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Firms face tough warehouse receipt system requirements

By Nicholas Waitathu
Tuesday, February 2nd, 2021
Agriculture CS, Peter Munya. Photo/PD/FILE
In summary
    • The regulations, seek to ensure there is established central registry, licensing of warehouse operators, warehouse receipts, negotiation and transfer of warehouse receipts, duties and obligations of warehouse operator, depositor and pledgee..
    • Food commodities companies will have to apply for licenses in the county governments but only after they have applied for a certificate of conformity from the warehouse receipt system council.
    • Companies can have their licenses revoked if they repeat failure to remit returns on operation, professional misconduct, falsification of documents and improper use of the licence.
    • Since last year Agriculture and Food Authority has been inspecting and certifying warehouses under the National Cereals and Produce Board.

Only companies that will demonstrate ability to raise adequate capital to finance initial investment in infrastructure and three years operational expenses will be licensed to operate new stores under the new warehouse receipt system.

The condition is among other criteria outlined in the new Warehouse Receipt System Regulations, 2021 recently published by Agriculture Cabinet secretary Peter Munya.

Munya said investors interested in undertaking food crops management under the new system must submit a viable business plan for the intended warehouse business based on outlined criteria.

The regulations, the CS explained seek to ensure there is established central registry, licensing of warehouse operators, warehouse receipts, negotiation and transfer of warehouse receipts, duties and obligations of warehouse operator, depositor and pledgee.

Food commodities companies, Munya said will have to apply for licenses in the county governments but only after they have applied for a certificate of conformity from the warehouse receipt system council.

“An application for a warehouse operator’s license shall be made to the respective county executive committee member of the respective county government in Form 1C set out in the First Schedule and be accompanied with a non-­refundable application fee prescribed in the Third Schedule,” he added.

Munya warned that the companies can have their licenses revoked if they repeat failure to remit returns on operation, professional misconduct, falsification of documents and improper use of the license.

Since last year Agriculture and Food Authority (AFA) has been inspecting and certifying warehouses under the National Cereals and Produce Board (NCPB).

New reforms

“Inspection of the stores is part of implementation of new reforms announced by Agriculture last year.

The inspection process has been followed by accreditation of the facilities,” AFA Acting director general Anthony Muriithi said.  

He added: “The silos must meet Codex standards – a collection of standards, guidelines and codes of practice adopted by Codex Alimentarius Commission, the joint intergovernmental body of Food and Agriculture Organisation  and World Health Organisation.

Leonard Kubok, AFA Food Crops Directorate interim director said 216 stores under the NCPB as well certified 118, all under the NCPB, account for 65 per cent of the agency’s total warehouses capacity.

Kubok further disclosed that the remaining stores have few issues that they need to comply with before they are certified.

The AFA inspectors are also inspecting stores under the management of the Kenya National Trading Corporation, private sector and co-operative societies. 

He said a team of inspectors have been assessing key parameters before certifying the stores.

“These include sound pest management and seepage systems, easy accessibility, air ventilation, well done floors, pallets, CCTV systems, septic structures, fire extinguishers, toilets and main entrance must have canopy,” added Kubok.

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