Description

Market participants can be encouraged to keep goods in storage for a time before placing them on the market by subsidising private storage. Private storage may stabilise prices by reducing the market offer. By storing a certain product, the national / regional security of supply may be improved, e.g. to safeguard against other countries imposing sudden export bans or other restrictions, or following harvest losses.

Private storage equates to a subsidised voluntary withdrawal from the market and can be used as a substitute for organising public storage. Subsidy payments are generally based on a certain subsidy rate per tonne and month. The conditions of storage and maximum storage times are officially regulated. The recipient of the subsidy is responsible for determining when the goods will be sold.

Requirements

• All actors along the value chain must be willing to take responsibility for quality assurance
• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Close cooperation and knowledge sharing with farmers' organisations
• Compatible regional and world trade law (WTO conformity)
• Constant market surveying and forecasting
• External inspection of quality management systems
• Quality management systems
• Regional and / or national regulations on storage conditions
• Regulated and legally protected payment structures
• Regulatory framework

Possible Negative Effects

• Inefficient market processes / market distortion
• Spoilage / loss of goods
• Surplus in the market when stocks are taken out of storage
• Private storage can involve a considerable financial burden, depending on the product and the storage requirements