News and knowhow for farmers

Njoro farmers initiate receipt system giving growers better prices & credit

Maize storage

By George Munene

Maize farmers from Tuiyotich Kenya Cereal Enhancement Programme-Community Based Organisation in Njoro Sub County have delivered 5,000 bags of grade 2 maize at the National Cereals and Produce Board (NCPB) deport in Nakuru under the new Warehousing Receipt System (WRS).

The Njoro maize farmers became the first small-scale farmers to adopt the electronic system. Through their Chairman Joseph Koech, the farmers explained that they opted to store their maize in a certified warehouse under the Electronic Receipt System for safety and quality of their maize as they scout for better prices above the prevailing Sh 2,400 per 50kg bag being offered by traders.

The Warehouse Receipt System act was passed into law by parliament in June 2019 and will help farmers be able to deposit their grain and get a receipt as proof of ownership. They can then sell their produce at a better price in the future as well as use their receipt to get credit and offer up collateral to get a bank loan.

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The new system seeks to offer transparency in a sector hitherto characterised by corruption, farmer exploitation and delayed or low payments.

Warehousing services are especially crucial for Kenya’s farmers given that post-harvest losses currently stand at between 40 per cent to 30 per cent. This often forces farmers into selling their produce at unfavourably low prices.

“This new system will give farmers the option to sell maize when prices are favourable instead of selling at throwaway prices, as has been the norm,” explained Agriculture CS Peter Munya.

Warehouse receipting technology is expected to be increased to also cover beans, fish, powdered milk and 13 other agricultural commodities in the country.

“Most of these warehouses are not in proper conditions as some of these commodities would require cold rooms and reconditioned warehouses to meet the required keeping standards. We will need investors to help in fixing them to meet the required standards and put in place the necessary infrastructure,” said. Samuel Ogola, WRS’s Council chief executive.

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The first phase of the WRS roll-out will focus on maize, beans, green grams, coffee, wheat, rice, processed milk, potatoes, macadamia nuts, pyrethrum, cotton, coconut, processed meat and fish.

“There exist readily available investment opportunities for investors in the aggregation of commodities, warehousing services for dry and perishable commodities, value addition and financing,” Ogola pointed out.

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