Trade in grains such as maize, wheat, rice, pulses, sorghum, millet in the region is generally unstructured and predominantly driven by small- and medium-scale traders. The trade is affected by many issues, such as wide fluctuation in prices, which are characteristically lowest at harvest and highest just before the next harvest. In a structured trading system (STS), farmers aggregate their produce to create economically viable quantities. The quality of the bulked grain is assessed and the grain is then stored in certified warehouses to guarantee the quality and quantity. The farmers benefit from the system because they are issued with a warehouse receipt that shows they own the deposited grains, which they can use to secure credit from a bank. This allows them to wait for higher prices later in the season. Processors and millers benefit from having access to grain that has been graded and safely stored. The mechanisms for receiving, grading, storing and selling grain give the system its structure.
The EAGC/CTA project supports efforts of the EAC Food Security and Nutrition Action Plan to harmonised approaches to enhancement of food security in the East African region and the Comprehensive Africa Agriculture Development Programme that seeks to reduce food insecurity and link vulnerable people to opportunities for agricultural growth through improved rural infrastructure and market access.
Speaking at the launch, both Mr Vincent Fautrel, Senior Programme Coordinator - Value Chains, and Dr Yihenew Zewdie, Senior Adviser – Policy, said CTA was excited to be working with EAGC on this innovative project and to contribute to improved grain trade in eastern Africa.
The EAGC Executive Director, Mr Gerald Masila appreciated the support from CTA, which also supported publication of the first structured trade handbook in Africa.
The project will unveil new innovations, including use of information and communication technologies (ICTs) in trade through the EAGC Regional Agricultural Trade Intelligence Network, inauguration of the first regional knowledge platform on food grains and development of an e-learning grain trade platform. The project will also offer scholarships for study of structured trade to boost knowledge and skills in the area. This capacity building will be delivered through partnerships with universities in the region and hosted under the Eastern Africa Grain Institute.
Key features of the project include: capacity building for stakeholders in STSs; promotion of adoption and use of regional grain standards; support for improved use of market intelligence services and development of ICTs to improve the performance of the grain value chain; and policy dialogue on STSs and multi-stakeholder engagement.
Structured grain trading systems will benefit all value-chain stakeholders, including farmers, traders, warehouse managers, processors and investors by reducing costs and facilitating trade. This will, it is hoped, lead to increased investment, employment and food availability.