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Monday, 10 February, 2003, 12:54 GMT
Rwandan coffee farmers head upmarket
Rwandan coffee growers
Low prices have devastated coffee growers incomes

Rwanda has launched itself into the speciality coffee market to reclaim the revenues of what was once its main export earner.

Rwanda coffee
Rwanda's speciality coffee launched in the UK
A combination of the record low coffee prices and the aftermath of the genocide in 1994 - which claimed the lives of more than 800,000 people - have left the country's economy devastated.

"It is terrible because some smaller holders have abandoned the plantations because they are not sustainable," Rwanda's Commerce Minister Dr Alexandre Lyambabaje told BBC News Online.

"The prices they were receiving were reduced by half last year and are lower than what it costs to produce."

Tea has now overtaken coffee as Rwanda's main export.

Higher prices

The Abahuzamugambi co-operative is pioneering the project to produce speciality coffees - which became popular in the US and Europe in the 1990s - and to sell them through fair trade deals.

Rwandan Commerce Minister Dr Alexandre Lyambabaje
Dr Lyambabaje offers coffee drinkers a better brew

Last year, Community Coffee of Baton Rouge in the US was its biggest customer and Union Coffee Roasters has now launched the co-operative's Maraba bourbon coffee variety in Britain.

"For the small holder, when he produces a kilo of ordinary coffee he receives 28 US cents a kilo," Dr Lyambabaje said.

"But once he produces specialty coffees he receives almost 80 cents."

In 1990, Rwanda exported 45,000 tonnes of coffee a year, but now only ships only 17,000 tonnes.

With competition growing from newcomers such as Vietnam, the market is becoming increasingly difficult.

"What we are doing is targeting a new segment of the market and by 2010 we will be back to the same quantity as 1990 but also with higher quality," he said.

Economic benefit?

The project - which is backed by USAID and other donors - is also bringing new or lost skills to the country.

"In the beginning we need foreign expertise, but soon Rwandans will be able to takeover production and marketing," Dr Lyambabaje said.

The falling coffee price has caused Rwanda - one of Africa's poorest and most densely populated countries - and many other states serious financial difficulties.

But the country that once earned 60% of its revenues from coffee has also diversified into other industries, which have made its economy more stable.

"Recently the mining industry has brought in quite significant revenues that has helped the government cope," he said.

"We are also signed up to the World Bank's HIPC (highly indebted poor countries) programme, which is how we are financing development," he added.

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 ON THIS STORY
Rwandan Commerce Minister, Dr Alexandre Luambabaje
"The prices they were having per kilo was reduced by half last year on international markets"
See also:

04 Feb 03 | England
07 Jan 03 | Business
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