Warehouse receipt system to open line of credit for farmers

By Sifiso Mpofu

Stakeholders in Matabeleland South province have welcomed plans by the government to introduce the warehouse receipt system saying it will help farmers unlock value from their agricultural produce.

The Ministry of Lands, Agriculture, Water and Rural Resettlement has held consultations with stakeholders in Matabeleland South province on its plans for a pilot project of the warehouse receipt concept.

A representative of the Financial Securities Exchange (FINSEC ), Setfree Nhapi explained how the concept works.

“The system that brings other players like banks allows for farmers to utilise the warehouse receipt to access lines of credit from the financial institutions on the strength that they have commodities stored in a warehouse.”

Ministry of Lands, Agriculture, Water and Rural Resettlement legal advisor, Darlington Tshuma said the warehouses will be established across the country for the benefit of farmers.

“For one to be a warehouse operator, the physical infrastructure itself has to meet certain standards. There are also requirements for insurance, and those who work there should be qualified,” said Mr Tshuma.

Stakeholders welcomed the initiative saying it will also help farmers to prevent post-harvest losses while recommendations were made for the concept to be improved to cater for the cattle ranching region.

“We believe that this concept is a good idea because in this region we produce a lot of horticultural produce, which normally goes bad because of lack of proper storage facilities, “ said a farmer Mr Nyathi.

“As a cattle country, we also hope that the government will factor in cattle farmers probably by establishing farms that will be run by warehouse operators.”

The warehouse receipts system has been successfully implemented in other countries.

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