11.06.2013

Apart from easing problems with financing household consumption needs, this system makes it possible for farmers to enter into forward contracts with suppliers for timely delivery of farm inputs. They can do this without having to sell their crop and therefore sacrificing potential gains from normal seasonal price movement. Evidence from the maize sub-sectors in Ghana and Zambia demonstrate that the profitability of using fertiliser improves significantly if the grain produced is marketed using the WRS. For instance, in Ghana, the value-cost ratio (VCR), which can be used to measure the profitability of applying fertiliser, rises from 1.4 when the grain is marketed without the WRS to 2.05 when farmers use the system to market their output. This is largely because farmers can better time the sale of their crop to benefit from seasonal price increase and/or sell to market players further down the marketing chain (e.g. larger-scale traders and processors) for better prices.