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{
    "id": 831172,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/831172/?format=api",
    "text_counter": 269,
    "type": "speech",
    "speaker_name": "Rongai, KANU",
    "speaker_title": "Hon. Kipruto Moi",
    "speaker": {
        "id": 2689,
        "legal_name": "Kipruto Moi",
        "slug": "kipruto-moi"
    },
    "content": " Thank you, Hon. Temporary Deputy Speaker, for the opportunity to speak on this Bill. It is a very important Bill and I support it. As we know, agriculture is the backbone of many economies in Africa. In Kenya, it accounts for about 30 per cent of the GDP and it employs close to 75 per cent of the population. So, it is a very important sector of the economy. While agriculture remains a key economic sector and a key link to food security, only about 5 per cent of lending by banks in this country goes to the agriculture sector and yet it contributes close to 30 per cent to the economy. So, it is skewed in that regard. The warehouse receipt system will give access to finances to small-holder farmers. It will have the ability to transform agriculture from subsistence and low value to innovative, commercially-driven and internationally competitive. The practices of small-holder farmers are extremely fragmented and unpredictable. So, the warehouse receipt system offers a very good solution to the small-holder farmers. After harvesting, the farmer or trader can deposit the goods to a warehouse and get a title document called a warehouse receipt, which the farmer can use to apply for a short-term credit facility to gain access to seed and fertiliser. This, in turn, will increase the productivity of small-holder farmers. The warehouse receipt system also reduces pressure on the farmers to sell immediately. Most of these goods will be locked in a warehouse. The farmers will then have to wait for the prices to go up and sell their produce as opposed to the case where they harvest and flog their produce to any buyer, whatever the prices. The warehouse receipt system will greatly change their lives. The warehouse receipt system also allows sales to continue from one harvest to another. This in effect will stabilise prices. It will reduce post-harvest losses because the warehouses are certified, equipped with appropriate facilities and expertise to ensure that the quality is right. This will certify the quantities too. The losses in certified warehouse receipt system warehouses are very minimal. If you were to go to the non-certified warehouses, namely, the ones owned by the NCPB, the losses at times can be 30 per cent. That is extremely high. For the warehouse receipt system to work there needs to be a legal framework and I think this Bill provides that. The current warehouse rules are just simply contracts, which cannot do much. The Bill establishes rules governing the participants. The rules also regulate all parts of the warehouse receipt system, namely, registration of storage facilities, operational requirements and insurance, which is extremely important. They also regulate safety measures, procedures for finance, audit and inspection requirements. These are the rules that govern how the warehouse receipt system will operate. These rules are meant to protect the farmer, the depositor, the warehouse operator and all those who will be doing business with the warehouses. Currently, operations of commodity warehouses in Kenya are governed by ordinary laws of contract, which is not adequate. An area of uncertainty, which I think needs to be addressed when we get to the Committee of the whole House stage, is the relationship the warehouse receipt system will have with the proposed commodities exchange system. Will it be possible to trade the warehouse receipts at the commodities exchange? Will the Capital Markets Authority (CMA) that supervises the Nairobi Securities Exchange (NSE) have an oversight role as part of its regulatory mandate? These are questions we need to ask. 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."
}