Shortfalls within the value chain hampering processing industries  

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Francois Kanimba minister of trade and industry

Francois Kanimba minister of trade and industry

The government says uncoordinated value chain is impeding the production within the processing sector thus lowering value added products.

The structures in the production value chain for most commodities, Francois Kanimba minister of trade and industry says uncoordinated value chain do not ease flow of these commodities from farmers to the processing factory.

“There is a problem in the way the chain is built, there must be linkages that enhance the movement of commodities from the farmer to the factory,” he said on Tuesday.

The government is looking at increasing agriculture commodities reaching processing factories in a bid to increase value added products that would fetch more foreign exchange to bolster the export receipts.

The country’s trade deficit continues to surge as export receipts weigh below the increasing import receipts pushing the government to boost value addition of products.

The deficit stood at US$ 338.95 million in the third quarter of 2015 higher than US$ 233.98 million in the same period in 2014.

Experts say that streamlining the value chain that allows famers link with factories would be able to increase commodities reaching factories for value addition.

“Most processing industries are working below the capacity not because there is low production from farmers but linking these harvests to the factory,” says Davis Mukiza agro- business consultant.

Some of these challenges, experts say include unclear logistics mechanisms, proper storage that would maintain the value of the commodities and price fluctuations which derail farmers from selling their produce to factories.

Nevertheless, the governments in the third quarter of 2015 intervened to stabilize prices of main commodities while also establishing collecting centers that enhance collection of the harvests to the market.

 

About the author

Olive Ndaka is the Junior Editor for RwandaEye. An investor and young entrepreneur, she is a quick learner and has contributed many articles for RwandaEye in Kinyarwanda.

More posts by | Visit the site of Ndaka

 

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