The United Nations-based Better Than Cash Alliance published a new 64-page report – called Scaling up Responsible Digital Payments in the Rwandan Tea Sector – with Ethical Tea Partnership (ETP), a “World Tea Best of Awards” winner for the “Most Impactful Global Tea Body” category at the 2023 World Tea Conference & Expo in Las Vegas.
The Better Than Cash Alliance is a partnership of governments, companies and international organizations that accelerates the transition from cash to responsible digital payments to advance the United Nation’s (U.N.) Sustainable Development Goals.
Ethical Tea Partnership is a membership organization that works with tea companies, development organizations and governments to improve the lives of tea workers, farmers and their environment. The organization’s aim is to drive long-term, systemic change across three thematic areas in tea – economics, equality and environment. ETP’s work is also focused on improving the progress that’s being made towards attaining the U.N.’s Sustainable Development Goals in tea-growing regions.
The study behind the new report lays the foundation for incorporating the U.N.’s Principles for Responsible Digital Payments in the Rwandan tea sector, with the goal of increasing efficiency and improving farmers’ living incomes. However, while the report is focused on Rwanda, it should be of interest to other tea-growing regions.
Digitizing Payments to Tea Farmers Leads to Key Benefits for All Involved
The report explains that digitizing payments to tea farmers in Rwanda could result in a savings of around US$8 million over 10 years for tea companies/estates – funds that could be spent on addressing climate change issues, according to the report’s authors.
In addition, tea estates/companies could see at least a 10 percent reduction in plantation wages due to the eradication of ghost workers, in addition to a 30 percent increase (approximately) in productivity and/or potential to improve quality.
For tea farmers, digitizing payments would allow them to experience more financial security, including an 87 percent reduction in payment timelines (from 4 weeks to three days). Biweekly payments could also be an incentive with the potential for stronger cash-flow management for workers. The workforce could also experience a 30 percent increase in productivity and/or quality of harvest, enabling increased incomes, in addition to other benefits.
Per the report, focusing on digitizing payments to tea farmers could deliver a much wider impact, if responsible digital payments were embedded across the entire agriculture sector in Rwanda, with the potential to reach 3.8 million farmers, including 2.1 million women, noted the report.
The proposed approach in this report for scaling digital payments in the Rwandan tea sector builds on the evolving payments ecosystem. It identifies six key areas of action, requiring a multi-stakeholder approach, to ensure farmers are at the center of a responsible and sustainable scale-up of digital payments.
Overall, the tea sector is the third-largest employer in Rwanda, directly employing more than 100,000 people, including 50,000 farmers and 50,000 workers, contributing to the livelihoods of around one million Rwandans.
Oswell Kahonde, agriculture and Africa regional lead at Better Than Cash Alliance, told World Tea News: “The Better Than Cash Alliance together with our member Ethical Tea Partnership are working towards increasing the number of tea workers and smallholder farmers worldwide who benefit from receiving payments digitally and using digital financial tools and services, so they are not exposed to the constant risks associated with cash in hand payments."
Kahonde added: “The report highlights specific actions for public and private stakeholders in the tea sector to embed responsible payment digitization practices to foster transparency and accountability in supply chains, and financial equality for tea farmers and their communities.”
Jenny Costelloe, executive director of Ethical Tea Partnership, stated, “We are committed to working closely with all stakeholders in the Rwandan tea sector to address the gaps that remain for scaling responsible digital initiatives. In particular, we see our engagement with the National Agricultural Export Development Board [in Rwanda] as critical for exploring sustainable and scalable solutions for the tea sector.”
Stakeholders Who Participated in the Rwandan Tea Sector Report; Downloading the Free Report
The National Agricultural Export Development Board provided support for the study/report, in addition to the numerous project and research team members.
Other stakeholders that helped or shared valuable information to make the report happen include representatives of the Government of Rwanda – Ministry of Agriculture and Animal Resources, Ministry of Finance and Economic Planning, Ministry of ICT and Innovation – and the National Bank of Rwanda.
In addition, senior leadership of numerous tea companies participated in the effort, including Cyato Tea, Rwanda Mountain Tea, Muganza-Kivu Tea Company and Sorwathe.
Representatives of smallholder tea farmers and their respective cooperatives also participated, including: Fédération Rwandaise des Coopératives des Théiculteurs, Coopthe Mulindi, Hillside Organic Tea Cooperative (in Rulindo), Cothecyaka, Cothemuki, Cothevm and Kobacyamu.
To download the complimentary report or the free executive summary, click here.
To learn more about the Better Than Cash Alliance, visit BetterThanCash.org. To learn more about Ethical Tea Partnership, visit EthicalTeaPartnership.org.
Aaron Kiel, based in Raleigh, N.C., has worked in the beverage, tea and coffee industries for nearly two decades. He’s a journalist and writer at heart, but he also wears a PR hat through his consultancy, ak PR Group. He works as the editor of World Tea News with Questex’s Bar & Restaurant Group, as well as a contributing writer for Bar & Restaurant.
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