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Publications & training courses: Structured grain trading systems in Africa
Title:      Structured grain trading systems in Africa
Categories:      Marketing
BookID:      117
Authors:      CTA and EAGC
ISBN-10(13):      9789290815242
Publisher:      Technical Centre for Agricultural and Rural Cooperation and Eastern Africa Grain Council
Publication date:      2013
Number of pages:      116
Language:      English
Rating:      0 
Picture:      cover
Description:     

This manual describes how structured trading systems work for grains such as maize, sorghum and millet, as well as commodities such as groundnuts and soybeans, Africa’s most important staples.

Structured trading is how most grain is traded in the developed world, and is now expanding in Africa. The manual explains how the system works, from postharvest handling and warehousing to trading on a commodity exchange. It describes the mysteries of standards, explains how market information is used, and explores the details of trade contracts and dispute resolution.

As more of Africa’s smallholder famers become active players in value chains, one needs to develop the institutions that enable farmers, traders, warehouse managers and processors to produce, trade and market products efficiently and cost-effectively. Sophisticated trading systems already exist for export commodities such as coffee and cut flowers. But for staple commodities, such systems are still in their infancy in most African countries.

Hence the need for this manual. It describes how structured trading systems work for grains such as maize, sorghum and millet, as well as commodities such as groundnuts and soybeans, Africa’s most important staples. Structured trading is a way of organising, regulating and financing trade in a commodity. The grain is graded according to a set of agreed standards, and it is stored safely in a trusted warehouse. These two things make it possible for the owner to use the grain as collateral for a loan before it is sold. Moreover, the grain can be sold without having to move it out of the warehouse. And it can be traded on a commodity exchange, where buyers and sellers can agree on a deal without having to physically inspect the grain.

This has huge advantages for everyone involved. Farmers have a more assured market, and can sell the grain when the price is right. For traders, buying and selling is easier, less risky, and more efficient. Buyers have a more reliable supply, assured quality, and a broader range of potential suppliers. Costs and wastage are lower; income for everyone involved can be higher.

To succeed, structured grain trading needs a conducive policy environment that levels the playing field and allows the market forces of supply and demand to support a transparent process of price determination. That means halting bans on exports and imports, and avoiding interventions in prices, procurement and distribution. By explaining how structured trade works in a clear manner, this manual should help those involved in setting policies to avoid unpredictable interventions that disrupt the smooth and efficient working of markets. It will also support them to put in place a policy framework that is conducive to developing the institutions needed for structured trade.

The manual was developed through a participatory “writeshop” in July 2012 in Arusha, Tanzania. The 17 contributors, all specialists in various aspects of grain handling and structured trading in Africa and elsewhere, presented and discussed manuscripts on each aspect of this complex subject. The editors then helped small teams of contributors to revise the manuscripts into the various chapters. After the writeshop, the draft was further refined to ensure it reflects recommended practices and needs.

The manual is an output of CTA’s new “Value Chains” programme, which is designed to support the development of more efficient chains for priority commodities in African, Caribbean and Pacific regions. It should be a valuable guide for all those involved in creating and running the elements that make up structured trading systems, such as managers of farmers’ associations, warehouse operators, grain traders, banks, market information services, students and educators, as well as the policymakers who aim to modernise grain trading in Africa. It will also form an important component of courses offered by EAGC’s Eastern Africa Grain Institute.

Aussi disponible en français.


Contents

1. Introduction to structured trading systems

2. Postharvest management on the farm

3. Grain standards

4. Commercial grain handling, storage and warehousing

5. Market information

6. Warehouse receipts and collateral management

7. Agricultural commodity exchanges

8. Trade contracts and dispute resolution

Resources

Contributors

Glossary


Availability


Role of Paul Mundy

Writeshop management, editing

Book owner:      paulmundy
   
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