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Business Updated: 20 October 2021 14:07 EAT 224 Views | ~ 1 minute

This Is How To Beat Broker Exploitation, Farmers Advised

Farmers have been urged to embrace the Warehouse Receipt System (WRS) to end exploitation by brokers who buy their produce at throw-away prices soon after harvest.

National Cereals and Produce Board (NCPB) chair Mutea Iringo said the new system will enable farmers to safely store their harvest until when the prices are favourable.

Addressing representatives of farmers, financial institutions, the county government and other stakeholders in the agricultural sector in Nakuru on Tuesday, Iringo said farmers who have adopted the system are able to access bank loans against receipts issued for goods stored in controlled warehouses.

President Uhuru Kenyatta signed the Warehouse Receipt System bill into law in 2020 providing a legal framework for the development and governance of the system. The Act provides for the establishment of a system whereby warehouse receipts will be 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,” he said.

Iringo added that WRS will help improve commodity storage, reduce post-harvest losses that stand at 30 per cent, curb value chain inefficiencies, and increase financial earnings to farmers, traders and service providers in the agricultural sector.

“These systems enable producers to delay the sale of their products until after harvest to a moment when prices are generally more favourable,” he said.

At the same time, the NCPB chair allayed fears that the State Corporation was on its death bed due to a Sh7-billion debt with the Kenya Commercial Bank.

He said the National Treasury Cabinet secretary, his Agriculture counterpart and the bank were working out modalities to resolve the debt which is attracting Sh110 million per month as interest.

“The three parties have arranged for a joint meeting in the coming weeks. The debt arose from a loan taken five years ago by NCPB to buy subsidised fertilisers for farmers, NCPB is more vibrant and stable than ever despite the loan that attracts Sh3 million on daily basis as interest,” he said, adding that the newly constituted board had strengthened its governance structures and was paying for cereal deliveries within 24 hours.

He also said that the board has established six testing laboratories in Kitale, Nakuru, Eldoret, Meru, Nairobi and Machakos to curb the aflatoxin menace, while three others will be unveiled in the coming months in Bungoma, Migori and Narok counties.

The Board, he said, was also a participant in the E-Voucher Inputs Programme where farmers use a mobile phone platform to access fertilisers and pay 60 per cent of the cost with the rest footed by the National government

Tags: National Cereals And Produce Board