Farmers in Gulu and neighboring districts in Acholi sub region say they are excited by a newly launched system intended to help them access credit facilities from commercial banks.
The initiation of the warehouse receipt system follows the commissioning of a 6,000 metric tons store for grains in Gulu last week. The system enables farmers with agricultural produce stored in the warehouse to acquire bank loans to meet their needs.
Betty Adong, a farmer at Koch Kweyo in Amuru district has commended the initiative saying it would help farmers especially at crucial times such as during the beginning of the school term, when most parents usually sell their produce at cheap prices in a bid to raise school fees.
Otika Samuel Ogikson, a resident of Pamucha parish in Amuru district expressed excitement at the initiative saying it would allow farmers to get money and yet keep their produce for better prices.
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Obote Baden, the Gulu branch manager of Housing Finance Bank said they honor receipts issued by Coronet, an organization that is managing the warehouse. He said all a farmer needs to do is present a receipt from the warehouse certifying the quantity and quality of produce that the farmer has deposited at the warehouse in order to access the credit facility.
He explained that the bank offers up to 60 percent of the total amount of money the produce is worth. He said the system is designed to help farmers who may want to access money but are unwilling to sell off their produce at the time due to low prices in the markets.
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Obote said the bank has been charging an interest rate of 22 percent on the warehouse receipt loan but added that the rate was being revised in response to the current inflation in the country.
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Chris Baine, the director of Coronet in Gulu has hailed the new system saying it would help farmers avoid exploitation by buyers who target harvest season to buy cheaply from the farmers only to sell it back later at high prices.
Sory Ouane, the World Food Program Country Director, said the Warehouse receipt System was a new initiative, which has provided relief to most farmers. He said money worth half a million dollars has been advanced to various small holder farmers through the system.
He said World Food Program has established warehouses at Nyakatonzi in Kasese, Tororo and Soroti in addition to two others in Gulu and Kapchorwa with a capacity of 6,000 and 2,000 metric tons respectively. Ouane said all the warehouses are equipped with facilities to clean, dry and bag that help to add value to produce from farmers.
