Sugar Cane Supply and Demand in Rwanda

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Sugar Cane Supply and Demand in Rwanda Rwanda’s economy is dominantly supported by agriculture, and any development in agriculture is a keystone to economic growth and the decrease in poverty in the country. Since Rwanda’s landscape is abundant in rich, green, rolling hills, the soil is fertile and suitable for maintaining plantations year after year. Unfortunately, with an economy based in agriculture, the climate, particularly the amount of rain, is a major determinant of the yield produced for the year. The last several years have brought abundant rainfall, leading to flourishing crops in the higher fields, but bringing excess water to the lower fields creating swampy soil that do not yield as much sugar cane. In the article, “Kabuye Sugar Works to Cut Costs with Upland Cane Growing,” the current environmental condition’s impact on sugar cane is discussed. Kabuye Sugar Works, the country’s only commercial sugar maker is suffering from the loss of sugar cane that is unable to grow in the new saturated conditions. Annually, the loss of sugar cane has been 3000-4000 tons, which decreases the supply available for profit. The company is currently trying to secure more land higher in elevation to produce more sugar cane. Land is scarce and the company must work through the government. Figure 1.1 illustrates a supply and demand graph of the current situation regarding sugar cane. Before the flooding, the company was producing around 14,000 tons of sugar cane yearly. Now, since the rain has destroyed some of the crop, the supply is only 10,000 tons per year. This shifts the supply curve left since there has been a decrease in supply. The demand curve will not change, but will move along its curve to create a new equilibrium price that is higher than the previous one since imports are now necessary in order to meet the demand for sugar. Farmers plan to

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