- Farmers and aggregators will be able to deposit their commodities in the revamped warehouses at affordable charges.
- They will in exchange get warehouse receipt which can be traded, sold, exchanged or used as collateral to obtain bank loans.
Small scale farmers could soon be able to store their produce for longer and sell when prices in the market are favourable.
This follows an investment partnership between IFC and the Trade Ministry to boost the value of produce through revamped warehouse receipt system.
Under warehouse receipting, farmers deposit their products in certified warehouses upon which they are issued with a receipt
The receipt can be used to access credit as the farmers await the sale of their produce at a favourable time and price.
Estimated at Sh306 million, the project also seeks to reduce the amount of post-harvest losses, improve food security and enhance market predictability and pricing to boost local and regional trade.
International Finance Corporation will provide technical assistance, help develop administrative procedures orders, service level agreements, and standard operating procedures to govern the WRS council.
IFC is a member of the World Bank Group and offers investment, advisory, and asset-management services to encourage private-sector development in less developed countries.
Trade principal secretary Alfred K’Ombudo said the project will enhance access to certified safe and quality storage facilities under licensed professional warehouse operators at affordable fees.
“This will greatly uplift the living standards of especially women and youth at the grassroots level,” K’Ombudo said.
He said the whole cycle will in turn result in the growth of agro-processing and value addition industries, as agro-processors will have access to consistent quality and quantity commodities that will ensure effective utilisation of their processing capacities.
The country loses approximately 30 per cent of its crop produce to post harvest mishandling, meaning for a farmer with 20 acres of land, six acres of the produce is lost before reaching the market, a catalyst to prolonged poverty, driving more people into extreme poverty.
More specifically, the project will be looking to counter post harvest losses in maize production by about 10 per cent a boost to the government's initiative to improve maize production through the fertiliser subsidy programme.
The country needs about 12 million bags of maize annually to fill up the consumption needs gap that has been widening over the past years on declined maize harvests.
Last year’s harvest was projected at 33 million bags of 90 kgs, the lowest in five years.
Ministry of Agriculture data shows maize production in 2021 was 38 million bags and 42 million bags in 2020.
In 2019 and 2018 the harvest stood at 44.0 million and 44.6 million bags, respectively, while 2017 saw the country harvest about 35.4 million bags of 90 kgs.
IFC’s country manager for Kenya Amena Arif, said through the system, farmers will be granted better storage to enable them fetch fair prices and access credit for growth.
“Participation and investment from the private sector will be key to unlocking the benefits of the warehouse receipt system in Kenya and uplifting farmers,” Arif said.