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UNFFE members to benefit from the Warehouse Receipt System 

On 9th December 2022, a section of farmers and farmer leaders under the UNFFE gathered at Rider Hotel in Mukono District to attend a two-day workshop organized by the Uganda Warehouse Receipt System Authority. This comes at a time when farmers have faced challenges in accessing loans from financial institutions as only 5 percent of bank lending in the country goes to the agricultural sector in support of agribusiness.

Besides climate change, lack of farm inputs, and poor extension services, farmers are also affected by the lack of a structured commodity trade system which has led to high post-harvest losses thereby contributing to low earnings by the farmers. Currently, most farmers, dealers, and traders who are unable to get loans from financial institutions because of the unpredictable, fragmented and unstructured nature of their agricultural activities have had their hopes lifted by a partnership between UNFFE and Uganda Warehouse Receipt System Authority.

Dr. Dick Kamuganga UNFFE president extended a sincere vote of thanks to the UWRSA for this strategic partnership that is looking at pulling the 39 percent subsistence farmers whom H.E the President normally refers to as working for the stomach, “Nkolera Kida Kyonka.” He noted that UNFFE’s value proposition is the ability to mobilize, organize, and empower, but also speak for all farmers in Uganda as can be witnessed by today’s engagement. The entire nation is represented right from the village enterprise cluster groups at the local level, to the National Executive Committee of UNFFE at the national level. He noted that UNFFE through its structures has an added advantage to supplement government efforts especially, in the implementation of the Parish Development Model that entirely focuses on smallholder farmers. “As UNFFE, we shall organize our farmers into enterprise cluster groups concentrating on priority enterprises under the PDM and take advantage of forming the first primary/micro grain stores in every trading center to support our farmers since we all know that the garden is the farmers our bank account. We have solidified this partnership to strategically position UNFFE as primary Off-takers.” Dr. Dick Kamuganga noted.

According to the president, UNFFE is currently organizing the first National Farmers Summit a platform for key stakeholders in agri-finance, agri-insurance, policymakers, scientists and researchers, development partners will meet with farmers to boost structured agricultural commodities trade and enhance farmers’ incomes for socio-economic transformation.

While addressing farmers, Deborah Asiimwe the Managing Director of Uganda Warehouse Receipt System Authority -UWRSA indicated that the warehouse receipt system was established in Uganda in 2006 by the Ministry of Trade, Industry, and Cooperatives and is governed and regulated through the Warehouse Receipt System Act of 2006 (WRS Act, 2006). She noted that this Act provides for the establishment of a Board of Directors of the Authority, and UNFFE happens to be one of the members as well as other organizations like the Uganda Cooperative Alliance, Uganda National Chamber of Commerce and Industry, Grain council of Uganda, Uganda Insurers Association, Uganda Clearing, and Forwarding Agents Association, and Uganda Bankers Association.

She further explained that the warehouse receipt system presents an opportunity where farmers especially, the smallholder farmers can use their commodities as security/collateral to reach affordable and accessible financing (Inventory Credit). The issuer of the Warehouse Receipt certifies the deposit of commodities and holds the commodity in safe custody until the depositor or a newly ascertained buyer claims the goods. She emphasized that UNFFE being an organized farmer organization, will help its members majority of whom are smallholder farmers readily available financing using their commodities to enter into the money economy. Deborah emphasized that as an authority, they certify and license warehouse operators, but also work with market players such as off-takers, and commodity exchanges to provide a reliable market for commodities.

UNFFE members welcomed this system and particularly pointed out that the numerous benefits that come with it will easy access to bank lending for agricultural commodities and access to credit financing for smallholder farmers.

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