Developing the Potato Value Chain in Kenya
Potato (commonly referred to as Irish potato) is the second most important food crop in Kenya after maize. Potato production in Kenya is expected to grow. Farmers are being encouraged by the government to diversify their food production practices by opting to grow potato because it matures faster than maize and can bridge the gap during grain shortages. The number of potato farmers in Kenya has grown from 500,000 in 2003 to 800,000 in 2011 (Thompson Reuters Foundation 2011).
Changing consumer tastes and an increased demand for fast foods led us to the informed decision to start a fresh cut potato business. The biggest challenge faced by fast-food restaurants is the small spaces they occupy. Most fast-food restaurants are located in the Nairobi central business center, making waste management a headache. Moreover, with the nature of the business being fast, waiting for the product to be prepared on demand was inconvenient. With all of this in mind, the Sereni Fries product was developed to provide precut potato fries, streamlining the process for fast-food restaurants.
Not long after the business kicked off, we saw the weak link in the potato value chain: market fluctuations that affected availability and prices for the potato. We visited potato farmers and it came as a shock that while we were facing shortages and exorbitant prices, potatoes were rotting in farms as middlemen offered very low prices. We embarked on a journey to address these challenges faced by the farmers which in turn affected us.
We have worked with many partners along the journey. Ours being among the first potato processing companies in Kenya, our banks have been very supportive. They provided overdraft to assist our working capital needs as well as asset financing to acquire basic processing equipment.
We have also partnered with development organizations such as SNV Netherlands Development Organization, International Fertilizer Development Center, German Agency for International Cooperation (GIZ) and Self Help Africa.
Each organization has really helped in building capacity at different levels of the value chain, especially in providing technical assistance to our smallholder farmers. That has brought significant benefits to the farmers.
Steps taken to solve the issue
It was clear to us that we needed to replace the middlemen and provide a direct market for the farmers. This was a win-win for all as it ensured that the farmers got the prices they deserved while we had reliable supply for our raw material. To achieve this, we needed to embark on a sensitization campaign on contract farming and good agricultural practices (GAPs). Since this was a financially intensive undertaking, we reached out to banks and development partners. We received funding from SNV (through the Kenya Market-led Horticulture Program (HortIMPACT) project) to recruit and train farmers on contract farming and good agricultural practices.
During the two-year project, we reached over 1000 farmers in Nakuru and Meru counties. Through the trainings farmers were able to double their yields. Our intervention also saw the average price per kilogram increase from USD 0.06 to 0.18. This had a direct impact on household incomes.
The success of the program was accompanied by an increase in the number of farmers interested in contract farming. With the adoption of GAPs, farmers were able to produce more. This presented another challenge for Sereni since we needed to increase our production as well as our capacity to receive more potatoes. We therefore needed an excellent potato storage. With the help of our banking partners, we constructed a 500-ton potato cold store (Picture 2).
We also moved our factory to a bigger premise that was able to handle more production. We invested in automated peelers for increased efficiency.
Continued improvements in the value chain led us to venture into the frozen fries value chain. This is a new venture in Kenya; the only frozen products available are imported into the country. After intensive investment, we launched our products and they were positively received. This drew interest from international franchises such as Kentucky Fried Chicken (KFC).
Our continued support for the value chain has had a positive impact. Some of the successes are:
- Increase in average yield from 10 to 20 tons per hectare due to adoption of GAPs.
- Average price increase for farmers from USD 0.06 to 0.18 per kilogram.
- 2855 farmers recruited and trained on CSA and GAPS (Table 1).
|Table 1: Farmers recruited per age group|
|Above 64 years||63||78||141|
- Adoption of the national potato policy in 2019 that stipulated the enforcement of the 50kg bags and the pricing of potato in kilograms instead of extended bags.
- Adoption of climate smart practices such as water harvesting, mulching to preserve water, use of cover crops to prevent soil erosion, integrated pest management to reduce overreliance on agrochemicals and soil testing to ensure right decisions for crop production (Picture 3).
- Streamlining the potato value chain enhances food security by ensuring accessibility and availability.
- Practicing climate smart agriculture ensures sustainability in the face of climate change.
- More needs to be done in enforcing policies in the potato industry.
- Investing in storage and technologies such as frozen products ensure food security.
- Functional partnerships with farmers lead to a sustainable, reliable supply of potatoes. Stable pricing of potatoes in turn avoids dramatic price fluctuations that may occur on the open market.