When it is successful, warrantage benefits to all those who are involved in the process. It is to receive a credit from a funding institution after leaving a stock of agricultural products in guarantee.
What are the strengths of this practice and the elements that may be his obstacle?
Win-win system between producers and MFIS
According to the process of the warrantage, producers and microfinance institutions each earn their share. The producer benefits from the credit to avoid selling its products in order to sell them at the best prices.
The financial institution also benefits from the interest charged on the loan granted to the producer. Compared to anxiety about the mutual trust of the stored products and the credit control system based on arrangement of two keys, one to the producer or the peasant organisation and the other to the funding institution is the solution adopted.
Between both actors, there are also other beneficiaries of the warrantage. It is the stock manager, agents of security and peasant organisations which are the attribute of the storage costs and or administrative.
It should be noted that the warrantage before it is actually profitable for everybody and especially the depositors of the stock, the latter must have sold their products more expensive during the phase of destocking.
If for example the kilo of rice paddy cost 135F.CFA when the producer used to store its product, he must sell widely beyond this price so he can remain a surplus when he was acquitted of all its due. The variations between storage and removal phases are usually higher than 10%
If they are estimated at about 15% in Burkina Faso and 18% in Niger, they go up to 100% or even beyond in Togo for corn.
The binding points of the warrantage.
Apart from the risk of not seeing the prices of various products and be a loser, the warrantage is constrained by other obstacles. The lack of infrastructure of storage buildings are more reliant on the State and external partners in a hindrance to the storage.
Also, the quality of some warehouse whose buildings do not meet the standards of storage infrastructure entails the loss of the quality of the product.
The partnership between the two actors of warrantage depends on the limited financial capacity the microfinance institutions. The long waits due to storage and lending procedures are z source of demotivation for producers.
The contribution of the state to a partnership provided the warrantage
States governments must play their partition for the smooth running of warrantage practices by supporting the construction of storage infrastructure, by providing a guarantee for the producers and by facilitating the installation and activities of institutions of funding.
Through their partitions, the warrantage will experience a remarkable development, security of the development of the agricultural sector.