A healthy post-harvest value chain can play an important role in the food security for rural farmers and communities by improving access to food with increased income from higher sales prices as well as increasing the availability of nutritious foods in the marketplace through staggered sales.
However, in many rural areas of India, farmers face a number of challenges related to the post-harvest value chain. Often their access to credit is severely limited due to the application requirements of formal financial institutions. This lack of access to secure financing combined with repayment pressure for debts accrued during the planting season often forces farmers to sell their crops immediately after harvest when the market is flooded, resulting in lower overall profit. In addition, costs to access the local market are often prohibitive for rural farmers, resulting in fewer options to sell their harvest at optimal prices. Finally, limited and inadequate storage options often results in farmers selling their produce immediately, which results in smaller profits for them and less product in the market.
One way to address some of these challenges is through a warehouse receipts system where produce is stored in secure warehouses and can be used by farmers as collateral to obtain financing. Upon receiving financing, farmers can pay back immediate debts while waiting to sell their harvest at a competitive price in the local market.
In this comparative case study, the Aga Khan Rural Support Programme-India (AKRSPI) and the Kazhi Kadamaidai Farmers Federation (KKFF) explore different approaches to developing and implementing a warehouse receipts system for the rural farmers who they work with in India.