Warrantage (inventory credit system) (النيجر)

Ensure agricultural producers have access to credit to cover their immediate post-harvest needs

Aims / objectives: The objectives of a warrantage approach are: to ensure agricultural producers have access to credit to cover their immediate post-harvest needs; to enable agricultural producers to profit from rising produce prices during lean periods; to provide access to inputs through a structured system of bulk purchasing.

Methods: Storage facilities are built using local materials to reduce investment costs. The storage conditions must adhere to quality standards for post-harvest produce. The agricultural credit means farmers can meet their own needs without having to sell their produce at a loss. During lean periods, produce prices increase (the price of rice grows by up to 200%, for example) and farmers can take advantage of these higher prices.

Stages of implementation: The support structure (IICEM) contacts the bank (National Agricultural Development Bank – BNDA) to discuss ways in which loans can be granted and repaid. Farmers are grouped into producer organisations (POs) which are tasked with building hygienic and secure storage facilities. The POs use local building materials to minimise the investment costs (mud-brick storehouses). PO members store all or part of their output in the storehouses, which is labelled with their own names. The POs are trained in how to bulk purchase inputs, so that reasonable prices can be negotiated with suppliers. Operation: In November/December, just after the harvest, the POs club together to store their different kinds of produce in a hygienic and secure storage facility. PO farmers store all or part of their harvest in the storehouse, which is then labelled with their name. The banker checks the quantity and quality of the stock. The average value of the harvests is calculated according to average market prices. The storage facility is locked up using two padlocked chains – the PO has the key to one and the bank has the key to the other. The bank then awards a loan corresponding to the price of the harvest held in storage. The producer organisation distributes the funds according to the quantity of produce stored by each member. Using the loan, producers can meet their primary needs or undertake an income-generating activity such as livestock rearing, market gardening, processing or trading. In April, the POs can forecast their available funds and negotiate good prices for inputs with suppliers. Due to greater demand, more favourable prices can be negotiated for the produce in storage. The produce is sold during the period when produce prices are high. Straight after selling the stock, the producers repay the loan plus 10% interest.

Role of stakeholders: The following institutions and groups are involved: farming organisations, banks and IICEM.