USAID initiates grain warehouse receipt system in Ghana… Holds action planning programme for 40 stakeholders

THE AGRIBUSINESS and Trade Promotion (ATP) project, funded by the United States Agency for International Development (USAID), has imitated the Ghana Pilot of the Warehouse Receipts system with a two-day Action Planning Workshop for about 40 stakeholders in Kumasi.

The project intends to establish three warehouses certified for the up coming harvest season.

The participants, mainly farmers, traders and processors, were drawn from the agricultural sector to address major post-harvest problems, including the lack of adequate storage facilities and the inability to access funds for investment capital facing Ghanaian farmers.

Ms Sophie Walker, a consultant of the East African Grains Council in Kenya, told the workshop that the warehouse receipts system was a critical factor in expanding and attracting credit to the agricultural sector, raising farmer incomes and increasing investment in production and storage infrastructure.

She said the warehouse receipts system allowed producers, traders and exporters to store their crops in approved warehouses that were secure and meet proper conditions, and receive receipts for their deposited goods which can be used at a bank to secure a loan worth a percentage of its value.

The Grains consultant indicated that under the system, once the goods are sold, the loan and interest are first paid off, along with any management fees from the warehouse, with the remaining profits going to the borrower.

Ms. Walker said the storage of the goods allows the seller to time the market to ensure the highest price for the goods, and that a quality storage system enables sellers to spread out their financial gain over a longer time span, as well as ensure more value for their products, as they are kept dry and clean.

The Ashanti Regional Director of the Ministry of Food and Agriculture (MOFA), Mr. George Badu-Yeboah, who represented the Minister, welcomed the initiative of the USAID-sponsored ATP project, following the realisation that major post harvest problems facing the Ghanaian farmer was the lack of adequate storage facilities for maize and rice, as well as legumes such as cowpeas and soya beans.

According to the Agric Director, about $429 million was tied up in the maize production at harvest, 50% of which is held by farmers, with the other half by traders, making the cost of tying up of capital quite enormous.

He expressed the hope that the implementation of a warehouse receipt system would enhance better storage conditions for foods.

He suggested that for a successful long term warehouse receipt program, all stakeholders must work together, and called for a regulator to make sure the system works.

We need warehouses willing to be certified, and willing to offer up their storage areas to anyone with commodity to deposit, as well as insurance companies to offer comprehensive policies to cover potential risks on the commodity stored, and banks to look at collateral being offered, he noted.

Mr. Badu-Yeboah also reminded the stakeholders (farmers, traders and processors) to agree on what quality should be deposited in the stores, and to participate in the system.

The Regional Director recommended for the consideration of government to utilize the over 20,000 metric tonnes of warehousing space by the Ghana Food Distribution Corporation in the maize belt of the Ashanti and Brong Ahafo regions.

The two-day action planning warehousing receipt system, comes barely a month after the ATP had organised a three-day USAID-sponsored Partner Institutional Viability Assessment (PIVA) capacity building workshop for agricultural traders, drawn from members of the Ghana Agricultural Producers and Traders Organisation (GAPTO), including maize dealers from Techiman and Ejura, onion growers from Enchi and livestock dealers from across the country.