Small-scale farmers in Nakuru have been urged to embrace the Warehouse Receipt Systems (WRS) initiated by the National Government, to re-engineer credit access and cut down on post-harvest losses.
Deputy Governor Mr David Kones called on smallholder cereal and potato farmers to deposit their produce in certified warehouses and receive a warehouse receipt, which can then be used as collateral for loans.
“We want to debunk the myth that WRS is a preserve of large-scale farmers. This system is a crucial step towards modernizing small- scale agriculture and boosting farmers’ earnings.
The system can go a long way in increasing lending opportunities for small-scale farmers, who mostly comprise youth, marginalized groups and persons living with disabilities for individual and national economic development,” stated Mr Kones.
While noting that WRS will protect smallholder farmers from theft and spoilage of their produce and fluctuations in the market, Mr Kones indicated that the system was a vital financial support and will allow upcoming agripreneurs to invest in their farming operations without the worry of losing their harvests during market downturns.
He noted that despite agriculture being a key economic driver and link to food security, only five per cent of commercial bank lending in the country goes to the sector.
The Deputy Governor pointed out that Warehouse Receipt Systems was a game-changer in agribusiness.
Mr Kones spoke when he held a meeting with officials from the Warehouse Receipt System (WRS) Council, led by Compliance Officer Mr Leonard Mwashuma, to explore strategic partnerships aimed at improving agricultural value chains and enhancing the livelihoods of smallholder farmers across the 11 Sub-Counties.
The WRS, established in July 2020, provides a structured mechanism for commodity owners, including farmers and traders, to store their produce in certified warehouses operated by the National Cereals and Produce Board (NCPB). In exchange, they receive a warehouse receipt, which can be traded or used as collateral for accessing credit from financial institutions.
The government spearheaded the programme to provide storage space for farmers’ produce at a fee of about Sh50 per bag of dry cereals stored for a year in certified and registered warehouses.
Private entities, who have the ability to provide such storage space, were given the green light to venture into the business provided they meet the specified standards and regulations.
Private operators providing warehousing facilities must be registered by the Warehouse Receipt Council and the Agriculture and Food Authority (AFA) to be eligible for the WSR while the county Departments of Agriculture inspect and approve stores earmarked for the initiative.
The idea behind the programme was to reduce post-harvest losses by at least 30 per cent, with agricultural experts indicating that about a quarter of the harvested produce goes to waste each season.
Mr Kones underscored the system’s potential to reduce post-harvest losses, eliminate exploitation by middlemen, and unlock financing for farmers—particularly women, youth, and persons with disabilities (PWDs)—adding that it presents a transformative opportunity for inclusive participation in agriculture and dignified access to agribusiness financing.
“The WRS is a way to streamline agricultural value chains, reduce inefficiencies, and ensure that farmers receive fair prices for their produce. By storing their produce in certified warehouses, farmers can minimize losses due to spoilage, pests, and other factors, ensuring they get the best possible price for their crops,” observed the Deputy Governor.
He added that “the WRS can help stabilize market prices by allowing farmers to store their produce until prices are favorable, rather than being forced to sell immediately after harvest when prices are typically lower. By accessing credit and reducing post-harvest losses, farmers can potentially increase their overall earnings from agricultural activities.”
Mr Kones stated that the rollout of WRS was a significant stride in overcoming long-standing challenges of market accessibility and post-harvest losses that have troubled the region’s agricultural sector, describing it as a transformative initiative for Nakuru’s agricultural landscape.
The DG further said that Nakuru is among Kenya’s top producers of maize, potatoes and wheat and added that the WRS system is intended to ensure that farmers receive fair compensation for their diligence.
The Compliance Officer, Mr Mwashuma, affirmed the WRS Council’s commitment to working with the County Government of Nakuru in promoting the model at the grassroots, noting that collective participation by organized farmer groups can accelerate food security and rural development.
He stated that the government, through the WRS Council, has already certified several public warehouses in Nakuru, Kitale and Eldoret.
Mr Mwashuma said selected National Cereals and Produce Board (NCPB), Kenya Farmers Association (KFA) and Kenya Planters Cooperative Union (KPCU) facilities are among those certified by the Council.
He emphasised that the WRS is expected to alleviate poverty and enhance food security by significantly reducing post-harvest losses, which account for 40 per cent of the food produced in the country.
The WRS operates electronically, enabling farmers to deposit their produce in warehouses certified by the National Cereals and Produce Board (NCPB).
“Despite the sector’s importance, smallholder farmers often sell their produce immediately after harvest when prices are low,” Mr Mwashuma said.
“This situation is worsened by inadequate storage facilities and poor preservation techniques, leading many farmers to sell at a loss to commercial or foreign traders who benefit from seasonal price fluctuations.”
The WRS aims to address these issues by stabilizing market prices and improving farmers’ profitability. It enhances transparency in the business, allowing farmers to make informed decisions about when to sell their produce rather than being forced to sell under pressure during harvest time.
In June 2019, Parliament passed the Warehouse Receipt System Act, providing a legal framework for its development and governance.
Later that month, the then President Uhuru Kenyatta assented to the Warehouse Receipt System Bill. The law provides for the establishment of a system whereby warehouse receipts will be issued by licensed warehouses to depositors upon delivery of agricultural commodities produced in Kenya.
For a start, they were dealing with maize, beans, green grams, coffee, wheat and rice before diversifying to other agricultural produce such as potatoes.
The Warehouse Receipt System Act established the Warehouse Receipt System Council, which was inaugurated on July 29, 2020.
The council is mandated to oversee the establishment, maintenance, and development of the WRS for agricultural commodities produced in the country in collaboration with county governments and other players in the value chain.
It also ensures the efficiency, effectiveness, and integrity of the system. It is also mandated to provide for the registration, licensing and inspection of warehouses and warehouse operators.
WRS Council comprises multi-sectoral representatives from the major agricultural commodities trade network in the public and private sectors.
By Jane Ngugi
