An opportunity has arisen for small-scale farmers in the Central Region to participate in World Food Programme (WFP) normal procurements through the warehouse receipt system (WRS).
WRS entails the issuance of a document by a licensed warehouse operator certifying the quality and quantity of a specified commodity placed by a named depositor into a secure storage environment.
The system ensures a farmer puts the commodity, for example, beans, maize, groundnuts in a warehouse, and receives a warehouse receipt as proof of deposit.
Just last week, Agricultural Commodity Exchange (ACE) held a Bid Volume Only (BVO) session in which WFP bid to buy 3 470 metric tons of maize from farmers in Lilongwe, Mchinji and Balaka, among others.
â€œIn the past, it was usually large registered suppliers that were allowed to participate in this type of procurement system.
â€œBut now, all small operators with warehouse receipts issued by a warehouse certified by ACE and registered with WFP as a supplier have a chance to participate, says ACE in a statement made available to Business News this week.
The BVO session attracted small operators from rural sites, WFP and ACE officials as well the business sector.
ACE says small-scale farmers in Africa, particularly in Malawi, face challenges when it comes to opportunities for better agricultural markets to reap the benefits of better incomes and, thus, improve their livelihoods
â€œBut now, for the first time in Malawi, they [small-scale farmers] have access to WFP large food procurement through warehouse receipt system being implemented by ACE for Africa,â€ says the statement
WFP has for some time tested procurement from smallholder farmers and operators on ACE through the purchase for progress programme. ACE says the results have been promising and commodity exchange has been able to use the demand to establish market structures such as WRS.
â€œIt is now the WRS that enables farmers and small operators to participate in the WFP normal procurements,â€ says ACE.
On the day of the BVO session at ACE trade floor, the highest offered price for maize was K98 per kilogramme whereas K70.9 per kg was the lowest offered price.
It now remains with WFP to scrutinise the offers and then award the contracts to the successful bidders.
Speaking later, principal advisor for ACE, Kristian Schach Moller, said it was the largest tonnage on the BVO system this year.
â€œI think this was also evident from the competition among, in particular, Nasfam, Farmers World, Rab Processors, HMS Food and Export Trading. They all wanted the contract,â€ he said.
Prices started around K100 per kg and small operators stopped competing when the price dropped to K79 per kg, according to ACE, an indication that many operators believe that maize prices will rise further.
A small trader, Andrew Kachete, with about 200 metric tons on a receipt in silos, said he started depositing maize in June and uses the warehouse receipt to source money to buy more maize.