Kenya has incorporated potato into the Warehouse Receipt System (WRS). This is the latest crop into the system that was dealing with maize, beans, green grams, coffee, wheat and rice.
Chief Executive Officer to the WRS Council Mr Samuel Ogolla made the announcement said the system would enable potato growers to access credit by borrowing against receipts issued for goods stored in controlled warehouses.
It also targets bringing to an end exploitation of farmers by brokers as they would now be able to sell their produce when prices are favourable. Mr Ogolla noted that the WRS would help improve commodity storage, reduce potato post-harvest losses that stood at 30%, curb value chain inefficiencies, and increase financial earnings to farmers, traders and service providers in the agricultural sector.
Warehouse Receipt System Act
In June 2019, Parliament passed the Warehouse Receipt System Act, providing a legal framework for its development and governance. Later that month, President Uhuru Kenyatta assented to the Warehouse Receipt System Bill. The law provides for the establishment of a system whereby warehouse receipts are issued by licensed warehouses to depositors upon delivery of agricultural commodities produced in Kenya.
“The receipt is proof of ownership. The document can be used as collateral to get a bank loan. These systems enable producers to delay the sale of their products until after harvest to a moment when prices are generally more favourable,” said the chief Executive Officer.
“WRS seeks to change the way the country trades, not just in cereals but other commodities. Private operators providing warehousing facilities have to be registered by Warehouse Receipt Council and Agriculture and Food Authority (AFA) to be eligible for the WSR,” noted the CEO.
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