• Starting in October, farmers will deliver maize to NCPB warehouses and be issued with receipts
• Warehouse receipts are how agricultural commodities are managed worldwide
Maize farmers are worried about the new Warehouse Receipt System (WRS) that will be rolled out in October.
From October, farmers will deliver their maize to 58 NCPB warehouses and simply be issued with a 'receipt'.
Unlike receipts in the past that were never paid, these receipts will be freely tradeable. So a farmer could sell a receipt for, say, 1,000 bags of maize immediately, or hold onto the receipt until maize prices go up. Alternatively, the farmer could borrow from the bank using the receipt as security.
The agricultural system is being modernised. The National Cereals and Produce Board will only store the maize, for a fee, under proper conditions and sell it to millers when they require it. This is how commodities are managed all over the world.
WRS will revolutionise agriculture to the benefit of the farmer. One caveat is that it was originally supposed to be managed by the Strategic Grain Reserve that had a better track record than the NCPB before it was abolished.
The government should therefore allow private sector warehouses to join the WRS and compete with NCPB to ensure efficiency.
Quote of the day: "Courage is never to let your actions be influenced by your fears."
The Hungarian author was born on September 7, 1905