A new scheme that will help farmers access finance has been introduced by the Rwanda Grains and Cereals Corporation (RGCC).“With the warehouse receipt system, a farmer takes his produce to an accredited warehouse and gets a receipt that he or she can use to secure funding from a financial institution,” the RGCC acting general manager Augustin Mutima, explained.Mutima said the receipt would act as collateral for the loan, adding that it would take a week for the loan to be processed.He also revealed that plans to link farmers to contract and auction markets were underway. He noted that in the near future farmers will start selling produce through these arrangements. He said they will be working with the local commodities exchange.Mutima was speaking during a meeting between maize farmers and the Minister of Trade and Industry, Francois Kanimba last week in Kigali. He said the corporation, in collaboration with Grain Pro, a global storage solutions provider, would also invest in drying facilities and storage warehouses to solve problems that expose farmers to post-harvest losses.RGCC was formed in January last year. It buys surplus grains and cereals from farmers and sells the produce when there are shortages on the market to stabilise prices.“Because of poverty and lack of storage facilities, farmers usually sell their produce immediately it is harvested when prices are low only to buy it at higher prices later,” said John Bosco Sebabi, chief operating officer of the Rwanda East African Exchange (EAX).Sebabi said the warehouse receipt system would reduce post-harvest losses to under 5 per cent. He pointed out that the exchange was working with RGCC to trade produce directly through the commodity exchange platform.“With this method, farmers will be able to access finance and focus on quality which later enables them to sell at better prices,” Sebabi said.Trade minister Kanimba advised farmers to sell their produce through auctions, arguing that not all of them have the capacity to acquire sale contracts to supply big factories.EAX Rwanda is the first part of a regional exchange intended to increase transparency in the region’s commodity markets.The commodity exchange platform gives small-scale farmers better access to global markets, and creates social value that will empower them for the long-term, according to experts.
