Farmers Can Now Reduce Post-Harvest Loses Through Improved Grain Storage Technolog

The newly unveiled Warehouse Receipt System (WRS) will bring to an end exploitation of cereal farmers by brokers as they will now be able to sell their produce when prices are favorable. 

Chairperson to the WRS Council Ms. Jane Ngige, said the WRS will help improve commodity storage, reduce post-harvest losses that stand at 30 percent of the losses that farmers face, curb value chain inefficiencies, and increase financial earnings to farmers, traders and service providers in the agricultural sector. 

While speaking in Nakuru where she addressed representatives of farmers, financial institutions, the county government and other stakeholders in the agricultural sector, Ms. Ngige noted that the system will also enable agricultural producers to access credit by borrowing against receipts issued for goods stored in controlled warehouses 

In June 2019, Parliament passed the Warehouse Receipt System Act, providing a legal framework for its development and governance. 

Later that month, President Uhuru Kenyatta assented to the Warehouse Receipt System Bill. The new law provides for the establishment of a system whereby warehouse receipts will be issued by licensed warehouses to depositors upon delivery of agricultural commodities produced in Kenya. 

“The receipt is a proof of ownership. The document can be used as collateral to get a bank loan. These systems enable producers to delay the sale of their products until after harvest to a moment when prices are generally more favourable.   

For a start we will be dealing with maize, beans, green grams, coffee, wheat and rice before diversifying to other agricultural produce” said the chairperson. 

She added that the system provides an opportunity for a national commodity exchange making it possible to trade in agricultural commodities, an important development that will further improve profitability, liquidity and price stability in the trade of agricultural commodities. 

“It is expected that the warehouse receipt will lead to the development of aggregation and off take centers across the country, a network of modern certified agricultural produce warehouses, and linkages with structured trading platforms such as commodity exchanges and auctions. 

WRS seeks to change the way the country trades, not just in maize but other commodities. Private operators providing warehousing facilities will have to be registered by Warehouse Receipt Council and Agriculture and Food Authority (AFA) to be eligible for the WSR,” noted the chairperson. 

 ”The council has embarked on educating farmers, so that we can move to this modern and more civilized way of doing grain trade which even neighbouring countries like Rwanda and Ethiopia are doing,” Ms Ngige said. 

The Warehouse Receipt System Act established the Warehouse Receipt System Council, 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 agricultural commodities produced in the country in collaboration with county governments and other players in the value chain.   

The council will also ensure the efficiency, effectiveness, and integrity of the system. 

It is also mandated to provide for the registration, licensing and inspection of warehouses and warehouse operators. 

The council comprises multi-sectoral representatives from the major agricultural commodities trade network in the public and private sector. 

Ms Ngige noted that the journey of introducing the Warehouse Receipt System in Kenya, which started way back in 2009, is near completion and is now at the validation stage of the Draft Regulations 2020. 

“I urge you, stakeholders and value chain actors, to propose improvements to fill any gaps in the draft regulations so that we can obtain a comprehensive clear and practical document. A total of 58 National Cereals and Produce Board warehouses have been identified as suitable for WRS.” 

She explained that the council is aware of inaccurate information in the public domain that is causing anxiety among stakeholders especially farmers. 

“I wish to assure the Cabinet Secretary, stakeholders and general public that the council has prepared a communication and outreach plan for vigorous awareness, sensitization and education of the value chain actors and the general public on the benefits of the WRS. We will continue to engage with stakeholders to make amendments that address emerging issues,” Ngige said.