Kenyan farmers and business people trading in agricultural commodities are set to benefit from a Warehouse Receipt System (WRS) that will enable them store their produce thereby boosting food security in the country.
During the launch of the electronic system on Thursday, the Cabinet Secretary for Agriculture, Livestock, Fisheries, and Cooperatives Peter Munya said farmers will be able to trade, sell, exchange or use the Warehouse Receipt (WR) to source credit and inputs in exchange of their produce.
“The use of a warehouse receipt system is expected to cut down on post-harvest losses from 40 percent to 10 percent,” Munya said in a statement.
The WRS will enable farmers to store goods such as coffee and grains in exchange for the WR.
Read: Kenya to Develop App Based Commodity Exchange for Farmers
A warehouse receipt is a document produced by warehouse operators as proof that certain items in the stipulated quantity and quality have been deposited at a specific location.
According to Munya, the deployment of a WRS will improve food security and ensure appropriate nutrition in the country, in keeping with the government’s national development program.
He added that farmers have suffered tremendous losses in the past at the hands of middlemen who function as market intermediaries.
“This has seen farmers get low prices for their agricultural commodities, making agriculture unfavorable to many,” he said.
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The warehouse receipt, according to principal secretary of the State Department for Crops Development and Agricultural Research Hamadi Boga, provides farmers more leverage since they can use it as collateral to obtain credit from banking institutions.
Boga observed that integrating agricultural commerce into the WRS will have a significant influence on poverty reduction.
“It will subsequently reduce price volatility and improve liquidity when farmers make use of it as the first step towards commodity exchange,” he added
Data from the government shows that agriculture accounts for over 33% of the economy and employs roughly 40% of the people.
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