In rural areas farmers lack incentives to increase production due to lack of spot market and also storage area. The introduction of grain banks would provide farmers with incentives to be efficient and productive. This organization is responsible for verification of farmer’s proposal and determines his/her capacity after which issues qualified farmers a local purchase order (LPO) on a given percentage of produce for a forward market based on prevailing market prices. The grains and commodities are stored in silos and sold later at favorable prices so as to make profit or in collaborations with SMEs set up mini Agro-Allied processing plants especially in rural areas to produce secondary commodities of higher value. These grain banks also have the responsibility of enlightening farmers on best agronomic practice to maximize yields e.g. right fertilizer use, seedlings and crop specification.
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