Quick Facts

• WRS Community

Sensitization 22nd

and 23rd

March 2012

• 50 participants (27 Female

& 23 Male)

• Ulongwe (8 Female & 37

Male)

• Livirivi (27 Females & 116

Males)

Balaka 500mt Warehouse on Nasfam site under

construction due to complete mid-April.

Balaka Community Sensitization

Balaka Community of Smallholder farmers are sensitized on how they can take part in

warehouse receipting system

ACE is running a warehouse receipt project funded by Common Fund for Commodities (CFC) in

partnership with European Union (EU). The project includes building and running of 3 rural

warehouses for third party storage, and access to finance. Balaka Farmers association spans into

three districts of Machinga, Mangochi and Balaka on a radius of 128km with 3545 registered

members split into 9 Grain aggregation centers (GAC). The farmers in the association are

diversifying from their traditional tobacco output to growing Paprika, groundnuts, Pulses and

sorghum.

ACE Organized a two day community sensitization workshops in Balaka

Central for the district council and District Executive committee,

another day was organized for sensitization in Ulongwe community

south of Balaka as well as Livirivi Community in central Balaka. Balaka

is largely a deficit area in Malawi for food crops but has substantial

harvest for cash crops of cotton, paprika, and tobacco. ACE is testing

the idea of Warehouse receipts and its effects in a rural community of

largely food deficit area by building this 500mt registered warehouse

right in the middle of Balaka. This warehouse is ideally positioned to

feed Balaka during acute lean season (low supply, high demand) of

December to March at usually higher price to the benefit of a

depositor. It will also help farmer entrepreneurs who are likely to use

proceeds from their abundant cash crop like cotton to purchase food

items such as Maize, Ground Nuts and pulses from surrounding districts of Mangochi, and Machinga to sale during the lean period.

The District Executive Committee (DEC) Workshop

The district council meeting attracted more than 50 executives of Organizations in Balaka that deal with different development

issues. The list included District executives of world renowned non-governmental organizations such as World Vision, Concern

Universal, Feed the Children, Catholic relief services, Wala among others who are promoting food security, education, and nutrition

through farming. Their idea integrates well with WRS so that families farming cash crops have now a storage center which allows

them to purchase food items for house hold use and income during surplus period of May to July and sale or use during lean season

of December to March without deteorating quality or volume.

DEC workshop in pictures

District Executive council members share

ideas on how they can collaborate with

ACE in enhancing the WRS concept with

their respective project beneficiaries.

Council Members listen

attentively on how the

registered 500mt warehouse

will benefit a smallholder

farmer through WRS project.

Ulongwe and Livirivi Communities sensitized

A total of 153 Men and 35 Women attended the two community sensitization meetings which included WRS presentation by ACE

officials, Speech by community elder, the Balaka smallholder association chairlady and Drama sketches to highlight the benefit of

WRS to smallholder farmers. The sensitization was based on three pillars, (1) Farmers are usually forced to sale their produce at low

prices as soon as they harvest (high supply with relatively low demand) due to lack of storage as well as their immediate cash needs

which prevents them to keep commodity till the price is right for them. (2) Commercial banks are not willing to lend to the

smallholder farmers despite 80% of agricultural production is done by smallholder farmers due to the risks associated in that lending

portfolio. (3) Contractual performance between smallholder farmers and organizations was very poor leading to numerous defaults

on the exchange usually because the change in price could have been higher than previously agreed on the contract, sometimes the

quality and volume was never as specified in their respective agreements leading to more defaults and disputes.

A warehouse receipt in such an environment

perhaps is the answer to solve the above problems.

Farmers are able to use their commodity on

receipts as collateral to obtain a loan from

participating banks during the high supply period in

order to offset their immediate cash needs. Banks

are willing to lend against this collateral up to 70%

of the commodity value on commission that the

commodity is in a third party insured warehouse

which will in this case not release collateral unless the loan has been settled. Thirdly contractual performance is improved as a

signature to sell the commodity by the depositor will mean an immediate invoice to the buyer and as soon as payment is made the

buyer is guaranteed performance as the commodity is in third party hands.

Community sensitizations in Pictures

A 15min sketch Drama is performed at Ulongwe to emphasise the

benefit of warehouse receipts in rural communities.

Watch the Video at: http://youtu.be/jc8SF001FdE

Women at Livirivi community listen on

as ACE officials present the upcoming

warehouse receipting system using a

500mt registered warehouse in central

Balaka.

Women represent a 45% of Livirivi

Community farmer group growing 90%

of grain (Maize, Groundnuts, and

Pulses) in this area. Most of the men in

this area grow cash crops like cotton

and tobacco.

WRS will enable such women access

finance using their produce as

collateral during the low price period to

fulfil their house hold needs including

feeding their children, sending the

children to school, medical care etc.

1. Ulongwe community elders and

association representatives listen

to warehouse receipt concept from

an ACE Official.

2. Some of the 116 Men in

attendance at Livirivi aggregation

centre.

3. Ulongwe farmer group members

watching a drama highlighting the

benefits of a warehouse receipting

system in this groundnuts rich

area.

4. An ACE Official responds to some

of the farmer concerns in

implementation of WRS.

Outcome

ACE has already identified three collaborating partners in Balaka to promote warehouse receipts to various stakeholders in the area.

Wellness and Agriculture for Life Advancement (WALA) a non-Governmental organization working with farmer groups in Balaka to

improve yields in respective crops Invited Farmer representatives to meet ACE warehouse managers to learn more about warehouse

receipts and how they can market their intended increased yields.

The District Commissioner has vowed to extend this project and its objectives to other arms within his authority to ensure more

people benefit from warehouse receipts.

Looking Forward

More community sensitization in the month of April through to May 2012

1

3

2

4