What’s on the horizon for Rwanda’s spices sector: four reasons why SITA advocates for a structured approach

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  • The rise of seasoning and spices sector has allowed Indian companies to move up the supply chain. As Indian companies have become agro-processors, there is a rise in demand for unprocessed agricultural inputs.
  • Meanwhile in Rwanda, agribusinesses can contribute to Sustainable Development Goal 8 (SDG 8) by diversifying into the corresponding horticultural crops.
  • Spotting this potential for South-South synergy, SITA supports Rwandan agribusinesses through the process of diversification (and those from neighbouring East African countries too).
  • Going forward, as more farmers diversify into seasoning and spices, SITA is advocating for a structured approach to ‘turbocharge’ the sector, because: (1) agro-industrial parks provide a link between agriculture suppliers and regional, national, and global markets; (2) a cluster would keep the sector inclusive to smaller businesses; (3) the creation of a herbs and spices clusters can create more employment opportunities for local women and young people; and (4) the newly developed skills and technologies will spill over into other sectors to help their growth too.
Source: Pixaby

The global seasoning and spices market size was valued at USD 13.77 billion (2019) and is expected to grow annual at an average rate of 6.3% until 2027 . The growth of the market has been fuelled by buyers’ willingness to pay a premium for new flavours and ‘exotic’ tastes. And there is growth on growth. With trends now set, more new avenues are opening up, for example now that consumers have a taste for certain flavours, there is rising demand for ready-to-use spice mixes as convenient options for home cooking.

The rise of seasoning and spices is not only due to their flavour, but also for their associated health benefits and their role in the nutraceutical industry. For instance, turmeric is a rich source of antioxidants and helps in preventing illnesses, such as Alzheimer’s, joint inflammation, and cancer. Similarly, cumin seeds contain antiseptic characteristics and help in boosting the immune system. These seasoning and spices can be used as alternatives for medicinal and beauty products. The varied industrial uses of seasoning and spices means their consistent demand is expected to remain stable for a long time.

India has long been a supplier of inputs for the seasoning and spices sector. More recently, many Indian agribusinesses have moved up the value chain and are focusing more on agroprocessing than on agricultural production. This has opened up opportunities for new suppliers of unprocessed goods, which represents an opportunity for East Africa’s Sustainable Development.

Meanwhile in East Africa, by diversifying into higher value horticultural crops like spices, agribusinesses can contribute to Sustainable Development. Why? First, because such crops are consistently higher in value, which means bigger profit margins for the farmers; in particular, light-in-weight but high-in-value goods are viable for export, whereas many traditional crops are not. Second, because herbs and spices also generate more decent employment opportunities for farm labourers than traditional crops do, Sustainble Development Goal 8 (SDG 8).

Characterized by an ideal climate, fertile soil and an abundant, hardworking labour force, Rwanda has particular promise to develop a vibrant horticulture industry. The Rwandan sector is undoubtedly on the move, but crop diversification can be risky business. Entering emerging markets is high risk for a small-scale farmer with little familiarity with the best agricultural practices and little knowledge of the market. Moreover, how can smallholder farmers find a buyer and develop a trusting relationship? SITA supports with both. First, SITA provides training and bespoke technical support based on India’s ‘lessons learnt’. Second, SITA introduces farmers to Indian buyers and facilitates them to develop buyback agreements: the buyer agrees to buy a certain quantity of goods, at a fixed-price, for a fixed time.

Looking ahead, as more farmers diversify, SITA is advocating for a structured approach to ‘turbocharge’ the seasoning and spices sector: a unified and coordinated post-harvest processing system, where all spices crops can come to be processed and stored in one location. This specialized zone or ‘cluster’ could then serve as one point of contact for international buyers. SITA identifies are four key reasons a cluster approach is a good way forward:

  1. Agro-industrial parks provide a link between agriculture suppliers and regional, national, and global markets: access to larger markets is one of the biggest challenges facing the Agri sector. Prompting farmers across the country to grow similar crops in large acreages will increase the exportable quantity of the crop. What’s more, once international buyers access Rwandan suppliers with considerable ease through agro-industrial parks,Rwanda would become a prefer. Export growth could transform into economic growth.
  2. Security and predictability that comes with a dedicated agro-industrial park will create a more equitable sector. Small-scale agribusinesses will be able to experiment with new technologies, farming practices and processing technologies. As well as improving productive capacities, these kinds of advancements would also improve the quality of farm products, so that smaller agribusinesses can remain competitive.
  3. The creation of a herbs and spices clusters can create more employment opportunities for women and young people: Evidence from countries implementing agro-industrial parks revealed that thousands of direct and indirect jobs can be created from one agro-industrial park. Moreover, linking smallholder farms and small-scale industries in the value chain can raise the income of smallholder farmers and lead to more jobs in off-farm activities – i.e. activities related to handling, packaging, processing, transporting, and marketing of agricultural products can generate important off-farm employment and can contribute to poverty reduction and sustainable inclusive economic growth. Importantly, a structured approach would attract more talent to the sector – particularly young people and women. 
  4. Fourth and finally, the newly developed skills and technologies will spill over into other sectors to help their growth too: For example, there is evidence that some Chinese zones operating in Ethiopia have become centers of knowledge, innovation, technology generation, and training. This has enhanced local skills upgrading and technology learning and has ultimately contributed to building local manufacturing capacity and establishing modern management practices.

ENDS.

Voices of SITA
Voices of SITA
This blog provides a window into the SITA project. Through stories from India, Ethiopia, Kenya, Rwanda, Uganda and the United Republic of Tanzania, this blog showcases the project’s progress and impact.