Case study 1: Warrantage System, Niger

Warrantage system, Niger. Credit, FAO.

Warrantage system, Niger. Credit, FAO.

The Food and Agriculture Organisation of the United Nations (FAO) provided support to cooperatives in Niger from 2008 to 2013. During this time the FAO project helped to establish farmers associations and cooperatives, which built more than 100 warrantage warehouses.[1] Farmers can store any end-of-season surplus produce in the secure warehouses that are owned by their cooperatives. The cooperative retains one key to the storage facility whilst the bank or microfinance institution keeps the other key. Farmers who deposit produce into the warehouse are given a loan that is negotiated by the cooperative against what is in the storage facility (known as their ‘collateral’). This allows the members to finance other household or commercial activities. By 2013 warrantge was available to more than 100,000 farmers.

Typically the surplus is stored for 6 months, by which time the market price for crops is higher as the market is no longer flooded. Money from the warrantage arrangements can be used to buy inputs such as fertilisers. The project therefore also set up 264 cooperative-managed input shops. Using the shops as a base, the cooperatives ran 375 farmer field schools with 780 demonstration plots. The success of the cooperatives has spread to villages outside of the initial project area, and now more than 780 input shops exist in Niger, reaching more than half of the agricultural villages in the country.[2]

By buying better inputs, smallholders have increased yields by between 34%-120%, and incomes have increased by between 19%-113%.[3] Sorghum yields have increased by 100%, whilst millet yields have increased by 81%. However, a particular issue with the system is that a bad harvest may result in little or no surplus, whilst in high produce seasons there may be more surplus than storage. In that case, there may also be insufficient financing available from the banks to cover all of the produce.

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