Warehouse Receipts Offer Financial Leap to Kabarole Farmers

1781 Views Fort Portal, Uganda

In short
With the warehouse receipt, depositors are able to get loans equivalent to 60% of the value of their produce. The farmer pays the loan after selling off the produce.

Farmers in Kabarole district have increased access to credit facilities after embracing the Warehouse Receipt System which is steadily growing in the region.

The system involves farmers; referred to as depositors taking their produce in a secured warehouse where they get a receipt verifying their produce tonnage and grade. For a small fee, the warehouse guarantees to maintain the grain's quality and quantity until it is transferred to whoever buys the receipt from the depositor.

In the past, farmers had difficulty in acquiring loans before selling off their produce. However, the difficulty ended after commercial banks announced that loans will be offered to farmers who have stored their produce in the warehouses. The district has two warehouses in Rwimi and Kisomoro.

With the warehouse receipt, depositors are able to get loans equivalent to 60% of the value of their produce. The farmer pays the loan after selling off the produce.

David Nsongi, a maize farmer in Rwimi Sub County says that the system has helped him and other 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.

He says that it has allowed farmers to keep their produce until they get better prices in the market. One of his success stories is the purchase of a piece of land to increase maize production after  securing a 5 million Shillings loan.
 
//Cue in: "the produce is there…'
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Richard Kagoro, the chairman Rwimi Maize Farmers Association says that the system has ended farmer exploitation  by buyers who target the harvest season to buy produce at low cost. He says that the association which has stored 1,500 kg of maize at Rwimi Warehouse secured a loan of 15 million Shillings, which they used to purchase more land and maize hullers.

Kagoro adds that the warehouse receipt system has also provided relief to most farmers, since the warehouse is equipped with facilities to clean, dry and bag; that help to add value to produce from farmers.
 
Francis Mwesige, the agricultural Credit Officer at Centenary Bank-Fort Portal Branch says that the bank has offered more than 80 million Shillings in loans to farmers and groups who have stored produce in the warehouse.

 

About the author

Emmanuel Kajubu
Emmanuel Kajubu is proud to have been the first Ugandan journalist to write in depth pieces about the Tooro Kingdom institution. His knowledge of the inner workings of the Tooro Kingdom is what made him privy to the splits in the royal family. These splits almost challenged Tooro Omukama Oyo Nyimba Iguru's reign.

Culture, agriculture and the environment are just two areas of many of interest to Kajubu. As long as he has held a pen, Kajubu has also written about public policy, health and crime.

Kajubu is keen on impacting his society not just as a writer but also a trainer and mentor. Bundibugyo and Ntoroko districts fall under his docket. Kajubu has been a URN staff member since 2008.