It is almost a tradition that a farmer will harvest around 10 sacks of maize or sesame and because of the fluctuating market prices, rush to sell them off at usually unfriendly prices.
On some occasions, that farmer might even lack money to send children to school if there is no ready market for the farm produce.
However, dear reader, there is a savior in town— warehouse receipting.
A creation of the Warehouse Receipt System Act 2006, warehouse receipting helps a farmer or trader access finances—to run any quick offline errand— on the back of the items they have stored in the warehouse.
A receipt is like trading collateral security. And this is how it works.
You have your goods or items of value, take them for safe storage in a government recognized warehouse, you are given a receipt. The receipt provides details in terms of weight and value of the goods and also acts as proof that you own the said goods in the warehouse.
If you are a farmer or trader, it is that receipt you take to a bank and pick a loan to clear your bills as you wait for the prices to surge.
And Ms Deborah Kyarasiime, the Acting Executive Director of the Uganda Warehouse Receipt System Authority, says the system creates the perfect opportunity for farmers and traders to streamline their work and also plug the suffering from the vagaries of price fluctuation and harsh trading environment.
“We are the-go-to people if you mean to trade formally. Anybody can sell and buy but not everyone is involved in trading where there is informed participation with traders having information on the products on the market and the correct pricing. We promote structured trading,” Ms. Kyarasiime said in an interview with Eagle Online.
To benefit from the receipting system, you must store your goods in a warehouse. The authority however neither owns nor develops warehouses. They only license them and their keepers.
“We promote the use of warehouse receipts as a collateral for financing where the receipts are used as a security.
The Warehouse Receipting System Authority has been in place for three years now and already has warehouses across the country. However, the first receipts, Ms Kyarasiime said, will be issued by late August.
“Farmers can apply for the receipts through their cooperative unions and they will be able to tap into the opportunities the receipts bring,” she said before adding that the Authority is, for now, more focused on agricultural commodities.
“Someone says they have produced a lot of produce because of the Operation Wealth Creation but they have nowhere to keep and therefore they get the worst prices and at the end of the day don’t benefit.
“Why should one part of this country suffer from hunger yet another part does not. With Warehouse Receipting we would only call up a receipt number we know has enough in the storage to supply instead of government going to out to beg for food from donors,” she said.
Although it seems to focus more on those who store in the warehouses, the system has opportunities for the owners of the storage facilities too, but only if the warehouse is licensed by the Authority.
“Being licensed by Authority means that a warehouse will optimize its operations due to the massive businesses we shall be forwarding to them,” Ms. Kyarasiime said, adding that the licensing will also protect users from being exploited.
“As a public warehouse, we negotiate with you the prices you charge depositors based on the level of services you will offer them,” she said.
Asked whether there is plan to address dealers in perishable goods, Deborah said it will be the role of warehouse owners to ensure they bring in relevant services which can help in preserving perishable goods.
“Lack of infrastructure affects most of the warehousing work. We need specialized kind of storage to be able to keep perishables. But we shall in the future achieve all that.
For now, I call upon Ugandans to embrace the Warehouse Receipting system. It is the best for their business and farming,” she said.