USAID Sustaining Partnerships to Enhance Rural Enterprise and Agribusiness Development (SPREAD) Project

Application Submitted by

The Texas A&M University System Michigan State University National University of Rwanda

Edwin C. Price Associate Vice Chancellor for International Agriculture and Federal Relations Office of International Programs Texas Agricultural Experiment Station The Texas A&M University System 123 Teague Building College Station, TX 77843-2477 Phone: 979-845-4164 Fax: 979-845-5663 Email: [email protected]

LIST OF ACRONYMS

ACDI-VOCA Agriculture Cooperative Development International Volunteers Overseas Cooperation Assistance ADAR Agribusiness Development Assistance in Rwanda ADF Africa Development Foundation AIDS Acquired Immunodeficiency Syndrome BK Bank of Kigali CAFÉ Starbucks Coffee Certification Program (Coffee And Farmers Equity) CGIS Center for Geographic Information Services CHF CHAMP CHF International’s Community HIV/AIDS Mobilization Program CoE Cup of Excellence COVEPAR Cooperative for the Valorization and Export of Rwandan Agricultural Products CTO Chief Technical Officer CWS Coffee Washing Station DCA Development Credit Authority DPC Dry Processing Center EAFCA Eastern African Fine Coffees Association FLO Fair Trade Labeling Organization FT Fair Trade GDP Gross Domestic Product GoR Government of Rwanda GIS Geographic Information Systems HAACP Hazard Analysis Critical Control Point HCC Harmonization and Coordination Committee HIV Human Immunodeficiency Virus ICT Information Communication Technologies IPM Integrated Pest Management ISAR Institut des Sciences Agronomiques du Rwanda KAP Knowledge, Attitudes and Practices LMI Last Mile Initiative M&E Monitoring & Evaluation MINAGRI Ministry of Agriculture and Animal Resources MINECOFIN Ministry of Finance and Economic Planning MINICOM Ministry of Commerce MINIDEF Ministry of Defense MISOZI FIDA/TWIN Trading 2nd level coffee company MSU Michigan State University NGO Non-governmental Organization NUFIC Dutch Government International Development Agency NUR National University of Rwanda OCIR-Café Office des Cultures Industrielles du Rwanda/Café ORTPN Rwanda National Office of Tourism OTF OTF Group, a US Non-governmental Organization for strategic planning PEARL Partnership for Enhancing Agriculture in Rwanda through Linkages PMP Performance Management Plan PMU Performance Monitoring Unit PSTA Strategic Plan for Agricultural Transformation in Rwanda R&D Research & Development RCA Rwanda Cricket Association RFA Request for Application RFCA Rwanda Fine Coffee Association RIEPA Rwanda Investment and Export Promotion Agency RSSP Rural Sector Support Project RWANDEX Largest Rwandan exporter of semi-washed coffee RWASHOSCCO Rwandan Small Holder Specialty Coffee Company SCAA Specialty Coffee Association of America SCAE Specialty Coffee Association of SCAJ Specialty Coffee Association of Japan SO Strategic Objective SPH School of Public Health SPREAD Sustaining Partnerships to enhance Rural Enterprise and Agribusiness Development SPS Sanitary and Phytosanitary Standards TAES/TAMUS Texas Agricultural Experiment Station of The Texas A&M University System TAMU Texas A&M University UK United Kingdom US United States of America USAID United States Agency for International Development USDA/FAS United States Department of Agriculture/Foreign Agricultural Service

ii 2. EXECUTIVE SUMMARY

The Texas A&M SPREAD Partners are pleased to offer this comprehensive and innovative strategy for implementing the Sustaining Partnerships to Enhance Rural Enterprise and Agribusiness Development (SPREAD) Project. We conceive of SPREAD as a development alliance among U.S. and Rwandan Universities, U.S. and European Industries, Rwandan enterprises and institutions, and U.S. and Rwandan NGOs. A cornerstone of this alliance is the strong continuity provided to SPREAD by the partnerships among members of this alliance, most of whom cemented their commitment to Rwandan coffee farmers during the 6 years of PEARL and PEARL II with phenomenal results, and who continue their commitment into SPREAD as partners of Texas A&M.

Our plan is to target rural cooperatives and enterprises involved in high value commodity chains and provide them with appropriate technical assistance and access to health related services and information that will result in increased and sustained incomes and improved livelihoods. The SPREAD Partnership is led by Texas Agricultural Experiment Station representing the Texas A&M University System, in partnership with Michigan State University and the National University of Rwanda.

Our approach for raising incomes and improving the rural economy is based on considerable institutional experience of our partners including six years of proven and documented success operating in rural Rwanda where over 20,000 farm families have doubled incomes as a direct result of the USAID PEARL and PEARL II projects. We intend to “spread” our success through focused quality interventions throughout the entire value chain and to other regions of the country, increasing efficiencies and profits for greater and greater numbers of rural farm families.

The TAMU Partners will focus on assisting Rwanda to strengthen and grow the number of cooperatives and private enterprises in coffee and other high value commodities that will lead to the creation of a powerful engine for rural economic growth. Our focus on growth and strengthening will impact directly on the livelihoods of hundreds of thousands of rural small holders. We will achieve this through a carefully designed program of value chain development and management.

This proposed SPREAD initiative will be market-driven; its targeted value chains will be propelled into high end, high value markets by capitalizing on four key 21st century, global consumer trends.

• Quality: Consumers worldwide are demanding higher quality products and are willing to pay more for them • Traceability: Consumers increasingly want to know where their food and beverages are grown and the socially and environmentally beneficial practices used in their production. • Farmer First: More and more consumers are interested in food products that are bought at fair prices to the rural small holders producing them • Africaphillia: Africa is in the hearts and minds of more people today than ever in history. Consumers want to support African products and Rwanda’s special story of crisis and rebuilding is compelling for all.

Our approach is simple and is designed to ensure long-term sustainability. We will identify high value product supply chains, perfecting each link in the chain from production, processing, packaging and on to transport to the market selling direct to buyer. We will “professionalize” each chain by first empowering the producer as the core of the critical mass of human resources to establish and maintain the targeted value chains. We will build

1 Rwandan capacity to work the value chains through appropriate long-term support institutions including NUR, MINAGRI, OCIR-Café, RIEPA and SCA. Finally, SPREAD will work with GOR and US partners to advocate, develop, and extend organic farming practices to re-build Rwanda’s slowly degrading and eroding soils. In doing so, organic certifications can be sought (and supported through other components of this proposal) and additional value can be added to the price of Rwanda’s agriculture products.

SPREAD will work at all levels and all links of the value chains to build sustained capacity. At the farm level, we will work through a network of extension agronomists, health professionals, and different media programs to empower and professionalize the Rwandan producer. We will use a holistic approach, coupling value chain information with health information and programs to build skills that will enable the decision-making key to continuous improvement of the quality of product as well as quality of life for the producers and their families. At the enterprise level, the TAMU Partners will work to strengthen weaknesses in management, cooperative governance, access to credit and new markets. In all cases, the TAMU SPREAD Partners will continue to depend on equitable participation and benefits to women as an operational principle.

As we ramp up Rwanda’s capacity to produce and sustain the production and export of high quality products through the SPREAD partnership, we will also assist and encourage entrepreneurs to start up 2nd level transformation businesses such as roasting, coffee and tea shops, chili sauce manufacturing, and other spin-off enterprises. This SPREAD component will create employment and a new ‘cadre’ of local Rwandan businesses that are progressive, proactive and prosperous showing other Rwandans how enterprise development can be a positive force for both the economic and social growth of the country.

We will work with the USAID Last Mile Initiative to promote internet access in rural communities where communications between U.S. and European companies and Rwanda’s rural agribusinesses are necessary to sustain rural economic growth. In addition to improved communication with foreign buyers, communications among cooperatives and other Rwandan businesses and institutions will accelerate growth of the rural economy through better organization, information exchange and reduced transaction time.

Texas A&M and its team of SPREAD partners recognize the importance of raising awareness among the rural population on health-related issues in Rwandan communities. The TAMU Partners will incorporate a health component into the majority of SPREAD training programs and activities, and will launch an innovated radio serial drama (soap opera) program highlighting health information, existing health service programs, and access to medical facilities. We will also insist on gender mainstreaming in all our activities.

In order ensure that we are making the expected impacts through growing value-added Rwandan enterprises and increasing rural incomes, we have developed a GIS-based M&E program using a Geographic Information System and database for information tracking and analysis. This linked database and GIS offers a systematic approach to managing, analyzing, and disseminating data, information and geographic knowledge on all activities and assistance provided by SPREAD to producer households, cooperatives and private enterprises. It will link geo-referenced locations (latitude and longitude) with systematic data gathered for each specific project beneficiary.

Finally, the SPREAD Project management team will exemplify Texas A&M’s results-oriented style of management and leadership. We will streamline all processes of financial management, procurement, travel and communications so that we can place our greatest efforts on producing SPREAD results as outlined in this proposal.

2 3. TECHNICAL APPROACH

3.A. Background

Rwanda has made remarkable progress in it’s reconstruction over the past twelve years since the 1994 war and genocide. Economic growth has been slow but positive. Reconciliation policy and good governance have together formed a strong foundation for accelerated rural economic growth in the future and the country’s emphasis on HIV/AIDS prevention and increased access to and better understanding of public health services will in the long run expand Rwanda’s labor productivity and comparative advantage in the region.

Despite these positive developments, Rwanda’s population growth rate is still very high at 2.8%, a level that will double the country’s population by the year 2030. Already food aid is necessary for a significant fraction of especially vulnerable Rwandans living in rural areas and their reliance on food aid will undoubtedly increase if efforts to raise rural incomes are not successful. Rwanda, despite its strong and positive reconstruction record to date, could again face the devastating events of famine and unrest a decade from now if rural economic engines are not successful in the near term in bringing peace, prosperity and empowerment to the country’s rural poor. Indeed, breaking the downward spiral of rural poverty is one of Rwanda’s primary challenges in achieving the Vision 2020 goals of US$ 900 per capita GDP and a poverty rate of 30% by the year 2020.

Fueling the engines of growth will be the development of high value commodity chains that will create employment, generate revenues and improve livelihoods in the rural communities where 90% of Rwanda’s population live and work. In recognizing this need, the Ministry of Agriculture and Animal Resources (MINAGRI) has placed a high priority on horticulture exports in its 2004 Strategic Plan for Agricultural Transformation in Rwanda (PSTA), a plan that aims to facilitate the sector’s transformation from subsistence towards a modern, market-oriented rural economy and to enhance productivity in all subsectors of the agricultural economy.

Through bold efforts led by USAID, Rwanda has managed to enter the lucrative specialty coffee market, create a niche for its dried chili pepper exports to Europe, and to develop and market an “ethnic food” product for direct, bar-coded sales to Auchan, the number three supermarket chain in France. These accomplishments were achieved through focused quality improvements and interventions along the entire value chain, including production, transport, processing, storage, packaging, shipping and wholesale and retail marketing. For these efforts to impact even greater numbers of rural small holders and to achieve the goals envisioned for the SPREAD project, these and other value chains must be grown and nurtured to become strong, prosperous and sustainable in the long term.

3.B. SPREAD Technical Approach

The TAMU Partners conceive of SPREAD as a development alliance among U.S. and Rwandan Universities, U.S. and European Industries, Rwandan enterprises and institutions, and U.S. and Rwandan NGOs. Our plan is to target rural cooperatives and enterprises involved in high value commodity chains and provide them with appropriate technical assistance and access to health related services and information in order to increase and sustain incomes and improve livelihoods. The SPREAD Partnership is led by Texas A&M University in partnership with Michigan State University and the National University of Rwanda.

Our approach for raising incomes and improving the rural economy is based on 6 years of proven and documented success operating in rural Rwanda where over 20,000 farm families have doubled incomes as a direct result of the USAID PEARL and PEARL II projects. We

3 intend to “spread” our success through focused quality interventions throughout the entire value chain and to other regions of the country, increasing efficiencies and profits for greater and greater numbers of rural farm families.

The TAMU Partners will focus on assisting Rwanda to strengthen and grow the number of cooperatives and private enterprises in coffee and other high value commodities that will lead to the creation of a powerful engine for rural economic growth. Our focus on growth and strengthening will impact directly on the livelihoods of hundreds of thousands of rural small holders. We will achieve this through a carefully designed program of value chain development and management.

This proposed SPREAD initiative will be market-driven; its targeted value chains will be propelled into high end, high value markets by capitalizing on four key 21st century, global consumer trends.

• Quality: Consumers worldwide are demanding higher quality products and are willing to pay more for them • Traceability: Consumers increasingly want to know where their food and beverages are grown and the socially and environmentally beneficial practices used in their production. • Farmer First: More and more consumers are interested in food products that are bought at fair prices to the rural small holders producing them • Africaphillia: Africa is in the hearts and minds of more people today than ever in history. Consumers want to support African products and Rwanda’s special story of crisis and rebuilding is compelling for all.

Our approach is simple and is designed to ensure long-term sustainability. We will identify high value product supply chains, perfecting each link in the chain from production, processing, packaging and transport to the market selling direct to buyer. We will “professionalize” each chain by empowering the producer as the core of the critical mass of human resources to establish and maintain the value chains. Finally, we will build Rwandan capacity to work the value chains through appropriate long-term support institutions including NUR, MINAGRI, OCIR-Café, RIEPA and SCA. Elements of our approach are:

A. Quality First: Our approach will concentrate first and foremost on quality improvement. Because quality is the single most powerful driver of the specialty coffee market, no other single factor has the ability to add as much value to Rwanda’s agricultural export products as the relentless pursuit of quality. This can be exemplified through last year’s sale of Karaba coffee for $3.50 per pound, demonstrating that current prices for Rwandan specialty coffee can be doubled and even tripled through focused attention and interventions in quality improvement and control. Quality improvement serves as the foundation for the partnerships that catalyzed the spectacular successes in rural income generation achieved from USAID investments under PEARL and PEARL II. The TAMU SPREAD Partners’ market-driven approach lays the groundwork for continued improvements in coffee quality to expand premiums for all coffee producers in Rwanda. This applies to other high value commodities as well. Our quality program will be executed and delivered by a synergistic group of public and private partners who share the same vision and expected results. Indeed, all our partners will directly benefit from our quality focus.

B. Environmental Stewardship: To sustain the quality interventions proposed herein, SPREAD will work with GOR and US partners to advocate, develop, and extend organic farming practices to re-build Rwanda’s slowly degrading and eroding soils. In doing so, organic certifications can be sought (and supported through other components of this proposal) and additional value can be added to the price of Rwanda’s agriculture products.

4 New technologies like the Californian Red Worm and locally made organic insecticides will be introduced to enrich and accelerate the transition process. Planned improvements to the design of coffee washing stations and retrofitting for significantly improved wastewater quality will further reduce the environmental footprint of the specialty coffee value chain. Activities targeting environmental health and compliance with safety standards in targeted value chains will be designed to improve food safety and expand market opportunities.

C. Sustainability: Current high value product supply chain initiatives have only emerged in the past 3 years in Rwanda; they are far from being considered stable engines of rural economic growth. The TAMU Partners have identified two critically important program elements fundamental to ensuring the sustainability of SPREAD’s quality-oriented value chain development.

● Capacity Building: Key to the sustainability of the market-driven value chains is the creation of a critical mass of Rwandans and Rwandan Institutions that will continue to push the envelope of efficiency and quality in each link of the targeted value chains. Capacity building in local institutions, from producer groups to producer-owned companies, to other privately owned companies and government agencies will result in the double benefits of professionalizing the value chain while simultaneously nationalizing new capacity to sustain value chain productivity beyond donor-funded programs.

We propose to work at all levels and all links of the value chains to build sustained capacity. At the farm level, SPREAD will work through a network of extension agronomists, health professionals, and different media programs to empower and professionalize the Rwandan producer. We will use a holistic approach, coupling value chain information and programs with health information and programs to build skills that will enable the decision- making key to continuous improvement of the quality of product as well as quality of life for the producers and their families. At the enterprise level, the TAMU Partners will work to strengthen weak areas in management, cooperative governance, access to credit and new markets. Of particular concern, based on our experiences under PEARL and PEARL II, will be the need to build capacity in financial management.

● Partnerships: Partnership is a major ingredient to long term sustainability. Each and every activity under SPREAD will be carried out through a well-designed public-private partnership among appropriate GOR institutions, U.S. companies and universities, and Rwandan enterprises. Under the USAID/PEARL project, coffee industry partnerships were cultivated and firmly established resulting in an unprecedented influx of over $100,000 of private sector funds and in-kind contributions to complement investments made by USAID in Rwanda’s coffee sector (see Annex A). The TAMU Partners will operate from the strong base of these longstanding partnerships, with continued commitment while new partners are brought aboard SPREAD building upon the partnership model and extending it to the entrepreneurial sector and to other value chains such as chili peppers, tea, and spices.

D. New Opportunities: As we ramp up Rwanda’s capacity to produce and sustain the production and export of high quality products through the SPREAD partnership, we will also assist and encourage entrepreneurs to start up 2nd level transformation businesses such as roasting, coffee and tea shops, chili sauce manufacturing, and spin-off enterprises. These businesses will in turn create higher value local markets for smallholder produce, and new employment opportunities that will continue to professionalize targeted Rwandan value chains.

E. Information and Communication Technology: The TAMU Partners will continue the PEARL successes with the USAID Last Mile Initiative (LMI). We will work with LMI to promote internet access in rural communities where communications between U.S. and

5 European companies and Rwanda’s rural agribusinesses are necessary to sustain rural economic growth. In addition to communication with foreign buyers, communications among cooperatives and Rwandan based businesses will accelerate growth of the rural economy through better organization, information exchange and reduced transaction time. Finally, through the internet, additional capacity building at the cooperative and enterprise levels will be obtained through free online courses for MS Word, Excel, accounting, health prevention information and even remote diagnosis and advice. Access to the Internet is empowerment.

F. Promoting Better Health: Texas A&M and its team of SPREAD partners recognize the importance of raising awareness among the rural population on health-related issues in Rwandan communities. The TAMU Partners will incorporate a health component into the majority of SPREAD training programs and activities, and will launch an innovative radio serial dramas (soap operas) that incorporate into storylines key health information, existing health service programs, and access to medical facilities.

G. Supporting USAID Strategic Objectives: The preponderance of the Key SPREAD activities described below are designed to support Strategic Objective (SO) 7: Expanded Economic Opportunities in Rural Areas, and the first two Intermediate Results (IRs): IR 7.1 Expanded adoption of improved agricultural and business practices, which directly addresses issues of sustainability of new production and enterprise activities; and IR 7.2 Rural finance more accessible, which underlines the importance of increased and sustainable access to credit for producers and their organizations. Together, these activities designed to strengthen the capacity of producers to participate in lucrative value chains and those to ensure their access to appropriate financial services to enable their participation, will create the engine needed to drive new economic growth from rural agriculture in Rwanda. Because rampant sickness in rural communities directly impacts and undermines their ability to participate in economic activity, The Texas A&M SPREAD Partners will support a stand-alone program of activities that will be integrated into other SPREAD activities to expand access to health information and services for coffee and horticulture producers and their organizations participating in SPREAD. In addition to these activities supporting USAID’s SO 6: Increased Use of Community Health Services, including HIV/AIDS, all health activities will be coordinated with key individuals and programs of the GoR’s Ministry of Health (MoH) in order to support its program to decentralize health services and strengthen the capacity of district and community-level health services, thus promoting SO 5: Improved Governance Through Increased Citizen Participation.

3.D. Key SPREAD Components

The Texas A&M led SPREAD proposal will assist Rwanda to become one of the world’s most sought-after specialty coffee origins in the world through a series of technical interventions executed in partnership with key public and private partners. The approach will assist Rwanda to build its specialty coffee sector in a manner that leaves the sector strong, prosperous and autonomous. The following description of our proposed activities will demonstrate how we intend to assist our Rwandan partners grow targeted high value sectors in a way that will serve as a major engine for rural economic growth, ultimately improving the livelihoods of hundreds of thousands of smallholders and their families.

I. Quality improvement and control: The specialty coffee industry is a $20 billion dollar per year industry in the U.S. alone and is growing at 9% annually. This industry depends on increasing supplies of high quality coffee if it is to meet current and future consumer demand. It has been demonstrated that the single most important variable that the specialty coffee buyer looks for when selecting green coffees is quality, followed by consistency and reliability. Quality premiums are quickly becoming the greatest area of value addition in the coffee value chain at origin. Rwanda’s comparative advantage from an agro-ecological standpoint provides an open door for producing some of the world’s finest coffees given

6 proper attention to quality throughout the value chain. The TAMU partners are committed to ensuring that this will happen over the next five years.

The following description of proposed interventions will improve the quality of all Rwandan coffees, private and cooperative, fully washed and traditional. These interventions have been carefully chosen to have the greatest impact on the quality of Rwanda’s coffee thus assisting Rwanda reach its strategic vision in Rwandan Branding. In doing so, per unit price of green coffee will increase as desired under SPREAD, leading to greater income generation in the country’s rural areas and thereby improving the livelihoods of significant segment of the rural population.

A. Establishment of cupping laboratories for all fully washed coffee operations and the training of a critical mass of professional Rwandan staff to maximize this capital investment.

The USAID PEARL project began an ambitious program of quality evaluation and control at the farmer level in 2003. Three small laboratories were built in 2004 and 14 Rwandans coming from both entrepreneurial and cooperative operations, were trained through an extensive SCAA cupping training program. Five of these Rwandan cuppers were selected and trained as trainers. They are now capable of training other Rwandans in the art and science of cupping.

Cupping laboratories and well trained cuppers have the ability to develop broad Rwandan capacity to understand coffee quality attributes, eliminate defective lots, identify exceptional lots and improve downstream interventions at production or washing station levels. This capability can not be overemphasized. It levels the playing field between the Specialty Coffee buyer and the Rwandan producer or seller.

For example, the Butare cupping laboratory controlled the quality on over 3,000 separate lots of fully washed coffees in 2005. These coffees included both private and cooperative coffees. Coffees controlled through the laboratories resulted in average quality premiums of $0.50 per kilogram of green coffee. This in turn translated into a total net gain of over $150,000 for the participating private and cooperative coffees as compared to their non- quality-controlled fully washed operations.

These results demonstrate the potential that quality evaluation and control play in improving green coffee price and thus increased incomes at the farmer level. The Texas A&M led SPREAD project will work closely with key partners to capitalize on past USAID/PEARL experience to build new quality training centers strategically placed in the coffee zones that will support them. The Texas A&M SPREAD will rely on U.S. and European experts and buyers to train new staff and continue to recalibrate Rwandan palates to the profiles desired by various buyers.

In addition to the quality benefits the laboratories provide, they also provide a place where cooperative mill workers, farmers, and managers can taste the coffee they grow and process and learn about quality and how it is made or destroyed. Through the USAID Last Mile Initiative, the laboratories are taking on an even greater dimension. They are becoming Internet Cafes, where the general rural public, students, teachers, government workers, project workers and others can come and surf the Web, communicate with friends in other countries, look up their coffees sold in the U.S., take training classes, etc. At the same time, they drink some of Rwanda’s best coffees which are fresh roasted and served daily.

SPREAD will work closely with OCIR-Café and the Rwandan specialty coffee operators to gain consensus on placement of the four laboratories to be established under SPREAD. Once the sites and owners are determined, SPREAD will provide laboratory design and some key equipment. The GOR, RSSP, or the coffee companies themselves will provide

7 funding for the construction of the laboratories. In discussions with OCIR-Café, it is likely that old, un-used OCIR-Café buildings would be donated in the different provinces. SPREAD will work with OCIR-Café, RWASHOSCCO and our US and European coffee industry partners to provide the training for the new cuppers. Our target will be 4 more laboratories in strategic coffee locations by the end of year 3.

This component will increase the quality of Rwanda’s specialty coffee allowing farmers to benefit from additional quality premiums on the order of $0.15-.25/lb. per washing station operation. It will also serve as a major force in the professionalization of the Rwandan Specialty Coffee sector. The number of Rwandan capable of describing accurately their coffee will increase from about 20 in 2006 to thousands in 2010.

B. Quality improvement through participation in national, regional and international competitions and auctions. The global market for specialty coffee is extremely competitive and constantly changing. As a springboard to greater competitiveness that maximizes brandability and increases value, the Texas A&M led SPREAD project will assist Rwandan coffee sector introduce the first Cup of Excellence (CoE) Auctions in Rwanda. The CoE has had remarkable success in improving coffee quality and building producer-buyer relations in other countries such as Brazil, Colombia, Guatemala, Nicaragua, Bolivia, and El Salvador.

The CoE is a highly organized, professional and prestigious program that works at the national level with appropriate public and private organizations to evaluate hundreds of different coffees in a pyramid manner, eliminating poor quality coffees and advancing high quality coffees until the final competition among the best of the best Rwandan coffees. These coffees are then auctioned to CoE buyers at prices varying between $4.00/kg to $40.00/kg. The coffees are then roasted by their buyers and sold under the CoE brand fetching the best prices in the entire specialty coffee industry.

The CoE program will assist Rwanda develop its organizational capabilities to develop and manage national competitions and to participate in regional competitions. It will also encourage quality improvement and healthy competition among all specialty coffee sector groups including the traditional exporters, the fully washed privates, and the cooperatives. Finally, the CoE will create a highly visible and prestigious auction whereby selected finalist will reap the quality rewards of the programs and eventually enter into longer term relationships with the buyers of their coffees. The competition among specialty coffee producer groups for the CoE distinction will encourage quality improvements among the groups as they strive for recognition in the marketplace.

The CoE is a process as much as it is an event. A minimum of 200 different high quality coffees are needed as a base from which the competition can be run. Rwanda will not produce even 100 different coffees in 2006. As such, the CoE act as a catalyst for Rwanda’s industry to focus on the production of 200-500 high quality, unique coffees consisting of 2 to 60 sacs of green coffee per lot. As such, the washing station operations must begin to differentiate their production into distinct mini-zones so that unique lots can be developed and constitute an ‘entry’ for a competition.

Today, most washing station operations only produce one huge lot of mixed coffee which is sold as entire containers to buyers. The USAID/PEARL project, however, initiated lot development, evaluation and control through its work in extension and quality control. Through its program of exceptional lots, cooperatives began breaking their production area into distinct zones. Coffees produced from a geographically distinct zone are kept separate from other coffees through the quality evaluation stage where final lots are defined for sale at differing sensorial targets. These coffees are then differentiated and higher quality buyers pay higher prices based on quality. The process is simple and will be extended to all interested coffee operations through the Texas A&M led SPREAD project.

8

SPREAD will assist OCIR-Café organize a highly publicized coffee quality national competition in late 2006 for all fully washed operations. OCIR-Café and PEARL will announce the competition in June 2006 and continue its promotion through the media up until the competition in November. CoE will send two international cuppers to help OCIR- Café organize and conduct the competition. This competition will serve as an assessment for CoE to study the strengths and weaknesses of the Rwandan sector. As such, the 2007 National Competition will be a much more professionally organized event with greater media coverage, international cuppers and regional attention. The 2007 event will allow OCIR- Café and CoE to decide whether Rwanda will be ready for the full CoE competition in 2008 or whether it will best to wait until 2009. As stated earlier, it is the process of sampling, organization, lot identification, quality production, and cupping that makes the CoE such an important event for the improvement of coffee quality and the education of the entire Rwandan coffee sector.

C: Value Chain Research and Development In order to become a ‘top drawer’ specialty coffee origin, it is necessary to possess minimum capacity in specialty coffee value chain research and development. Costa Rica, Honduras, El Salvador, Colombia, Kenya and other major specialty coffee origins have strong research components that assist the sector develop, grow and increase value along the chain of events from inputs, production, transport, processing, quality controls, and export.

Although the SPREAD project does not have a mandate to create a strong R&D program for Rwanda, the Texas A&M led SPREAD project will work with ISAR and the NUR Faculty of Agriculture to develop a minimum capacity and experience in this important value-addition component of the program. SPREAD will support salaries for researchers from ISAR and NUR to work on coffee quality value chain research. Practical and applied research themes will be identified through an initial coffee value chain assessment. This assessment will be conducted by a team consisting of Specialty Coffee industry leaders, a TAMU/MSU value chain research specialist and researchers from ISAR and NUR. This team will conduct the assessment early on the project and generate a series of research themes that have the potential to increase final product value through constraint alleviation or innovation in any of the value chain links.

Research themes will then be turned into research topics and programs. These programs will be executed by the ISAR/NUR research team under the guidance of the MSU/TAMU value chain research specialist. Industry partners will provide input at all stages of research development and provide all quality analyses related to research interventions. Most of the quality analyses will be done with Rwandan cuppers in Rwandan laboratories. In addition to the research programs, this program will also be responsible for testing and evaluating new machinery like Eco-pulperies, vacuum sealing machines for green coffee, and drying equipment. New and innovative ideas to increase operational efficiency and develop new processing methods like ‘pulped natural’ coffees will also be strongly encouraged. This component will add value to Rwanda’s specialty coffee product through alleviation of constraints, identification of new value-added processes or innovations and increase in efficiency. In addition, the ISAR and NUR will acquire new skills in applied value chain and quality research.

D. Cross-cutting quality interventions Coffee Bikes: Rwanda has a comparative advantage over most coffee origins since farmers can give maximum husbandry skills to the small garden-like coffee plots where the old heirloom ‘bourbon’ varieties still reign. This is where quality is ‘created’. However, because the Rwandan coffee farmer is so small, it takes about 500 of them to produce one container load of exportable green coffee! The organizational burden on processing plant management is great. Trucks must be rented and cherry collection points must be installed

9 in order to get the cherry from the farm to the processing plant or washing station. Hundreds of farmers walk in their cherries from their fields 2-4 kilometers to the collection points, they sit, they wait for the truck, they wait for weighing and quality control, they load the truck and off it goes to the washing station.

The above method results in the cherries arriving at the washing station 6 to 12 hours after picking. This delay deteriorates the quality of the coffee. If the transport time of cherries coming from the coffee field to the washing station was reduced to from 6-12 to 2-4 hours, USAID/NUR/PEARL value chain research has shown that cup quality will increase significantly from 82/100 to 86/100 on sensory evaluation scores from which coffee price is determined. This translates into a $0.15 or higher premium per pound of green coffee sold.

SPREAD will work with Project Rwanda to manufacture at least 500 modified, coffee-bikes for each of two pilot operations. A credit program will be developed and extended to the select coffee families to receive the bikes. The program will be introduced as part of a ‘package’. In order to obtain credit a farmer would have to ‘subscribe’ to a special quality improvement program where they would agree to use the bike to rapidly transport their cherries to the station before 3PM, for example. In this way, those cherries could be separated from other cherries arriving later from the collection-point-truck system. As such, the quality of ‘bike-cherries’ could be preserved throughout the entire process all the way to the green, exportable coffee stage. This would allow the cooperatives to sell higher quality, ‘bike coffee’ to partner coffee companies who have engaged to do so as part of the program. It also allows the quality premiums to return directly to the ‘participating’ farmers. Farmers reap $0.30 per kilogram reward for quality and obtain a life-enhancing rural acquisition, the bicycle.

Coffee Lifeline Radio Program: The USAID/PEARL project initiated a partnership in 2005 with the FreePlay Radio Foundation in London and the Coffee Lifeline project in the U.S. which in turn partnered with several American Coffee companies including InterAmerican, Holland Coffee and Green Mountain. The program donated and distributed one FreePlay radio to each of RWASHOSCCO’s 140 cooperative level extension agents. Other coffee companies became interested in the program and increased donations. In 2007, the program will donate 1,000 radios to farmers in RWASHOSCCO and RFCA operations who qualify.

NUR has recently established a national broadcasting radio station called SALUS. They have agreed to work with the Coffee Lifeline project, OCIR-Café, RWASHOSCCO, RFCA through SPREAD to develop program broadcast content on topics concerning coffee quality, the “C” market, how coffee prices are determined, the advantages of organic farming and fair trade certification, where to obtain new varieties of coffee, how to apply new organically certified insecticides, safety issues regarding insecticide applications, etc. These programs will be developed in a ‘soap opera’ fashion using NUR journalism students. They will be broadcast several times nationwide. The Coffee Life project will partially support costs associated with developing broadcast content. Information extended through the broadcasts will be transformed into posters and other physical media means to be distributed to the cooperatives and other washing station operations. This ‘conduit’ to the rural population will also be used to pass information on HIV, AIDS, and Malaria. Similar formats will be developed by the NUR School of Public Health in collaboration with the journalism department at NUR. These programs will be complemented by cooperative visits.

SPREAD will provide modest funding for NUR Radio SALUS to establish a ‘sketch studio’. Then NUR Journalism department working with NUR Agriculture, Public Health partners, OCIR-Café and Coffee Life Line experts will work together to develop the content for targeted broadcasts. A schedule of one new broadcast per month will be targeted. Each broadcast will be aired several times per month. This component will increase the

10 professionalism of the coffee producer by increasing his/her knowledge base and understanding of the coffee sector. Coffee farmers will know what inputs to apply, where to purchase inputs, prices, how to apply inputs and all information concerning safety. Coffee quality will increase through improved agronomic interventions. There will be decreased numbers of HIV positive people in coffee cooperatives and decreased frequency in malaria cases.

II. Good environmental practices, organic and fair trade certification preparedness

A. Environmental soundness and CWS renovation: Rwanda is increasing the construction of wet processing facilities throughout the country at a very rapid rate. From one functional processing center in Maraba in 2002, there is already over 70 factories in 2006 and the number is rising. Many of the wet mills are constructed without consideration of environmental impacts. The environmental state of most mills today would prevent their organic certification; nor would they meet environmental conformity with the Starbuck’s C.A.F.E. practices, Fair-Trade standards, and other certification compliances. The Texas A&M led SPREAD project will work with OCIR-Café and the Rwandan Bureau of Standards to develop environmental criteria and code by which wet mills must conform. We will assist OCIR-Café organize and support a detailed GIS-based environmental assessment of each wet mill and develop remedial action plans for each. SPREAD will then assist the wet mill owners at identifying sources of funding to execute the action plans. The action plans will become a key condition that must be met in order to meet organic certification standards. B. Organic coffee farming systems: Most of Rwanda’s soils are fragile and weathered but must support an increasingly large rural population. In order to sustain the current growth in high quality coffee production, the soils on which the coffee is cultivated must be improved through the development of organic farming methods. In addition, organic coffee is the fastest growing segment of the Specialty Coffee sector and thus yields price premiums of 15-20%. SPREAD will work in partnership with NUR, ADF, Taylor Maid Farms and ICRAF to develop organic strategies to increase the health and sustainability of the Rwandan coffee farming system. In doing so, quality will be improved.

C. Preparedness and certification: SPREAD will work with OCIR-Café, ADF and Taylor Maid to promote organic farming practices and support organic and Fair-trade preparedness training programs for the entire coffee sector. A strong organic coffee campaign will be developed with OCIR-Café using radio programs, press and television. Interested cooperative and privately owned specialty coffee production operations will be assisted through the SPREAD project to obtain organic certification. SPREAD will work with the African Development Foundation, ADF, to assist an enterprising Rwandan private group in the development of a Rwanda-based organic certification company. Organic certifications obtained through the Rwanda-based company will be significantly less expensive than equal programs in the region, Europe or the U.S.

D. Fair Trade certification: The USAID/PEARL project began work with the Fair Trade Labeling Organization (FLO) in 2002. Maraba was the first cooperative certified Fair Trade in Rwanda. Afterwards, PEARL succeeded in institutionalizing the FT access through RWASHOSCCO. Today Rwanda has 8 FT certified coffee cooperatives with another 6 in application stage for inspection. SPREAD will continue to work with FLO, RWASHOSCCO and all stakeholders to build their capacity to apply for certification, arrange inspection visits and follow FLO recommendations. It is our intention to work with the entrepreneurial sector to develop ways of working with the small holder cherry providers that will allow them to qualify for Fair Trade certification too.

Our environmental stewardship component has enormous potential. It will assist Rwanda improve its coffee soils thus sustaining high quality specialty coffee production into the distant future. It will allow all of Rwanda’s organic coffee farming operations to benefit from

11 the Organic, Fair Trade and Organic-Fair Trade market premiums. SPREAD intends on having at least 25 specialty coffee operations organically certified by the 2010 and another 20 operations Fair Trade certified.

III. Capacity building: No single factor is as important in building a sustainable high value chain as that of capacity building. In order to strengthen and grow Rwanda’s young and emerging specialty coffee sector, the Texas A&M led SPREAD project will place our greatest level of effort in building the capacity of the farmers, enterprises and institutions directly involved in the coffee value chain growth. Our effort in capacity building is designed to leave Rwanda’s specialty coffee sector focused on quality, autonomous, and prosperous. SPREAD will address capacity building issues at their different levels, National institutional level, company level (RWASHOSCCO, MISOZI, RFCA), cooperative and private washing station level, and the farmer level.

A. National level: OCIR-Café: OCIR-Café continues to play a key role in the development of the Rwandan specialty coffee sector. As the sector grows, it is becoming more and more apparent that three key roles for OCIR-Café will be regulatory, monitoring and promotional. Issues concerning placement of washing stations, quality certification, environmental and safety standards for washing stations are areas where OCIR-Café needs assistance in providing science-based regulatory solutions. In order to assist OCIR-Café, SPREAD will work with the NUR Center for GIS and Remote Sensing, the Faculty of Agriculture to develop a GIS-based decision support system within OCIR-Café. This system will be capable of: • Determining optimal sites for location of new Washing Stations based on coffee density, hydrology, slope, altitude, road network, electrical network and distance from other washing stations • Monitoring production and export of fully washed and traditional coffees • Detailed maps production at the sector and sub sector levels • Development of the national Appellation for Rwandan coffees • Determining optimal areas for sector growth

Work on this system was initially funded by the MINAGRI RSSP in 2003 (see Annex B for program document). Although considerable progress was made through 2004, inability of MINAGRI to furnish datasets on soils, elevations and other key variables resulted in suspending work under the project. Recently, however, the NUR CGIS gained access to the key variables from the MINAGRI datasets and the work can be continued from where it was left off in 2005. SPREAD will work with NUR CGIS, OCIR-Café, ICRAF, and the SCAA mapping unit to complete this key project.

SPREAD will also assist OCIR-Café promote quality improvements through full cooperation in the SPREAD Quality Improvement program, including the CoE, Value Chain R&D, Coffee- bikes, Coffee Lifeline, and other initiatives. Finally, SPREAD will work with OCIR-Café to increase local consumption through assistance to the tourist industry, hotels, restaurants, new roasteries, and specialty coffee cafes. This work will be described under spin-off business development.

B. Company or Enterprise level: As the number of washing station operations approach 100, different operations have started to form companies or umbrella organizations to manage their members’ coffee production, quality control, export and even extension services. This is a normal and healthy development and can be seen in Guatemala, Costa Rica, Colombia, Tanzania, etc. SPREAD will support the development of ‘umbrella’ organization both privately or cooperatively owned. Currently there are six initiatives to develop apex companies or associations that serve member operations to export specialty coffee: RWASHOSCCO, RFCA, MISOZI, MINIDEF, Rwandex, and Rwanda Mild. In the

12 horticultural and other value chains, COVEPAR is another ‘apex’ organization that SPREAD will work to improve.

Today, RWASHOSCCO S.A.R.L, is the only registered specialty coffee export and marketing company in Rwanda. It is owned by the cooperatives it serves and provides services to private entrepreneurs in promotion, extension, buyer-dialogue, sampling, quality evaluation, and marketing. SPREAD will continue to provide support for the company to gain full autonomy by 2008. Its core business as an export company can be sustained through member contributions based on a 2.5% check-off fee on total gross sales however, crucial capacity building extension programs must be funded from GOR or other donor sources since the check-off fee can not cover the high cost of extension.

Extension: Through work conducted under USAID PEARL and RWASHOSCCO, a very effective extension system has been developed and is in place with the RWASHOSCCO cooperatives. At the level of RWASHOSCCO, there is a team of 4 extension agronomists. These extension agronomists work directly with their cooperative level counterpart extension agronomists. The cooperative extension agronomist then has between 7 and 15 cooperative-paid, zone-level agronomists or ‘animateurs’. The zone-level agronomist works directly with 100-200 coffee farmers (see Diagram 1). SPREAD will support this and other extension efforts for all new ‘umbrella’ initiatives. Extension services for all this and other systems are necessary for growth of specialty coffee quality and volumes.

Diagram 1: SPREAD Farmer Information Delivery System

Farmer Level

Production Zone ZE-1 ZE-2 ZE-3 ZE-4 ZE-5 ZE-6 ZE-7 ZE-8 Extension Agent Level

Cooperative or CWS-1 CWS-2 CWS-3 CWS-4 CWS-5 CWS-6 CWS-7 CWS-8 CWS Private Level

Company Level Umbrella (RWASHOSCCO, RFCA, MINIDEF) Company Level

The extension system is very effective at disseminating information on quality, prices, new initiatives, IPM activities, organic fertilizer application, and organizing the cherry collection by zone. In addition to coffee information, the system will also be supported under SPREAD to extend information on HIV/AIDS prevention and treatment, malaria, and family planning.

The costs of extension services are estimated from RWASHSOCCO and PEARL to be on the order of $150,000 per year or approximately $15,000 per year per cooperative of 2,000 members. The USAID/PEARL project is currently seeking another donor to assure the

13 continuation of extension services. There are several sources of funding available for extension support including MINAGRI RSSP, MINICOFIN, and the new NUFIC project. SPREAD will make every effort to secure funding for this key component for all enterprise level initiatives. In addition, we have reserved some SPREAD funds for leveraging match from other national or international partners for extension supplements.

C. Cooperative and Entrepreneurial Washing Station operation level: There are two major approaches to current coffee value chains development, the cooperative approach and the entrepreneurial approach. They are both private approaches and differ principally through their profit sharing model. Cooperatives share profit among producer members and entrepreneurs attempt to maximize individual owner profits. On one hand, Rwanda’s cooperative movement is young and immature. Business management skill sets are rudimentary. They face problems of poor governance and leadership. On the other hand, the entrepreneurial sector lacks product quality control, traceability systems, market attraction and certification potential.

This situation has caused jealousies, power struggles and unwarranted competitive behavior among all players involved. This will ultimately lead to high volumes of mediocre products reducing Rwanda’s comparative advantage to produce traceable, high quality agricultural products. The Texas A&M led SPREAD project will make all an all out assault to harmonize this debilitating situation by strengthening the weaknesses in each sector and working with appropriate GOR institutions like OCIR-Café to develop trade associations where both sectors can learn from each other and profit from economies of scale in procurement and other areas. Grower’s First will be our lead partner in capacity building for cooperative and entrepreneurial growth. We will place equal emphasis on building the capacity of both approaches.

There are currently 21 cooperative operations in Rwanda and approximately 40 private operations producing fully washed coffee and hoping to sell their coffees on the Specialty Coffee market. Each operation type has advantages and disadvantages as listed below:

Table 2: Comparison of private enterprises and cooperatives

Private Cooperative Strong • Entrepreneurs/investors have good to strong business • Members own all coffee trees and washing points skills station • Entrepreneur/investor capital assets assist with • Qualify very easy for Fair Trade certification obtaining loan • Qualify easy for Organic certification • Strong voice in Government and Parliament • Direct sales to US and UK markets bring • Streamlined decision making process higher returns • Relationship coffee model is pillar of long term sustainability • Higher incomes for farmers result in accelerated poverty reduction • Quality is rewarded Weak • Do not own the coffee trees and therefore problematic • Poor to average business management skills points certification for Organic and FT • Poor to average governance and leadership • Anonymous growers have little incentive to increase skills quality • Few to no capital assets held by members • No experience in exporting their coffees • Higher risk of corruption • Most coffees sold to European importer resulting in mediocre prices • No other market access • Lower farmer incomes result in de-accelerated poverty reduction

The SPREAD Project will work closely with Grower’s First to strengthen both operational types to the point where at the end of SPREAD both cooperative and private types are

14 strong, prosperous and in harmony with each other. We will place an equal level of effort for each approach.

SPREAD will achieve this goal by expanding the work of USAID/PEARL in the following activities for the cooperative approach: • Building cooperative business skills • Building financial management capabilities • Targeted training in leadership, democracy and governance • Sensitizing cooperative members on Rwandan Cooperative laws and member rights • Supporting 2nd level cooperative companies and apex organizations • Identifying sources of funding for washing station construction

And for the entrepreneurial specialty coffee operator: • Supporting the formation of private company groups, business planning and export • Linking privates and/or their companies directly to US, European and Japanese buyers • Assisting the private groups develop direct relationships with their grower groups • Assisting the privates comply with standards for FT and Organic certification • Assisting private groups develop traceable small lot procedures and programs that would allow them to differentiate their coffees on quality and thus compete in national, regional and international competitions • Assist privates develop ‘buyer appeal’ • Assist privates know and understand trends in the Specialty Coffee market that can yield higher returns to them • Continue to train their washing station staffs either through the Kenyan manager system or using the RWASHOSCCO model where cooperative experts in washing station management • Assist privates develop rigorous quality protocols

We will also provide all services formerly provided by USAID/ADAR (DCA, CWS design and management, promotion, etc.) for the entrepreneurial sector but we will complement those services by providing access to a greater variety of Specialty Coffee markets rather than just one European importing company. We will work to attain certification for C.A.F.E., Organic and even Fair Trade programs for entrepreneurial operations.

We will work with the entrepreneur to harmonize their relations and develop a win-win business relationship with the producers who live and own the coffee plantations around the washing station. In doing so, the entrepreneurial operations will be able to qualify more easily for quality, social and environmental premiums. For example, in coffee, many buyers are interested having their product certified Fair Trade, Organic, C.A.F.É., Utz Kapeh, etc. These certifications can increase the price of the coffee by as much as 15-20%. However, in able to obtain the certification, the seller must comply with a set of rigid socio-environmental and traceability criteria. To the extent that the entrepreneur works directly with their producer group, the more likely they are to achieve a certification. Although, they will be required to invest more in the well-being of their farmers, the price premiums obtained should more than compensate for their investment in their small holder groups. The USAID/PEARL project has shown this approach to work through their partnership with BufCafe and MIG in Ginkongoro. Other entrepreneurs have expressed interest.

D. Farmer level: All of SPREAD’s components and activities have been designed to impact at the farmer level. A specific program will be implemented that empowers the rural small holder coffee grower through professionalizing their key role in the specialty coffee sector. This will be achieved through the following four activities.

15 1. NUR-Radio SALUS will become a beacon of knowledge for the small holder coffee farmer. Through targeted broadcasts developed in partnership with industry leaders, coffee farmers, OCIR-Café, NUR Faculty of Agriculture and other sources, the Rwandan specialty coffee producer will learn about the international coffee market, how quality increases prices, how quality is determined, new farming methods, health advice, current coffee prices, etc. 2. OCIR-Café and SPREAD will work closely to develop extension strategies to reach all coffee farmers, starting with the specialty coffee farmers. As mentioned earlier, we will seek funding from different sources to support discrete extension teams run from the “company level” through the cooperative/entrepreneur level to the production zone level to the farmer (see Diagram 1). This system will be used to promote all quality interventions at the farmer level and will also serve as the delivery system for all the health programs. 3. SPREAD will continue partnership with the USAID Last Mile Initiative, TERRACOM and their partners to extend the internet access through establishment of rural Internet Cafes. SPREAD will continue to provide solutions for access to email communication and internet to the remote coffee zones where cooperatives and their rural businesses are headquartered. Through these initiatives, cooperative members will be exposed to a new world of learning through the Internet. In addition, the coffee cooperatives, private operators and coffee companies will save enormous amounts of time and money through the improved communication network at the level of the washing station. 4. The cupping laboratories will also play a key role in farmer education. During the off- season, the cupping labs will run coffee quality awareness programs at the labs for coffee farmers, washing station personnel and cooperative management. The RWASHOSCCO lab in Butare began a similar program in 2006 with exceptional results allowing all cooperative managers and washing station employees to learn and appreciate the quality attributes of coffee and how to preserve and respect them on the job.

IV. Off-farm business development: Increased local consumption of coffee will provide strong internal markets for Rwandan high value products, create employment and help build a strong Rwandan coffee culture. SPREAD will work with entrepreneurs and other private initiatives to provide assistance in business planning, access to American and European experts for advice and innovative business ideas and linkages. Key areas in spin-off businesses are: • Specialty coffee roasting companies • Specialty coffee cafes and internet cafes • Coffee brewing equipment maintenance training • Barista training • Chili sauce manufacturing • Processed food products

Much of the assistance from SPREAD for this component will be through the use of our large roster of US and European companies who are willing to assist in business development for entrepreneurs at no fee.

V. Marketing and sales: SPREAD will assist coffee cooperative, entrepreneurs and their companies to market different qualities of coffee. A specialty coffee operation can not produce ONLY fine coffee. In producing fine coffee, a fully-washed coffee operation will also produce volumes of lower grade coffees. In order to turn a maximum of profit, an operator must sell all grades at the best price possible. As such, SPREAD will assist coffee operations and their export companies differentiate their ‘product’ for sale to different market segments thus maximizing total annual sales and profits.

16 The specialty coffee industry is made up of three primary market segments: 1. Retail Roasters: Buy small quantities of high quality and exceptional coffees at high price differentials 2. Wholesale Roasters: Buy large quantities of high quality coffees and pay FT-ORG and quality premiums 3. Large Importers: Buy high volumes at moderate to good prices AND they buy the lesser grades

Rwanda needs all three of these segments to attain maximum profits and to prosper. Currently, through the work of the USAID coffee projects, Rwanda has the following companies as business partners buying coffees directly from both cooperatives and privates.

RETAIL ROASTERS WHOLESALE ROASTERS

• Groundwork Coffee in L.A., CA • Community Coffee in New Orleans, LA • Stumptown Roasters in Portland, OR • Intelligentsia Coffee in Chicago, IL • Counterculture Coffee in Durham, NC • Deidrich Coffee in San Fransico, CA • Ancora coffee in Madison, WI • Thanksgiving Coffee in Fort Bragg, CA • Thousand Hills Coffee in Boston, MA • Allegro Coffee in Denver, CA • Mamamouth Coffee in London, UK • Union Coffee Roasters in London, UK • Starbucks Coffee in Seattle, WA • Howell Select Coffees in Boston, MA • Coffee Pacifica in Vancoover, Canada • Bullrun Roasters in Minneapolis, MN • Green Mountain Coffee Roasters in Burlington, VT • Mr. Espresso in Berkeley, CA • Kavanaugh Coffee in Berkeley, CA • Duncan's Coffee Roasters in Houston, TX • Paramount Coffee Roasters in Ann Arbor, MI • Peet’s Coffee, Berkley, California • Starbucks Coffee in Seattle, WA

In addition, SPREAD will continue work with importing companies like InterAmerican Coffee, Volcafe Specialty Coffee Company, Sustainable Harvest Coffee and Mercanta Specialty Coffee Hunters Inc. who are capable of purchasing all of Rwanda’s specialty coffee. SPREAD will grow the current roster of retail, wholesale and importer partners in order to continue to create higher demand than Rwanda has supply and to maximize total profit through market segment matching. We will also bring in new specialty coffee markets like Japan. On the promotional marketing side SPREAD will work to continually place Rwanda’s specialty coffee production in higher demand than its supply through a series of well designed marketing activities as described below.

A. Rwanda’s Coffee Appellation: SPREAD will continue work with OCIR-Café and the NUR CGIS center to produce an Appellation system for Rwanda’s specialty coffees. As consumers demand higher levels of traceability, the Appellation system will be able to meet their every demand. The concept of ‘terroir’ coffees is becoming increasingly popular in the specialty coffee industry. The Appellation system will link agronomic and other ‘terroir’ variables to a taste profile. The terroir will then become the traceable element consumers are wanting complete with information on taste, the farmers who grow it, the climate and region where it is grown, etc.

B. Information and Communications Technologies (ICT): SPREAD will take advantage of ICT and its partnership with the USAID Last Mile Initiative to continue to assist the Rwandan Specialty Coffee sector to create and sustain the business linkages it needs in order to grow once SPREAD and LMI have terminated. In addition to providing access to internet for remote rural businesses, LMI and SPREAD will work with specific coffee buyers to provide

17 them with specific marketing information that they need to promote and sell higher volumes of Rwandan coffee. Video Podcasts via Portafilter.com will be developed, video streaming of cupping and coffee processing will be offered as will special farmer stories and terroir information. These are all information bytes needed by the US and European coffee buyers to better promote and sell Rwandan coffee. LMI and SPREAD will work with the industry partners to assist the cooperatives and privates establish ICT systems and capabilities to do respond directly to their buyers.

C. Buyer Tours: Like the previous USAID projects, SPREAD will continue to assist producers, producer groups, privates, cooperatives and coffee companies organize and run sophisticated buyer tours. SPREAD will work with ORTPN and private tour groups to develop “coffee tourism”. Already, USAID/PEARL has worked successfully with Java Ventures Inc. to develop Rwanda’s first coffee tourism event in 2006 and SPREAD will continue to promote and advance this event. In addition, SPREAD will work with other tour groups like Project Rwanda’s bicycle tourism program where SPREAD will develop a one day bicycle tour of Rwanda’s coffee sector from its plantations and farmers to the washing stations and cupping laboratories.

D. Trade Shows: SPREAD will support all efforts to have Rwanda represented at the major specialty coffee shows. EAFCA, SCAA, SCAE and SCAJ will all be targets. SPREAD will work with RIEPA to identify sources of funding for all industry partners to participate in one event over the life of the SPREAD project. SPREAD will provide limited support for this activity.

E. Press and Industry Articles: One of SPREAD key personnel, Ms. Anne Ottaway, will continue her past work under USAID/PEARL to keep the press informed and to develop articles and information for the industry journals.

VI. Credit and Finance: An important constraint to attaining high volumes of specialty coffee in Rwanda is access to credit and poor financial management skills. Among the problems encountered in the coffee sector for credit are: • Rigorous banking demands • High interest rates • Late disbursements • Hidden charges • Poor synchronization of disbursements with farmer needs

Farmers need credit throughout the year to meet demands of their families in medical, education, and emergency situations. These credit demands are at the heart of both cherry quality and quantity. SPREAD will work at the company level and with Ecologic Finance and Grower’s First to try to build management capability strong enough for the companies to provide credit direct to the cooperatives and the cooperatives to the farmers. In addition to seasonal credit, long term capital loans are also necessary for cooperatives and entrepreneurs to build new washing stations, dry processing centers, cupping labs, etc. SPREAD will assemble all interesting credit programs and develop a menu of credit services to offer all coffee operators. These programs will include:

• Ecologic Finance seasonal loans • DCA backed capital loans through the Bank of Kigali • The Rwandan Development Bank and their RSSP 40% rebate program • The Competitive Client-Oriented Microfinance project • The Popular Bank • Opportunity International

18 In addition to providing access to credit, SPREAD will work closely with Ecologic Finance, Grower’s First and NUR to develop and extend training modules in financial management for coffee cooperative and private operators as stated in the capacity building section.

VII. Horticulture and other high value chains: One of the most sudden and dramatic changes brought by the expanding global economy has been the transformation of food procurement systems around the world, particularly the rapid rise of regional and multinational supermarkets. Over the coming decade, Rwanda will be enveloped by this transformation and will find itself even farther behind if does not move swiftly to position itself as a player in these markets. Unless Rwanda’s producers of spices, fruits, vegetables and flowers make a quantum leap in their levels of productivity and awareness of how supermarket procurement systems operate, their share of these important regional and international (and eventually domestic urban) markets will be minimal.

We aim to enhance Rwanda's access to these growing regional and international markets by identifying high value product supply chains, perfecting each link in the chain from production, processing, packaging and transport to the market selling direct to buyer. Our technical approach to development of horticulture value chains follows the same step by step process described for Rwanda’s specialty coffee value chain. From a supply perspective the emphasis is placed on meeting official and commercially defined grades and standards of product quality and safety at every step of the value chain. We will professionalize each chain by empowering the producer as the core of the critical mass of human resources to establish and maintain the value chains. Finally, we will build Rwandan capacity to work the value chains through appropriate long-term support institutions including NUR, MINAGRI, OCIR-Café, RIEPA and SCA.

We will start by supporting the continued promising growth of the bird’s eye chili and ethnic food sub-sectors in year two and then expand to include other subsectors identified by regional and European buyers in later years of the SPREAD project.

While there are important parallels in horticulture and specialty coffee value chains, including the market’s penchant for product quality and the centrality of strong producer-buyer relationships in coffee marketing, horticulture and specialty coffee value chains differ in several important ways. SPS requirements are more challenging, products are more perishable, requiring cold storage, and market windows and variations are far more complex than are specialty coffee markets.

Key components of our approach will include: • Facilitation of face-to-face communications between horticulture buyers and suppliers. • Providing supplier upgrading to new technologies, new ways of organizing and managing the supply chain for public or private certification, traceability and other improvements. • Joining supply networks through strategic alliances and joint-ventures • Building reputation capital and minimizing failures

3.E. Health and HIV/AIDS Program

The Texas A&M led SPREAD project health goal will be to improve the health and access to information regarding health to every specialty coffee farmer family and other high value farmer families targeted by SPREAD. Our approach to providing health-related programs will first capitalize on existing USAID projects in Rwanda in order to maximize synergy and minimize duplication of efforts. Texas A&M has assembled a SPREAD Partners team that includes organizations that will encourage innovativeness and effectiveness in health programming, and will collaborate with Rwandan and international organizations in order to

19 make their respective organizations’ assets available to SPREAD farmers, families, and communities. This component’s programs will be developed to support the objectives of the GoR Ministry of Health’s strategic plans for strengthening the capacity for sustainable district-level and community-level health service delivery, and to help communities and individuals understand how to access the health services available to them.

While the NUR Radio SALUS Broadcasts will reach a national audience, the integrated training will focus on the needs our target communities in coffee and other high value commodities. At the end of the 5 year project, it is projected that approximately 75,000 individuals within our target group will have received health-related training and/or vastly improved access to information.

The SPREAD Health Coordinator will lead the health-related efforts of the TAMU SPREAD Partners, and this coordinator will be headquartered at the SPREAD Outreach Center in Butare. The primary duties of the HC will be to oversee and manage our health program partners and their activities with our target communities, and to maintain 2-way flow of information between SPREAD health activities and those of the GoR and other donors. The following discrete set of activities has been designed to have direct impact on SPREAD’s 75,000 rural families working in specialty coffee and targeted SPREAD value chains.

A. Access to Health Information via Radio SALUS: The Texas A&M SPREAD Partners will assist the NUR Department of Journalism and Radio SALUS in developing effective and innovative radio programs, or soap operas/serialized dramas, that creatively incorporate both health-related issues and safety, as well as information on specialty coffee and high value horticultural topics. The approach will use specialized health experts from respective SPREAD partners to develop the content of the broadcast while Population Media, MSU and Coffee Lifeline broadcasting experts work with Radio SALUS and the NUR School of Journalism to develop the screenplay or show.

In addition, select staff from Radio SALUS and NUR’s School of Public Health will participate in a 1-month internship with MSU’s College of Communications, the oldest and most prestigious College of Communication in the United States. With a unique blend of expertise in radio broadcasting and health communication, the MSU internships will create a set of technical broadcast skills that will allow the interns to prepare Rwanda broadcasting programs to disseminate key information regarding HIV/AIDS, malaria and other infectious diseases, family planning, family health and nutrition, and other hot health topics via radio.

The broadcasts will air once a month for Health topics emissions. They will be repeated weekly. It is expected that the broadcasts will reach over 2,000,000 rural small holders weekly. These broadcasts, in combination with the direct interventions on target communities as listed below, will result in reduced HIV infections, malaria, general health and better family planning.

B. Specialized Health-Related Programs: The Texas A&M led SPREAD project will utilize the existing health-related training programs, activities, and materials developed by its partners and will work to ensure that all aspects of the project are well networked into current efforts in Rwanda. The initial health training and programs will be implemented throughout Rwanda where SPREAD is working with high value commodities. The information dissemination program will be that used by USAID/PEARL and RWASHOSCCO for transmitting agriculture information as shown in Diagram 1.

To implement the specialized health-related capacity building programs, the Texas A&M led SPREAD project has partnered with the following organizations: • Growers First will provide health-focused training emphasizing food and medical aid within a community leadership context.

20 • World Relief will serve as an HIV/AIDS resource to SPREAD personnel and will provide resources for family planning as well as the ABC intervention model. • Dian Fossey Gorilla Fund International will provide resources through its current Ecosystem Health Program, which: tests and treats for internal parasites; supports the establishment and stocking of village clinics with basic medical supplies; trains paraprofessionals to administer tests and medicines in rural communities; and who, through their partner institution Family Health International, also supply medicines, anti-retrovirals, condoms, and instruction on their use. • NUR’s School of Public Health students and faculty will play an integral role in disseminating health-related issues and information to SPREAD SCCs. Additionally, students and faculty will serve as trainers in several of the programs. • URWEGO will assist in disseminating HIV/AIDS related information to farming communities through its community development training programs.

Though no formal partnerships have been established at this point, Texas A&M has discussed the project with IntraHealth/Twubakane to provide training modules and information relative to family health, family planning/reproductive health, child survival and nutrition, and malaria prevention, and will ensure that SPREAD communities are aware of family health services provided by Twubakane. In addition, we have discussed collaboration with CHF CHAMP to serve as a resource to SPREAD coffee communities and cooperatives by providing services on the prevention, care, and treatment of HIV/AIDS.

C. Internship Program with NUR School of Public Health (SPH): Under SPREAD, the TAMU Partners will establish an ongoing internship program with the NUR School of Public Health. The NUR School of Public Health student interns would: 1) create a database and detailed map of available health services and locations throughout targeted SPREAD regions; 2) coordinate specialized health training programs with SPREAD partners; 3) assist the HC to incorporate a health-related focus in all training programs and activities; 4) develop and execute a general health marketing campaign for cooperative communities; and 5) have the opportunity to attend short-term training at MSU to study radio management, programming skills, and health communication.

3.F. Project Management: The SPREAD Project management team will exemplify Texas A&M’s results-oriented style of management and leadership. We will streamline all processes of financial management, procurement, travel and communications so that we place our greatest efforts on producing SPREAD results as outlined in this proposal.

The SPREAD project will be based out of the National University of Rwanda’s Outreach Center, where PEARL and PEARL II were headquartered. The Outreach Center is in the process of obtaining legal autonomous status as NUR’s Value Chain Development Center, highly appropriate as the operations and management center for SPREAD. The strategic placement of SPREAD at NUR demonstrates our firm commitment to building the capacity of Rwanda’s institutions to grow and sustain targeted value chains well after SPREAD has ended.

Texas A&M’s SPREAD Project will be led by Dr. Timothy T. Schilling, senior Agricultural Development Specialist at Texas A&M International Agriculture Program Office. Dr. Schilling led the successful PEARL, PEARL II, TRADE and LMI projects in Rwanda. His practical approach to value chain development and his intimate knowledge of Rwanda’s agriculture sector and the U.S. and European high value markets are crucial to the success of the SPREAD project. He will be assisted by Jean Claude Kayisinga as co-Director and later by Dr. Abdoul Murekezi, who will be phased in during 2008. Both Rwandan counterparts represent a considerable investment by USAID in their long term advanced degree training though the PEARL project. In addition, both individuals played key roles in the PEARL

21 projects and are well respected by U.S. Industry partners and Rwandan public and private sectors.

Supporting the SPREAD Project in Rwanda will be a technical team that includes: a Coffee Coordinator; a Cooperative Development Specialist; a Private Development Specialist; an Agronomist; a Logistics Coordinator; a Finance Coordinator; and a Coffee Researcher. Rwanda-based support staff will include a project accountant, an administrative assistant, and an ICT-Radio-Public Relations officer. From NUR, the Management Team will be supported through part-time assignments of faculty to SPREAD for specific activities. NUR will also identify a SPREAD Project Liaison responsible for ensuring effective management of all NUR resources and activities related to SPREAD, and who will liaise to the project through the SPREAD Co-Directors.

In the U.S., the SPREAD Project will be managed out of Texas A&M’s International Agriculture Programs office by Linda Cleboski. She will serve as the Chief Project Officer responsible for the development of terms of reference, communication among partners, coordination of activities, procurement, resource flow, and all reporting to USAID. Linda is an experienced international project manager, having managed and provided support for over 20 projects including the PEARL and PEARL II projects. Financial and budget elements of management of the SPREAD agreement will be the responsibility of Mr. Keith Cole, a seasoned financial manager. Rounding out the US-based team will be Joey King, an experienced project auditor. The Texas A&M campus management team will provide streamlined, efficient and comprehensive support to the SPREAD project team in Rwanda. They will draw on the many resources of the Texas A&M System of Universities and state agricultural agencies to provide agribusiness industry-related expertise and information resources as needed by the in-country Project Director.

Dr. Dan Clay, Director of Michigan State University’s Institute for International Agriculture, and the US-based leader of both the PEARL and PEARL II Projects, will lead MSU’s management team. Ms. Diane Cox, MSU budget and financial specialist, Ms. Anne Ottaway, Coffee Industry Specialist, and faculty members who will provide assistance in the horticulture, health, and M&E activities, will support Dr. Clay.

A Harmonization and Coordination Committee (HCC) will be established provide oversight for the SPREAD Project. This committee will meet every 6 months to comment on proposed work plans and to review progress on past work. In addition to the SPREAD Director, members for the committee will be sector stakeholders including OCIR-Café, NUR, RIEPA, SCAA, RFCA, MINICOM, MINIDEF, RWANDEX, OTF Group, RCA, USAID and RWASHOSCCO among others.

Management Plan: The TAMU SPREAD project will be ready for immediate implementation as soon as the award is made since the project Director, Dr. Schilling, will already be housed and headquartered in Rwanda under the USAID/PEARL project that ends 30, September, 2006. Start-up costs and time will be reduced to a minimum. Ms. Cleboski and Mr. Cole will travel to Rwanda in early October to set-up our financial management system with NUR and to discuss project operation with the Rwandan public and private partners. Shortly afterwards, Dr. Schilling will organize the first SPREAD harmony and coordination committee to discuss overall project goals, objectives, management, and approach. SPREAD office equipment and vehicles will be purchased in October and personnel recruitment will be conducted in November. Although some SPREAD activities will start immediately in October as stated in the technical approach and implementation plan SPREAD will be fully operational by December 31, 2006. A detailed plan of work will be developed before January and submitted to USAID and the HCC for approval.

22 The management of SPREAD will focus and emphasize the sustainability of SPREAD supported enterprises, companies, cooperatives, and the Rwandan institutions that serve them. This will be accomplished in part by incrementally reducing the level of support for the SPREAD Project director. During Project Years 1 and 2, Schilling and Kayisinga will co-lead SPREAD. The Project Director’s level of effort will remain at 100% for the first 2 years of the project, during which time he will train and mentor the Co-Director for a gradual shift into taking on an increasing leadership role. At the end of Project Year 2, Dr. Abdoul Murekezi, a second Rwandan trained under PEARL funding for his Master’s degree at MSU, and subsequently provided assistantship funding to obtain his PhD at MSU, will complete his academic training and return to move into a second SPREAD Co-Director role.

During Project Year 3, the Project Director will reduce his SPREAD level of effort to 50%, and the 2 Co-Directors will provide continued leadership. The Project Director’s level of effort will remain at 50% during Project Year 4, and go down to 25% by Year 5. Simultaneously, the level of effort of the 2 Rwandan Co-Directors will go down to 50% beginning in Project Year 4, and remain at 50% through Year 5.

This approach is a departure from classic project approaches where the expatriate personnel remain in-country throughout the entire project. We feel strongly that this approach will lend itself better to the long-term sustainability of SPREAD supported enterprises, institutions, activities, and initiatives. However, if the Harmony and Coordination Committee feel as if the full time departure of the SPREAD director is pre-mature, Texas A&M University will assure continued full-time leadership until sufficient maturity has been acquired.

In addition to discussion and management of SPREAD between the Project Director and the USAID CTO, the USAID Mission will approve key personnel and changes in key personnel, approve annual work plans and changes to annual work plans, approve key Rwandan and other implementation partners, approve terms of reference for mid-term and final program evaluations, and approve program management/coordination structures with Government of Rwanda implementation partners.

23 4. IMPLEMENTATION PLAN FOR SPREAD PROJECT (See Implementation Timeline in Annex B)

Table 3: SPREAD Implementation Plan Objective 1. Increase prices paid for Specialty Coffee through improved quality & quality control systems, R&D on quality Prices paid for Rwandan Specialty Coffee increase from $2.92 per kilo in 2005 to over $3.60 by 2010 (Addresses SO 7) Activity Year 1 Year 2 Year 3 Year 4 Year 5 Cupping 1 new ‘regional’ cup. lab fully Two more cup. labs established & 4th cup. lab built & fully 600 spclty. coffee value chain 800 spclty. coffee value chain Lab functional; 15 new cuppers trained fully functional; 200 spclty. coffee functional, 300 spclty. coffee workers trained in coffee quality workers trained in coffee quality Establish- for priv. & coop. opera- tions; 200 value chain workers trained in value chain workers trained in appreciation; 4 containers of appreciation; 4 containers of ment spclty. coffee value chain workers coffee quality appreciation; 2 coffee quality appreciation, 3 exceptional lots id. & sold at exceptional lots id. & sold at (Indicator trained in coffee quality containers of exceptional lots id. & containers of exceptional lots exceptional premiums; Cupper exceptional premiums; Cupper 7.1.2) appreciation; 1 con- tainer of sold at exceptional premiums id. & sold at exceptional training training & re-training exceptional lots id. & sold at premiums exceptional premiums Value Chain Multi-disciplinary value chain First study results are confirmed & 1 more research theme Follow through on implementing Follow through on implementing Research & assessment completed; Themes recommendations for value begins; Results from earlier research results; Results from research results; Results from Develop- id. & research work plans addition made; Second & third theme are adapted to add- earlier theme are adapted to earlier themes adapted to add- ment developed; Research on one studies are begun value add-value; Results on 1st value; Results on all research (Indicator theme begins research work published work published scientifically & 7.1.1) within industry journals Cup of Ntl coffee quality competition; Additional necessary equipment Cup of Excellence event Cup of Excellence event could Cup of Excellence event could Excellence Assessmt of Rwandan capability purchased; Training in scientific takes place take place if GOR funds it; take place if GOR funds it; (Indicator complete; Plan of action sampling methods conducted; Lot Professional Ntl coffee quality Professional Ntl coffee quality 7.1.1) developed formation training; First large Ntl competition becomes annual competition becomes annual coffee quality competition event event Bike-Coffee First 1,000 bikes modified & 2,000 coffee-bikes modified & 3,000 coffee-bikes distributed 3,000 coffee-bikes distributed to 3,000 coffee-bikes distributed to Initiative distributed to 2 coops.; Microcredit distributed to interested coffee to interested coffee interested coffee operators; 5 interested coffee operators; 5 (Indicator prog. established & working; 1 operators; 2 containers of bike- operators; 5 containers of containers of bike-coffee containers of bike-coffee 7.1.1) container of bike-coffee produced coffee produced & sold at pre- bike-coffee produced & sold produced & sold at premium produced & sold at premium & sold at premium prices miums; Ritchey establishes bike at premium prices; Other bike prices; Other bike shops prices; Other bike shops shops at coops. shops established established established Coffee Establish recording studio at Radio 12 sketches broadcast on relevant 500 more radios distributed; 12 new broadcasts developed & 12 new broadcasts developed & Lifeline SALUS; Develop 1st 6 coffee coffee themes 12 new broadcasts dev. & aired aired Initiative broadcasts; 500 Freeplay radios aired (Ind. 7.1.1) distributed Objective 2 : Increase Market Opportunities & Premiums through Organic Coffee Farming and Certification: CWSs env. sound & Rwandan coffee operations go organic (IR 7.1) Karaba pilot project initiated on Karaba produces 1st quantities of Karaba experience confirmed Karaba diversifies into other All Karaba farmers own milk (All address organic fertilizer development; organic fertilizers using new & extended to other coffee income generating activities in cows & are generating major Indicator Organically certified coffee methods/technologies; 10 coffee operations; 20 more coffee dairy; 20 more coffee operations increases in income; First 10 7.1.3) pesticide is identified, ordered & operations begin certification operations begin certification begin certification process incl. coffee operations certified applied; Rwandan organic coffee process incl. remedial effluent process incl. remedial effluent remedial effluent mgmt. organic selling to buyers at 15% assessment & plan of action mgmt. improvements; Chili pepper mgmt. improvements; Chili improvements; More high value or higher premiums; Organic completed; Special study on & other high value commodities pepper & other high value export commodity operations certification enterprise inspects Washing Station effluent mgmt. evaluated for organic market & commodity operations begin begin certification process; A 20 new coffee & other high conducted in Rwandan standards certification certification process new Rwandan organic value operations; Organic bureau certification enterprise opens for farming certific. preparedness is business completely privatized

24 Objective 3. Expanded capacity at all points along the coffee value chain. Capacity built at the national, company, coop./enterprise, & farmer levels. (Addresses SO 7, IR 7.1) Level Year 1 Year 2 Year 3 Year 4 Year 5 GIS-Based decision support GIS-Based decision support GIS-Based decision support NUR Radio SALUS independent NUR Radio SALUS produces National system for OCIR-Café developed, system for OCIR-Café produces system integrated into OCIR- in broadcasting & content 1st year of broadcast without coordinator hired for OCIR-Café regulatory analyses for CWS café; GIS coordinator development.; OCIR-Café & outside assistance; OCIR-Café near year end; Radio SALUS placement; NUR Radio SALUS permanent GOR position at NUR produce 1st GIS-Based autonomous in GIS analyses & strengthened in broadcast strengthened in broadcast content OCIR-Café; NUR Radio Rwandan Appellation System regulatory applications capability; OCIR-Café techs development & ‘radio sketches’; 1 SALUS strengthened in trained in scientific sampling & lot Radio SALUS broadcast broadcast capability formation techniques; OCIR-Café specialists goes to US short term & NUR begin partnership w/ LMI training SPREAD assists OCIR-Café SPREAD works w/ OCIR-Café to Extension program Extension programs functioning Extension programs functioning Company obtain supplemental funding for develop extension programs at functioning in 3 companies.; 1 in all companies; 1 new in all companies; 1 new “Company Extension” programs; 1 Company level for one more new ‘Specialty Coffee Export ‘Specialty Coffee Export ‘Specialty Coffee Export new ‘Specialty Coffee Export Co.’ company; 1 new ‘Specialty Coffee Co.’ established; New Company’ established; New Company’ established; New established; New markets for Export Company’ established ; markets for private operators markets for private operators markets for private operators private operators are opened & More markets for private & coop opened & partnerships are opened & partnerships are opened & partnerships partnerships formed; 501(c)3 & operators are opened; Business formed; Access to capital formed; Access to capital loans formed; Access to capital loans other possible funding for CWS mgmt training begins; Access to loans for CWS & DPC for CWS & DPC construction for CWS & DPC construction station construction initiated; capital loans for CWS & DPC construction provided via provided via DCA & other provided via DCA & other Access to capital loans for CWS & construction provided via DCA DCA & other instruments; 1 instruments instruments; A new DPC opens DPC const. provided via DCA instrument; 1 new Dry Processing new Dry Processing Center instrument Center (DPC) functional opens for business Financial & business mgmt. Financial & bus. mgmt. learning Financial & business mgmt. 20 Cooperatives & other CWS 20 more coops. & other CWS CWS/ modules developed; SPREAD modules extended to coop. & modules extended; operations financially sound; operations financially sound; Enterprise begins work w/ private private rural operations; Modules Governance, leadership & Washing Station operation Washing Station operation entrepreneurs to build on governance, leadership & coop. coop. law modules extended; training for new stations training for new stations relationships w/ coffee growers; law are dev. & extension begins; SPREAD begins work w/ conducted; Financial & business conducted; Financial & business Washing Station operation training SPREAD begins to dev. private- private entrepreneurs to build mgmt. modules extended; mgmt. modules extended; for new stations conducted; coop. model for interested private relationships w/ coffee Governance, leadership & coop. Governance, leadership & coop. Washing Station personnel trained operators; LMI supported growers; Washing Station law modules extended; Washing law modules extended; Washing in coffee quality appreciation & community .initiative provides operation training for new Station personnel trained in Station personnel trained in improvement access to Internet for new stations conducted; Washing coffee quality appreciation & coffee quality appreciation & operations; CWS operation Station personnel trained in improvement improvement training for new stations coffee quality appreciation & conducted; CWS personnel trained improvement in coffee quality appreciation & improvement; Exceptional lot program extended to all SP coffee operations Radio SALUS broadcasts on Radio SALUS broadcasting Radio SALUS produces Radio SALUS produces another Radio SALUS produces another Farmer coffee quality begins; Health monthly on important coffee another 12 broadcasts; 12 broadcasts; Health programs 12 broadcasts; Health programs programs begin; Bike-coffee issues, policies, techniques; Health programs cover cover extend to 30,000 farmer cover extend to 50,000 farmer program begins; Training in coffee Farmer family health improves in extend to 20,000 farmer families; 3,000 more bikes families; 3,000 more bikes quality appreciation begins 10,000 families; More bikes are families; 3,000 more bikes distributed; Training in coffee distributed; Training in coffee distributed; Training in coffee qual. distributed; Training in coffee quality appreciation extended to quality appreciation extended to appreciation extended; Grower’s quality appreciation extended more farmers more farmers First begins capacity building to more farmers

25 Objective 4. Increased Local Consumption of Coffee & Other Products, & Spin-off Businesses Developed. (Addresses IR 7.1, indicator 7.1.4) SPREAD Business Development Business plans developed w/ Business plans developed w/ Business plans developed w/ Business plans developed w/ program is set up; Ideas discussed clients; Credit ‘shopping’; First off- clients; Credit ‘shopping’; clients; Credit ‘shopping’; Third clients; Credit ‘shopping’; Fourth w/ entrepreneurs farm business opens doors Second off-farm business off-farm business opens doors off-farm business opens doors opens doors Objective 5. Increased Marketing & Sales of Quality Coffee. Increased coffee sales over 5 years in Rwanda (Addresses IR 7.1) LMI-SPREAD partnership provides Video podcasts are developed for 10 new coffee coops. or Another 10 operations have Another 10 operations have internet based communication & private & coop. operations under private-coop. operations have access to LMI Internet; Buyer access to LMI Internet; Buyer marketing innovations; SPREAD LMI; SPREAD works w/ coffee access to LMI Internet; Buyer tours organized by Coffee tours organized by Coffee organizes at least 3 different US, companies to organize buyer tours organized by Coffee Companies & OCIR-Café w/ Companies & OCIR-Café European & Japanese buyer trips; tours; Rwanda participates in Companies & OCIR-Café w/ SPREAD support; Rwanda without SPREAD; Rwanda Rwanda participates in SCAA, SCAA, SCAE, EAFCA & SCAJ SPREAD support; Rwanda participates in SCAA, SCAE, participates in SCAA, SCAE, SCAE, EAFCA & SCAJ conferences; Two industry participates in SCAA, SCAE, EAFCA & SCAJ conferences; EAFCA & SCAJ conferences; conferences; 1 new Industry article publications release in-depth EAFCA & SCAJ conferences; 2nd Rwandan Specialty Coffee Rwandan 3rd Annual Specialty is published on Rwanda’s Rwandan coffee sector stories; Rwanda establishes it’s own conference; Increased coffee Coffee Conference; Increased Specialty Coffee sector; Coffee Increased coffee tourism activity annual conference; tourism activity; 2-3 journal coffee tourism activity; 2-3 tourism promoted w/ the Project Appellation system is articles published in Industry journal articles published in Rwanda Bike Safari & Java published in all major industry magazines Industry magazines Ventures journals; Increased coffee tourism activity Objective 6. Horticulture and Other High Value Chains Expanded. (Addresses IR 7.1) Meetings held w/ other sector Open new markets for organic chili Increase sales & exports of Increase sales of new product; 4 new value chains established; leaders in tea, chili peppers, peppers & cassava flour; Focus on organic chili peppers & Work w/ RADA on HACCP Private or Cooperative essential oils; Very light support to one new high value commodity; cassava flour; Export 1st new issues; Begin export of second producers; Train producers, COVEPAR to maintain current Organize growers; Conduct market value chain product; Begin identified product; Train coops. & entrepreneurs activity surveys & Whole Foods Inc. work on another high value producers, coops. & interest in new commodity; Train commodity; Work w/ RADA entrepreneurs producers, coops. & entrepreneurs on HACCP issues; Train producers, coops. & entrepreneurs Objective 7. Increased Access to Health and HIV/AIDS Information and Services. (Addresses SO 6) Identify/hire SPREAD Health Expand links with other health Increased numbers of farmer New programs add health to Continued development of new NUR/Radio Coordinator; 1 broadcast programs; content development families listening to health horticulture production programs and nationwide SALUS internship at MSU (1 mo); develop experts improve and expand radio broadcasts; increased broadcasts; reduced numbers of broadcasting of serialized Health 1st 6 health-based serialized broadcasts; 6 new programs. 2nd numbers of people accessing people contracting malaria; dramas with agriculture, value Program dramas; 500 Freeplay radios broadcast internship at MSU (1mo) health services more accessing health services chain, and health content. Specialized Identify and establish links with Health training integrated into Health training integrated into Community parasite testing and Health topics integrated into Health health services programs; develop training of producers and coops; 6 CWS operations trainings; treatment continues (DFGFI); training for new CWSs; Programs plan; conduct parasite test and extension workers trained to 500 new Freeplay radio health training integrated into 6 extension workers deliver health treatment campaigns (DFGFI) deliver health messages. owners hear health programs horticulture producer trainings messages; NUR SPH 1 NUR/SPH student intern at MSU 2 NUR/SPH students in communi- 2 NUR/SPH students in com- 2 SPH students in community 2 SPH students in community Student for radio program; coordinate with ty health internships; create health munity health internships; health internships; dev. health health internships; Internships SPREAD health activities; services database; help design training programs mkting campaign for coops Youth & HC, NUR/SPH and NUR/Dept of 4 trainings delivered through Assess impacts of training 8 training activities to benefit 8 training activities to benefit Women Ed identify training resources and cooperatives led by women; 4 activities, revise plan for next youth, women, child heads-of- youth, women, child heads-of- Developmt. articulate training plan for 2 years. training programs in collab. with 3 years; 8 training activities household carried out household carried out Training Impl 4 trainings. DFGFI. via collaboration with partners

26 5. GIS-based Monitoring and Evaluation Plan

This application places emphasis on monitoring and evaluation as a tool for meeting three key functions: 1) better planning, 2) dissemination of results, and 3) understanding the project’s broader impacts. Our methodology for data collection, monitoring, analysis and reporting will enable us to meet all three of these M&E goals. We depart from the conventional “reporting of outputs” that, while useful for program tracking purposes, does not give us the breadth of knowledge needed to understand program impacts. This level of understanding is necessary for determining the relative effectiveness of various interventions for future programming purposes and for reporting these impacts to the larger development community and to US legislators and other USG officials responsible for international development programming.

In this Section we describe our plan for measuring and reporting progress against the project’s explicit objectives, targets, benchmarks and indicators presented in the Implementation Plan (see Section 4). and closely conforming to the main USAID SO7 & SO6 PMP indicators. For SO7, these include: • Percentage change in household incomes in targeted rural areas • Percentage of persons employed in targeted rural areas • Increase in the number of entities dealing in new products and services in targeted areas

Intersecting these overall SO7 indicators with the related goals specifically stated in the SPREAD RFA emphasizing increased quality and quantity of specialty coffee and other high value products produced and marketed, there are several sub-intermediate results under SO7 that stand out as crucial for the SPREAD monitoring and evaluation plan: • Percentage change in the market price of selected goods before and after value- added, notably for specialty coffee and horticulture products. • Percentage increase in volume of coffee & horticulture marketed by assisted enterprises • Number of new technologies adopted in coffee & horticulture production and processing • Number of assisted enterprises borrowing funds from financial institutions

The M&E Plan also addresses selected objectives of the USAID SO6: Increased use of Community Health Services, including HIV/AIDS. These are: • Reinforced capacity for implementation of the GoR decentralization policy. • Reduce the transmission and impact of HIV/AIDS. • Support for family planning. • Prevent and control infectious diseases of major importance. • Improve child survival, health and nutrition. • Improve maternal health and nutrition.

5.A. Methodology for Data Collection, Monitoring, Analysis and Reporting

Our M&E plan places relatively greater emphasis on the overarching program impacts under USAID’s SOs 7 and 6. For example, it not only looks to assess the increased volume of coffee sold, it seeks to understand how that has increased incomes in among target groups and whether/how increased incomes have improved the well-being of those groups. At yet another level, it seeks to know whether increasing coffee sales through one business model (support to cooperatives) may be more or less effective than through another (support to private investors) in the context of Rwanda. We summarize our approach to how we will both track immediate results and assess broader impacts below.

27 The TAMU Partners’ vision for the SPREAD M&E Plan draws on the concepts of participatory investigation—an evaluation that energizes the partners involved in the project activities, addresses critical issues facing agricultural value chain development in Rwanda, asks the right questions, and assists NUR, OCIR-Café, RWASHOSCO and other local partners in making longer-term planning decisions for future programs. Thus, it will be an evaluation with both formative and summative dimensions, incorporating broad-based inputs and using multiple methods and approaches. We will ground the evaluation work in the standards of the Joint Committee on Standards for Educational Evaluation.

The core set of evaluation methodologies for measuring and reporting progress against project results (objectives, targets, benchmarks and indicators presented in the in the PMP table) are of two types: 1) the establishment and use of a project database and GIS-based information system to document progress against clear and measurable indicators, and 2) a program to assess and analyze the programs broader impacts on Rwanda’s rural population.

I. Geographic Information System (GIS) and Database: A cornerstone of the TAMU Partners’ M&E plan under SPREAD will be the development and use of a Geographic Information System (GIS) and database for information tracking and analysis. This linked database and GIS offers a systematic approach to managing, analyzing, and disseminating data, information and geographic knowledge on all activities and assistance provided by SPREAD to producer households, cooperatives and private enterprises. It will link geo- referenced locations (latitude and longitude) with systematic data gathered for each specific project beneficiary.

This GIS-based M&E plan is modeled after MSU’s highly successful PFID-F&V/Nicaragua system, one that has been implemented by small (three-member) team who train partners and beneficiaries in data collection using field data cards for later tabulation and processing through database and GIS software. The Cross-validation step described below is essential to the integrity of the system’s results.

Diagram 2. Illustrative dashboard for the SPREAD database and GIS M&E Plan.

This system will provide a reliable, integrated M&E system that eliminates the possibility of ‘double counting’ that often comes with more generalized reporting. Working together, MSU and the NUR GIS and Remote Sensing Center will design and develop a GIS-supported monitoring and evaluation system as a highly transparent tool for evaluating and auditing project results. Household and cooperative/enterprise data will be reported for precise geographic locations. A baseline will be established at the start of the SPREAD project and

28 results will be geographically reported at regular intervals throughout the project’s five year implementation.

Within the NUR Outreach Center the Partnership will create a GIS-supported Performance Monitoring Unit (PMU) for SPREAD, managed locally and supported on an as-needed basis with specialists from MSU and the NUR GIS Center. The PMU data collection, processing and reporting methodology for SPREAD will be implemented through this ten step approach:

™ Definition of monitoring units of observation. There will be multiple units of observation, the three most important being the producer household unit, the communities in which these households are located and the coffee/horticulture cooperatives and enterprises around which these local value chains are organized. ™ Definition of geo-referenced sites. For the purposes of establishing the geographical coordinates of the monitoring observation unit, the procedure will be to geo-reference the center point of the production unit (farm, washing station, etc). ™ Definition of the summary report information fields based on program targets. The GIS- based M&E plan will address SPREAD’s objectives in economic growth, sustainability, Health Services and other target areas along the following illustrative indicators: ƒ Number of beneficiary households ƒ Number of hectares under project assistance ƒ Number of men, women and children assisted ƒ Total value of sales increased (divided in local, regional and international markets per product category) per household and aggregated per cooperative and agro- enterprise ƒ Number of business relationships/contracts/alliances per product (coffee, horticulture) ƒ Ratio of dollars invested to sales generated ƒ Percentage change in household incomes ƒ Percentage of persons employed ƒ Number of new, equivalent full time jobs increased as a result of the project ƒ Percentage change in the market price of selected goods before and after value- added (monitored through participating households) ƒ Percentage increase in the volume of products marketed by assisted enterprises (monitored through participating households per enterprise) ƒ Number of beneficiaries trained in new technologies (men and women) ƒ Number of new technologies adopted ƒ Number of assisted cooperatives/enterprises accessing credit from financial institutions (particularly those supported by SPREAD). ƒ Number of households trained on improved environmental production practices (e.g. mulching, composting, IPM, etc.) ƒ Number of households listening to SPREAD HIV/AIDS serial dramas. ƒ Number of households with changed KAP as a result of HIV/AIDS serial dramas ƒ Incidence of Malaria among the listening vs. non-listening populations ƒ Use of family planning services a month the listening vs. non-listening populations

™ Generation of baseline and periodic information. Partners, field technicians and beneficiaries will be trained on practical data gathering tools using field data cards that will be collected on a regular basis by the PMU. ™ Cross-validation of data. The PMU will cross-validate the data gathered by a random verification of 5 to 10% of the field data cards received through partners and beneficiaries. ™ Paper tracking of project results. The PMU will collect all pertinent evidence of project results such as copies of purchase orders, copies of lists of participants, invoices, and other documents that provide evidence of support to reported project achievements.

29 ™ Initial data processing. Entering data gathered into a statistical database along with geographic positioning coordinates taken with handheld GPS devices. ™ Data analysis against program targets. Processing and analyzing the data against program result targets and benchmarks on a quarterly basis. ™ Entering data into GIS software for analysis. Transferring the cumulative information from each beneficiary from an access database to the GIS system where data and geographic points are combined and analyzed. ™ Reporting. Development of reports and maps according to M&E reporting schedule.

Thinking in terms of how this GIS oriented database will be used internally for improved SPREAD management and planning, a set of formative evaluation procedures will be designed collaboratively by the SPREAD team to provide objective and responsive information for administrative decision-making. To the extent possible, the project will also incorporate the use of participatory assessment techniques, such as focus group interviews with key stakeholder groups in targeted communities both before and after SPREAD interventions are implemented.

II. Impact Assessment and Analysis: Understanding and demonstrating the impacts of SPREAD interventions is of paramount importance to the program and goes a step beyond the measurement of more immediate outputs and results. SPREAD will invest in measuring and studying impacts and orienting programmatic investments in ways that will achieve significant impact. This component of the SPREAD M&E Plan builds on the database and mapping functions, adding specifically targeted data and analysis to examine program results at a higher level. These are the impacts that demonstrate how the program has affected the well-being of the rural population and how well project investments have resulted in the direct and tangible results they were designed to produce. These are the impacts that USAID strategic objectives are meant to achieve. When they occur they make a difference; they are the ones that have long-term sustainability, empower rural communities, improve the welfare of women and children, and reflect well on the institutional partners and sponsoring agencies.

Summarized below are six priority areas where the TAMU Partners will focus attention in this component of the M&E plan. It is anticipated that other areas for impact assessment will emerge over the course of the SPREAD project’s 5-year implementation.

A. Impact of increased incomes from coffee and horticulture sales on the well-being of producer households: Households will be sampled from among the coffee producing households in the project MIS data base. PMU field staff will measure the changes in household income resulting from exports of these high value products and will examine the expenditure patterns associated with these cash revenues. Metrics will include the level of access to revenues by women, expenditures on education, health care, improved nutrition, and other indicators of improved well-being attributable to SPREAD. Results of this analysis will demonstrate not only levels of increased income but the deeper impact on what higher incomes mean in terms of poverty alleviation and other important measures of development.

B. Impact of cooperatives vs. private investors: The coffee revolution in Rwanda over the past four years was initiated by the PEARL project and its work with Maraba, Karaba and now dozens of other coffee cooperatives. More recently there has been an emergence of private investors building coffee washing stations and producing specialty coffees. A debate has emerged among the development community regarding the relative costs and benefits of interventions supporting these two “business models.” Impact will be assessed along several key dimensions, including economic returns to producers, coffee quality, community investments, community ownership, empowerment of communities, empowerment of women, long-term sustainability, environmental stewardship, community healing, etc.

30 This study will be a powerfully useful tool for guiding government and funding agencies in their development programming aimed at reducing poverty in rural areas. Expected recommendations will also inform policy makers on the role of coffee cooperatives and private enterprises in developing Rwanda’s coffee industry. Findings from this study of the coffee subsector will be likewise be useful in setting policies for other cash crops such as tea, which is currently in the process of market liberalization that started in the coffee sector more than a decade ago. This work will be led by Abdoul Murekezi, a member of the NUR Faculty of Agriculture trained at the MS level by the PEARL project and currently completing a Ph.D. candidate in Agricultural Economics at MSU. Murekezi is an outstanding researcher and is highly motivated to carry out this study as it will also serve as the basis for his doctoral dissertation. The field costs for this applied research will also be off-set by a grant awarded to Murekezi from the Borlaug Leadership Enhancement in Agriculture Program (LEAP).

C: Impact of the Cup of Excellence (CoE) Competition. This assessment and analysis will focus on the impact of the Cup of Excellence competition and auction on: a) coffee quality, b) coffee industry development, and c) coffee prices. The primary goal of the CoE competition and auction is to inspire coffee cooperatives and entrepreneurs to produce a higher quality coffee and receive prices commensurate with quality improvements. CoE is intended to underscore the importance of quality and through its blind cupping evaluation and subsequent auction rewards growers who score well with higher prices. This impact study will establish a benchmark for coffee prices and then assess the increased value for specialty coffee brought by competition and auction. More important, this study will assess the degree to which the CoE competition will help enterprises and producer groups to better understand the importance of quality in their coffee and to strive to improve quality year after year. Quality comparisons will be made among producers entering the CoE competition and those not entering, and whether the level of quality increases over time as a result of the competition. Evidence from other countries (e.g.,Nicaragua and Bolivia) show that CoE has achieved these intended effects.

D. Impact of health interventions on the target population: This impact study will measure and report on the degree to which radio serial dramas (soap operas) with HIV/AIDS, malaria and family planning content developed and broadcast with NUR’s Radio Salus will attract a listener base and ultimately result in behavioral change. This impact study will place an emphasis on gender and understanding how women and men may be differentially influenced by the proposed interventions in the health area.

E. Impact of SPREAD training in effluent management at coffee washing stations: This study will be implemented collaboratively with OCIR-Café and will engage students in NUR to test resulting changes in washing station water quality as a result of training and technologies introduced by SPREAD.

6. INSTITUTIONAL CAPACITY AND PAST PERFORMANCE

6.A. The Texas Agricultural Experiment Station of Texas A&M University System (TAMUS) will lead the SPREAD Partnership. (Letters of commitment from institutional partners for SPREAD appear in Annex G.) Through its International Agriculture Programs office, over the last 10 years the A&M System has expanded its reputation as a renown leader among U.S. universities in supply chain and value-added production systems development for agricultural and livestock products. Texas A&M will continue under SPREAD the strong partnerships with Michigan State University’s Institute of International Agriculture and the National University of Rwanda established under the PEARL and PEARL II Projects. Under the dynamic leadership of Texas A&M’s Dr. Timothy Schilling, the Director of both PEARL and PEARL II, these two projects have demonstrated phenomenal success in assisting rural communities to improve livelihoods through coffee and horticulture export value chain development.

31

Texas A&M Agriculture of the Texas A&M University System is the largest and most comprehensive public agricultural teaching, research, and extension program in the United States. It comprises 15 academic departments in the College of Agriculture and Life Sciences, 5 departments in the College of Veterinary Medicine, 13 regional research/extension centers, the Texas Veterinary Medical Diagnostic Laboratory, the Texas Agriculture Experiment Station, the Texas Cooperative Extension Service, 5 agricultural colleges at affiliated Texas A&M System universities, 8000 agricultural students, 2000 extension staff, and over 23,000 system-wide faculty and staff members located through Texas’ 254 counties. Texas A&M Agriculture is responsible for 21 research and extension centers, and 36 agriculture-related, specialized institutes, centers and laboratories across the State of Texas, including the Center for Food Processing, the Dryland Agriculture Institute, the Spatial Sciences Laboratory (GIS), the Texas Agricultural Market Research Center, the Borlaug Center for Southern Crop Improvement and the Center for Natural Resource Information Technology, among others. Over the course of 70 years, Texas A&M’s Office of International Agriculture has developed an outstanding record in the management of international technical assistance and training programs with cooperating institutions worldwide. It currently has projects in over 40 countries and works with counterparts in more than 70 countries in Asia, Latin America, Africa, and the Middle East, including long-term involvement with 6 Collaborative Research Support Programs (CRSP) activities, having contributed over 300+ staff years to international development and currently providing 15+ person-years of long-term and 21+ person-months of short-term technical assistance yearly.

As global markets become increasingly intertwined, Texas A&M’s international work in agriculture has become more focused on value chain strengthening, food safety and standards, and market development. We have partnered strategically and leveraged expert technical assistance and training resources to provide the tools for small farmers, producer groups, and medium-sized enterprises to: develop new fruit, vegetable, grain, meat and seafood products; transition to organic production practices; qualify for and obtain fair trade certification; acquire skills related to HACCP, SPS and other safe and clean processing; access new markets and market information; and many other activities to enhance the success and sustainability of rural enterprises and agribusinesses. Select recent and ongoing projects with focus similar to SPREAD include:

Rwanda Partnership for Enhancing Agriculture in Rwanda through Linkages (PEARL and PEARL II): 2000–2006, 2 unique and extraordinarily successful projects led by Texas A&M’s Timothy Schilling under a sub-agreement from Michigan State University. In partnership with the National University of Rwanda, MSU and TAMUS worked to rebuild the capacity of NUR’s Faculty of Agriculture in higher education, research, and outreach. As a result of drastically expanded focus on technology transfer and income generation in rural Rwanda, farmers who participated with the PEARL and PEARL II projects have gained access to lucrative new markets for the first time and introduced quality standards geared for sales to these markets, including US and international specialty coffee markets.

Ethiopia: Ethiopia Sanitary and Phytosanitary Standards (SPS) and Livestock and Meat Marketing Program: 2005–2008. The SPS-LMM project will increase the export of Ethiopian livestock and meat. To accomplish this, project activities focus on improving animal health, improving national animal health policies and expanding veterinary services, increasing food safety and use of clean processing practices, developing new animal-based products and identifying new markets, promoting sustainable use of natural resources in livestock production systems, and improving access to livestock services and credit.

El Salvador: Strengthening Agribusiness Competitiveness (PFCA) Project: 2004-2005. Working with 3 Salvadoran universities and 400 small producers, provide technical assistance, training and equipment, developing new food products. These interventions have resulted in: 16

32 new products developed; 400 shrimpers trained in enterprise budgeting; 15 food businesses, 25 government and non-governmental extension workers, and 60 university professors training in 5 food processing topics (dehydration, refrigeration/freezing, modified atmosphere, quality control, and thermal treatments; 18 university professors trained in case study development as a teaching tool; and introduction of 28 Salvadoran food producers/processors to US-based supermarket chain representatives for market assessment and new market development.

See Annex D for Texas A&M Past Performance References and Annex E for other institutional capability information. A list of all non-USAID funded activities conducted by Texas A&M’s Texas Agricultural Experiment Station (TAES) in the last 3 fiscal years is included in Table 4.

Table 4: Non-USAID funded activities

Donor Name, Instrument Number and Project Name Funding Amount and Contact Information USDA-FAS, OGSM: FCC-520-2006/099-00 $3,109,999 Guatemala: Food for Progress project (2005-2007) *Kenneth Naylor TAES- TAMUS is working with Universidad Del Valle de Guatemala to expand food FAS - USDA/FAS processing by building on existing facilities and production activities, and launching a pilot Ph: 202-720-0150 Fax: food processing center and the promotion of canning and preserving by indigenous 202-690-3078 women. Promoting improved agricultural techniques by providing technical assistance to [email protected] 285 growers and introducing new techniques as improved irrigation, appropriate *Johanna Roman, Project Mgr, technology greenhouses, double cropping and disease-resistant stock. Providing farmer Ph. +979-862-2036 education to 2800 growers and promoting cooperatives. Promoting the development of Fax: +979-458-3405 agriculture-related businesses by providing training to 25 entrepreneurs for non-traditional [email protected] activities such as agroforestry, and ornamental plant production. Government of El Salvador – Ministry of Agriculture and Livestock. $986,624 El Salvador: El Salvador Fortalecimiento de la Competitividad de los Agronegocios *Ryan Bathrick, Project (PFCA II) 2006-2007. Director (ES) TAES (sub) and Agricultural Development International, Inc. are linking universities with Ph: +503-2298-2815 the private sector, supporting the former with equipment and expertise to solve industry [email protected] problems related to food processing and production (i.e. shelf-life testing, packaging, food *Beatriz Alegria (MAG/ES) safety), and with co-finance with business to implement results `from the university Ph. 7899-1034 laboratory to the processing plant.’ Over 2000 producers will receive training in topics [email protected] related to banking, credit, and food business management; and to link directly with a minimum of 7 processors to improve business management. The project will also establish an Entrepreneurship Center with a Salvadoran university, to support producers in processing and business planning. Government of El Salvador – Ministry of Agriculture and Livestock $363,817 Fortalecimiento de la Competitividad de los Agronegocios (PFCA) 2004-2005. *Ryan Bathrick, Project Direct TAES (sub) and Agricultural Development International, Inc worked with 3 Salvadoran Ph: +503-2298-2815 universities and 400 small producers, providing technical assistance, training and [email protected] equipment & developing new food products. These interventions resulted in: 16 new *Beatriz Alegria (MAG/ES) products developed; 400 shrimpers trained in enterprise budgeting; 15 food businesses, Ph. 7899-1034, 25 government and non-governmental extension workers, and 60 university professors [email protected] trained in 5 food processing topics (dehydration, refrigeration/freezing, modified .gob.sv atmosphere, quality control, and thermal treatments; 18 university professors trained in case study development as a teaching tool; and introduction of 28 Salvadoran food producers/processors to US-based supermarket chain representatives for market assessment and new market development. USDA – CSREES Cooperative Agreement No.: 31000-35207/04-IA-22-35207-JE1 $349,468 Armenia: USDA Marketing Assistance Project (MAP) – 2004-ongoing. *Clemen G. Gehlhar, Ph.D. In collaboration with the USDA Marketing Assistance Project (MAP) and the Armenian Development Resources Agricultural Academy, TAES helped create a new 3-year agribusiness degree program that Specialist USDA/FAS has graduated 85+ students. ACT has now grown into a foundation developing applied Ph: 202-720-1891 research and outreach programs. fax: 202-690-4846 [email protected] USDA-FAS, OGSML G-497-2004/141-00 $4,938,177 Indonesia: Southeast Asian Food and Agricultural Science & Technology *Linda Cleboski, Program (SEAFAST) Center Project 2004-ongoing. Devp. Coordinator (TAMU) SEAFAST was designed and implemented to increase practical knowledge of food safety and Tel: +979-845-0706 Fax: +979- processing technology in Southeast Asia through the establishment of active learning centers Email: [email protected] employing distance education, faculty development, and other learning tools in collaboration with the B* Joyann Binsley, Agricultural University (IPB). After 1 year of project implementation, results include a fully- USDA/FAS/EC/PPD equipped distance education classroom with 26 work-stations, and food science, management, and USDA/FAS Export Credits leadership courses delivered via the internet, supported by text books and face-to-face course Programming Division delivery; Center faculty have been trained at Texas A&M for DNA analysis, advanced vegetable oil Washington,DC processing, and food safety; a feeding program for 450 disadvantaged students and 200 pregnant Tel: 202-720-7236 Fax: 202- women was initiated in the community to address undernourishment indicated during early 690-3077 Email:

33 assessments; a fully equipped pilot food processing plant was launched and is being used to develop [email protected] and improve food products, with special emphasis on value added products (to date: fried tropical fruit chips, coconut yogurt, a powdered drink made from toasted soy beans, and a sport drink made from coconut water), for public markets.

USDA-FAS Section 416(b) $815,275 Indonesia Cold Chain Development Project (2003-205) *Corey Rosenbusch, Project The Indonesia Cold Chain Project was funded by the USDA with TAES serving as a subcontractor Director for Winrock International. The project successfully established linkages in the refrigerated chain Ph (62 361) 288 588 of food distribution from the point of production (farmer, fisherman, etc.) to the point of consumption [email protected] (consumer, processor) in eastern Indonesia. As a result of the project, 13 research projects were *Henry Harmon, Chief of implemented, 39 university staff were trained in delivery of postharvest training curriculum, and Party (Winrock) 521 Indonesian entrepreneurs, farmers, and fishermen participated in postharvest training, among (62 361) 288 124 other results. [email protected] G-497-2000/548-00 $2,100,000 Indonesia: Education for Community Food Enterprise Development (ECFED) - *Avram E. Guroff 2000-2002 Ph: (202) 383-4961; Fax: (202) 7 Texas A&M University and ACDI/VOCA partnered to expand food processing and E-mail: [email protected] development in Indonesia using funds from sales of donated soybeans. The program provided faculty training at 5 Indonesian universities through distance education methods and direct specialist contact, and product development activities with private sector food processing businesses in their local communities.. Private sector food processors were trained in food handling and safety, product processing, management skills and marketing techniques. One long-term goal of the project, to build a Food Processing Institute at IPB in Bogor, evolved into a proposal that

The Texas A&M University System is a well-led, capable and comprehensive resource for enhancing rural enterprise and agribusiness development in Rwanda. Rwandan coffee growers will benefit through SPREAD from this force of extension workers, teachers and scientists – seeking to respond to the needs of Rwandans and committed to Rwanda’s agricultural development.

6.B. Michigan State University

Michigan State University through the Institute of International Agriculture has earned a reputation as a leader among U.S. universities in the extent of its international agricultural development programs. Since the 1950s MSU has been home to hundreds of successful training, research, and outreach programs throughout the world and in cooperation with a great diversity of funding agencies. See Annex D, Past Performance References, and Annex E, Institutional Capability Information, to view some of MSU’s longer-term, USAID-funded development programs with direct relevance to the value chain orientation of SPREAD (especially coffee and horticulture exports).

International Food Industry/Value Chain Development is an area for which MSU has long been regarded as a center of excellence. Most notably Michigan State holds preeminent capability in horticulture value chains, food laws and regulations, food and agriculture grades and standards, food safety, Non-Tariff Barriers (NTB) to trade, traceability, certification systems, packaging, plant and animal health (SPS), market access, and supermarket trends/market intelligence. In support of MSU’s initiatives in these core areas of food industry development, the university is home to six world-class centers, institutes and alliances whose purpose is solely or in large measure the provision of food industry development services and products aimed at meeting grades and standards along product value chains, most notably value chain safety (SPS) and quality (commercial) standards and the international food laws and regulations that govern these standards and terms of trade between countries.

MSU’s recent projects include The Partnership for Enhancing Agriculture in Rwanda through Linkages (PEARL and PEARL II) , the Nicaragua Partnership for Food Industry Development – Fruits and Vegetables (PFID-F&V), Trade Capacity Building in Relation to the Application of Sanitary and Phytosanitary Measures (RAISE/SPS), and the Armenia Food Traceability Initiative. MSU has implemented a broad range of applied teaching, research, and outreach

34 programs in the area of food industry development through specialized unites such as the Institute for Food Laws and Regulations, Institute for Food and Agricultural Standards, National Food Safety and Toxicology Center, Food Safety Policy Center, and the National Alliance for Food Safety. Examples of these programs include the Food Industry Management Program, the Integrated Pest Management Program, the International Short Course in Food Safety, the International Short Course in Integrated Pest Management, and the MSU World Technology Access Program.

6.C. National University of Rwanda (NUR)

The National University of Rwanda is Rwanda’s premier institute of higher education and the strategic, lead in-country institution under which SPREAD will operate. NUR produces approximately 1,200 graduates per year and has just incorporated Master level education in several faculties. The SPREAD project will be housed in the NUR Outreach Center. This center is seeking legal status as The Value Chain Development Center under the Faculty of Agriculture. NUR has predominant capability among all Rwandan institutions to assist in the development of strong, prosperous high value commodity chains. Since 2000, NUR has worked with Michigan State and Texas A&M Universities to implement the highly successful USAID/PEARL project. Relevant to SPREAD are some key achievements attained under PEARL that will further the work proposed under SPREAD. First, the Faculty of Agriculture has been transformed through a complete curriculum reform aimed at producing a practical, applied, well-connected agronomist capable of developing Rwanda’s agriculture sector. Two new departments were created that have direct implication in SPREAD: The Agribusiness Department and the Food Technology Department. These resources, that were earlier supported under USAID/PEARL, will now produce results increasing revenues for small holders under the activities of the SPREAD project.

Specific areas where NUR will play key roles in the execution of the SPREAD project are:

• NUR will provide researchers for evaluating the coffee value chain and recommending technologies, methodologies and approaches to alleviate constraints thus adding value to the final product. • Professors from the Faculties of Agriculture, Management, and Sociology will assist SPREAD partners develop learning modules in financial management, governance and leadership for Rwanda’s emerging cooperative sector. • Professors and students from the Faculty of Journalism will develop targeted broadcasting programs for improving coffee quality, increasing access to health information, and promoting more important roles for women in rural communities. • Civil engineers will work with SPREAD environmental partners on producing remedial engineering plans for managing coffee washing station effluent. • The School of Public Health will provide health workers and students to provide health content for Radio SALUS broadcasts. They will also extend health information on HIV/AIDS, Malaria, and Family Planning. • The Computer Science Faculty will provide support to cooperatives for training in rudimentary computer skills, Internet, and maintenance of equipment and connections. • The Center for GIS and Remote Sensing will support the SPREAD GIS based M&E plan. They will work with OCIR-Café to develop a GIS-based decision and monitoring tool and will assist the coffee sector develop an Appellation system in for specialty coffee.

Finally, scores of NUR students will be given opportunities to work in rural areas, study the value chain system, and learn about focused development through the SPREAD link.

35 Professors will gain new skills in value chain management that will be used to support further development and to teach this important economic development approach.

6D. Linkages, Partnerships, and Participation: The success of the SPREAD project will depend upon strong partnerships between rural Rwandan enterprises and the U.S. businesses and/or the capacity-building NGOs. The TAMU SPREAD project will continue to strengthen all existing partnerships that were built under USAID PEARL, ACDI/VOCA and ADAR projects. In addition to existing partners, we have strategically aligned ourselves with new partners that provide even greater strength in building Rwanda’s rural communities through focused interventions along the value chains. SPREAD will place great emphasis on the ‘relationship’ model where Rwandan enterprises are linked to their U.S. or European business partners in a long term contractual relationship that benefits both parties. This model will be used for all targeted high value commodities being produced and exported by cooperatives or private entrepreneurs. Each partner has been selected based on their unique skill set relevant to their respective SPREAD activity, their understanding of their unique roles, their contribution to SPREAD and their passion for improving the livelihoods of hundreds of thousands of rural small holders. The following table shows the TAMU SPREAD partners, their respective roles, contribution to SPREAD. Partner intervention in health, environment, and ICT has been highlighted in bold in table 1. Table 1: Role and Commitments of SPREAD Partners Partner Activity Annual Contribution Michigan State Radio SALUS capacity building for coffee and Significant contribution through IDC reduction University health broadcasts, M&E, marketing, coffee and faculty time. industry liaison, horticulture. Internet based health information and training. African Principal partner in organic farming Grant for $250,000 and possible supplements at Development preparedness, advocacy, and certification. Off- mid project depending on needs. Foundation farm business development support with emphasis on women entrepreneurs. Growers First Principal partner in capacity building at farm, 4 person months per year donated through the cooperative and entrepreneurial levels. Asses- GF network of expert volunteers. M&E data ment of project impacts using coop focus collection model and analytical framework at groups; Strengthen role of women in coops. farm level. provide volunteer-based training for coop & community leadership and health training. Cup of Excellence Preparedness training and assist to develop Market impact value of event is considerable but national competition and all-Africa competition difficult to estimate. planned for 2008 ICRAF Provide fodder, shade and leguminous shrub Contribute 2 RT travel and perdiem expenses species for organic farming systems per year. development including shade. Appellation system development. EcoLogic Finance Provide pre-finance and capital loan funds to Contribute tailored financial management training entrepreneurial and cooperative operations; modules developed for coffee operations. financial management capacity building at Enterprise level Taylor Maid Development of organic fertilizer from coffee Supplies and equipment for vermiculture Farms pulp waste streams using vermiculture; program. 50% salary contributions for Rwandan assisting to develop organic production visits. systems for coffee and horticulture crops Coffee Lifeline Establishing a pilot radio project in Rwanda, and Salary contributions from Holland Coffee and Rwanda support development of coffee content for radio. InterAmerican Coffee Inc. for broadcast training. Promotion of targeted women’s broadcasts. Freeplay Providing self-powered Freeplay radios and Contribute 500 Freeplay radios to targeted coffee Foundation training for distribution and demonstration of growers; Travel, perdiem and salary for radios. monitoring of radio program. Dian Fossey Community-level basic medical services; Pfizer pharmaceuticals donated through their Gorilla Fund Int’l. testing and treatment for parasites; training of Ecosystem Health Program locally-based medical paraprofessionals and equipping of local clinics; training in health topics. Population Media Training NUR journalism students for serialized Share resources of current Project in Rwanda; Center drama radio broadcast scriptwriting and expenses covering development of training guide program development. Use of ICT in training. Ritchey Design/ Establish bicycle manufacturing plant in 20% discount savings on coffee-bike price for

36 Project Rwanda Rwanda; develop modified, coffee-bike coffee farmers enrolled in quality bike-coffee specifically for rapid transport of coffee cherries program. Coffee Quality Provide coffee experts in cupping, hotel barista Possible cost sharing via regional activities with Institute training, training the trainers. EAFCA and RATES. Sustainable Karaba Relationship Roasters Coffee Tour- A minimum of 7 person days in country each Harvest Rwanda; Let's Talk Coffee Workshop-Oaxaca, year. Consultation & coordination of events such MX; Agriculture Extension Services for Organic as Coffee Tours. Some funding for Rwandan Transition; Capacity Building-Business Training participation in Let’s Talk Coffee. Monmouth Coffee Origin visit-Cupping Training and Calibration Travel to Rwanda/Consultation services: minimum 1 person/wk/year Mercanta Origin visit-Cupping Training and Calibration Travel to Rwanda/Consultation Services: 1 wk Importers Thanksgiving Origin Visit-Organic Coffee Development Consultation Services: 2 weeks of salary Coffee contributed. Stumptown Origin Visit-Cupping Training/Barista Travel to Rwanda/Training services: 1 wk;. Coffee Training/Capacity Rwanda Roaster to Portland, OR-Lodging,Meals, Building-Marketing; Roaster Exchange and Training:1 wk Scholarship Program. Counter Culture Origin Visit/Capacity Building/ Recalibration Travel to Rwanda/Consultation Services: 1wk Coffee Training for Rwandan Cuppers Union Coffee Cupping Training; CWS effluent management; Travel to Rwanda/Training Services-1 wk; Travel Roasters Cooperative social health assessments and to Rwanda/Consultation Services: 1 wk remedial plan. Social and environmental contributions to cooperatives. Bull Run Roasters Origin Visit/Capacity Building -Rusenyi Travel to Rwanda/Consultation Services and Cooperative Needs Assessment:1 wk Green Mountain Origin Visit-Karaba Pilot Organic Coffee Travel to Rwanda/Consultation Services: Green Coffee Initiative; Origin Visit-Cupping Training, Mt. specialist: 1 wk; Travel to Rwanda/Training Women’s continuing education sponsor. Svcs:1 wk. Tuition and fees for cooperative women management training. Intelligentsia Origin Visit-Cupping Training /Capacity Building Travel to Rwanda/Training and Consultation Coffee for Quality Production. Cupping training manual services: 2 wks development. Volcafe Specialty Volcafe Coffee Buyers Tour of Travel to Rwanda/Consultation & Training Coffee Importers Rwanda/Capacity Bldg & Training & Market Services: 2 weeks Expansion (US and Intl) Thousand Hills Origin Visit-Meetings w/ Growers & Oversight of Travel to Rwanda/Advisory Services: 1 wk Coffee Paraclete Foundation's Middle School Project.

KEY PERSONNEL

Success of the SPREAD project will depend, above all, on the experience and resources of the institutions responsible for its implementation. This includes the caliber of key personnel selected to lead the program and the broader institutional resources that the TAMU Partnership can draw upon. Resumes and letters of commitment for all Key Personnel appear in Annex E.

Dr. Timothy T. Schilling will lead the Texas A&M SPREAD Partners as SPREAD Project Director. His leadership and innovation was responsible for the very successful entry of Rwanda into the American and European Specialty Coffee markets. This new multi-million dollar sector has doubled incomes for over 40,000 small coffee producers and has assisted the Government change the image of Rwanda in the international press. He also created Rwanda’s first Specialty Coffee roasting company, Rwanda Roasters SARL, for increased local consumption and sales. In addition to coffee, Schilling introduced and created the Bird’s Eye Chili pepper sector in Rwanda that is now exporting high quality, dried BEC to UK and French spice markets. He also developed and marketed Rwanda’s first fully produced, processed, packaged, and supermarket-ready food product for the French grocery chain, AUCHAN.

Dr. Schilling is an agronomist, manager and former-researcher with strong market orientation and experience in agribusiness and cooperative development. He brings a very diverse set of skills to the SPREAD project through his past work in international development. He worked for 10 years as an agricultural researcher in the U.S. and in Cameroon and therefore can assist and oversee the development of the SPREAD Value

37 Chain research and development program. His experience in Brazil as extension officer in remote areas provides him with the tools necessary to work with farmers and rural communities. Dr. Schilling’s work at Texas A&M in the 1990’s has honed his ability to lead proposal development which will be crucial to obtaining grants and contracts for the NUR Value Chain Development center which is being created and to secure necessary extension funding from GOR and donors. His ability to link U.S. and European industries to high value export commodities in Mali and Rwanda will continue to serve to grow the necessary business linkages to sustain Rwanda’s high value chains into the future. As a trained cupper and roaster, Dr. Schilling is well placed to lead the quality initiatives proposed in the establishment of cupping laboratories and cupper training programs. Most importantly, Dr. Schilling’s diverse life experiences provide him with a unique ability to work in harmony with a large group of dissimilar partners including large company CEOs, chili pepper distributors, coffee connoisseurs, medical doctors, extension agents, farmers, bicycle manufactures, radio broadcasters, European or U.S. supermarkets, international press, university professors, Ministers, and USAID officials.

Jean Claude Kayisinga is proposed as Co-Director for SPREAD. From December 2001 to August 2004, he served as Director of the Outreach Center for the PEARL and PEARL II Projects in Rwanda, where he was actively involved in coordinating all the project’s outreach activities. He monitored and evaluated activities related to the development of the project’s goals and objectives and participated in strategic objectives of the project; he also collaborated and coordinated with project partners regarding rural agriculture development, identified and located the poorest communities for agriculture development, facilitated and assisted both international and local university students to understand tools and methods for developing improved rural agriculture. He submitted business plans to financial institutions for loans and credit on behalf of the coffee cooperatives and submitted quarterly reports on Project’s performance to USAID. He is currently a graduate Student in the Master of Agribusiness program in Department of Agriculture Economics at Texas A&M University. He is conducting research on the impact of fair trade price on major coffee exporters in Rwanda. He will graduate in Dec. 2006. From June-August 2006, he will be working as an intern in Starbucks Coffee’s Department of Green Coffee Operations & Sustainability, where he will be groomed to serve in Rwanda in the future as a key Starbucks liaison for their Africa program. During his internship, he will spend one month working at the Starbucks headquarters in Seattle learning how the Company works, then three weeks in their buying office in Switzerland under the guidance of the managing director, Alain Poncelet, and two weeks with Starbucks’ Latin America field office in Costa Rica to learn about Starbucks’ CAFÉ practices program and their business practices working with coffee farmers. Before coming to Texas A&M, he worked as Assistant lecturer in the Department of Soil Sciences at National University of Rwanda, and as Director of Outreach Center, USAID/PEARL Project. He has three years experience in working with small coffee farmers regrouped into cooperatives. From July 2001 to August 2004, he was very involved in the development and growth of the specialty coffee sector in Rwanda; monitored and evaluated the establishment of coffee washing stations in most parts of Rwanda; directed and assisted in formation of Coffee Cooperatives; designed constitutional frame-work of the major Coffee exporting Cooperative in Rwanda to acquire a legal status; assisted cooperative members in acquiring personal bank accounts; assisted and facilitated coffee cooperatives in acquiring fair trade certifications. He is fluent in English, French, Swahili and his native languages are Kinyarwanda and Kirundi.

Dan Clay will lead and provide programmatic leadership and administrative oversight to the MSU SPREAD project team. Dr. Clay holds over 25 years of experience implementing USAID development programs in Rwanda. He is the Michigan State University (MSU) Director of the USAID-funded Partnership to Enhance Agriculture in Rwanda through Linkages (PEARL and PEARL II), focusing on building institutional capacity and developing

38 Rwanda’s specialty coffee and horticulture exports sector. From 1992-1995 Dr. Clay was the In-country Director for the Food Security-II project (FS-II) in Rwanda, and then in U.S. following his evacuation from Rwanda in April 1994. From 1979 to 1987 Dr. Clay was the Chief Technical Advisor on the USAID-funded Projet Enquete Agricole, Rwanda’s first nationwide agricultural census program. Clay was also the developer/innovator of the Partnerships for Food Industry Development in Fruits and Vegetables (PFID-F&V) at MSU, an exciting program committed to strengthening horticulture exports supply chains around the world. Areas of specific research and program implementation in Rwanda include: income diversification strategies, agricultural exports supply chains, food security, food aid impacts, relief-development linkages, conservation investments, and household survey methodologies.

Anne Ottaway is proposed as Coffee Marketing and Cup of Excellence Coordinator. Ms. Ottaway is a marketing specialist and former retail coffee businessperson with over 10 years of experience in the specialty coffee industry. Her leadership of the PEARL marketing campaign and the strong ties that she has developed with key industry importers and roasters has been a primary factor in the successful entry of Rwanda into world specialty coffee markets. She has also worked with other MSU specialty coffee initiatives in Latin America. Based on this experience, she will work with the Alliance for Coffee Excellence and in-country personnel for planning and implementation of the first international Cup of Excellence auctions in Rwanda. She will also be responsible for expanding specialty coffee market access and providing targeted training to Rwanda’s coffee marketing staff in RWASHOSCCO and RFCA.

Abdoul Murekezi is proposed as SPREAD Project Co-Director. An agricultural economist, Mr. Murekezi was Vice-Dean of the Faculty of Agriculture at NUR, responsible for supervision of teaching, research and outreach. He was selected for support under the PEARL project to complete a Master’s degree at MSU, where his thesis research focused on profitability and strategic planning of coffee processing and marketing in Rwanda through a case study of a coffee grower’s association. He so impressed his advisors that they found outside funding for his continuation in a Ph.D. program at MSU, where his dissertation research compares impact of two business models of technical assistance (one cooperative based and the other private enterprise based) on income growth and other poverty alleviation indicators for smallholder coffee growers in Rwanda. Mr. Murekezi will complete his Ph.D. program in 2008 and will transition into the Co-Director position at that time.

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