Warehouse Receipt System operational in Kenya

Photo caption: Lesiolo Grain partnered with EAGC and financial institutions to pilot the first WRS system in Kenya.

In Kenya, AGRA has been supporting the Ministry of Agriculture, and in partnership with the Eastern Africa Grain Council (EAGC), to pass micro reforms that include changes in agriculture markets. In particular, AGRA has been supporting the Agriculture Ministry to develop regulations and set up other institutional frameworks to make the Warehouse Receipt System (WRS) operational in Kenya.

Under the Warehouse Receipt System, owners of commodities, who may be producers or dealers, deposit produce in certified warehouses. They are issued a title document called a Warehouse Receipt as proof of ownership. The receipt can be used as collateral, reducing pressure on farmers to sell their produce immediately after harvests when prices are usually low. As collateral, the receipts can be used to access credit from participating financial institutions or traded in commodity markets. A virtual inauguration of the WRS was held on July 29, 2020.

As reported in the KenyaStar, Agriculture Cabinet Secretary Peter Munya speaking during the virtual inauguration of the Warehouse Receipt System Council directed the Warehouse Receipt System Council to ensure the system is working by October 2020. He noted that the system will enable farmers access credit as they wait for favorable prices. 

Related Posts