The Mercatus Center at George Mason University recently released a very interesting policy paper on the coffee industry in Rwanda.

The paper was written by Karol Boudreaux and Daniel Sacks of Enterprise Africa and is worth the time to read.

I know, like me, the only thing you knew about Rwanda was the great movie Hotel Rwanda, but read on please.

Long Rwanda’s leading export and chief source of foreign income, coffee has played a pivotal role in the nation’s economic development. Even today it accounts for 50 percent of Rwanda’s export income and employs some 500,000 families. Historically this industry has been highly regulated and politi- cized, but in the decade since Rwanda’s disastrous genocide, the government has promoted coffee industry liberalization as a means of alleviating the country’s poverty and addressing fi scal crises. The results have been promising: entrepreneur- ship is fl ourishing, international trade volume is increasing, human capital is developing, income and employment are increasing, and most surprisingly, grass-roots reconciliation is taking place. changes for the best From colonization in the 19th century to the 1994 genocide, Rwanda’s rulers have controlled and exploited the coffee industry for their political and fi scal gain. Laws and regula- tion forced Rwandans to grow coffee and exploited farmers by creating a government monopoly that bought the country’s entire coffee crop at well below market value.

After the genocide, the new government liberalized the cof- fee industry, allowing farmers to voluntarily contract with any buyer and join together in co-ops to share expenses and resources. Rwandans are no longer required to grow coffee, but many voluntarily choose to, as they can now sell their beans to international buyers at prevailing world market prices. As a result, Rwandans are profi ting from coffee production.

Although driven by homegrown entrepreneurs, the revitalization of Rwanda’s coffee industry has been facilitated by many international organizations. For example, USAID funded coffee-related projects such as the Partnership for Enhancing Agriculture through Linkages (PEARL), which helps Rwanda’s poorest coffee growers adopt more effective production and marketing practices.

Click here… for the complete report.