As Rwanda is expected to return to its rapid growth trajectory following the COVID-19 pandemic, agriculture will continue to play a central role in the structural transformation of the entire economy. To this end, the Government of Rwanda continues to invest in the agricultural sector by building on Strategic Plans for the Transformation of Agriculture (PSTAs) that began in the early 2000s. The challenging question is how to prioritize public expenditures across a broad portfolio of policies and programs. Ambitious plans, whether in the short or long term, require difficult decisions. The prioritization of public investment becomes even more complex as Rwanda’s structural transformation advances and as new investments—beyond the farm—become critically important for the agricultural sector. The structural transformation process itself means that as agriculture becomes more integrated with the rest of the economy, public resource allocations need to address a wider range of issues across the entire food system; these include nutrition-sensitive food production systems, inclusive value chain development, nonfarm rural enterprise development, and climate-resilient sustainable intensification of both crops and livestock. This study provides evidence that is designed to assist the Government of Rwanda in its selection of agricultural policy, investment, and expenditure portfolios that reflect the country’s broad focus on its food system and structural transformation. This process of prioritization will need to incorporate multiple public investments targeting multiple development outcomes and will need to be grounded in the costeffective use of public resources in a largely market-led transformation process. This data-driven and evidence-based approach must critically underpin an informed investment prioritization process that helps achieve ambitious targets in an environment constrained by limited public resources. The study uses the Rural Investment and Policy Analysis (RIAPA) economywide model developed by the International Food Policy Research Institute (IFPRI), with contributions from colleagues at the Ministry of Agriculture and Animal Resources (MINAGRI), the Ministry of Finance and Economic Planning (MINECOFIN) and the National Institute of Statistics of Rwanda (NISR). The study draws on data from multiple sources as well as expert insights to inform the application of RIAPA’s Agricultural Investment for Data Analyzer (AIDA) module as a tool to measure the impacts of alternative public expenditure options on multiple development outcomes. Using this integrated modeling framework, the study links agricultural and rural development spending to four specific outcomes: economic growth, job creation, poverty reduction, and diet quality improvement; at the same time, it considers the synergies and tradeoffs associated with the different investment options in the transformation process. The paper first assesses the contribution of public expenditures to agricultural and rural development under the fourth Strategic Plan for Agriculture Transformation (PSTA 4) that extends between 2018 and 2024. These findings are important, given the fact that since the beginning of PSTA 4, the budget allocated to MINAGRI (measured in constant prices) has stagnated. Our results suggest that increased spending on agriculture is well justified and that such spending is essential if the Government of Rwanda is to achieve its long-term development goals.

Although public spending under the fourth Strategic Plan for the Transformation of Agriculture 2018– 2021 (PSTA 4) is generally well structured and cost-effective, funding has been largely stagnant— and even declining, when measured in constant prices—during PSTA’s first four years. This note summarizes the effects of a modest reallocation of public spending under PSTA 4 towards greater cost-effectiveness, as well as a modest increase in PSTA 4 spending. Results draw on an economywide modeling tool designed to prioritize public resources around four key development goals: economic growth, employment creation, poverty reduction, and diet quality improvement.

Rwanda’s fourth Strategic Plan for the Transformation of Agriculture (PSTA 4), which extends from 2018 to 2024, is currently at its midpoint. This note highlights the contribution of PSTA 4 in its first half (2018–2021) to four key development outcomes: economic growth, job creation, poverty reduction, and diet quality improvement.

This study utilizes a recursive dynamic general equilibrium model calibrated with data for Tanzania to explore the link between agricultural and rural development spending and four development outcomes: economic growth, job creation, poverty reduction, and diet quality. Results show that no single expenditure option is the most effective in achieving all four desired development outcomes for Tanzania. Productivity-enhancing agricultural interventions in horticulture are effective at generating growth in the agri-food system (AFS) and improving diets, but have a limited effect on employment. Supporting cereal producers has large effects on growth and poverty reduction, with relatively high returns per dollar invested, but its effect on diet quality is weak. Providing livestock services to milk and poultry farmers consistently ranks high across the outcome indicators, with strong employment effects on downstream AFS. Crop research and development and feeder roads generate moderate impacts on all four outcomes. Partially reallocating the budget towards the most cost-effective spending options can substantially increase the development effectiveness for Tanzania of agriculture sector support expenditures. The approach adopted in this study can help policymakers design and prioritize agricultural interventions and expenditure portfolios that better reflect the country’s broad food system.

Agricultural input subsidies are a prominent feature in the 2018-2024 Strategic Plan for Agricultural Transformation (PSTA 4), which is designed and implemented by the Ministry of Agriculture and Animal Resources (MINAGRI). By reducing the cost of improved seed and inorganic fertilizers, subsidies are designed to accelerate the use of these productivity-enhancing inputs, thereby increasing agricultural yields and output, increasing rural incomes while reducing food prices, and improving food security in line with PSTA 4’s targets. However, questions arise about whether the current input subsidy rates and levels are sufficient to increase crop production and meet the PSTA 4 targets, and whether the subsidy system can be expanded in the current economic climate and fiscal situation caused by the COVID-19 pandemic and spike in global fertilizer prices. This paper examines the impact of an increase in the price of fertilizer in Rwanda using seasonal production data from National Institute of Statistics of Rwanda (NISR) in a microsimulation model aimed at three priority crops—maize, rice, and Irish potato—and the three main fertilizers in use—diammonium phosphate (DAP), urea, and NPK.

This paper provides a diagnostic of Rwanda’s food systems and the policy landscape that shapes it. It aims to inform national and local conversations on Rwanda’s food systems transformation—an idea that has attracted considerable attention in national consultations conducted in the run-up to the United Nations Food Systems Summit in September 2021, at the summit itself, and in the post-summit actions that Rwanda is now pursuing. A food system comprises the full range of actors and activities originating from agriculture, livestock, forestry, or fisheries, as well as the broader economic, societal, and natural environments in which they operate. An inclusive and sustainable food systems transformation is a process of growth and development that is profitable for the full range of individual actors engaged in the system, beneficial for society including marginalized and vulnerable groups, and advantageous for the natural environment. Rwanda’s journey towards a food systems transformation is well captured in Vision 2050, the National Strategy for Transformation (NST 1), and strategic plans for sectors such as agriculture, health, nutrition, commerce, and the environment. Their priorities are echoed in ongoing programs and investments of the government, its development partners, the private sector, and civil society. Nonetheless, there are still challenges facing Rwanda’s efforts to sustain and accelerate progress along this journey. Efforts to overcome these challenges call for a deeper and more significant shift in thinking—informed by the food systems perspective—that is highlighted by stronger multi-sectoral approaches to problem-solving. Overall findings suggest an opportunity for a tangible shift in how public policy in Rwanda approaches its food systems and how the systems contribute to the broader national transformation process. This means addressing how balances are struck—and tradeoffs are managed—between and among agriculture, nutrition, health, and the environment in the face of a climate crisis. It also means giving greater attention to the demand-side drivers in Rwanda’s food system, recognizing that singularly focused supply-side strategies rarely succeed in isolation. Finally, it means deepening the integration of policies and policy actors in the design and implementation phases of interventions that shape the food system. We offer several recommendations to translate abstract ideas into a coherent and focused set of actions in the policy space. 1. Strengthen existing entities and mechanisms rather than create new ones. 2. Develop a national food systems transformation strategy that is integrative, multi-sectoral, and action-oriented. 3. Innovate on existing programs. 4. Allow for learning through both success and failure. 5. Invest in rigorous impact evaluation. These actions aim to strengthen the policy environment that enables a truly broad-based food systems transformation. This enabling environment is itself an outcome of broad-based national conversations, integration across sectors, domains, and levels; and the encouragement of policy and program innovation.

This paper assesses the structure of Rwanda’s current and evolving agrifood system and its contribu-tion to national development. The paper reiterates the point that Rwanda’s agrifood system stretches well beyond primary agriculture and creates jobs and income opportunities throughout the economy. While off-farm components of Rwanda’s agrifood system have generally grown more rapidly than pri-mary agriculture in recent years, growth varies across value chains of the agrifood system in the stud-ied period. The growth diagnostic in this paper reveals that it is domestic markets that have driven the recent growth in Rwanda’s AFS other than exports. The paper’s forward-looking analysis assesses potentially differential impacts of value-chain develop-ment efforts on broad development outcomes. The analysis measures the synergies and trade-offs of value-chain development in the context of an inclusive agricultural transformation. Such analysis is conducted using the Rwanda Computable General Equilibrium (CGE) model – an adaption of IFPRI’s Rural Investment and Policy Analysis (RIAPA) model to the Rwandan context. The modeling results indicate that value chains differ considerably in their effectiveness in achieving development goals and there are significant trade-offs among different development goals from pro-moting a specific value chain. The value chains that make a larger contribution to growth or job crea-tion are not necessarily effective in reducing poverty or improving dietary quality – for example, value chains for coffee and tea – while value chains that play an important role in improving dietary quality may contribute less to job creation – such as vegetables or fruits. While there is no single value chain that can achieve all development goals effectively, it is possible to select a diversified set of value chains that complement each other in achieving different development goals. This latter strategy is a more realistic approach to growth and development.