Warrantage: the solution to "pure exploitation"
29 October 2010
A recent article published in the journal African Studies Review has described the Rwandan practice of kotsa imyaka - in which poor farmers sell their maize crops while they are still growing in the field for very low prices - as the "most exploitative system I came across... pure exploitation of their vulnerability to the benefit of the better-off party in this transaction." 1
The RIU Rwanda-supported Maize Innovation Platform was also concerned about this practice and the broader issue of access to credit. The solution the platform came up with was to introduce a warrantage scheme. Basically this allows small-scale farmers to obtain small bank loans to meet their immediate cash needs and also to receive a better price for their harvest when it is eventually sold. A stock of maize kept in a secure storage facility acts as surety for the loans. The warrantage scheme in Rwanda has just been featured in an RIUtv film.
1 An Ansoms (2010) Views from Below on the Pro-poor Growth Challenge: The Case of Rural Rwanda. African Studies Review - Volume 53, Number 2, September 2010, pp. 97-123
Note
RNRSS looked at warrantage under the Crop Post Harvest Programme but called the programme warehouse receipt systems.
29 October 2010
A recent article published in the journal African Studies Review has described the Rwandan practice of kotsa imyaka - in which poor farmers sell their maize crops while they are still growing in the field for very low prices - as the "most exploitative system I came across... pure exploitation of their vulnerability to the benefit of the better-off party in this transaction." 1
The RIU Rwanda-supported Maize Innovation Platform was also concerned about this practice and the broader issue of access to credit. The solution the platform came up with was to introduce a warrantage scheme. Basically this allows small-scale farmers to obtain small bank loans to meet their immediate cash needs and also to receive a better price for their harvest when it is eventually sold. A stock of maize kept in a secure storage facility acts as surety for the loans. The warrantage scheme in Rwanda has just been featured in an RIUtv film.
1 An Ansoms (2010) Views from Below on the Pro-poor Growth Challenge: The Case of Rural Rwanda. African Studies Review - Volume 53, Number 2, September 2010, pp. 97-123
Note
RNRSS looked at warrantage under the Crop Post Harvest Programme but called the programme warehouse receipt systems.
| RIU Rwanda introduces its warrantage scheme |  |
