Developing Warehouse Receipt and Grain Bank Microfinance Systems to Stabilize Nigeria’s Rural Food Supply Chains and Farmer Incomes
Lead Consultant, Dongrong Capital LLC, Nigeria.
Review Article
World Journal of Advanced Research and Reviews, 2023, 20(03), 2464-2677
Article DOI: 10.30574/wjarr.2023.20.3.2647
Publication history:
Received on 23 November 2023; revised on 28 December 2023; accepted on 30 December 2023
Abstract:
Volatility in agricultural markets remains a major constraint on rural income stability and national food security in many developing economies. In Nigeria, smallholder farmers are particularly exposed to post-harvest losses, seasonal price swings, and limited access to affordable credit, all of which weaken rural livelihoods and disrupt food supply chains. At a macro level, stabilizing food systems requires financial and institutional mechanisms that allow farmers to store value, smooth income over time, and participate more effectively in markets rather than being forced into distress sales immediately after harvest. This study situates warehouse receipt systems and grain bank–linked microfinance within the broader framework of agricultural finance, rural development, and food systems resilience. It conceptualizes these instruments as complementary market infrastructures that transform stored produce into bankable assets, enabling credit access while reducing supply gluts and price collapses. Drawing on principles of collateralized lending, cooperative finance, and value-chain integration, the paper outlines how regulated warehouse receipts and community-based grain banks can function as risk-mitigating platforms for both farmers and lenders. The analysis then narrows to Nigeria’s rural economy, proposing an integrated model that links certified storage facilities, local financial institutions, and farmer cooperatives within a transparent governance structure. Warehouse receipts are positioned as tradable, verifiable instruments that unlock seasonal credit, while grain banks serve as decentralized buffers that enhance household food security and stabilize local markets. Microfinance institutions play a catalytic role by aligning loan products with agricultural cycles and receipt-based collateral. By reducing post-harvest losses, moderating price volatility, and improving farmers’ bargaining power, the proposed framework strengthens rural incomes and enhances national food supply chain reliability. Policy implications are discussed in relation to regulatory oversight, digital tracking, and scalability across agro-ecological zones, highlighting a pathway toward inclusive agricultural growth and long-term food system resilience in Nigeria.
Keywords:
Warehouse Receipt Systems; Grain Banks; Agricultural Microfinance; Rural Food Security; Farmer Income Stabilization; Nigeria
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Copyright © 2023 Author(s) retain the copyright of this article. This article is published under the terms of the Creative Commons Attribution Liscense 4.0