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Value Chain Analysis for the Coffee Sector in Rwanda Report for the CBI – 27 July 2018

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Value Chain Analysis for the Coffee Sector in Rwanda Report for the CBI – 27 July 2018 Value Chain Analysis for the Coffee Sector in Rwanda Report for the CBI – 27 July 2018 Contents Glossary ........................................................................................................................................................ 4 Introduction ........................................................................................................................................................ 6 Executive Summary ............................................................................................................................................. 9 Export Market and Value Chain Competitiveness ........................................................................ 11 1.1 Specialty coffee ................................................................................................................................. 11 1.2 Coffee production in Rwanda ............................................................................................................ 12 1.3 Exports ............................................................................................................................................... 16 1.4 European market demand ................................................................................................................. 19 1.5 Trends ................................................................................................................................................ 27 1.6 European requirements .................................................................................................................... 32 1.7 Comparative and competitive advantage ......................................................................................... 33 1.8 Potential for local value addition ...................................................................................................... 36 1.9 Conclusion to Element 1 .................................................................................................................... 38 Structure, Governance and Sustainability of the Value Chain ...................................................... 39 2.1 The coffee value chain ....................................................................................................................... 39 2.2 Coffee farmers ................................................................................................................................... 41 2.3 Primary processing ............................................................................................................................ 43 2.4 Secondary processing & export ......................................................................................................... 47 2.5 Roasters ............................................................................................................................................. 48 2.6 Enabling environment ....................................................................................................................... 49 2.7 Sustainability of the value chain ........................................................................................................ 54 Identification and Analysis of Opportunities and Obstacles ......................................................... 60 3.1 Mapping the value chain opportunities and obstacles ..................................................................... 60 3.2 Key opportunities & challenges ......................................................................................................... 60 Possible Interventions and Support Activities in the Value Chain ................................................ 64 Conclusions ...................................................................................................................................................... 68 References ...................................................................................................................................................... 69 Annex I Map of Rwanda ............................................................................................................................. 77 Annex II List of Exporters (2017) ................................................................................................................. 78 Annex III List of Roasters .............................................................................................................................. 81 Annex IV Members of CEPAR ....................................................................................................................... 81 Annex V Stakeholder Assessment Grid ....................................................................................................... 82 Annex VI List of Coffee Projects ................................................................................................................... 83 Prepared by Page 2 Annex VII Washed, Natural and Honey Coffee ............................................................................................. 85 Annex VIII Quality Standards in Rwanda ........................................................................................................ 86 Annex IX Competitive & Comparative Advantage Scoring .......................................................................... 87 Annex X Constraints in the Value Chain ...................................................................................................... 90 Annex XI SWOT Specialty Coffee Sector Rwanda ........................................................................................ 93 Annex XII Value Chain Baseline Measurement ............................................................................................. 94 Prepared by Page 3 Glossary AFI Alliance for Financial Inclusion AGLC Africa Great Lakes Region Coffee Support Program ARFIC L'Autorité de Régulation de la Filière Café (Coffee Board Burundi) BCI Business Case Idea BRD Rwanda Development Bank BSO Business Support Organisation CAGR Compound Annual Growth Rate CBD Coffee Berry Disease CBI Centre for the Promotion of Imports from developing countries CCAFS CGIAR Research Program on Climate Change, Agriculture and Food Security CEPAR Coffee Exporters and Processors Association of Rwanda CGIAR Consultative Group on International Agricultural Research CHF Swiss Franc CIAT International Centre for Tropical Agriculture CSR Corporate Social Responsibility CWS Coffee Washing Station DFID Department for International Development (UK) DRC Democratic Republic of Congo EDPRS Economic Development and Poverty Reduction Strategy Rwanda ESA European Space Agency EUR Euro (currency) FAO Food and Agricultural Organization of the United Nations FiBL Forschungsinstitut für biologischen Landbau (Research Institute of Organic Agriculture) FOB Free on Board FOT Free on Truck FSC Farmer Support Centre FTA Free Trade Agreement GCP Global Coffee Platform GIS Geographic Information System GiZ Deutsche Gesellschaft für Internationale Zusammenarbeit (German Corporation for International Cooperation) ICO International Coffee Association IFAD International Fund for Agricultural Development IFOAM Organics International IGC International Growth Center IMF International Monetary Fund IT Information Technology ITC International Trade Centre IWCA International Women’s Coffee Alliance JDE Jacob Douwe Egberts JICA Japan International Cooperation Agency KfW German Government-Owned Development Bank KOICA Korea International Cooperation Agency KPI Key Performance Indicator LPI Logistics Performance Index MFI Micro Finance Institution MIFOTRA Ministry of Public Service and Labour MIGEPROF Ministry of Gender and Family Promotion MINAGRI Ministry of Agriculture and Animal Resources MINEACOM Ministry of Trade and East African Community Affairs MINICOM Ministry of Commerce MT Metric Tonne MYICT Ministry of Youth and ICT NAEB National Agricultural Export Development Board NCA National Coffee Association NISR National Institute of Statistics Rwanda NYC National Youth Council OCIBU Office du Café du Burundi OOH Out of Home Prepared by Page 4 OYE Opportunities for Youth Employment PDCRE Smallholder Cash and Export Crops Development Project PEARL Partnership to Enhance Agriculture in Rwanda through Linkages PRC People’s Republic of China PRICE Project for Rural Incomes through Exports Rwanda PSACC Private Sector Adaptation to Climate Change PSF Private Sector Federation PSTA Plan for the Transformation of Agriculture Rwanda PTD Potato Taste Defect RA Rainforest Alliance RAB Rwanda Agricultural Board RSB Rwanda Standard Board RCCF Rwandan Coffee Cooperatives Federation REST Roundtable on the Elimination of Child Labour for Sustainable Tea Forum RFCC Rwanda Farmers Coffee Cooperative ROW Rest of the World RURA Rwanda Utility Regulatory Authority RWF Rwandan Franc RYAF Rwanda Youth in Agribusiness Forum SACCO Savings and Credit Cooperation SCA Specialty Coffee Association SCC Sustainable Coffee Challenge SME Small or Medium Sized Enterprise SPREAD Sustaining Partnership to enhance Rural Enterprises and Agribusiness Development UNIDO United Nations Industrial Development Organization USADF US African Development Fund USAID United States Agency for International Development USD United States Dollar VCA Value Chain Analysis VCS Value Chain Selection WB The World Bank WTO World Trade Organization Prepared by Page 5 Introduction Rationale CBI (Centre for the Promotion of Imports from developing countries) is part of the Netherlands
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