Potato is now integrated with the warehouse receipt system
NAKURU, Kenya, February 26 – Potato is the latest crop to be included in the Warehouse Receipt System (WRS) which dealt with maize, beans, green grams, coffee, wheat and rice.
WRS Council chief executive Samuel Ogolla said the scheme would allow potato growers to access credit by borrowing against receipts issued for goods stored in controlled warehouses.
It also aims to end the exploitation of farmers by brokers, as they could now sell their produce when prices are favourable.
During a speech at the Mauche Potato Cold Store in Njoro Sub-County, Mr Ogolla noted that the WRS would help improve storage of commodities, reduce post-harvest losses of apples of land which amounted to 30%, to reduce inefficiencies in the value chain and to increase the financial income of farmers, traders. and service providers in the agricultural sector.
In June 2019, Parliament passed the Warehouse Receipts System Act, providing a legal framework for its development and governance.
Later that month, President Uhuru Kenyatta approved the Warehouse Receipt System Bill. The Act provides for the establishment of a system whereby warehouse receipts are issued by licensed warehouses to depositors upon delivery of agricultural products produced in Kenya.
“The receipt is proof of ownership. The document can be used as collateral to obtain a bank loan. These systems allow producers to delay the sale of their products after harvest at a time when prices are generally more favourable,” added the general manager.
He said the system provides an opportunity for a national commodity exchange to enable agricultural commodity trading, an important development that would further improve profitability, liquidity and price stability in agricultural commodity trading.
“The warehouse receipt is expected to lead to the development of aggregation and collection centers across the country, a network of modern certified agricultural commodity warehouses, and linkages to structured trading platforms. such as commodity exchanges and auctions.“, said Ogolla.
WRS seeks to change the way the country markets, not only grains but also other basic products. Private operators providing warehouse facilities must be registered with the Warehouse Receipts Board and the Agriculture and Food Authority (AFA) to be eligible for WSR,” noted the CEO.. He confirmed that there is still a lack of information about the system among farmers.
“The council has embarked on educating farmers, so that we can move to this modern and more civilized way of doing business, which even neighboring countries like Rwanda and Ethiopia are doing,” Ogolla noted.
The Warehouse Receipts System Act established the Warehouse Receipts System Board, which was inaugurated by Agriculture Cabinet Secretary Peter Munya on July 29, 2020.
The council is mandated to oversee the establishment, maintenance and development of the WRS for domestically produced agricultural commodities in collaboration with county governments and other value chain actors. The board also ensures the efficiency, effectiveness and integrity of the system.
It is also responsible for providing for the registration, licensing and inspection of warehouses and warehouse operators.
The council includes multi-sector representatives from the main agricultural commodity trading network in the public and private sectors.
Ogolla noted that the journey of introducing the warehouse receipt system in Kenya, which started in 2009, is nearly complete and a total of 58 National Cereals and Produce Board warehouses have been identified as suitable for WRS.
He said the council was aware of inaccurate information in the public domain which was causing anxiety among stakeholders, especially farmers.
“I want to assure the Cabinet Secretary, stakeholders and the general public that the council has prepared a communications and outreach plan for vigorous sensitization, sensitization and education of value chain actors and the general public. about the benefits of WRS. We will continue to engage with stakeholders to make changes that address emerging issues,” Ogolla noted.