The disruptions on food systems caused by the COVID-19 and the current Russia-Ukraine crisis are just some of the latest issues that have brought to the fore discussions on the role of Strategic Food Reserves (SFR) in Africa.
With support from AGRA’s Hub for Agricultural Policy Action (HAPA), a team from Nigeria’s Federal Ministry of Agriculture and Rural Development held a tour from 16 to 20 May 2022, to study Kenya’s storage infrastructure, management models for public-private-partnership, institutional design, social safety nets, price stabilization mechanisms, and appropriate SFR stocks levels.
The tour is part of Nigeria’s Federal Ministry of Agriculture and Rural Development request for AGRA Technical Assistance as the country seeks to build up grain reserves and develop strategic food stocks for timely response in times of food security crisis. The support aims specifically to assist Nigeria in determining optimal stock levels for the country’s SGR, to assess the existing storage infrastructure capacity and to develop partnership models with the private sector.
The Nigerian team was drawn from the country’s Food and Strategic Reserves Department and was led by the Agriculture Permanent Secretary Dr. Enerst Umakhihe.
After a meeting with AGRA President Dr. Agnes Kalibata on the first day of the tour, the team’s schedule included meetings and tours with various government and private facilities, including the Ministry of Agriculture, Livestock, Fisheries and Co-operatives, National Cereals and Produce Board (NCPB), the Warehouse Receipt System Council and the East African Grain Council (EAGC).
According to the Dr. Umakhihe, maize and sorghum have been the main crops under the strategic grains reserve in Nigeria, with budgetary constraints and fluctuations in prices of commodities being the main challenges to optimum reserves. One of the team’s key interests in the tour was the running of the Warehouse Receipt System (WRS), which Kenya has been running for the last two years. Nigeria intends to establish a WRS as it reforms its SFR strategy.
AGRA, in partnership with the Eastern Africa Grain Council, supported Kenya’s Ministry of Agriculture, Livestock, Fisheries and Co-operatives to develop regulations and other institutional frameworks to make the WRS operational in Kenya.
Briefing the visiting team, WRS Council Board member Ms. Rose Mutuku said that the Council has already certified five National Cereal and Produce Board warehouses in Kitale, Eldoret, Nakuru, Nairobi and Meru.
In these certified warehouses, farmers or traders are depositing commodities and are issued with a Warehouse Receipt which is then registered by the Council. The depositor may use the receipt to trade with other buyers, finance institutions or input suppliers.
Apart from reducing post-harvest losses which currently stand at about 30%, the WRS is enabling small scale farmers to participate in a modern and efficient market with standard quality and weights. The system is also creating flexibility, as farmers can plan to sell their commodities when the prices are favourable. As a commodity exchange system, it will also play the role of stabilizing prices.
AGRA and other players supported the establishment of the WRS to counter challenges such as incidents where maize was bought at above market prices and sold at lower than market prices, undermining market functioning and pushing out private sector participation.
The support included the establishment of a Food Balance Sheet Committee at the Ministry of Agriculture, Livestock, Fisheries and Co-operatives which currently determines the price and quantities of food commodities for price stabilization. Apart from Kenya, AGRA is also supporting the development of Food Balance Sheet initiatives in Burundi, Malawi, Zambia and Mozambique.
At the briefing by the National Cereals and Produce Board with Managing Director Joseph Kimote, the Nigerian team was informed that Kenya’s food reserves is being restructured to constitute physical stock of food commodities or their cash equivalent, based on a three-month country population maize requirement. For emergencies, the food reserve targets 10 percent of the population and about 26 percent of the chronically food insecure Kenyans.
The Board currently operates a network of 110 storage facilities which together have a storage capacity of 1,841,467 metric tonnes. With the WRS system rolling out, NCPB is gradually leasing out the storage facilities to the private sector, with about a quarter of the capacity now being used by private entities.
East African Grain Council Chief Executive Officer Mr. Gerald Masila said that the private sector has worked closely with the government in the roll-out of the Warehouse Receipt System to ensure incentives for the commercial sector.
He said that apart from policy advocacy, the Council supports farmers with information services such as the newly-launched Climate Information for Grains tool. The council also runs the Grain Business Institute, its training division that addresses knowledge gaps in Eastern Africa’s grain sectors.
In her remarks at the conclusion of the study tour, Dr. Kalibata called for greater information exchange among countries, saying that African countries face similar food security challenges and exchange of experiences and lessons is prudent use of resources.
“It does not make sense for individual countries to struggle to figure out what others already have answers to,” she said.
Dr. Umakhihe said that the study tour had given the team important insights, including identifying some gaps in the National Food Reserve Agency (NFRA) Bill that is due to be discussed in the Federal Republic of Nigeria’s parliament.
As part of the objectives of its Regional Food Trade and Resilience programme, AGRA’s support for target countries’ SFR policies aims to ensure that they are not designed or implemented in ways that avoid negative ripple effects on private sector investment and participation of small farmers in markets. The Hub for Agricultural Policy Action is working in Burkina Faso, Cote d’Ivoire, Mali, Nigeria, Ghana, Togo, Kenya, Uganda, Tanzania, Rwanda, Ethiopia, Malawi, Mozambique, and Zambia to increase the use of evidence to inform decisions during implementation of such policies.