Trade Ministry Launches Project to Enable farmers Access Credit Depositing Grains
The Ministry of Trade & Regional integration launched the National Warehouse Receipt pilot project, a system that enables farmers to get credit for depositing grains in exchange for a warehouse receipt.
With the Ministry’s legal-regulatory framework for licensing and overseeing warehouses, by storing their produce farmers can preserve their produce from the high levels of post-harvest loss that the local agriculture currently suffer, according to a statement from the Ministry.
The National Warehouse Receipt system will also improve the quality and safety of the stored produce, and - by accessing bank credit secured against the stored commodity collateral - avert distress selling soon after harvest when prices tend to be lowest.
The system, which is launched with the assistance from the International Financial Cooperation (IFC), will also help farmers to overcome working capital constraints.
Three years ago, the Ethiopian Commodity Exchange (ECX) started this system with IFC’s support.