In the Sahel area agriculture is subject to unfavorable weather conditions, ultimately resulting in low crop production. In addition, smallholder farmers are often forced to sell their produce immediately after harvest — when everyone else is selling and prices are lowest – to obtain liquidity in order to satisfy priority needs.

In this context FAO introduced the warrantage, or inventory credit system, pioneered in Niger in 1999 and then extended to Burkina Faso, Mali and Senegal. Under the warrantage system farmers, rather than selling their harvest at once, can use it as collateral to obtain credit from a bank.

This good practice fact sheet is directed at actors interested in applying the warrantage system. These actors include umbrella and grassroots producers’ organizations (POs), men and women farmers, as well as partners and other development stakeholders. The purpose of this fact sheet is to promote the use of inventory credit as a good agricultural practice, and to encourage umbrella POs to adapt this technique for financing smallholder families, as a way of ensuring the most effective management and highest profits for their agricultural and non-agricultural activities.