Kenya to kick start use of Warehouse Receipting System for maize in October

KENYA – The Kenyan government through the ministry of agriculture has directed maize farmers in the country to start selling their produce through the newly established Warehouse Receipting System from October this year.

“I have given my undertaking and pronounced that come the next harvesting season, starting early October 2020, the ministry’s management of newly acquired stocks will be under the WRS,” said Agriculture Cabinet Secretary (CS) Peter Munya.

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

It will undertake 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.

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.

The system will remove the logistics burden and facilitate producers and traders to access agricultural credit against the deposit certificate.

The CS said one of the key interventions of the WRS will be to improve commodity storage, reduce average post-harvest losses, curb value chain inefficiencies, increase financial earnings to farmers, traders and service providers in the agricultural commodity trade.

Last year alone, farmers lost close to 10 million bags of maize due to post-harvest losses. In Kenya, it is estimated that a grower loses up to 30 percent of their produce due to poor handling and storage, reports Business Daily.

The Cabinet Secretary also unveiled the Warehouse Receipting Council to oversee the operations of the system.

The CS called on the council to ensure that value chain actors get the benefits that come with the warehouse receipt system and hit the ground running and steer the WRS ship to deliver on the new mandate given to them.

“Going forward you will be expected to support and ensure that WRS Council management develops and refines a system for effective regulation of its activities and roll out the system for the benefit of the general public,” Munya said.

He added that the council will be expected to attract investments into the warehouse from the private sector actors who have been waiting for this system for over 10 years and even pioneered the system on their own.

The Council will focus on implementing the Warehouse Receipt System for coffee, tea, rice, beans, green grams, and wheat but progressively expand to cover other agricultural commodities.

Jane Ngigi, who is going to chair and steer the formation and operations of the council for the next three years said that as they roll out the WRS, farmers should be assured of a structured farmers access for their commodities and that they were committed to actualize the Agriculture Sector Transformation and Growth Strategy (ASTGS) 2019-2029 with reference to strategic food reserve reforms.

“We will create linkage to the existing networks and as expected we will reach out to most of the small-scale farmers involved in the business that WRS will support going forward,” she said.

Ngigi added that while promoting the WRS, they will further strengthen value chains in terms of reducing wastage and improving productivity through efficiency improvement, both at County, National and Private sector involvement.

Other members of the WRS council are Anthony Muriithi Ag. Director of Agriculture Food Authority (AFA);  Rose Mutuku from Eastern African Grain Council (EAGC); Eng. Kennedy Wandera  from the Ministry of Agriculture; Christine Mwai  from Kenya Bankers Association (KBA); Benson Loktari  from the Council of Governors (COG) and Samwel Ogolla who is the Ag. CEO of the Warehouse Receipt System (WRS) Council.

Warehouse Receipt Systems have successfully been operationalized in South Africa, Ethiopia and Rwanda.

Kenya has successfully conducted piloted programmes on WRS by both public and private sector players in the last 5 years.

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