Grain warehousing: A way to go in ensuring proper storage of grains and Kenya's food security

Grain warehousing                 by Mwangi Mumero

Across the East African region, many farmers suffer from post-harvest losses mainly due to poor grain handling, low storage capacity and poor skills. From wheat, rice, sorghum, maize and millets – foods that supply most of the carbohydrates in the region- losses have been immense, threatening food security.

During the 1997/98 El Nino rains, Nduku Nzioka, a farmer from Kitui, Eastern Kenya could not handle the huge harvest that came from her normally dry piece of land.

Kitui is a semi-arid region where residents have to periodically rely on food aid from the government and donor organizations especially during extended drought.

Yet, the El Nino phenomenon brought huge harvests and fortunes as heavy rains pounded their region.

“Our pigeon pea, beans and maize harvest was unprecedented. Many local persons had never witnessed such a boom in yields for over a generation. We made huge profits”, remember Nduku, a mother of four.

But even with these hefty yields, local farmers were unprepared. Their grain storage capacity was low and many did not even have granaries to store much grain.

“We lost a large part of the grain through decomposition as grain left uncovered outside got rain on. Brokers and buyers from Nairobi also took advantage of our precarious situation and bought the grains at throwaway prices. It was distressing”, added Nduku.

During this prolonged rainfall period, local media houses aired reports of exploitation of local farmers by brokers and buyers mainly from Nairobi, Nakuru and Mombasa who were buying to hoard awaiting a period of scarcity to re-sell to the same farmers at a higher price. Across the country, grain loses are huge especially after harvesting.

An agriculture think tank, Egerton University based Tegemeo Institute, estimates that post harvest losses in Kenya is around 30 per cent of all stored produce.

However, the advent of Larger Grain Borer and Aflatoxin, the loss can be over 100 per cent depending on the severity of the outbreak.

As recently as the October/November 2009, the harvesting period in Eastern, Central and Coast regions experienced wet weather.

This resulted in widespread outbreak of Aflatoxin contamination in these regions making grains unsuitable for human consumption and hence not marketable.

   

With this in mind, organization have come up with ways of working with farmers on grain storage capacity and value addition to get maximum benefits from their yields.

“Farmers deposit their grain at our certified warehouse and then the farmer can decide to sell immediately or store the grain longer waiting for better prices”, observed Samuel Munyasia, a food officer with the East Africa Grain Council (EAGC).

EAGC has offices in Kenya, Uganda and Tanzania and is supported by development organizations such as Sida, USAID, COMPLETE and Financial Sector Deepening (FSD) Kenya.

The EAGC has introduced a warehouse receipt system (WRS) where a farmer –now known as a depositor- can store grains with the organization and then use the receipt as security to obtain loans from financial organizations.

“While waiting for a better price, the depositor can use the receipt to access financing from banks which can loan up to 60 to 80 per cent of the prevailing market value of the grain. The funding allows the farmer to carry out normal business such a land preparation, purchase of farm inputs for the next season”, said Mr. Munyasia who is based in Mutomo, near Kitui.

With little harvest obtained in this dry part of the country, a big number of farmers in Kitui, Machakos and Makueni have not constructed modern grain storage facilities that can hold dry cereals over long periods.

“The warehouse system allows us to reduce post-harvest wastage, exploitation by brokers and buyers as well as cushioning the farmer from low grain prices”, said David Kasyoki, another farmer in the region.

According to Mr. Munyasia, this warehouse receipt system allows for aggregation of larger and tradable volumes from small scale farmers while using professional managers to store grain and ensure good conditions that reduces post-harvest loses.

“ There is also increased financing of the agricultural sector to bring about investment in infrastructure such as warehouses, trucks and grin processing thereby increasing efficiency in grain value chain”, he said.

Accordingly, this system is credited with helping farmers access a larger and more formal market even to distant places because buyers have knowledge of quantity and quality of tradable grains.

Through the system, it has become possible to transfer grain from one owner to another without the added cost of transporting the commodity from one store to the next along with handling on and off the trucks, bagging and re-bagging, spillages and pilferage.

The Government of Kenya in its 2010/11 budget statement committed itself to supporting the development of WRS and other related exchange infrastructure, building on a pilot initiated by the Eastern Africa Grain Council (EAGC) (ENDS)