The Ghana Grains Council (GGC) expects that a well regulated warehouse receipt system will help the country combat persistent problems in agricultural marketing and credit including variable seasonal prices, cheating on weights and quality and limited access to credit. These problems stem from a lack of efficient storage facilities, poorly developed systems of standard grades and measures, unreliable market information systems and lack of collateral for bank loans. In addressing many of these issues, both producers and consumers will benefit.
The system integrates smallholders into the warehouse receipt system so they can benefit from direct linkage to more diversified markets, including buyers who are looking for standardized grain stocks. Loans granted under the system can be used to cover immediate expenses or make investments in preparation for the next harvest. It is hoped that such a system will create more stability in the market, as well as better harvesting, processing and storage practices and a better product for consumers.
For Ghanaian farmers, who usually have to sell their crop at harvest time, when the market is glutted and prices are low, the creation of a warehouse receipt system is a welcome development.
Under the system, grain is delivered to; inspected, cleaned, graded and certifiedby; and stored in GGC-certified warehouses that meet Ghanaian and international standards.Once graded and certified, the commodity can be used as collateral by participating banks. Banks who are members of the GGC will be able to rediscount the receipts by selling them to other GGC members.
The GGC developed a regulatory framework and design specifications for certifiable warehouses. It built a membership of grain value chain actors including farmers, grain traders, millers, poultry feed associations, banks, nonbank financial institutions and collateral managers.The Council worked closely with the Ghana Standards Authority, the Minister of Food and Agriculture, the Minister of Trade and Industry and partners such as the World Food Program, which has agreed to purchase commodity from GGC-certified warehouses under Purchase for Progress, the WFP’s local procurement program.