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{
    "id": 831031,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/831031/?format=api",
    "text_counter": 128,
    "type": "speech",
    "speaker_name": "Mandera South, JP",
    "speaker_title": "Hon. Ali Adan",
    "speaker": {
        "id": 13418,
        "legal_name": "Adan Hajj Ali",
        "slug": "adan-haji-ali"
    },
    "content": "long overdue. It is very important to the economy of this country, especially the agriculture sector. The Warehouse Receipt System Bill, 2017 was sponsored by the Leader of the Majority Party in the Senate. The Bill, having been considered and passed in accordance with Senate’s Standing Orders, was forwarded to the National Assembly for consideration. This Bill seeks to provide a legal framework for the development and regulation of a warehouse receipt system for agricultural commodities for the purpose of providing for the establishment of a warehouse receipt council to oversee and regulate the implementation of the warehouse receipt system. The Bill further sets out the process of depositing commodities, issuance and transfer of receipts to regulation of activities involving agricultural produce. It also provides for the establishment of the council and Warehouse Receipts Appeals Committee, which make up the warehouse receipt system. Over the years, the major problems we have had which have been identified as affecting small-scale farmers has something to do with storage. As a result of poor storage, we have commodity losses. This Bill seeks to mitigate on the post-harvest loss as well as mitigate on price fluctuations. Hon. Speaker, warehouse receipts are documents issued by a warehouse operator as evidence that a specified commodity of a stated quantity and quality has been deposited at a particular location. That simply means that a depositor, farmer or trader would bring in the commodities into a registered warehouse, deposit the wares for a fee, leave the commodity in the warehouse and the warehouse operator grades and then keeps the commodity on behalf of the farmer. The title of the product or the commodity is with the depositor. In that case, he is issued with a warehouse receipt which is transferrable and the farmer can take it to the bank. He can also take it to any other person who would give him money on the basis of the receipt so that he can meet his long-term or short-term obligations. The warehouse operator holds the stored commodity by way of safe custody implying that he is legally liable to make good on any value lost through theft or damage by fire and other catastrophes, but has no legal or beneficial interest in it. The receipt may be transferrable. It allows the new holder to use it as security for a loan upon presentation at the warehouse. In relation to this, Part IV of the Bill provides for the negotiations and transfer of receipts. Clause 38 of the Bill provides that a warehouse receipt issued to a person may be negotiated by endorsement and delivery to another specified person. Upon deposit of the commodity to a warehouse, the depositor can give this warehouse receipt which is endorsed to a third party to obtain a bank facility, for example. The prospective benefits of this system would include the following: Warehouse receipt system encourages the flow of trade. It also enhances market efficiency. That means that once the product is stored in a warehouse, it can be traded efficiently between persons who are willing to trade with the commodity and thus increase the flow and frequency of business in the economy. The other benefit that we get out of this warehouse receipt system is that it mitigates on price fluctuation. The farmer would bring the commodity into the warehouse. If he is not in need of the cash immediately, the commodity would be deposited and remain in the warehouse. It does not need to be transferred or sold at a throwaway price. It can be kept in the warehouse until such a time that the prices are right and the producer can sell it at the prevailing market price at a premium. The warehouse receipt system also provides or facilitates trade by enabling nondescript commodities to be assembled at a stated location. A warehouse receipt system facilitates The electronic version of the Official Hansard Report is for information purposes only. Acertified version of this Report can be obtained from the Hansard Editor."
}