Farmers will be required to deposit their maize in certified warehouses at a fee and get issued with receipts as they wait for favourable prices to sell at a later date.
They can also use the receipts to access credit.
The WRS is expected to cut off cartels who have been offering farmers rock bottom price for their produce, making it difficult for them to break-even.
But it remains to be seen if the growers will embrace this new concept.
As the harvesting of this year’s main crop season starts this October, maize farmers are anxious over the system that they will use in selling their produce.
Over the years, they have relied on National Cereals and Produce Board (NCPB) to sell their grain at a price determined by the government for stocks in the national strategic food reserves.
But the government has announced that it will no longer buy maize from farmers this season, advising them to sell their grain through the warehouse receipting system (WRS).
Farmers will be required to deposit their maize in certified warehouses at a fee and get issued with receipts as they wait for favourable prices to sell at a later date. They can also use the receipts to access credit.
The WRS is expected to cut off cartels who have been offering farmers rock bottom price for their produce, making it difficult for them to break-even.
But it remains to be seen if the growers will embrace this new concept.
Kimutai Kolum, a farmer in Uasin Gishu County, says many of them don’t understand what WRS is or how it operates.
“We have started harvesting. The WRS Council needs to come immediately to the ground to educate farmers on this new concept to enable us weigh the options whether to sell our grain under this scheme or sell to the market as soon as we harvest,” said Mr Kolum.
The operation of the schemehas already been set in motion, with the certification of 36 out of the 121 warehouses that have been inspected by Food Crops Directorate across the country.
“Out of the 121 stores that we inspected, 36 have been certified to operate as warehouses in the first phase with 32 of them need to undergo corrective measures before they are certified,” said Leonard Kubok, head of the Food Crops Directorate.
Dr Kubok said a warehouse has to undergo at least a checklist of 122 items for it to get certification and allowed to store maize under this programme.
The facility needs to score a minimum of 90 percent on the list of requirements in order to get the directorate’s green light.
Phase one of certification, which started in May to July, saw the agency certify warehouses in Trans-Nzoia, Nandi and Ukambani.
Phase two of the certification process started in mid-October and covered 97 facilities in three regions of South Rift, northern Kenya and Lake/Western regions.
Some of the warehouses have totally been rejected for what the directorate termed their having serious flaws.
“These warehouses will be handling human food and we have to ensure that they meet the highest standards in order to avoid contamination,” said Dr Kubok.
The 36 stores that have been certified have a capacity of three million 50kg bags, with the number expected to rise to seven million when more warehouses receive certification.
Kipkorir Menjo, a director of Kenya Farmers Association (KFA), said the WRS scheme can work well if farmers are grouped under cooperative societies.
“This scheme can work well with cooperatives as this will enable farmers to aggregate their grain and store it as a group in WRS,” said Mr Menjo.
He warned that small-scale farmers could miss out on the economies of scale if they opt to store their produce in the warehouse because of low volumes.
In light of the cross-border trade that allows maize to flow into the country from the neighbouring Uganda and Tanzania, local farmers might also find themselves holding their grain in the stores for an unknown period of time as they wait for prices to go up.
Uasin Gishu county minister for agriculture Samuel Yego said the WRS is good for farmers but called for the public to be made aware about its benefits and operation.
“We are not opposed to the WRS. However, farmers need to be sensitised on what the this programme is all about,” said Mr Yego.
Parliament passed the Warehouse Receipts Systems Act 2019 on June last year providing a legal as well as regulatory framework for development and regulation of the scheme.
Agriculture Cabinet Secretary Peter Munya said the WRS was meant to improve commodity storage, reduce post-harvest losses, curb value chain inefficiencies, and increase financial earnings to farmers, traders and service providers.
“The WRS is therefore intended to offer a range of solutions to farmers, especially the smallholder farmers who face several challenges related to inefficiencies brought about by lack of a transparent and structured market system,” he said.
Last year alone, farmers lost close to 10 million bags of maize post-harvest. In Kenya, it is estimated that a grower loses up to 30 percent of his or her produce due to poor handling and storage.
Kenya now becomes the fourth country in Africa after Ethiopia, Rwanda and South Africa to have a fully functioning commodities exchange.
The new development, which will promote price discovery mechanism, comes at a time when private sector and agriculture think tanks have been opposed to government’s directive in setting prices of maize in the market.
