NCPB staring at empty warehousing space with no grain to handle

 Smallholder farmers in Kenya are yet to embrace the Warehouse Receipt System more than one year after it was unveiled.

This is coming at a time when the government has embarked on a campaign in the counties to sensitise farmers, devolved units and other stakeholders on the need to embrace the system, which is expected to revolutionise farming.

The government has stepped up a campaign to woo farmers to use its storage facilities across the country.

Early this month the National Cereals and Produce Board (NCPB) put up a paid advert in the local dailies in which it announced availability of storage space for leasing in seven regions in a bid to help farmers address post-harvest challenges.

The implementation of the Warehouse Receipt System (WRS), which was unveiled in July last year has seen a slow uptake by the farmers prompting the government to scale up its campaign strategy.

Lease space

"NCPB has warehouses that are suitable and regulator certified for grain storage and other long and short term warehousing needs distributed all over the country. NCPB is therefore inviting interested parties to lease stores that are convenient for them," said NCPB in a paid-up advertisement.

However, the state agency did not specify the storage charges saying "the facilities are available for short and long term leasing and are suitable for farmers' co-operatives, individual farmers, non-governmental organisations, government institutions, Aid agencies, traders and millers."

The stores that are readily available for lease are Lake and the Western region in Kisumu, Muhoroni, Awendo, Kehancha, Ntimaru, Nyansiongo, Muhuru Bay, Tamlega, Lugari, Webuye, Miyanga and Malava.

In the Nairobi and Eastern regions, the empty stores are in Lunga Lunga, Thika, Kithimani and Konza while in the food basket of the North Rift region farmers could store their produce in Eldoret, Turbo, Lodwar, Kacheliba and Sigor.

Post-harvest management solutions

The stores that are ready for storage in the South Rift region are Kirindoni, Kabarnet, Naivasha, Mulot, Ndanai and Kimalel while in the Coast region the space is in Voi.

The Northern region which is prone to drought has storage facilities lying idle in Ishiara, Sagana, Dol Dol, Mandera, Wajir, Kyuso and Nanyuki.

NCPB also announced that it has massive unutilised bulk handling and storage facilities in Mau Narok depot, Kitale and Nakuru wheat silos.

The board is also offering a range of grain post-harvest management solutions to farmers at competitive rates which it did not indicate.

The post-harvest services which are critical to farmers to reap maximum returns from their investment include drying, weighing, grading and aflatoxin testing, clearing and forwarding, cleaning services, fumigation and pest control and Warehousing Receipt System (WRS).

WRS is expected to solve the challenges smallholder farmers face related to inefficiencies brought about by a lack of a transparent and structured market.

The WRS is a process where producers or dealers deposit their commodities in certified warehouses and are issued with a warehouse receipt as proof of ownership.

Reduce post-harvest losses

The system is touted as a key intervention to improve commodity storage, reduce post-harvest losses, curb value chain inefficiencies, increase earnings for farmers, traders and service providers in the agricultural value chain.

The system also confers a wide range of benefits to the farmers that include an assured market for their produce at the best prices, reduced post-harvest losses.

The produce is cleaned and fumigated to remove impurities and pests and is graded.

Therefore, farmers sell the products according to grades. With warehouse receipts, farmers can access inputs and loans on the strength of the deposits at the warehouse while millers can do value addition as they have guaranteed raw materials.

The system has been rolled out in Nakuru and is expected to attract investments in the warehousing sector.

Besides Nakuru, the system has been successfully launched in Trans-Nzoia, Uasin Gishu, Meru, Embu, Nyeri, Makueni and Machakos among other counties.

Maize farmers in Tuiyotich in Mauche Ward, Njoro sub-county, were the first small-scale farmers to adopt the electronic system in trading agricultural commodities in Kenya when they delivered 5,000 kilogrammes grade two maize to the NCPB depot in Nakuru in April.

Quality standards

The maize was subjected to quality standards moisture content verification, aflatoxin testing, grading and storage before they were issued with a document confirming the ownership of their produce.

"This is the best system and we hope to reap from the good prices besides being assured of the safety of our produce. We have been exploited by middlemen for many years," says Joseph Koech who is also the farmers' leader.

"Days of selling our produce at a throwaway price to middlemen who invade our farm gates are long gone."

Apart from maize other produce that qualifies to be stored in a warehouse include rice, processed fish, beef, macadamia, cashew nuts, coconuts, powdered milk, cotton, sisal, pyrethrum, potatoes, coffee, tea, rice, beans, green grams and wheat.

At least 150 warehouse operators that include cooperatives, counties and NCPB have applied for licences to operate WRS.

Strategic food reserve

The government through NCPB is leasing space for seven million bags of cereals to the private sector, farmers and traders at competitive rates. The NCPB's total storage capacity for strategic food reserves is about 22 million bags.

Acting Warehouse Receipt System Council chief executive Samwel Ogola says the system is geared towards the creation of an Agricultural Commodities Exchange.

 He exuded confidence that the Warehouse Receipt System would solve many challenges in the sector.

Mr Ogola says the national government has formed the Kenya National Multi-Commodity Exchange (Comex) to fast-track the system.

"Comex is in the process of setting up the trading floor, which should be up and running by the end of the year. Nairobi Security Exchange is a board member of Comex and would help in technology and knowledge transfer. Comex is not solely for agricultural produce. It is a multi-commodity exchange."

"The services will also be rolled out across the counties. This will help farmers monitor the prices of various commodities and eliminate exploitation by brokers. Farmers' bargaining power will be enhanced," Mr Ogola told Business Daily in a past interview.

Kenya does not have adequate warehousing facilities in the right places. Most of what it has for goods storage are either substandard stores or warehouses that are built in the wrong locations.

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