review of warehouse receipt system and inventory credit initiatives in ...

• to prioritise above all else the emergence of a cadre of competent warehouse operators,
while applying pragmatism in the pursuit of social objectives
• to develop regulated systems where conditions are favourable, i.e. where the regulatory
service can be highly focused and professional, and the economics are favourable
• to encourage spontaneous moves by companies seeking to provide public warehousing or
‘field warehousing’ services
• to prioritise the testing and roll-out of electronic warehouse receipt systems, in the light of
the record in South Africa and Uganda, as a key step in improving security, motivating
stakeholders (particularly banks) and facilitating the use of negotiable warehouse receipts
• to develop public sector procurement of goods held on warehouse receipts, building on a
start made by WFP
• for donors to work together in implementing an agreed and consistent approach, in
recognition of their major role in WRS and related initiatives
Some countries may also wish to follow Tanzania’s example, of first establishing the WRS
for export crops, with a view to eventually focusing on more politically sensitive food crops
(if and when policies are more favourable)
Farmer-focused approaches (Category 3)
Improvements in the policy framework will similarly increase the effectiveness of these
initiatives, and notably in the area of microfinance.
Structured microfinance networks, which may or may not be linked to farmer associations,
can play an important role in agricultural development, and in Madagascar have had
considerable success financing seasonal storage by farmers. Regulatory agencies in Eastern
and Southern Africa should facilitate the establishment of such networks in their countries.
MF and rural marketing specialists in these countries should assess whether and how they can
adapt this storage credit system to their own circumstances. There is a need to monitor the
implementation of progress with microfinance-linked and cooperative approaches particularly
in Tanzania.
It is worth helping farmers increase their role in crop storage. There is a need to re-evaluate
the level of storage losses at farm level, and the efficacy of different approaches to their
reduction, including the use of hermetic structures.
Specific proposals
Proposals for commercial-level WRS
Priority should be given to countries with prospects for developing or establishing the WRS
in the near future, i.e. Tanzania, Kenya, Uganda and Zambia, as follows:
• In Tanzania, cash crops should be the main focus, building on the considerable progress
to date. The priorities should be to: (a) review progress with cashew, coffee and cotton in
greater detail than has been possible in this study, comparing to alternative approaches
(e.g. contract farming), and; (b) develop rigorous, efficient, and self-financing regulatory
mechanisms.
• In Kenya: the EAGC-supported grain system should be the prime focus, given a more
quality conscious and formalised market than in most countries, strong stakeholder
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