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Kenya: Potato Now Incorporated Into Warehouse Receipt System

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4 years ago

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Nakuru — Potato is the latest crop to be incorporated into the Warehouse Receipt System (WRS) that was dealing with maize, beans, green grams, coffee, wheat, and rice.

Chief Executive Officer to the WRS Council Samuel Ogolla said the system would enable potato growers to access credit by borrowing against receipts issued for goods stored in controlled warehouses.

It also targets bringing to end exploitation of farmers by brokers as they would now be able to sell their produce when prices are favourable.

While speaking at Mauche potato cold storage facility within Njoro Sub-County Mr Ogolla noted that the WRS would help improve commodity storage, reduce potato post-harvest losses that stood at 30 percent, curb value chain inefficiencies, and increase financial earnings to farmers, traders and service providers in the agricultural sector.

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 law provides for the establishment of a system whereby warehouse receipts are issued by licensed warehouses to depositors upon delivery of agricultural commodities produced in Kenya.

“The receipt is 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,” added the chief Executive Officer

He said the system provided an opportunity for a national commodity exchange making it possible to trade in agricultural commodities, an important development that would 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 centres across the country, a network of modern certified agricultural produce warehouses, and linkages with structured trading platforms such as commodity exchanges and auctions,” Ogolla said.

WRS seeks to change the way the country trades, not just in cereals but other commodities. Private operators providing warehousing facilities have to be registered by Warehouse Receipt Council and Agriculture and Food Authority (AFA) to be eligible for the WSR,” noted the CEO. He confirmed that there is still a lack of information on 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 trade which even neighbouring countries like Rwanda and Ethiopia are doing,” Ogolla said.