Designing warehouse receipt legislation: Regulatory options and recent trends
Directions in Investment series - N. 11 - 2015
The FAO Investment Centre and the FAO Development Law Branch have just published a review of warehouse receipt legislation and related regulatory practices worldwide. The publication - “Designing warehouse receipt legislation: regulatory options and recent trends” - provides country-based examples on how to develop enabling legislation for inventory credit.
Farmers often face difficulties accessing credit and are compelled to sell their crop immediately after the harvest, when prices are typically at their lowest, to buy inputs for the next season. Warehouse receipt systems allow them to access short-term credit from banks by depositing their crop in certified warehouses and using it as collateral.
The publication provides guidance for countries seeking to develop or reform existing warehouse receipt legislation. It highlights the importance of core elements of a good enabling legislation, while suggesting flexibility to accommodate country specificities.