Posted on March, 1, 2021 at 02:48 pm
The Agriculture ministry has invited firms to apply to set up and operate the new warehouse receipt system that will back commodities exchange.
The electronic system would allow owners of agricultural goods to deposit their commodities in certified warehouses and get issued with receipts as they wait for the price to be in their favour before selling at a later date.
The Warehouse Receipt System Council did not say when it expected the planned exchange to kickstart.
"The Council hereby invites interested members of the public, current warehouse operators, farmers, Cooperative societies and investors to apply for licensing as Warehouse Operators to participate in the warehouse receipt system," said Samuel Ogola the acting chief executive of the Warehouse Receipt System Council in a tender notice.
Experts say an efficient warehouse receipt system can help farmers overcome challenges of market access by removing room for middlemen to exploit farmers — which diminishes returns on their labour.
This is because it allows farmers to avoid selling after harvest, when prices are depressed, by enabling them to deposit their commodities in a certified warehouse, which issues them with a receipt that serves as document of title.
Mobile funds
This can in turn be used as a security for short-term credit, helping to mobilise funds, note experts.
Parliament passed the Warehouse Receipts Systems Act in June 2019, thereby setting out a legal framework for the development and governing of a WRS for the Country.
President Uhuru Kenyatta appointed Ms Jane Ngigi, former chief executive officer of the Kenya Flower Council as the first chairperson of the council with Mr Munya nominating Samuel Ogola, who previously served as head of Tea Directorate to act as the body’s chief executive officer.
Source: Business Daily