Improving Agricultural Market Performance:
Creation and Development of Market Institutions
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and security, sparked expansion of warehouse receipt financing, backed in part by a US$55
million EBRD credit line for domestic commercial banks. According to FAO, “[Kazakhstan’s
system contains all necessary elements and has been steadily gaining strength for the last six
to seven years. The indemnity fund is a good example of effective organizational structure.
After the success of utilizing grain warehouse receipts, the industry is investigating the
introduction of a similar mechanism for cotton.” 141
Tanzania Warehouse Licensing Board
Tanzania has what may be the most developed warehouse receipt system in Africa. Virtually
the entire cashew crop is marketed through the warehouse system, which introduced for
cashew in 2007. Under the system, village agricultural marketing cooperatives obtain bank
finance to aggregate raw cashews, which are receipted and traded through an auction system
that comprises more than 30 exporters and processors and provides some US$85 million in
financing per season. The success of the warehouse system has been reinforced by the auction
system: in the 2007/08 season, cashew farmers in Tanzania received average farm gate prices
of about US$290 per tonne. By the 2011/12 season, the minimum price paid to farmers had
risen to about US$750 per tonne, and total production had doubled from 79,000 tonnes in
2008/2009 to 158,000 tonnes in 2011/2012.142
Features that have contributed to the success of Tanzania’s warehouse receipt system (which
now handle coffee, raw cashew nuts, maize, paddy, sesame, sunflower, pigeon peas and cotton)
include:
 Warehouse receipt legislation and accompanying regulations;
 The Tanzania Warehouse Licensing Board, which regulates the system;
 Commodity grading system for many commodities, including coffee and cashew;
 Dedicated licensing system and standards for warehouses and warehouse operators;
 Issuance of credit not exceeding 75% of the value of the deposited commodity;
 Involvement of:
o farmers’ and financial organizations,
o local Government,
o local and international markets
o crop Boards,
o Tanzania Bureau of Standards,
o Weight and Measures Agency,
o Tanzania Food and Drugs Authority,
o Tanzania Revenue Authority,
o Tanzania Ports Authority,
o Tropical Pesticides Research Institute.143
141 Hollinger, F., Rutten, L., & Kiriakov, K. (2009), “The use of warehouse receipt finance in agriculture in transition
countries,” FAO Investment Center Working Paper , 6-9 June, p. 8.
142 Onumah, G., (2013), Warehouse receipt financing in agriculture in Africa, available at
Accessed June 2017].
143 TWLB (2013), The Warehouse Receipts System Operational Manual, available at
Accessed June 2017].