Rwanda: Who Is Swindling Dairy Farmers?
By Michel Nkurunziza
Milk traders who don’t pay dairy farmers could soon be blacklisted according to Rwanda Agriculture and Animal Resources Development Board (RAB).
Solange Uwituze, Deputy Director General in charge of Animal Resources Research and Technology Transfer at RAB told The New Times that the list of defaulters is being prepared and could soon be published for blacklisting.
“We are still waiting for submissions of the lists from some districts,” she said.
The move, she noted, aims to increase milk production by addressing barriers that are derailing farmers’ efforts.
However, currently, cattle keepers’ efforts to increase production were discouraged by milk traders who are defaulting them.
Uwituze said that RAB will work with Rwanda Cooperative Agency to blacklist the defaulters through their respective banks.
In Kayonza district alone, cattle keepers have defaulted about Rwf50 million.
As a result, this leads to the informal selling of milk that brings about a difference of more than 55,000 litres daily yet the six most producing sectors of Kayonza district produce more than 75,000 litres of milk per day
Stephen Sebudandi, the President of Kayonza Dairy Farmers Union told The New Times that so far about 15 cases of defaulting have been recorded in Kayonza district.
“It has become like a culture. After defaulting, the milk traders relocate to other districts such as Nyagatare, Burera, Gicumbi, Gatsibo among others. After arriving there, they pay cattle keepers for the first two or three months and then start defaulting before disappearing. It seems like an organized way of swindling from dairy farmers,” he said.
He said the cases are happening in areas where some dairy farmers have no market from big investors such as Inyange industries.
“These defaulters join dairy farmers pledging solutions to buy their milk, especially in areas where feeder roads are not yet good. Now some defaulters have escaped from the country,” he said.
Setback for dairy farmers’ cooperatives
Sebudandi said some dairy farmers’ cooperatives are no longer operating as a result.
“Some dairy farmers’ cooperatives were discouraged. For instance, out of five cooperatives near Akagera park, only two are operating,” he said.
He said although the government is considering blacklisting defaulters through banks, there are solutions that should first be considered.
“There should be ready lawyers who can defend dairy farmers’ cooperatives whenever they face such problems. In this case, the defaulters’ assets can be confiscated earlier before they escape.
This is because when it delays, they conceal their assets through registering them to other people’s names as well as creating new companies under which they continue doing their businesses,” he explained.
He added that there is a need to empower cooperatives’ management by appointing leaders with financial and law literacy.
“The cooperatives’ leaders also need motivation in terms of monthly salary that can come from the cooperative’s treasury,” he said.
Gahiga Gashumba, the outgoing President of Nyagatare Dairy Farmers’ union reiterated that the issue was serious adding that it has to be considered.
“Since 2018, we have been pursuing some milk traders who defaulted on milk in different districts such as Nyabihu, Kayonza and Gicumbi when I was leading the dairy farmers’ federation at the national level. Currently, In Nyagatare district, most of the farmers are not facing the issue after securing a market from Inyange industries,” he said.
Gad Tegeri Gahiya, the President of Nyabihu Dairy Farmers’ union told The New Times that at least Rwf31 million was defaulted from dairy farmers since 2015.
“By next week we will know if there are new defaults,” he said.
Rush to meet milk demand
If cattle keepers get the necessary support, Rwanda could increase milk production by 34 per cent in one year according to RAB.
According to Uwituze, as of 2021/22, Rwanda was producing 932, 951 tonnes of milk per year.
Rwanda will be producing 1,250,000 tonnes of milk every year by 2024, so as to satisfy milk demand.
She said farmers are being mobilised and supported to increase milk production to satisfy demand and therefore defaulters should be discouraged.
The target will also be aimed at catering for a milk powder plant that is under construction in Nyagatare District.
Inyange Industries is setting up a powdered milk factory in Nyagatare district that will require 500,000 litres or 500 tonnes of milk per day or 180,000 tonnes per year. It will have an annual capacity to produce 14,000 tonnes or 14 million kilograms of milk powder and 5,460 tonnes of fat.