The role of warehouse receipt systems in enhanced commodity marketing and rural livelihoods in Africa

Most African countries have, since the 1980s, liberalised agriculture without experiencing food crisis, as feared by sceptics, but the outcome of reforms has been rather disappointing and agricultural markets remain underdeveloped and inefficient. One means to improve agricultural marketing, which is the focus of this paper, is to develop regulated warehouse receipt (WR) systems. The system will curtail cheating on weights and measures; ease access to finance at all levels in the marketing chain; moderate seasonal price variability and promote instruments to mitigate price risks. It will also reduce the need for the Government to intervene in agricul- tural markets, and reduce the cost of such interventions if needed.

The major problem in establishing WR systems in Africa is disabling elements in the policy environment. Drawing on experience from projects implemented in Africa during the last decade1, the authors outline how this challenge can be addressed, the most crucial being to build strong stakeholder support behind the initiative.

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