The launch of the first ever Warehouse Receipt System in East Africa is among a raft of measures being put in place to see the private sector enter into post-harvest grain handling business.

The system launched in Nakuru last week by the East African Grain Council (EAGC) will finally see the entry of more private players into the business, which has been a preserve of the buyer of last resort, the State- owned National Cereals and Produce Board (NCPB).

It came as a response to the persistent calls by farmers and other stakeholders for the liberalisation of the post-harvest cereals handling business to let in more players as years of monopoly appeared to have left the sector with few options other than contending with NCPB's services.

Every year, NCPB faces accusations of stirring wild fluctuations in grain prices either due to delay in processing farmers' payments or its inability to absorb all the seasons' produce.

The scenario has, every year, left a gap that middlemen have used to exploit the poor farmers, who either have to take the low prices or grains rot in the farms.

In an interview, the EAGC's managing director, Ms Anne Mbaabu, told Business Daily the council was about to make post-harvest grain handling viable for the private sector players. "We are also campaigning to have small scale farmers leave the task of handling produce to professionals so that they may have ample time to prepare for the next planting season," she said.

But a section of small scale farmers have since adopted a wait-and-see attitude towards a system whose promoters say is key to food security in the continent.

Among the issues raised is lack of well-equipped stores in the country to cater for all the seasons' produce.

The farmers should know better. When heavy rains set in during the harvest time in the months of August, September and October last year, small scale farmers bore the brunt.

"Poor roads network made it impossible for farmers to access storage facilities, which are often situated far from the farms," says the Nakuru region Kenya National Federation of Agricultural Producers (Kenfap) chairman, Mr Samuel Gitonga.

"Those who managed to transport their produce found out that the cost of drying their grains were often turned away on grounds that they exceeded recommended moisture content," Mr Gitonga said.

As a result, the farmers' lobby said the cost of post-harvest grain handling stretched the small holder farmers by up to 40 per cent.

It is a common feature to find farmers drying grains under the direct elements of weather either in the farms or on the unused sections of tarmacked roads during harvest times due to the inability of the NCPB to purchase all their produce.

The council is now out to win the farmers' hearts.

The Kenya Maize Development Programme and Cereals Growers Association officials have also pitched tents on farms to popularise the system, saying it will turn grain into security for loans.

Equity Bank chief executive officer, James Mwangi, said the system would be a long- term solution to the ever-fluctuating agricultural prices. The bank has set aside Sh1.5 billion to prop up the system.

Ministry of Agriculture officials say the system will make extension services relevant to the farmer right from land preparation to marketing level.

Ms Mbaabu says the new receipt system was installed after a thorough feasibility study and had all the tools of trade it requires to succeed.

To boost its grain handling capacity, the council is eyeing the grain handling facilities currently lying idle at NCPB premises.

While the council's strategy is to acquire unused NCPB facilities in the regions, the council is approaching large scale farmers to lease out their stores.

"Farmers will be asked to take their produce to the nearest certified service providers," she said in response to concerns raised by growers over transportation costs.

EAGC has so far licensed only one warehouse operated by the Nakuru-based Lesiolo Grain Handlers and expects NCPB to release nine other facilities for the system.

NCPB has excess capacity for handling grain. It uses only a third of the silos spread out in the cereal producing regions.

One silo such as the one managed by Lesiolo Grain Handlers has a capacity of 90-kg 55,500 bags. The silo, hired from the NCPB, had been idle for 18 years before the private firm approached the parastatal to lease it to them.

So far, just over 10,000 bags of maize have been deposited at the Nakuru facility and growers issued with storage receipts backed by Equity Bank.

Ms Mbaabu said the new system would not push the parastatal out of business.

"We will create a symbiotic relationship with NCPB because they will now be able to make money from 70 per cent of their facilities, which have been lying idle for many years," she said. The council is also working towards ensuring that NCPB establish a private wing to manage the certified stores under the new warehousing system.

Part of the plans to have the system running smoothly is training the parastatal's officers to learn about and internalise the concept for the benefit of farmers and NCPB.

The council has asked the board to lease out its silos in Narok, Kitale, Webuye, Bomet and Lugari; in Eldoret, it will secure a warehouse.