Agricultural Commodity Exchange (ACE) for Africa has appointed Prisca Muona as new managing director to take the lead in consolidating the structured produce market in Malawi.
In an interview on Monday, Muona, said her main focus will be to build more volumes within the warehouse receipt system (WRS).
WRS, which was introduced in 2011, is a mechanism where farmers and traders deposit agricultural commodities such as maize, soya beans and pigeon peas into certified warehouses, receiving a negotiable receipt as proof of ownership.
Primarily managed by ACE, the system allows farmers to store produce, avoid selling at low harvest-time prices and use the receipt as collateral to secure bank loans.
Muona said a key foundation for economic and rural growth is to build more volumes for the warehouse receipt system and this means ensuring many farmers to join the platform.
She said: “Aggregation is key when smallholder farmers come together.
“They gain bargaining power, access to better prices and the ability to meet larger market demands.”
Muona further said the main driver of high volumes is finance, adding that one of the critical challenges will be to address the gap between producers and off-takers.
A recent study conducted by Centre for Agricultural Research and Development at Lilongwe University of Agriculture and Natural Resources found that many smallholder farmers shun structured markets in favour of quick cash sales.
The study also noted limited aggregation of produce, with most constraints linked to inadequate information and infrastructure challenges that make it expensive for farmers to transport produce to warehouses.
ACE for Africa is a commodity exchange and warehouse receipt system operating in Malawi.
Since its inception in 2006, the exchange has facilitated finance worth $22 million (about K38 billion) to small and medium enterprises for agricultural produce and has traded over 200 000 metric tonnes of commodities.
