RDB adopts Warehouse Receipts Financing Project

To create continues secured price for agricultural products

By Waruni Paranagamage

The Regional Development Bank (RDB) announced that the Anuradhapura Upuldeniya warehouse had commenced the Yala season yields collection process from North Central Province farmers under the Warehouse Receipts Financing Project developed by the World Bank (WB).

Operated by the Ministry of Finance in collaboration with WB, the Warehouse Receipts Financing Project is a farmer- friendly agricultural marketing system with the implementation of proper storage methods.

The purpose of the project is to increase farmers’ profits by providing storage facilities for their crops at warehouses until off seasonal demand rises and creating good price by releasing them to market at the proper time.

The cost for infrastructure development of the warehouse in Upuldeniya at $ 6.5 million had been carried out by the WB as a grant for the Sri Lankan Government. The project is being implemented under the guidance of the Ministry of Finance while the RDB has been appointed as the banking partner of the project.

Describing the program’s benefits to farmers, Consultant of the project former Audit General of Central Bank W.M Karunarathne said that the project would ensure a better price and better security for farmers’ production.

“The Government officers at warehouse centres will link the facilities to farmers with RDB officials to measure, issue bill and ensure quality management process of crops brought to the warehouse. The Ministry has appointed two administrative offices at the warehouse with three other officials to provide fair and qualitative services to the farmer,” Karunarathne added.

The RDB has agreed to provide credit facilities to farmers in case of any financial difficulty during the 120 days the harvest is kept in the warehouse. The bank will disburse the loans to farmers considering the receipts issued by warehouse officials.

“A warehouse receipt is like a Treasury bill. The face value of the receipt will be considered as the current price of the crops. Therefore farmers could apply for a loan up to 50% of the face value of the receipt of any time,” he said.

The warehouse in Anuradhapura has been developed on three acres of land according to universally-verified warehouse standards. It is also facilitated with new techniques for pest control and other techniques at the premises to avoid crop damages by animals.

“We have a dryer machine at the warehouse to dry crops which have been rejected from the store due to poor dry conditions. Each farmer has their own place for their crops in the warehouse. They can check their crops and release them at any time following the method in the agreement,” he added. He said Bank of Ceylon (BoC), People’s Bank, Hatton National Bank (HNB) and other two banks had collaborated with them to support under the project. The warehouse has the facility to store 5,000 MT crops at the same time and the maximum store capacity available for crops by a farmer will be 12,000 kg.  Each farmer is allowed 120 days to keep the harvest in the stores.

The RDB encourages all farmers engaged in farming paddy, maize, bran, black beans, soya, pepper and other crops to link with the project and reap the benefits.

The next warehouse will be opened in Buttala, Moneragala District by the end of this month.