Government has been urged to amend the Warehouse Receipt Act to pave way for a proposed model which will establish a board to oversee the implementation of the warehouse receipt system which enhances commodity marketing.
Speaking at the second public stakeholder consultative meeting on the operationalisation of the Warehouse Receipt System and Agriculture Commodity Exchange for Zimbabwe yesterday, senior law officer in the Attorney General’s Office Blessing Mujaja said the current legislation did not provide for such a board.
“The proposal model should provide for a board to oversee the implementation of the system so that it is also provided for in the Warehouse Receipt Act,” he said.
The role of warehouse receipt systems is to enhance commodity marketing and rural livelihoods in Zimbabwe.
Mujaja said the proposed model should also provide for the introduction of electronic receipts, a central depository and a dispute resolution mechanism not covered under the Act in its current form.
“The Warehouse Receipt Act needs to be amended such as when the farmer defaults; going to the civil court stakes longs, so it is anticipation that the Warehouse Receipt Act will be amended to accommodate the arbitration by the secretariat,” he said.
Warehouse Receipt consultant Reneth Mano said the proposal was informed by failures experienced in marketing grains.
He, however, said there was need for the harmonisation of the Warehouse Receipt Act with other laws already in place.
“There is need to harmonise the current legislation in place to allow the Grain Marketing Board (GMB) to be an equal player in line with the Warehouse Receipt System,” said Mano.
Zimbabwe had a thriving commodity exchange, which was, however, closed in 2001 when the government gave the monopoly on corn and wheat trading to GMB.
Agriculture, Mechanisation and Irrigation Development permanent secretary Ringson Chitsiko said the government was in the process of establishing the Zimbabwe Agriculture Commodity Exchange (ZIMACE) as a marketing instrument to accelerate agriculture-led economic growth and wealth creation.
Chitsiko said ZIMACE would provide a platform for efficient price discovery, minimise post-harvest losses, allow for better price risk management and facilitate access to credit by farmers.
“The success of ZIMACE will depend on the successful implementation of the warehouse receipt system, based on a robust effective model which you, the captains of industry and public officers here present will discuss and finalise today,”he said.
Chitsiko, however, said the role of government in the warehouse receipt system would be restricted to crafting rules and regulations that would ensure effective and equal participation of all players in the system.
He added that the ministry was expecting the warehouse receipt system to be piloted this marketing season.