Warehouse receipt system depots open doors to maize as prices fallWednesday October 19 2022
The Warehouse Receipting System (WRS) has opened up its stores for farmers to deposit their grain in exchange for receipts which they can cash to meet their immediate financial needs.
This is also meant to save growers from middlemen who are eyeing to reap where they have not sown.
Mr Samuel Ogola, chief executive officer of the Warehouse Receipt Council said farmers should take their grain to the nearest stores to avoid selling at poor prices.
This season’s maize crop will be the first to be stored under the system after its launch in January this year.
Farmers in parts of the North Rift have started harvesting maize and middlemen have flocked the region to take advantage of those who are under financial strain such as school fees payment.
“We encourage farmers not to sell at prices below their cost of production because they are in a hurry to meet their financial needs. They can store it at WRS and obtain receipts that they can use to obtain credit,” said Mr Ogola.
The price of maize in North Rift has dropped from a high of Sh5,500 for a 90-kilogramme bag in June to Sh4,000 currently with returns expected to drop further in the coming days as more stocks enter the market.
Under the WRS, producers can keep their maize at certified stores as they wait for the prices to stabilise. They are then issued with receipts, which they can cash at financial institutions participating in the programme, an amount that is recovered after they have sold their produce.
Farmers will pay Sh48 for a 90-kilogramme bag in the first month of storage with the subsequent months attracting a Sh9 charge.
“Farmers will not be required to pay immediately when they deposit their grain. The amount will be recovered later after their grain is sold,” Mr Ogola said. Mr Ogola said the first month’s fee is expensive because of the charges that are incurred in grading and fumigation of the grain.
So far the council has certified 10 stores in Moi’s Bridge, Kitale, Eldoret, and Nakuru, which have the capacity to store at least 12 million bags.
In June 2019, Parliament passed The Warehouse Receipt System Act, providing a legal as well as a regulatory framework for the development and regulation of a Warehouse Receipt System and establishment of the council.