Small scale farmers in the country are set to reduce their post-harvest losses by utilizing the Warehouse Receipt System (WRS) which will enable them to store their produce in certified warehouses as they wait for good market prices.
Agriculture Principal Secretary (PS) Dr. Kipronoh Ronoh said that the WRS is poised to help alleviate poverty and increase food security in the country, giving the smallholder farmers a substantial advantage by reducing post-harvest losses which accounts for 40 per cent of the food produced in the country.
Dr. Ronoh urged farmers to embrace the WRS initiative as the receipt issued is a valuable asset and can be used to access affordable credit facilities from participating financial institutions, providing smallholder farmers with necessary tools to thrive.
The PS explained that the WRS operates in an electronic system, allowing farmers to deposit their commodities in the National Cereals and Produce Board (NCPB) certified warehouses and facilities.
The PS spoke in Nairobi on Monday where the Financial Sector Deepening (FSD) Kenya, in partnership with Agriculture Finance Corporation (AFC) and other stakeholders hosted a workshop aimed at disseminating the findings of the recently conducted viability study on WSR financing in Kenya.
Dr. Ronoh noted that agriculture being the cornerstone of Kenya’s economy, it is important to invest in the sector to boost its growth and stability as it sustains the livelihoods of millions particularly those in rural areas.
“Despite the significance of this sector, our smallholder farmers face difficult challenges as they frequently sell their produce immediately after their harvest when prices are low,” PS Ronoh said,
“This practice is exacerbated by inadequate storage facilities and improper preservation techniques, forcing many farmers to relinquish potential profits to commercial or foreign traders who benefit from seasonal price fluctuations,” he added.
The PS said WRS addresses price exploitation by middlemen by stabilizing market prices and enhancing farmer’s profitability. It also enhances business transparency enabling farmers to make informed decisions about when to sell their produce rather than being forced to sell under distress during harvest time.
Agriculture Finance Corporation (AFC) Managing Director George Kubai highlighted their commitment to delivering tailored financial solutions for the agricultural sector.
“AFC’s strategic goals are focused on enhancing financial inclusion, supporting smallholder farmers, and creating innovative products that revolutionize agricultural financing in this country. The warehouse receipt financing product is a pivotal component of this strategy,” Mr. Kubai added.
Mr. Kubai observed that warehouse receipt financing has the potential to revolutionize agricultural financing in Kenya by enabling farmers to access credit against stored commodities, thereby easing the burden of post-harvest losses and offering them better bargaining power.
He reiterated that for it to be successful, the product must be designed with a deep understanding of the realities on the ground, the challenges faced by farmers, the capabilities of financial institutions and the regulatory and environmental factors that impact the agricultural sector.
By Patience Mabonga and Cecil Oduor
