News and knowhow for farmers

New platform that allows farmers to use Grains as collateral for loans launched

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The East African Grain Council (EAGC) has been looking for a method of protecting grain farmers in Kenya need from selling their produce at ridiculously low prices. And they have found it. Through a homegrown solution, in the form of a platform known as G-Soko, farmers will now have a direct connection to buyers across East Africa. The platform utilises innovative technology to provide information on market opportunities, track goods, and connect buyers and sellers.

The model has been based on tested market structures such as aggregation centres and certified warehouses, which store bulk goods, ensure quality and provide storage and credit facilities.

This system also helps farmers to access finance and to source higher quality inputs at more affordable prices.

The platform, on its launch has started making large gains in improving market access, enhancing productivity and helping farmers to increase production, employment and income.

This platform aims at effecting many structural changes in the grains market. Smallholders deal with village level aggregators who are directly linked to certified warehouses, so `their` prices are no longer set through interactions with traders. The farmers then transport a bag of grain and receive a goods received note (GRN) as evidence from an aggregation centre.

From that moment, structural changes start to emerge – in that prices are struck completely differently; they are higher (estimated at 15%) and a better reflection of final market prices, and it makes sense for them to produce more marketable output – as the price gain is predictable as it now would be.

Farmers get some cash immediately and can opt to leave part of their grains to gain value through storage, to sell later at higher price. In addition, through interaction with the system of village level aggregators and certified warehouses, they learn about EAC standards and the price that better grades will fetch.

Through their shares of warehouse receipts, they can access good inputs on credit, and also on demand extension advice to achieve better quality maize. Main benefit for smallholders is access to a better price through affordable storage while still being able to access cash and credit immediately through the system.

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