 321 1264 80 581 134 20787

0 61

Beans 160 41240 1901 37 1843 32 16 760 2 20 1840 49318 14.47

Bananas 164 2839 2494 135 1 28 32154 9.44

Passion 240 27 96 39 0 18 425 0.12 Irish potatoes 1238 377 5407 968 7871 11 6800 100 6 7869 31712 9.31

Pineapples 8 2361 122 9 3 23 500 0 6 3039.3 0.89

Rice 2721 3284 129 407 0 63 168 2625 1 61 16252 4.77

TOTAL 5481 169177 79576 2388 9852 756 505 11949 183 674 9843 34077

0

Source: Adapted from Nile Bassin Initiative ( 2012).

A look at the informal trade among EAC partner states, there is evidence of informal trade that

can be explained by many factors (Table5). These include administrative procedures that take

long for some customs, phytosanitary certification, poor infrastructure leading to high

transaction costs, warehousing and storage facilities, and the like.

TableTableTableTable 5555:::: Total Informal Commodity Trade between EAC countriesTotal Informal Commodity Trade between EAC countriesTotal Informal Commodity Trade between EAC countriesTotal Informal Commodity Trade between EAC countries

Kenya Uganda

Uganda Kenya

Uganda Rwanda

Rwanda Uganda

Rwanda Burundi

Burundi Rwanda

Tanzania Burundi

Tanzania Kenya Total

Maize 292000 24887310 429600 1200 0 0 66300 75600

25752010

Beans 63700 9507970 295630 5500 2550 6000 3200

9884550

Bananas 47560 615440 123000 44550 230 5600

836380

Passion fruits 136800 18360 48000 19500 0 6300

228960

Irish potatoes 296140 112200 468600 33280 1300 560

912080

Pineapples 3320 209950 20520 4050 1500 7650

246990

Rice 1 411 200 313 120 123000 2200 0 1740 13000 2250

142190

TOTAL 839520 35351230 1508350 110280 5580 27850 82500 77850

3.5 International Dev3.5 International Dev3.5 International Dev3.5 International Development Interventions in the EAC pelopment Interventions in the EAC pelopment Interventions in the EAC pelopment Interventions in the EAC partartartartnernernerner StatesStatesStatesStates

The debate over the nature and the impact of the international development interventions in

Africa has a long history. These interventions are of different natures. In this section we appreciate

pg. 17

the international interventions in East Africa with focus Official Development Assistance (ODA)

and to multilateral support for last five years (2007-2011). The Official Development Assistance

generally includes grants and concessional loans ( with a 25- percent grant component calculated at

a rate of discount of 10 percent) (Stein, 2002). We capture these through the geographical

distribution of financial flows to developing countries as reported by the Organization for

Economic Co-operation and Development (OECD) (2013) . The Table (...) below shows different

data on the disbursements from member countries of the Development Assistance Committee

(DAC ) plus World Bank , IMF, and UNDP as permanent observers. We consider the

disbursement by the multilateral, ODA loans, and ODA grants to the EAC member states.

Table (Table (Table (Table (6666)))). . . . DisbursementsDisbursementsDisbursementsDisbursements of ODA by DAC countries and Multilateral ( of ODA by DAC countries and Multilateral ( of ODA by DAC countries and Multilateral ( of ODA by DAC countries and Multilateral ( $ million) $ million) $ million) $ million)

YearYearYearYear DisbursementsDisbursementsDisbursementsDisbursements 2007200720072007 2008200820082008 2009200920092009 2010201020102010 2011201120112011

Burudi DAC Countries 207.5 217.3 237.0 346.6 267.0 Multilateral 276.7 267.0 297.2 347.0 305.3 ODA Loans 40.8 55.6 49.4 47.5 42.0 ODA Grants 473.5 519.4 1548.6 597.1 549.0

Kenya DAC Countries 1971.4 980.9 1913.4 1137.1 2246.9 Multilateral 2406.4 1384.9 2459.7 1700.4 3305.4 ODA Loans 491.8 380.4 613.2 512.5 940.1 ODA Grants 1068.2 1228.3 1390.6 1378.1 1804.1

Rwanda DAC Countries 382.9 463.9 601.0 531.0 584.8 Multilateral 735.4 952.3 1025.2 1027.8 1272.7 ODA Loans 119.7 107.4 53.6 46.5 206.3 ODA Grants 610.6 832.9 886.6 997.9 1090.5

Tanzania DAC Countries 1398.5 1534.6 1625.8 1738.2 1655.8 Multilateral 2381.0 2515.9 3149.2 3054.9 2447.9 ODA Loans 686.4 549.6 1237.9 952.9 550.3 ODA Grants 2156.2 1799.8 1722.0 2025.7 1964.7

Uganda DAC Countries 1093.7 1143.3 1129.3 1124.2 1034.3 Multilateral 1833.6 1875.2 1985.8 1878.3 1658.7 ODA Loans 503.2 280.0 502.7 455.5 343.3 ODA Grants 1269.1 1403.4 1303.6 1288.3 1266.2

Source: Adapted from OECD (20013)

Each country has had historically divergent strategies, politics, and relations with the donors; all

these are part of determinant of ODA. The ODA for the period 1980s to 2000 was much linked

to the accord between the World Bank and IMF and EAC countries of economic reforms under

the structural adjustment and performance based support. While the ODA for the period after

2001 is much tied to each country’s achievement of the Millennium Development Goals (MDGs)

( Stein, 2002). Thus, the agricultural policy is somewhat tied to the IMF and World Bank

conditionalities and currently along the achievement of the MDGs as well as CAADP budget ( at

least 10% of total budget allocated to agriculture) and growth commitments ( at least 6% growth of

the agriculture sector).

pg. 18

TableTableTableTable 7. 7. 7. 7. Bilateral ODA commiBilateral ODA commiBilateral ODA commiBilateral ODA commitments by purposetments by purposetments by purposetments by purpose ( $ million) ( $ million) ( $ million) ( $ million)

Purpose Burundi Kenya Rwanda Tanzania Uganda

2010 2011 2010 2011 2010 2011 2010 2011 2010 2011

Social Infrastructure & Services 146.0 139.1 833.9 1110.9 290.0 218.9 1079.0 843.5 738.7 797.2

Economic Infrastructure & Services

42.1 1.6 852.0 203.6 23.3 96.4 375.1 151.7 299.2 77.5

Production Sectors 33.4 42.1 272.8 103.4 81.1 58.4 83.6 201.5 86.6 46.8 Multisector 16.1 8.1 152.3 92.8 75.7 57.0 57.2 84.8 74.2 45.2 Programme Assistance 34.7 33.1 29.7 29.5 1.2 23.4 74.4 225.1 175.1 71.4

Total 311.9 262.8 2411.8 2027.7 489.9 476.9 1712.6 1544.1 1434.7 1082.6

% Agriculture, Forestry, Fishing 83.8 100 96.3 78.9 82.6 83.7 87.2 85.4 64.1 63.2 % Food Aid 36.0 70.7 100 100 100 30.8 47.9 4.5 21.1 55.0 %Humanitarian Aid 11.1 12.8 10.8 23.3 2.5 3.4 1.8 1.5 3.6 3.6

Source:Source:Source:Source: Adapted from OECD, 2013

Figure5: Figure5: Figure5: Figure5: Grants to Gross Domestic Product in the EAC member countries (%) Grants to Gross Domestic Product in the EAC member countries (%) Grants to Gross Domestic Product in the EAC member countries (%) Grants to Gross Domestic Product in the EAC member countries (%)

Source: Source: Source: Source: Data from IMF (2013)

The above Table (7) depicts the bilateral ODA commitments by sector of intervention such as

the social Infrastructure and services, economic infrastructure and services, Production sectors,

multilateral , and programme assistance. The agriculture, forestry and fishing are part of the

production sectors and constitute major part of the commitments made in this area. An average of

82.5 percent of the Official Development Assistance is allocated the agriculture, forestry and

fishing in the EAC countries. The assistance in terms of food aid constitutes about 57 percent of

the programme assistance of the bilateral ODA commitments. Looking at Figure (....) we realize

pg. 19

that Burundi and Rwanda have the highest percentage Grant/GDP starting from 2005 onwards.

Kenya has the lowest compared to the rest.

3.3.3.3.6666.... PublicPublicPublicPublic----Private Partnerships and the Agriculture DevelopmentPrivate Partnerships and the Agriculture DevelopmentPrivate Partnerships and the Agriculture DevelopmentPrivate Partnerships and the Agriculture Development

In this sub-section we follow a historical perspective to show how the public private paternerships

(PPPs) have evolved over time in the EAC and what challenges or areas that need future

considerations.

The EAC aims to ensure food security, poverty reduction and improvement of standards of

living. Thus, Agriculture and Food Security are key areas of co-operation by Partner States as

outlined in Chapter 18 of the Treaty. The Partner States are mandated to undertake a scheme for

the rationalisation of agricultural production in the sustainability of National Agricultural

Programmes in order to ensure: (1) a common agricultural policy, (2) food sufficiency within the

community, (3) an increase in the production of crops, livestock, fisheries and forest products for

domestic consumption, exports within and outside the community and as inputs to agro-based

industries within the community, (4) post-harvest preservation and conservation and improved

food processing. The Partner States are already cooperating on a number of areas in agriculture

and rural development such as food security, control of trans-boundary animal diseases,

environnemental management, and sanitary and phytosanitary issues. This policy aims at

strenghtening this co-peration. However, the current state of knowledge shows that states only

cannot achieve much in this area. Private organistions are called on board to help carrying the

heavy load.

The agricultural sector is dominated by smallholder mixed farming of livestock, food crops, cash

crops, fishing and acquaculture. The major food crops are maize, rice, pottatoes, bananas, cassava,

vegetables, wheat, sorghum, millet and pulses. Most of these are also sold and could be regarded as

cash crops. Cash crops include: tea, cotton, coffee, pyrethrum, sugarcane, sisal, horticultural crops,

oil-crops, cloves, tobacco, coconuts and cashew nuts. The livestock sub-sector consists of cattle,

sheep, goats, and camels, mainly for meat and milk production; pigs and poultry for white meat

and eggs respectively, hides and skins for export and industrial processing. Fish and fisheries

products include both fresh water fish from rivers, dams and lakes and marine fish from the indian

Ocean. Forestry products include fruits, honey, herbal medicine, timber and wood for fuel.

pg. 20

4.4.4.4. Policy processes and Conditions for Agricultural transformationPolicy processes and Conditions for Agricultural transformationPolicy processes and Conditions for Agricultural transformationPolicy processes and Conditions for Agricultural transformation–––– A case study A case study A case study A case study

of Rwandaof Rwandaof Rwandaof Rwanda

An Agricultural policy observatory provides a brief and simple guide to the laws and policies in the

Rwandan agricultural sector (Alinda F. and Abbott P., 2012). In view of findings from the above sub-

sections, this sub-section gives key highlights from the Rwandan experience on policy processes

and under what condition the on-going agricultural transformation evolve. We also show how

effective agricultural policies can reduce poverty and ensure food security and nutrition security in

sub-section 4.2..

4444.1. .1. .1. .1. Policies and Programs Relevant to Agricultural Transformation in Policies and Programs Relevant to Agricultural Transformation in Policies and Programs Relevant to Agricultural Transformation in Policies and Programs Relevant to Agricultural Transformation in Rwanda Rwanda Rwanda Rwanda

In this section we present the most recent agricultural policies and related programs that guide

strategic plan for agricultural transformation (PSTA) and economic development ad poverty

reduction strategy (EDPRS. These include

PSTA-II, the 2010 Development Driven Trade Policy Framework, the National Rice Policy, the

Tea and Coffee Strategy for Rwanda, the National Decentralization Policy, the Decentralization

Implementation Programme, the National Agricultural Extension Services Strategy, the 2005 Land

Policy and Gender Equity Laws. The intent here is to give highlights on the description and the

rationale of each of this policy and how they complement the National Agricultural Policy. We

also give some areas of the effectiveness of these policies.

1. The 2010 Development Driven Trade Policy Framework: This policy was prepared by the

United Nations Conference on Trade and Development in collaboration with the Ministry of

Trade and Industry (UNCTD 2010). The policy directs that foreign direct investment should

enable diversified exports and markets development, build local processing industries that add

value to exports especially in agriculture but also in manufacturing and services. These expected

contributions of direct investments are in line with the prospects of the EDPRS2.

2. The National Rice Policy, Rwanda is seeking to attain self-sufficiency and competitiveness in

rice production in the next 10 years. The NRP sets out interventions aimed at enhancing the

productivity levels and raising the standards of post-harvest processing of rice in a bid to improve

volume (quantity) and value (quality) of rice looking forward to create self-sufficiency in the

domestic rice market. The PSTA is the agriculture sector strategy for achieving the above

EDPRS goals and objectives in the domain of agricultural development

3. Coffee Strategy for Rwanda (2009-2012): Coffee is one of Rwanda’s most important export and

cash crop with almost half million coffee growers. Over the last decade, the industry has been

steadily growing; however, it is falling short of targets set for it in 2002. Part of explanation is

insufficient production of coffee cherries, high operating costs, weak management skills, slow

implementation of value-adding processes, and lack of adequate data to monitor and evaluate the

pg. 21

progress. Rwanda’s targets are to move from production of 19,900 tonnes (average from 2005-

2007) to 33,000 tons during this strategy cycle with an estimated revenue of USD 115 million. This

is a comprehensive strategy with OCIR-Café leading the coordination efforts.

4. The National Decentralization Policy (NDP): Policy formulation and implementation relate to

the local governance structures. The nature of planning, alignment and effectiveness of the

structures can influence policy effectiveness or trigger amendment and even dissolution of some

policies. The existence, alignment and effectiveness of governance structures can favour, promote

or discourage agricultural programs implementation. Since 2000 the government of Rwanda has

pursued the National Decentralization Policy (NDP). This policy is reflect the government’s

commitment empower (politically, socially, and technically) local population fight against poverty

(MINLOC, 2004). The NDP is an umbrella of the Decentralization Implementation Program

(DIP) and the Agricultural Extension Strategy (NAES) under which agricultural extension services

are delivered to farmers. The reporting system is from sector to district, from district to province

and from province to the Ministry of Local Government. In the new context of decentralized

extension, the main functions of the Ministry for Agriculture and Animal Resources (MINAGRI)

comprise: (i) coordination and planning of agricultural development programs, (ii) agricultural

sector information function, (iii) monitoring and evaluation function, (iv) regulation and control

function, (v) resources mobilization function. The MINAGRI receives information from districts

to be able to properly plan the development of the agricultural sector, while districts get support

from MINAGRI to ensure coherence and effectiveness in formulating and implementing policies

and agricultural development programs.

5. The Decentralization Improvement Program (2000-2003, 2004-2008): In a bid to improve

governance in local governments, streamlined in the EDPRS and Vision 2020, the Ministry of

Local Government has pursued a three-year Decentralization Implementation Programme (DIP)

since 2003. More specifically, the DIP provides a positive synergy to agricultural programs aiming

to contribute to the PSTA objectives to “improve the production and productivity of rice crop

through production intensification, promote the use of farm mechanization in appropriate forms,

promote development of agro-processing industries, enhance agricultural technology and develop

road infrastructures in a bid to transform its agriculture”.

6. The National Land Policy (NLP) and Gender Equality Laws: Rwanda’s Land Policy has gone

through many transitions since the colonial period. During the colonial period, the Belgian

colonial administration established the decree of 1885 concerning land. Only the colonial public

officer could guarantee the right to occupy land taken. The colonial government also introduced

the written law into the “Codes and Laws of Rwanda”. After independence, the government of the

time recognized the very important role played by the commune in the administration of land. The

commune through the “communal law” of 23/01/1963 held responsibility over conservation of

rights concerning registered land (Rurangwa, 2002). The period post the 1994 Genocide against

pg. 22

Tutsi, the government of Rwanda through the Ministry of lands (MINITERE), remains committed

to clarify the land tenure system and have an appropriate land policy and land law. This

commitment is reflected in the Rwanda’s 2005 Land Policy and the current law governing land in

Rwanda of June 2013.

7. Strategies to Agricultural Transformation (Since 2010): This section presents the most recent

strategies to achieve agricultural transformation as set out in the PSTA II. The PSTA-II is a 5

years strategic plan for agricultural transformation that translates regional and national

development goals in the domain of agriculture development. All activities under this strategy aim

at achieving food security, reduce hunger, and reduce poverty; which is consistent with MDG1. To

operationalize this strategy and make it more inclusive, some coordination mechanisms were put

in place such as the Agriculture Sector Working Group (AGSWG). With reference to the PSTA,

a country agriculture investment plan is in place to guide investments in core sector development

programmes in the agriculture sector, highlighting roles of various contributors (government,

private, and civil societies). It is within this framework that Rwanda was able to access the Global

Agriculture and Food Security Fund (GAFSP). Rwanda has a clear vision, strategy and investment

plan to improve food security in line with CAADP budget and growth commitments.

8. The National Agricultural Extension Strategy (NAES): Rwanda’s NAES is envisioned to “ensure

ideal conditions for the dissemination and exchange of information between producers, farmer

organizations and other partners in order to transform and modernize the agricultural sector so

that it can contribute effectively to achieve the millennium development goals, CAADP goals,

Vision 2020, and the Economic Development and Poverty Reduction Strategy objectives. Fitting in

the objectives of Vision 2020, EDPRS and PSTA, the extension strategy comes under PSTA-II

“Support to the Professionalization of Producers” is well aligned with Rwanda’s development

objectives as well.

9. The Agricultural Mechanization Strategy–AMS (2010-2015): The AMS (MINAGRI, 2010) is

Rwanda’s road map to creating conditions that are conducive to the adoption of appropriate farm

tools, implements and machinery in the most effective and efficient way. Agricultural

mechanization refers to the use of tools, implements and machines for agricultural land

development, crop production, harvesting, and preparation for storage, storage, and on-farm

processing. The strategy responds to agricultural sector challenges such as over-reliance on less

productive and less efficient human labour and seasonal labour and constraints from the rapidly

changing demographic trends such as urban migration, ageing rural population, ageing farmers,

and the HIV/AIDS pandemic that add more concerns on labour availability. It seeks to enhance

the adoption of mechanization looking forward to enhanced crop productivity, increasing the area

being cultivated for food crops and consequently contribute to food security. It borrows from

successful experiences from Asia, Latin America and in some African countries where labour

pg. 23

productivity was greatly enhanced by using alternate farm powers such as motorized engines and

draught animals. The strategy focuses on mechanization in the commodity value chain thereby

enhancing farm produce quality, value, marketability and consequently farm profitability.

10. The National Post-Harvest Staple Crop Strategy (2011-2016): The National Post-Harvest

Strategy (MINAGRI, 2011) is a policy framework to assist with strengthening the harvesting, post-

harvest handling, trade, storage, and marketing within staple crop value chains; strengthening

markets and linkages for farmers; and reducing post-harvest losses. The strategy addresses the

challenges that accrued following successful implementation of the Crop Intensification Program

(CIP). Basically, the CIP resulted in increased crop yields with unanticipated surpluses in key

staple grains and cereals. The strategy therefore responds to the heavy post-harvest losses that

accrue from the lack of capacity in post-harvest handling and storage. The strategy is MINAGRI’s

initiative through the Post-Harvest Task Force that was formed in 2009, essentially to maximize net

profits for small-scale farmers and reduce food insecurity by strengthening staple crop value chains

and reducing post-harvest losses. The 5-year action plan, approved in March 2011 by the

Agriculture Sector Working Group, remains Rwanda’s guiding strategy to address sector-wide post-

harvest loss issues by several ministries and agencies.

11. The Agriculture Gender Strategy (2010):::: The gender strategic goal is to ensure that agricultural

output and incomes increase rapidly under sustainable production systems for all groups of

farmers, and that food security ensured for all the population by 2012. The overall objective of the

gender strategy is to contribute to poverty reduction and sustainable development through

institutionalization of gender responsive programming (planning and budgeting), implementation,

monitoring and reporting systems and improve gender equality in the agriculture sector.

12. Agricultural Programs and Project Initiatives (Since 2008): In this section, we present a brief

highlight of the most recent programs that work towards contributing to the PSTA and the

EDPRS, the national economic and agricultural development agenda. Among these programs are:

the “Girinka program” “One Cow per poor Family”, the Umutara Community Resource and

Infrastructure Development Project (PDRCIU), the Purchase for Progress initiative (P4P), and the

Millennium Village Project.

13. Key Funding Partners in Agricultural Programs:::: In pursuit of PSTA-II, the Government of

Rwanda, under the Ministry of Agriculture and Animal Resources (MINAGRI), attracts

international co-operations. Among the partners include the Belgian Government, World Bank,

FAO, IFAD, BTC, JICA, DFID, EU, WFP, UNDP, and CIDA, among others. The partners are

mainly international development agencies who initiate and fund projects that contribute directly

and indirectly to agricultural productivity and growth.

pg. 24

4.2. 4.2. 4.2. 4.2. EEEEffectiffectiffectiffectiveness of the Current Agricultural Policies: Impact on Agricultural Growth and Povertyveness of the Current Agricultural Policies: Impact on Agricultural Growth and Povertyveness of the Current Agricultural Policies: Impact on Agricultural Growth and Povertyveness of the Current Agricultural Policies: Impact on Agricultural Growth and Poverty

ReductionReductionReductionReduction

In this section we present a highlight on the status of the economy as of 2006, upon which the

EDPRS was built. We provide an overview of Rwanda’s progress towards meeting the EDPRS’

(2008-2011) aspirations with regard to agricultural productivity, growth and poverty reduction and

highlight the current status of the agricultural contribution to economic growth relative to other

sectors. Finally, we acknowledge that the government of Rwanda pursues a development strategy

led by the agricultural sector. We consider the MINAGRI’s agricultural growth and poverty

reduction strategy (PSTA II) and draw an insight into the extent to which the poor can benefit

from PSTA II.

In the period 2000-2005, the government of Rwanda implemented the Poverty Reduction Strategy

(PRS) to manage the transition period of rehabilitation and reconstruction post 1994 war and

Genocide against Tutsi. The strategy registered progress but with insignificant contribution to

poverty reduction. This was attributed to the structural adjustment of the economy and having the

service sector taking a leading role to the economic development. . In this period, GDP increased

at an annual rate of 6.4 per cent while poverty levels stood at 56.7 per cent in 2006 compared to

44.9 percent in 2010/2011. The extreme poverty rate reduced from 35.8 percent to 24.1 percent

during the same period. Poverty remained high (91%) in farming households with land shortage as

key challenge towards agricultural production. The proportion of land protected against soil

erosion was 40 per cent while 15,000 hectares were under irrigation (EICV2). The percentage of

people purchasing chemical fertilizers was 11 % in 2005 compared to 28.9 percent in 2012.

Average fertilizer use was 6 kg per hectare in 2007 against 30 kg per hectare in 20013. In the study

on economic transformation of Rwanda, Malunda (2010) observed a steady increase in both

agricultural labour and land productivity in the period 2000 to 2008. In the same period, there

was a decrease in employment in the agriculture sector and an increase in employment in the

manufacturing sector. The current estimate of farm employment is 72.6%, of which women are the

majority compared, to 27.4 non-farm employment. Despite its declining contribution to GDP, the

agricultural sector remains the most dominant to Rwanda’s economy contributing 32 per cent to

GDP compared to 46% generated by the tertiary sector in 2011. Currently Rwanda is considered

among the fast African growing countries ( Africa progress report, 2012) and the agriculture sector

receives the merits.

The effectiveness of the agricultural policies is partly attributed to the institutional arrangement for

policy implementation. In the paper by Burruss and Bizoza (2013) it is argued that the

Agriculture policy in Rwanda is articulated in line with the overall development policy framework

contained in the Vision 2020, which, in turn, is translated to short-midterm plans and strategies

through the 7 Year government plan articulated in the EDPRS and PSTA. Accordingly, Rwanda’s

are well-elaborated policies and strategies and give clear guidance on the policy implementation.

pg. 25

The leading intent in policy design is to address the prospects of national, regional and

international development goals (such as CAADP, MDGs the G8 Cooperation Framework). In

the same paper by Burruss and Bizoza (2013) it is indicated the GoR takes the lead in the design

and implementation of agricultural policies through the MINAGRI, which in turn, designs and

implements its policies and strategies through its line institutions, RAB and NAEB, and other

development partners in the sector as above indicated. The coordination of all this process is

done through the agriculture sector working group (ASWG) , soliciting input from donors and

stakeholders in an inclusive manner. But, more efforts are being made to improve on the

participation of the private and civil society organizations in the policy design and implementation.

Nevertheless, the role of the private sector is well recognized as main driver of the economic

growth; lading to achievement of national and regional development goals ( Bizimana et al. 2012).

Therefore, the effectiveness of current agricultural policies is justified by both farm-sector

institutional environment and arrangement that the government facilitated and yet to facilitate.

Another similar contributing factor to this effectiveness is the governance and leadership . Kigabo

(2010) in his paper confirms that governance and leadership factors namely charismatic

leadership, rich and positive ideology, strict political will, and lessons from the genocide and

Rwandan history are fundamental causes of the decade’s quick development. Furthermore,

increased growth in the agriculture sector is result of policies and institutions pertaining the sector.

To a larger extent, better policies in agriculture lead to agricultural growth which in turn offers

direct benefits to the poor farmers, such as income and food, contributes to broader food security

objectives, and helps establish forward linkages with higher value added industries (World Bank

and IFPRI , 2005).

pg. 26

5. 5. 5. 5. Conclusions and Conclusions and Conclusions and Conclusions and Recommendations Recommendations Recommendations Recommendations

This paper analyzes policies, institutions and international development interventions in the

agricultural development process in EAC countries. Africa and the EAC region in particular have

gone different phases of policy and institutional transformation in the last 50 years. Policy design

and institutions during the period post colonial till 1980s were much informed by the colonial

believe attributing much space to the state in the policy formulation as well as implementation. The

role of the private sector and civil society as well as local government started to be recognized

during 1980s to 2000. The last decade of 2003-2013 is marked by diversified farm-sector and

other macro-economic policies that are driving the current economies within the EAC region.

However, drawing the maximum potentials in those policies remains an area to consider in the

next 50 years of agricultural development.

The article shows also that, although tremendous effort in policing and creating institutions in the

agriculture sector, smallholder farmers are yet to cope with many challenges such as limited access

to agricultural finances and credits, limited access to inputs and output markets, poor

infrastructure, limited agricultural extension services and innovations, low agriculture productivity,

enfant agriculture-based enterprises and cooperatives, and high transaction costs within the sector.

These farmer based challenges need careful and rational joint interventions between the state and

the private sector as well as civil society organizations in line with the process of regional and

economic integration.

The institutional and economic integration in the EAC started early 2005 has already proved

positive effects in terms of economic integration indicators namely the per capita GDP, inflation

rate, real interest rate, exchange rate, and trade openness. The trade openness has led to improved

intra-trade within the EAC and cross-border trade. The analysis of exports and imports statistics

have showed positive trends of exports and imports in praise of the regional and economic

integration.

The economic development in the EAC region evolved with Official Development Assistance

from the DAC member countries with continuous participation of World Bank, IMF and UNDP

as permanent observers. During the period of 19980s to 2000, the level ODA was much

dependent on each countries divergent strategies, politics and relations with donors; while the

period after 2001 and onwards is being marked by the achievement of MDGs. The analysis of the

bilateral ODA commitment in the most recent period show that agriculture received much

attention (an average of 82.5 %) in the production sector than industry, mining, construction, trade

and tourism.

The case study of Rwanda gives some concrete examples of policies and institutions and how these

have already affected the development process in Rwanda in terms of food security and the role of

pg. 27

agriculture to GDP and job creation. However, similar to other EAC partner states, a lot still to be

done in terms data gathering to inform the measurements of agriculture policy effectiveness vis-a-

vis to other macro-economic policies.

Lessons from the review of the existing materials give light on some improvements made vis-a-vis

to policies, institutions and international development interventions in the EAC for the last 50

years. We have learnt that:

- The state has played major role in policy design, institutions establishment and

implementation, leaving a narrow space for the private sector, civil society organizations

and the community participation. However, there is currently evidence that countries have

started recognizing the need for the private sector and civil society involvement, but

mechanisms to materialize this understanding remain an area for further consideration.

Regional and international initiatives such as CAADP and Grow Africa should receive

much support to allow the private sector lead the agriculture development in the next 50

years.

- The policy design in the EAC countries draws less on evidence-based analysis.

Consequently, investment and the policy targeting fall short of sufficient facts leading to

misallocation of investments and inadequate appreciation of the sector impacts towards

economic development. In addition, this disconnect between policies and research

products or evidences fuels the dilemma between policy makers and researchers. Future

initiatives to address this dilemma could consider strengthening linkages between high

learning agriculture and research institutions, and creating a basket fund for agriculture

research and development for the EAC community.

- The existing policies and institutions as well as development interventions are addressing

challenges of small-holder farmers in a traditional way while the former are dynamic,

calling for institutional adaptation. For instance, the financial institutions need to repackage

their products ( such as crop insurance) to accommodate evolving challenges such as

climate change. Furthermore, international development interventions should also be

flexible and align with each country's strategic development frameworks through.

- Positive trends in terms of exports and imports are observed due to the ongoing

institutional and economic integration in EAC partner states, achieving further steps of the

integration process (FTA, CM, EU and TEI) is likely to induce more intra- EAC trade and

cross-border trade, value added and diversified traded products, more food production

and access to markets, leveraging on potential competitive advantages and labour mobility,

and food security. More regulations creating a conducive environment for the intra- EAC

trade are needed to be established and enforced.

pg. 28

pg. 29

ReferencesReferencesReferencesReferences

AfDB, OECD, Dev Center, UNDP , UNECA (2012). African Economic Outlook 2012. Special

theme on Promoting Youth Employment. Alinda F. and Abbott P. (2012), Agricultural Policy and Institutional framework for

Transformation of Agriculture, Economic Development and Poverty Reduction in Rwanda, Institute of Policy Analysis and Research – Rwanda, April, 2012

Bizimana, C, Hasengumukiza F, and Rwirahira John ( 2012). Trends in Key Agricultural and

Rural Development Indicators in Rwanda. Rwanda Strategic Analysis and Knowledge Support System (SAKSS), Ministry of Agriculture and Animal Resources, Kigali, Rwanda.

Burruss D and Bizoza A (2013). Rwanda Agriculture Sector: Policy and Implementation Review.

Human and Institutional Capacity Development Project in Rwanda. Kigali, Rwanda. Dorward, A., J. Kydd and C. Poulton (2005), ‘Beyond liberalisation: “developmental

coordination” policies for African smallholder agriculture’, IDS Bulletin, 36 (2), pp. 80-85. Brighton: Institute of Development Studies.

EAC (2006), Agriculture and Rural Development Policy, November 2006, Arusha, Tanzania EAC (2007), Treaty for the establishment of the East African Community, 2007, art 5; al.2,

www.eac.int/index.php, visited on 20 sepember 2013. EAC (2011), EAC Development Strategy (2011/12 – 2015/16), Deepeniing and Accelerating

Integration, One People, One Destiny, August 2011. EAC (2012). Eastern African Community Facts and Figures 2011. Arusha, Tanzania. EAC Secretariat (2010), East African Community (EAC) Food Security Action Plan (2010 –

2015), Arusha, Tanzania. Eastern Africa Farmers’ Federation (2011), Database of Agricultural Policies in East Africa: Kenya,

Rwanda, Tanzania and Uganda. Grindle, M. and J. Thomas (1991), Public Choices and Policy Change. Baltimore: Johns Hopkins

University Press. GSR (2007). Analysis for policy: evidence-based policy in practice. Government Social Research

Unit, UK.

pg. 30

Holland and Mertz (2012). USDA Assessment Missions to Rwanda: Assessing Capacity for Agricultural Data Collection and Analysis in Support of Feed the Future. Kigali, Rwanda

Kakande Namirembe (2010). Final Report on the status of achievement of MDGs by the East

African Community. Keeley, J. and I. Scoones (1999), Understanding environmental policy processes: a review, IDS

Working Paper 89. Brighton: Institute of Development Studies. Kigabo R.T ( 2010). Leadership, Policy Making, Quality of Economic Policies, and Their

Inclusiveness: The Case of Rwanda. Krueger, A. (1990), Government failures in development, Journal of Economic Perspectives,

Volume 4, Number 3 – Summer, pp. 9-23. Lidia Cabral and Ian Scoones (2006), Narratives of Agricultural Policy in Africa: What Role for

Ministries of Agriculture? March, 2006 www.future-agricultures.org, Research paper 001. Lipton, (2005). From policy aims and small-farm OECD (2001) ‘Aid to agriculture’, Organisation

for Economic Cooperation and Development. Available at http://www. oecd.org/dataoecd/40/43/2084403.pdf.

MINAGRI (2010). Enhancing Self Sufficiency and Competitiveness of Rwanda Rice. Issues and

Policy Options. Ministry of Agriculture and Animal Resources , Kigali, Rwanda. MINEAC ( 2013). [Internet]: http://www.mineac.gov.rw/index.php?id=35. Ministry of Eastern

African Community, Kigali, Rwanda. Ministry of Trade and Industry (2012). National cross-border trade strategy: A comprehensive

strategy to support Rwanda’s exports to neighbouring countries. Kigali, Rwanda Molua, E. and M. Rajab (2002), The future of agriculture in Sub-Saharan Africa: challenges and

agenda for action, paper presented at the first African Researchers’ Association seminar on Strategies for Improving the Quality of Life in Africa, Clemson University, South Carolina, 20-23 March 2002.

Mubiru E. (2003). The efffect of globalization on trade, a special focus on rural farmers in

Ouganda. World Vision International, East Africa Regional Office. Nile Bassin Initiative (2012). Analysis of Cross-border Trade in Agricultural Products along

Selected Corridors of the Nile Basin Region. Nile Basin Initiative. NELSAP/ Regional Agricultural Trade and Productivity Project Bujumbura-Burundi.

OECD (20013). Geographical Distribution of Financial Flows to Developing Countries:

Disbursements, commitments, country indicators. OECD Publishing.

pg. 31

Petit, M. (1995), Agriculture in liberalizing economies, in D. Umali-Deininger and C. Maguire (eds.) Agriculture in Liberalizing Economies: Changing Roles for Governments, Proceeding of the Fourteenth Agricultural Sector Symposium, World Bank. p.449.

Poulton, C., J. Kydd and A. Dorward (2004), Overcoming market constraints to pro-poor

agricultural growth in Sub-Saharan Africa, paper prepared for the Africa Commission, November 2004.

Richard Ndereyahaga (2010), Accession of Burundi and Rwanda to the East African Community:

Implication for Private Sector Development, Policy Brief, BIEAC no 6/2010 www.allafrica.com/stories/20070618180.html

Stein H (2002). A brief History of AID in East Africa: The Political Economy of Convergence.

University of Michigan State, East Lansing, USA. Wiggins, S. (2005), Innovation in agricultural and rural development: should we return to the

learning process?, paper presented at the IMI workshop, IFAD, November 2005. World Bank (2009), Eastern Africa: A study of the regional maize market and marketing costs.

Report No. 49831 – AFR. World Bank (2012). East African Community: Reshaping Economic Geography of East Africa

from Regional to Global Integration. Poverty Reduction and Economic Management Unit World Bank (2012). East African Community: Reshaping Economic Geography of East Africa

from Regional to Global Integration. Poverty Reduction and Economic Management Unit, Africa Region Document. Washington DC. Report No. 65699-AFR, Volume 2: Technical Annexes.

World Bank and IFPRI, 2005. Agriculture and Achieving the Millennium Development Goals.

Agriculture and Rural Development Department. 1818 H Street, N.W., Washington, D.C. 20433.

pg. 32

AnnexAnnexAnnexAnnex 1. 1. 1. 1. Agricultural Policies Agricultural Policies Agricultural Policies Agricultural Policies in EAC in EAC in EAC in EAC member states in the last decade (2003member states in the last decade (2003member states in the last decade (2003member states in the last decade (2003----2013)2013)2013)2013)

Name of the policyName of the policyName of the policyName of the policy CountCountCountCountries and year of implementationries and year of implementationries and year of implementationries and year of implementation

National Oceans and

Fisheries Policy

Kenya (2008) - - -

Cotton Policy Kenya (1990,

2006)

National Dairy

Development Policy

No. 1

Kenya (2010)

Co-operative

Development Policy

Kenya (2011)

Co-operative

Investment Policy

Kenya (2011)

No policy on sugar Kenya (2011)

Policy on Kenya

Plant Health

Inspectorate Services

(KEPHIS)

Kenya (2008)

National Livestock Policy Kenya(2008)

National Poultry Policy Kenya (2010)

Apiculture Policy Kenya( 2011)

Livestock Feeds Policy Kenya (2011)

Animal Breeding

Policy

Kenya (2011)

Fertilizer Policy Kenya (2011)

National Agricultural

Sector Extension Policy

(NASEP)

Kenya (2011)

Agricultural Sector Gender

Policy

Kenya (2011) Rwanda ()

Seed Policy and Seed and Plant

Varieties Bill

Kenya (2011)

National Horticulture Policy Kenya Rwanda

(2007)

Policy on Bioprospecting Kenya

Biotechnology Policy Kenya (2011) Rwanda

National land Policies Rwanda (2012) Tanzania

2006

Uganda

pg. 33

National Agricultural Extension

Strategy

Rwanda Uganda ()

National seed

Policy

Rwanda (2008)

Inputs fertilizers

Policy

Rwanda (2008)

Livestock policy Rwanda ()

East African Community (EAC)

Policies (Harmonized sanitary

and phytosanitary, mammals,

birds and bees and their

products).

Rwanda,Burun

di

Kenya Uganda Tanzania

Agricultural Policy Tanzania

Sisal Industry Act Tanzania

Cotton Industry Tanzania

Cashew Industry Tanzania

Pyrethrum Industry Tanzania

Coffee Industry Tanzania

Tobacco Industry Tanzania

Sugar Industry Tanzania

Tea Industry Tanzania

Fertiliser Industry Tanzania

Seed act Tanzania

Warehouse Act Tanzania

Cerals and other produces Tanzania 2009

National Irrigation

Development Policy

Tanzania 2002

National land policy Tanzania 2006

National water policy Tanzania 2009

Public Private

Partnership Policy

Tanzania2010

The National Meat Policy Uganda2003

Policy on Delivery of Veterinary

Drugs Policy

Uganda 2011

National Veterinary Drug Policy Uganda 2002

National Coffee Policy Uganda 2010

Development strategy and

Investment Plan (2010/11-

2014/15)

Uganda march

2010

pg. 34

National Agriculture Policy Uganda Rwanda Kenya Tanzania

The Uganda Food and Nutrition

Policy,

Uganda 2003

National Fisheries Policy Uganda Kenya Tanzania

The National Agricultural

Research

Policy

Uganda 2003 Rwanda Kenya Tanzania

The National Agricultural

Advisory

Services

Uganda Act

2001

Kenya Rwanda

The Seeds and Plant Act Uganda 2006

Agricultural Chemicals (Control)

Uganda Act

2006

National Co-operative

Development Policy

Uganda 2010 Rwanda

National Industrial Policy Uganda 2008

National Trade Policy (Trading

out of Poverty into Wealth and

Prosperity)

Uganda 2008

National Sanitary & Phyto-

sanitary

Policy

Uganda 2008

The Uganda Gender Policy Uganda 2007 Rwanda

National Standards Policy Uganda 2011 Rwanda

Rural Communications

Development Policy,

Uganda 2001

National Environment

Management Policy for Uganda

(1994)

Uganda 2011

The Uganda National Forestry

Policy

Uganda 2002

National Land Use Policy Uganda 2011

National Housing Cooperative

Policy

Uganda 2011

Microfinance policy Uganda 2011

Source: Source: Source: Source: Eastern Africa Farmers’ Federation (2011)