9 June 2014

East Africa: MINAGRI, EAX Sign Deal to Ease Grain Marketing and Funding Woes

Farmers' market access and funding woes could end following a deal signed between the East Africa Exchange (EAX) and the Ministry of Agriculture (Minagri) to provide grain storage and warehouse management services across the country.

Under the agreement, EAX will provide professional warehouse storage and inventory management, including moisture testing, drying, cleaning and weighing of stock prior to storage to reduce losses.

"The warehouse programme will help us reduce post-harvest losses through proper grain storage. It will enhance grain quality and enable farmers to earn handsomely through EAX," said Paul Kukubo, the EAX chief executive officer.

Under the deal, Minagri will organise sensitisation and outreach programmes where EAX will educate farmers on the warehouse receipt system, grain standards and certification, as well as trading on the commodities exchange and how they can access finance.

EAX will also provide electronic warehouse receipts to the farmers so that they are notified when buyers of their stock are identified and after trading their grains at the exchange's NASDAQ trading platform.

The farmers could also use their electronic warehouse receipts to get loans from the Exchange's partner banks.

Tony Nsanganira, the agriculture ministry permanent secretary, said the joint initiative will ensure access to more diversified markets, enabling farmers to earn better revenue for their efforts.

It will also help in mobilising farmers to improve grain quality and strengthen marketing efforts, he added.

"Good storage management will translate into better revenues for farmers since it will enable them wait for the best time to sell produce and ease access to finance from banks," Nsanganira said.

Thirteen warehouses, which were set up by the government around strategic grain producing areas in Karongi, Nyanza, and Kayonza districts, will be managed under the deal.

The warehouses are all linked to the national feeder road programme which eases access to markets and inputs.

The grain storage and warehousing management services will be provided through Collateral Management International (CMI), a specialised agricultural services company with presence in several African countries, including South Africa, Zambia, Nigeria, Ghana and now Rwanda.

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