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Rwanda Trading Company: Navigating Marke...

Murphy, Daniel, Ch...

Case

Rwanda Trading Company: Navigating Market Frictions and Government Intervention in the Coffee Market

Murphy, Daniel; Chinnaswamy, Trent

GEM-0251 | Published October 6, 2025 | 15 Pages Case

Collection: Darden School of Business

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This case examines Rwanda Trading Company (RTC) as it navigated shifting government policy and market dynamics in Rwanda’s coffee sector. For eight years, zoning regulations required farmers to sell their coffee cherries to designated coffee-washing stations (CWSs), incentivizing firms like RTC to make heavy investments in farmer support, including subsidized inputs, training, and infrastructure projects. In 2023, the government repealed the zoning policy, reintroducing competition among CWSs and exporters. RTC’s operations manager, Vincent Karenzi, faced the challenge of deciding whether to continue costly farmer-support programs without the assurance that farmers would sell exclusively to RTC. The case situates this decision within Rwanda’s broader history of coffee production, government intervention, and international market dynamics. This case can be used to teach about the interaction of multiple market frictions, such as imperfect information and monopsony power, and the trade-offs involved in government intervention.

The case is designed to help students gain a better understanding of adverse business implications of imperfect information, the interaction of market frictions, and government reforms to address market friction.