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State bets on new law to stem post-harvest losses

BUSINESS
By Awal Mohammed | October 29th 2020

Fruits traders wait for customers at Daraja Mbili Market in Kisii County on October 22, 2020. [File, Standard]

The government is betting on the newly passed Receipt System Council Act, 2019 to cut post-harvest losses for local farmers.

The Act, which was assented to in July, provides the legal framework for the development a regulation that will address marketing challenges of agricultural commodities.

Crop Development and Agricultural Research Principal Secretary Hamadi Boga yesterday lauded the Act as the antidote for post-harvest losses.

“Our targets relating to affordability include reducing post-harvest losses from 20 per cent to 10 per cent and reducing value chain inefficiencies by at least 50 per cent, which will be enhanced through improved storage,” said Prof Boga during a media breakfast in Nairobi.

Under the system, farmers will deposit their commodities in certified warehouses and then be issued with a warehouse receipt as proof of ownership.

They can use the receipt as collateral for bank loans, pending sale of the commodity at a later stage.

Farmers will also trade the commodity in a structured system while shielding themselves from post-harvest losses.

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The council will focus on implementing the warehouse receipt system for maize, beans, green grams, coffee, wheat and rice before progressing to other agricultural produce.

The council has already established five warehouses that they will start accepting commodities from farmers from early next month. The council chairperson Jane Ngige expressed confidence that it will deliver on its mandate.

“We come into office to help farmers store their crops. Our key mandate is to ensure no farmer sells their produce at a throw-away price because they don’t have anywhere to store their produce,” she said.

Modern trading

The Act also provides establishment of a commodity exchange marketplace where buyers and sellers come together to trade commodity-related contracts following rules set by the exchange.

The exchange provides an efficient, modern trading system that protects the rights and benefits of sellers, buyers, intermediaries and the public.

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