The government has moved to tame post-harvest losses from smallholder farmers with a new warehouse receipting system.
In the plan, small-scale farmers in the country will be able to store their produce in certified warehouses while awaiting favourable market prices.
Agriculture Principal Secretary Kipronoh Ronoh said that the WRS is expected to alleviate poverty and enhance food security by significantly reducing post-harvest losses, which account for 40 percent of the food produced in the country.
Ronoh encouraged farmers to adopt the initiative, noting that receipts issued under the WRS can be used to secure affordable credit from participating financial institutions.
The system operates electronically, enabling farmers to deposit their produce in warehouses certified by the National Cereals and Produce Board (NCPB).
The PS spoke during a workshop hosted by Financial Sector Deepening (FSD) Kenya, aimed at presenting findings from a recent viability study on WRS financing in Kenya.
The PS noted the critical role of agriculture in Kenya’s economy and the need to invest in the sector to enhance growth and stability, particularly for rural livelihoods.
“Despite the sector’s importance, smallholder farmers often sell their produce immediately after harvest when prices are low,” Ronoh said.
“This situation is worsened by inadequate storage facilities and poor preservation techniques, leading many farmers to sell at a loss to commercial or foreign traders who benefit from seasonal price fluctuations.”
Kenyas National Agroecology for Food System Transformation Strategy, 2024 – 2033, shows that between 20 per cent and 40per cent of the food produced is lost or wasted
For Kenya, unlike the developed world, food loss, not waste, is the greater problem, with small-scale farmers, who account for 75 per cent of the total agricultural output in the country, facing a myriad of challenges, including inadequate market linkages and a failure to meet the cosmetic specifications for their produce.
The WRS aims to address these issues by stabilizing market prices and improving farmers’ profitability.
It enhances transparency in the business, allowing farmers to make informed decisions about when to sell their produce rather than being forced to sell under pressure during harvest time.
Agriculture Finance Corporation (AFC) Managing Director George Kubai underscored their commitment to providing tailored financial solutions for the agricultural sector.
“AFC’s strategic goals focus on enhancing financial inclusion, supporting smallholder farmers, and developing innovative products to transform agricultural financing in Kenya. The warehouse receipt financing product is a key component of this strategy,” Kubai said.
He noted that warehouse receipt financing has the potential to transform agricultural financing by allowing farmers to access credit against stored commodities, thereby mitigating post-harvest losses and improving their bargaining power.
Kubai emphasized that the success of this initiative depends on effective implementation and widespread adoption among farmers.
