The Federal Government plans to revitalise commodity exchange in Nigeria as part of a comprehensive development programme for the nation’s agricultural sector.
Vice President, Professor Yemi Osinbajo, made this known yesterday at the 1st National Economic Forum organised by Vintage Press Limited, the publishers of The Nation Newspapers, in collaboration with CEEDEE Resources at Lagos Airport Hotel, Ikeja, Lagos.
Osinbajo said the government would develop the commodity exchange system to support the development of the agricultural sector.
He said government would revitalise the Abuja-based Nigeria Commodity Exchange (NCX) and other infrastructure and operators in the whole commodity exchange value chain.
According to him, a functional commodity exchange would ensure that Nigerian farmers receive good prices for their products.
Osinbajo said government also plans to introduce a Minimum Price Guarantee scheme under which government will set floor prices at which it would buy agricultural produce from farmers.
He noted that a Minimum Price Guarantee scheme would encourage the farmers to scale up their production to their highest capacity with the assurance that government will be ever ready to buy the farm produce at guaranteed prices.
It should be recalled that the NCX had introduced a pilot electronic warehouse receipt system (e-WRS) in 2014. Under the e-WRS, farmers will be able to place their commodities at an NCX-accredited warehouse in different parts of the country and will be issued an electronic receipt stating details such as commodity type, quality and quantity, owner and other relevant information. The depositor will have the choice of using the receipt as collateral to obtain bank loans or for trading on the Exchange. Another option is to keep such commodities in the warehouse until their prices stabilize or appreciate.
The new initiative would encourage the provision of standard storage facilities for operators in the agricultural value chain and make the warehouse receipts a prime tool of trade while facilitating access to finance. The e-WRS is also expected to strengthen small scale farmers and agro-allied businesses while creating jobs and sustainable economic growth.
Source: The Nation
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