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Warehouse Receipt System to bring relief to Farmers

Agriculture in Ghana is recognised as the mainstay of the economy with a greater impact on poverty reduction than other sectors. It is also critical for rural development and associated cultural values, social stabilization, environmental sustainability and buffer during economic shocks.

Agriculture remains one of the key sectors prioritized by government to expand exports and promote a sustained approach to poverty reduction.

In spite of these, Ghanaian farmers, both Commercial and smallholders continue to grapple with challenges ranging from post-harvest losses, low prices for products due to early selling, non-availability of quality assurance and access to credit.

It is for these and other reasons that farmers and other stakeholders in the Agriculture sector have welcomed the introduction of the Warehouse Receipt System (WRS) which was brought into being to increase farmers’ access to credit, storage and market facilities. It is also to ensure that agricultural commodity produced are stored properly and traded in a structured manner to avoid chaos in the market

The WRS allows farmers to deposit their agricultural products in a public or private warehouse where operators will evaluate and grade the commodity, and agree to maintain and insure it.

A detailed receipt reflecting the quantity and quality of the deposited commodity is then issued to the farmer. It can be used by the farmers as a negotiable item—they can trade it, swap it and use it as collateral to access credit facilities.

According to proponents, the system provides an avenue to develop a more robust database of agro-export products, for policy makers and they could effectively track what tonnages are being exported and which commodities are meant for export when export and export financing is done through the system.

They insist that Agricultural market operators would also experience an increased flow of more reliable and relevant market information for the purposes of business planning and strategy

The system is being implemented by the International Finance Corporation of the World Bank Group in collaboration with the Ministries of Trade and Industry and Food and Agriculture, as well as the Ghana Exchange Commodity.

The WRS is expected to address major challenges facing farmers such as access to credit facilities, markets and storage facilities and make the sector attractive for more people, particularly the youth, to venture into.

Making presentations on the WRS to a group of journalist in Kumasi recently, some advocates who do not want their names mentioned argued that the System would improve storage, promote structured trade and enhance financing, while allowing producers to select the best time to sell their products.

Farmers, according to them, can now get easier access to loans that are collateralized by certified warehouse receipts as well as get better prices because commodities are of higher quality and farmers can postpone sales until when the market is more profitable, while, Mitigating substantial risks in transactions.

The System would guarantee a reduced risk of grain contamination and ensure there is a year-round access to grain of assured quality at competitive prices.

On his part, Mr Charles Mawusi, Executive Director of Trans-Media Network, encouraged journalists and all stakeholders to join the advocacy to ensure that government’s policy of constructing one Warehouse each in all the districts across the country is fulfilled.

For him, it is through such robust government initiatives that the Warehouse Receipt System would thrive for the benefit of all Ghanaians.

 

By Mohammed Suleman

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