Rural Development Through Agricultural Commodity Exchanges and Warehouse Receipts Presented at Regional Development Briefing N 0 3 Financing Agriculture in Southern Africa Lilongwe, Malawi, th October 2010 By Kristian Schach Moller

BRIEF HISTORY NASFAM (National Smallholder Farmers’ Association). Regional sensitisation Regional Internet trading system was developed. Defaults eroded the activity Focusing on farmers WFP P4P Warehouse receipts / rural storage & financing

Trades on ACE YearVolumeValue (USD) , , , , , , , , , ,75 Total45.170, ,75

Vision Integrated trading system –Normal trades –Bid volume only (BVO) and offer volume only (OVO) –Warehouse Receipts Linking small farmers through Urban and Rural warehouse infrastructure –Bringing choice to rural areas –Financing into rural areas.

BVO / OVO Procurement –WFP and other donors Local and Regional –Other larger buyers –Govenment Bringing price discovery, transparency and order to the market. Mixed reactions from the market

BVO provides a demand Testing linking small farmer groups to the BVO market. –If a trader is happy with X price; then so will a farmer association. –Problems with quality –Without a proper structure – not sustainable. –NGOs organisaing farmers should focus on this.

Creation of an Indemity Trust Self owned entity with 2 objectives: 1)Build rural storage 2)Underwrite the WRS Build 1000 MT rural silos –In a surplus producing area –NASFAM will manage silos –Revolving fund

Justification Post havest loss Choice – store/financing or sell Farmers keep ownership Benefit from price increase Commodity stay in local area Revolving fund – 5 to 1 NASFAM into storage and handling ACE trade WR and increase volume

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