Post-harvest loss is a major challenge that eats into farmers' incomes, Agriculture PS Kello Harsama has said.
PS Harsama said most losses occur at the storage level, hence, the need for farmers to invest in proper storage systems.
He spoke during signing of a cooperation deal with the Warehousing Receipt System Council, the Ministry of Investments, Trade and Industry and the International Finance Corporation.
The PS encouraged farmers to adopt the warehouse receipt system to help in minimising the losses.
Harsama said for many years, small-scale farmers have been at the mercy of brokers and cartels who exploit them by dictating prices of farm produce.
"Agriculture markets in Kenya have been largely run by cartels and brokers. They dictate prices to the farmers who are helpless because they are dealing with perishable goods. The brokers take advantage of this and offer low prices," Harsama said.
The PS said this demoralises farmers and some end up abandoning farming due to the frustration.
He said the warehouse receipt system is key in ensuring farmers are not exploited and that they can store their produce and sell when market prices are better.
Trade PS Alfred K’Ombudo said Kenyan farmers have long grappled with food insecurity, post-harvest losses due to poor storage, aggregation and post-harvest handling.
This is in addition to limited access to markets, lack of effective and transparent price discovery mechanisms through a commodity trading platform and lack of affordable credit.
K’Ombudo said a strong warehouse receipt system helps address these challenges.
He said the government is engaged in an aggressive campaign to increase food production under the fertiliser and seed subsidy programme.
"WRS will help ensure this happens through provision of quality storage and certified warehouse facilities once farm produce is harvested," K’Ombudo said.
The PS said receipt reflects the quantity and quality of the commodity deposited at a certified warehouse and is transferable and negotiable. Thus, it can be used as collateral to secure credit for farmers, cooperatives traders.
"This will greatly uplift the living standards. especially of women and youth at the grassroots level in line with the Government’s ‘Bottom-Up’, Economic Transformation Agenda,” he said.
Warehouse Receipt System Council chairperson Jane Ngige said the system enhances access to certified safe and quality storage facilities.
This is done under licensed professional warehouse operators who charge storage fees.
"This will in turn result in the growth of the agro-processing and value addition industries as agro-processors will now have access to consistent quality and quantity commodities that will ensure effective utilisation of their processing capacities," she said.
She explained that farmers and aggregators across the country can deposit their agricultural commodities in certified warehouses.
This will be done in exchange for a Warehouse Receipt, which can be traded, sold, exchanged or used as collateral to obtain bank loans.
The Warehouse Receipt System covers the entire process of depositing commodities in a licensed warehouse, the issuance of a warehouse receipt reflecting the quantity and quality of the deposited commodity.
It also entails the management of the transfer of the receipt as a document of title, and includes, but is not limited to, the regulation of warehouses operators and actors associated in the processes.
(Edited by V. Graham)
