Produce worth $300,000 (Rwf243 million) was traded during the first two months of G-soko, a new grain trading platform linking cereal buyers and sellers in East Africa.
At least 1,120 metric tonnes were sold online and 50,360 MT traded off-line through certified warehouses linked to the platform that was created to promote structured food markets like the Kigali-based East Africa Exchange (EAX).
Traders and agro-processors have cited scattered smallholder farmers and buyers, lack of market information, poor storage facilities and unpredictable weather as key barriers to food commerce in the region.
G-Soko launched in October seeks to ensure that farmers growing maize and beans in East Africa can sell their produce across East Africa through regionally certified warehouses.
This could address unstructured markets challenges such as post –harvest handling, eliminate middlemen and increase farmers’ income.
“Sometimes we realise that farmers don’t have infrastructure to sustain production. They don’t have the equipment needed for post- harvest handling and so they try to sell their produce rapidly at low prices,” said Thadee Musabyimana, director-general of Sosoma Industries Ltd, a Rwandan agro-processing company.
Food Trade East and Southern Africa (FoodTrade ESA) seeks to address food commodity markets in the region through a £9.5 million (Rwf10 billion) challenge fund.
Beneficiaries are regional companies that are involved in staple food value chain markets.
Beneficiaries are regional companies that are involved in staple food value chain markets.
“Investment in infrastructure to village aggregator centres and certified warehouses is important to help farmers participate in structured trade,” said Diana Ngaira, knowledge management expert at FoodTrade.
“As a smallholder farmer unless you come together as a group it is very difficult for you to aggregate and collect quality and quantity that will attract big traders,” she said.
G-soko and East Africa Exchange are linked to certified warehouses.
Sosoma Industry Ltd which trades in nutritious food from grain, says it has signed contracts with 3 co-operatives in Tanzania and Uganda to supply maize and soy bean.
Some experts say, enhancing structured markets will ensure growth of markets for staple foods delivering a range of benefits to farmers, the private sector and households.
KilimoTrust, an agricultural cross-border organisation hopes to structure beans trade in East African Community using consortiums approach that comprises of buyers connected to farmers who would supply food.
The company’s target is reaching 30,000 metric tonnes traded across EAC and beyond every year, but building the trade model is not straight forward.
“It takes sometimes to build the structures of consortium, bringing all partners together and make sure they understand benefits,” said Eddy Frank Rugamba, programme assistant.
Unpredictable weather was one of key challenge farmers and traders faced in the last agriculture seasons.
Mr Rugamba said the low volume traded reduced confidence in buyers and also farmers felt blamed for not fulfilling their supply requirements. For instance in Rwanda, one consortium has been trading at least 150 metric tonnes from a co-operative, but for the previous season some co-operatives didn’t even deliver a metric tonne of beans.
“So there was completely no trade between them,” he said “As that relationship doesn’t go on it can break, yet we have put more efforts to build this consortium!”
According to Kilimo Trust, this was the same in some parts of eastern Uganda where farmers planted beans but they didn’t grow due to bad weather. Buyers from Kenya therefore couldn’t fulfil their supply requirements.
Source: THE EAST AFRICAN
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