PROFIT+ Participants Trade on Commodities Exchange, Benefit from Warehouse Receipt System

ACDI/VOCA implements the USAID-funded Production, Finance, and Improved Technology Plus (PROFIT+) program in Zambia, a core Feed the Future (FTF) activity. PROFIT+ uses market system solutions to create opportunities for farmers and agribusinesses to increase agricultural productivity and access high-value markets, while facilitating private-sector investments in target value chains.

One of PROFIT+’s recent accomplishments involves supporting smallholder farmers in Zambia’s Eastern Province as they trade their crops on the Zambia Agricultural Commodities Exchange (ZAMACE) for the first time. PROFIT+ collaborates with ZAMACE as it improves agricultural trade through the implementation of the Agricultural Management Information System (MIS) and Warehouse Receipt System (WRS). WRS enables farmers to deposit storable goods (usually grains) in exchange for a warehouse receipt (WR). By storing their goods, farmers can sell them once prices have picked up, to maximize their return.

The seven PROFIT+ producer companies (PCs) and cooperatives that have been shortlisted to participate in the ZAMACE rollout are projected to transact in excess of ZMW1,000,000 ($99,750; 500MT) in grain trade.

ZAMACE Executive Director Jacob Mwale says the partnership between ZAMACE and PROFIT+ is “consultative at all levels” as it “address[es] [the] challenge of provision[ing] market information to participants.”

PROFIT+ COP Says ZAMACE Will Change How Trade Is Done in Zambia

PROFIT+ Chief of Party Alex Pavlovic explains that, “Those who will directly benefit from ZAMACE are those that work with PROFIT+: our PCs, our coops, our traders, even bigger Community Agro Dealers (CADs) who decide to pick up products [and] go deposit in the ZAMACE warehouse. [There they] are availed of a receipt, get a loan, [and] go buy more or utilize that loan until the sale is made. It’s a market system that will fully change the way that trade is done in the country, add transparency, open up international markets, allow farmers to manage their capital better and get access to finance.”

ZAMACE Provides Certified Warehouses and Dissemination of Agricultural Information

ZAMACE has identified certified warehouses for the warehouse receipt system. It already has 400,000 MT of certified warehouse capacity owned by four commercial grain trader firms. At this point, it has developed standards for three value chains: maize, wheat, and soybeans.

ZAMACE will also compile and analyze agricultural commodity prices, agricultural stock market information, and supply-and-demand statistics to disseminate to stakeholders. These strategies are critical as they will be available to many farmers, including those who are unable to receive communications via modern technology.

PROFIT+ Forges Partnerships with Private-Sector Agribusinesses to Transform Farmers’ Lives

In the Eastern Province, NWK Agri Services and AFRGRI Corporation have been certified as warehouse operators. NWK Agri Services is a Zambian company that trades agricultural commodities, supplies agricultural inputs and seeds, and provisions storage space to the agriculture sector. It currently has a memorandum of understanding with PROFIT+ CADs to buy their aggregated agro produce for cash. AFGRI is a leading agricultural services and food-processing company with a focus on grain commodities.

Henry Zulu, Community Agro Dealer and a Pecad Limited director, was among 21 farmers who attended the May PROFIT+ ZAMACE training.

He says that, “ZAMACE has taught us how to aggregate produce and how the warehouse receipt system works. When we buy produce when the price is low, we go and store it in the warehouse and then sell when the price is high.” Through its partnership with ZAMACE, PROFIT+ provides more benefits to a broader range of buyers and sellers, and is improving the lives of farmers in rural Zambia.

Read more about our work in Zambia

Read more about PROFIT+