Online granary register gives grain farmers market access past brokers
Farmers dry maize in Eldoret. Grain farmers will be able to use e-granary registration for access to credit and keeping brokers at bay. PHOTO | FILE
Market access ranks among the headaches of grain farmers, leading to losses or manipulation by brokers or middlemen.
However, farmers now stand a better chance of wriggling past the hawk-eyed and sweet-talking middlemen — who acquire grains for a song — thanks to the launch of an online tool for updates on market availability.
The e-granary developed by the East African Farmers Federation (EAFF) will, among other benefits, link farmers to traders, giving them room to negotiate for better prices.
The technology joins a list similar tools in the grain industry. It will update users using the USSD code that enable farmers to register using a mobile phone, stating their location and the type of crop to facilitate a marketing plan.
Users register by dialling a short code— *492# — and following prompts.
“The e-granary is unique in many ways as it will facilitate farmers’ access to markets, saving them the trouble of looking for buyers,” said EAFF during the launch.
Other grain handlers such as warehouse operators will use the tool to understand crops planted, where, and access.
The federation has partnered with organisations such as the East African Exchange (EAX) and the East African Grain Council (EAGC) which operate warehouses in Kenya.
User details will be adequate also for accessing bank loans, based on estimated future production and earnings.
“This facility will offer credit to farmers by providing tailor-made credit based upon future production and expected sales/profit,” said the federation.
The e-granary loan, according to EAFF, does not require a collateral or a lot of paperwork. These loans are tied to a farmer’s expected income.
This model of financing has been partly borrowed from the dairy and tea sectors. It is tied to farmers operating as a group, thus reducing the risk of bad debt since the farmer groups depend on good name for ratings.
Users of e-granary will be able to know the number of farmers on the network, amount of seeds planted and harvest in gazetted weights.
They would also be able to tell quantity and quality of deliveries to a collection centre, supply contracts, and monthly payments.
Last year, the EAGC launched G-Soko, an online platform that links small-scale farmers and buyers with the target of eliminating cartels in the grain value chain.
Cartels are one of the challenges so far identified as a threat to food security because of skewed returns from investment even as the fate of a Kenyan commodity exchange remains unclear.
Cutting down on investment in agriculture is one of the steps farmers usually take in reaction to poor facilitation.
Price signals
Recently, EAX announced plans to establish a futures market in the country, becoming the second in the continent after South Africa.
Such an exchange would offer price transparency, organised marketplace and risk mitigation in the grains sector. “With the futures in place, farmers in Kenya will be able to plan better given the assurance of a locked price for their produce,” says Ms Constantine Kandie, Kenya’s EAX country manager.
The futures, which will run on the EAX commodities exchange platform, will also help farmers to make decisions on crop patterns based on price signals.
