Kenya introduces Warehouse Receipt System to facilitate storage and trade of produce

KENYA – The Kenyan government has established a warehouse receipt council to undertaken the roles of buying, selling and setting maize prices, a scenario that has been characterized by business unethical practices leading to grand corruption in the country.

With the new reforms, Warehouse Receipt System (WRS) will now be an open trading platform that links buyers and sellers, modelled along the stock exchange.

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It will enable farmers to store their maize as they monitor prices, reducing the pressure to sell immediately after harvest when prices are normally low and sell when it is favourable.

According Agriculture Cabinet Secretary Peter Munya, the Warehouse Receipt System will remove the logistics burden and facilitate producers and traders to access agricultural credit against the deposit certificate.

“The Warehouse Receipting Council has now been appointed and we shall soon be inaugurating the Council and which already has an appointed acting CEO,“ Munya said.

He added that the reforms will include enhanced private sector participation in the agricultural value chain, including storage, thereby creating a competitive food market and the efficiency that comes with it.

According to the Kenya News Agency report, other reforms in the agricultural sector stipulated by the Cabinet Secretary include revamping of the food Balance Sheet Committee to oversee accounting and monitoring of the country’s food supply pattern, utilization and distribution.

The other will be Institutionalizing reforms to eliminate overlapping roles, conflicts between different government agencies and better respond to changing food demand.

To this end the government is seeking the restructuring of the National Cereals Board (NCPB) and the Strategic Food Reserve Trust Fund (SFRTF) to make them efficient and autonomous.

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Being blamed for distorting the market and crowding out the private sector, the board will lose at least 25 per cent of its more than 100 stores to ease effective early participation of the private sector and the establishment of a warehouse receipt system.

To spearhead the implementation of these reforms, a Technical Working Committee has been appointed to ensure that systems are in place to receive produce in the next four months by October 2020.

“To encourage the early participation of the private sector, and the establishment of ware receipt housing system, NCPB will release 7 million bags of space through competitive commercial leases. The release of designated storage space to private sector will proceed speedily and completed by December 2020,” Munya said

 “To better ensure that NCPB as an organization execute more effectively and devoid of historical burdens, I direct the Technical Committee and NCPB Board to immediately undertake capacity and suitability vetting of all the serving officers,” he added.

Soon he said they will undertake a policy legal review towards the harmonization of mandates of various agencies under the agriculture sector towards enhancing their complementarity.

In addition to that, the Agriculture and Food Authority (AFA) in collaboration with the counties will undertake the registration of farmers, dealers and the licensing of primary warehouses; the Warehouse Receipt Council will be responsible for warehouses trading in the Commodity Exchange (KoMEX).

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