AFRICA FEEDING AFRICA The Role and Importance of Developing Vibrant Commodity Exchange Systems

Transcription

1 AFRICA FEEDING AFRICA The Role and Importance of Developing Vibrant Commodity Exchange Systems i Warehouse Receipts Systems Experiences from Eastern Africa. Gerald Makau MASILA, Executive Director, EAGC Presented to the ReNAPRI WORKSHOP 4 th - 5 th Nov 2014, Lusaka, ZAMBIA

2 Contents... Introduction to EAGC Key EAGC Initiatives EAGC WRS programme Achievements Challenges Lessons Learnt

3 EAGC Mandate Inclusive Main Grains/Cereals Maize Beans Wheat Green grams Rice Pigeon peas Sorghum Soya beans Millet Teff..Etc... Farmers/Producers small holder and large Traders, Handlers, Warehouses Processors/Milling/Manufacture As Members of EAGC Active, Affiliate,

4 EAGC Object To develop and promote regional structured grain TRADE Advocate for an enabling environment, Reduce transaction costs, trade barriers, Increase incomes/reduce poverty, improve food security

5 GRAIN VALUE CHAIN... PRODUCTION ( SMALLHOLDERS 70-80%) INPUTS(SEEDS, AGRO-INPUTS, FERTS FINANCE ACCESS MARKET ACCESS, MKT INFORMATION RISK MANAGEMENT PRICE VOLATILITY COMPETITION (INTERNATIONAL/REGIONAL POLICY MACROECON FISCAL MONETARY NATIONAL POLICIES IMPORT/EXPORT REGIONAL POLICIES(RECS) AFRICAN UNION(AUC) IGAD,COMESA,EAC SADC, ECOWAS etc

6 Key EAGC Initiatives Structured Trading Systems (STS) Market Information Systems (MIS) Grades and Standards Storage and Warehousing, Post Harvest Warehouse Receipt System, Trade Contracts, ADR Financing Systems Inventory Credits -Collateral Management Grain Trade Platform/Commodity Exchange Capacity Building Trade Policy Policy Dialogue Regional harmonization of Trade Policies Regional Food Balance Sheet Removal of Trade barriers

7 Structured TRADING System TRADING PLATFORM/ COMMODITY EXCHANGE BANKS PROCESS/ MILLING SILOS STORES WRS FARMERS/ TRADERS RULES OF TRADE/CONTRACTS/ARBITRATION STANDARDS & GRADING ENABLING POLICY ENVIRONMENT/LEGAL & REGULATORY FOR STS

8 EAGC WRS Programme... WRS Kenya Pilot Development of WRS process & Protocols Certification criteria for Warehouses Awareness creation to Stakeholders Participation of Financial Institutions/Banks Farmer/ Trader mobilization to utilize WRS. Market linkage Sale of commodities in WRS Market Information Services to support WRS

9 EAGC WRS PROCESS...

10 EAGC WRS PROTOCOLS... WAREHOUSE CERTIFICATION INSPECTION CRITERIA, INSURANCE, SERVICES FACILITY SILO OR FLAT BED WAREHOUSE APPOINTMENT OF INSPECTORS ISSUE OF WAREHOUSE CERTIFICATE & WHSE RCPTS COMMODITY CARE RULES WAREHOUSE RECEIPT REGISTRY TRIPATITE CONTRACT EAGC/WHOUSE/BANK RULES OF TRADE & ARBITRATION - ADR MARKET LINKAGE/TRADE PLATFORM

11 WRS ACTIVITIES... Warehouse Identification & Certification WRS concept awareness creation/sensitization Farmer Groups formation & Training Grain Aggregation/bulking centres Issue of PHH equipment for Quality Control Warehouse Operators Training Monitoring/Facilitating Grain deposits to Certified Warehouses Surveillance, Impromtu Inspections

12 FARMERS TRAINING...

13 SUPPORT TO FARMERS...

14 GRAIN HANDLING EQUIPMEMENT..

15

16 WAREHOUSE OPS TRAINING

17 GRAIN BULKING & TPT...

18 GRAIN WAREHOUSING...

19 Achievements... Certified Warehouses 10 (Ten) Certified Warehouse Capacity 33,705MT Commodities Deposited in WRS 21,000MT MAIZE, WHEAT & PULSES Total farmers reached 13,233 LOANS advanced to date Kshs.108 Million Depositors to date 1,100 Financial Inst/Banks - 4 Equity Bank, Krep FSA, Unaitas Sacco, Chase Bank

20 EAGC WRS CERTIFIED WAREHOUSES

21 WRS Cost Analysis % 80% 60% STG TPT FINANCE 40% 20% 0% Gogar Farm J.K Koech Minua C. A

22 WRS benefits Warehouse Receipt System is a market instrument that enables aggregation & safe storage of produce at harvest for eventual release to the market and thereby enable; Aggregation of produce from smallholder farmers at village bulking centres to access certified warehouses Transaction costs reduced for farmers, traders, millers etc which allows for increased earnings for all. Market Access Buyers can purchase directly from the warehouses where quality and quantity is guaranteed. Finance Access Warehouse receipts used as collateral for borrowing Stabilizing prices by eliminating excess supply at harvest

23 EAGC Experience...&...Lessons Learnt Warehouse Receipt System(WRS) WORKS! It s a Win- Win for all Stakeholders Depositors i.e. Farmers/Traders, Warehouse Operators, Financial Institutions, Commodity BUYERS/Processors/ Consumers Risk Management is key Professionalism & Insurance Governance - Roles & Responsibilities clear

24 EAGC Experience...&...Lessons Learnt Commodity Trade is key and critical to spatial redistribution of food from surplus production areas to deficit demand areas. Region as a unit for production and consumption. Cross border trade in Eastern Africa is the avenue to achieve this. However, XBT faces many challenges and barriers, tariff and non-tariff all which increase transaction costs.

25 Lessons...cont... TRADE POLICY and predictability of policy is either a support or a disincentive especially to private sector investment in the grain trade value chain. MARKET INFORMATION about available stock levels and to inform POLICY decision as well as supporting buy/sell decision by the value chain actors is necessary.

26 Challenges... Low Awareness & Participation in structure trade by FARMERS, TRADERS etc WAREHOUSE FACILITIES Under utilized / Few MARKET/BUYERS Low Awareness, Commodity Standards &Grading, Delivery, Procurement Procedure/Tendering POLICY Legislative, Trade/Market limitations

27 APPRECIATIONS. Donor Support SIDA - Sweden USAID USAID/Compete USAID/MLI USAID/Lead FSD AGRA CTA Partners FAO WFP CGA/UCE UNCTAD IFC RESAKSS ASARECA ICRISAT ACDI/VOCA/KMPD Nile Basin Initiative EAC COMESA African Union AFRACA abi Trust -UG

28 EAGC - Vision To be the leading voice for the grain industry in Africa Mission... To advocate for an enabling environment and promote structured grain trade for optimum stakeholder benefits