Technical Progress Report

Foodnet Project G.10

  1.         Introduction

The general goal of the project is to investigate a viable business or market driven interventional strategy to enhance Irish potato production in Kenya and East Africa. Irish potatoes are second to maize in Kenya as energy food and are potentially viable Food commodities for alleviation of chronic food insecurity, associated with frequent maize crop failure due to the frequent drought conditions. The project seeks to investigate the viability of the establishment and operation of a National Potatoes storage structure similar to the National Cereals and Produce Board, but operated commercially with similar operational objectives, namely

a.       Element of strategic reserve and

b.      Prices stabilization for the benefit of producers, (mainly in order to increase production) but also consumers for purposes of improving consumption as an alternative to the staple maize.

The project's deliverables are:

a.       Market research studies on potatoes

b.      Pilot plant investigations on the storage and utilization quality behavior of the popular local potato varieties and

c.       The economic viability analysis of establishment and operation of large-scale potato storage facilities operated under the prevailing conditions.

The market research studies are meant to illuminate the market conditions influencing Irish potatoes, and particularly determine factors that fuel price fluctuations, the role of potatoes storage and its potential as an interventional strategy in stabilizing prices, given the prevailing market dynamics. The studies on the potato cultivars are meant to examine the storability of the available popular varieties, with reference to delaying setting or elimination of spoilage characteristics for purposes of reducing wastage on storage, and conserving the utilization qualities.

 The economic analysis of commercial potato storage is expected to provide data to enable develop a feasibility report on the viability of large-scale commercial potatoes storages, given the expected investment, operational costs, and different prices offered to producers for potatoes that should provide farmers with sufficient incentives to produce more potatoes.

2.         The Study Design and Methodology

2.1       Market Studies On Potatoes

      The activities here involved:

a.   Extensive literature review meant to retrieve secondary data on national Irish Potato production, prices fluctuation and contributing factors. Data on other constraining factors to production of Irish potatoes were also examined.

  1. A field study using an interview guide was carried out in Nyandarua district as well as at the market destination points in such urban centres like Nairobi, Naivasha and Nakuru. This exercise was meant to document and characterise the potatoes marketing channels as well as the agents involved, for potatoes grown in Nyandarua, a major potato growing area in Kenya.  The marketing functions for various agents were examined as well as the varieties and quantities handled, supply pattern, extent of storage, wastage in the chains, prices changes in the chains and the mechanisms for prices determination by the agents. Annexure 1 indicates the instruments used to gather the market data in Nyandarua and market consumer outlets in the urban areas.

2.2              Storage Behaviour and Utilisation

The varieties under study for the storability and which are popular and traded commercially are:

Variety                                                                                    Utilisation

Dutch (Ngorof/Bomet)                                                  Crisps

Tana, Nyayo and Tigoni                                                            Chips

Kerrs Pink (Meru)                                                                    Stew and mashing

Each variety was washed to remove soil dirt, dipped in 50 to 60 per cent ethanol solution to dry them or harden or make the skin firm, dusted with Propham, a germination suppressant and packed in small wooden crates. About 50kg were put in each crate for each variety and put in different environmentally controlled cabinets. The storage conditions set for all the five cabinets are as follows:

The quality parameters that were monitored with time are:

a.         Deteriorative.

b.           Utilisation Quality

·        Crisps—Brown colour development on deep-frying in oil

            ---Sugars (sweetness development)

                  ---Taste (Bitterness development)

·        Chips—Colour development

                ---Sugars

                ---Oil absorption (sogginess).

·        Stew/mashing—Flouriness check and development of translucence (mashing)

                                          ----Taste in comparison to the fresh control.

Annexure II shows the experimental design for the storage study

2.3              Economic Viability of Potato Storage

Data gathering towards the goal under this output has been initiated with the largest potato Storage Company in Holland, namely Netagco Tolsma B.V, which has branches in Germany, France and Russia. A questionnaire of Netagco Tolsma B.V, annexure III, indicates the basis and type of data being exchanged to facilitate compilation of relevant technical and financial data for the feasibility study.

The data obtained so far from outputs 1& 2 are proving invaluable in synthesising the necessary information for the questionnaire. Data derived from this questionnaire, plus supplementary data to be derived from a visit to the Netagco potato storage facility and subsequent assessment of investment costs related to buildings and other fixed costs will assist in putting together the necessary economic statistics appropriate to our local situation, for the purpose of viability analysis for a commercially operated potato storage in Kenya.

3.0 Results

3.1 Potatoes Market Structure in Kenya

Table I shows production statistics for potatoes in five provinces in Kenya for the years 1997 to 2000. Central province leads both in hacterage and tonnage production accounting for 40-60%of the total national potato production. Over the four years central province produced an average of 412,700 metric tonnes per year from an average of 57,650 hectares. Rift Valley followed this with an annual average production of 228230 metric tonnes from 27,138 hectares, and Eastern province, producing annual average of 160,725 metric tonnes from 22315 hectares. In total annual potato production in Kenya ranged from 670,000 metric tonnes in 1998 and 2000 to 1,050,000 metric tonnes in 1999. Such drastic fluctuations in production can be explained by the rainfall precipitation pattern, which has been erratic, with intervening dry spells. Fluctuations in yields are also weather or rainfall dependent. In general, rainfall has been higher in the Western Kenya, and that explains why yields are on average higher in Western and Riftvalley provinces. However, production in RiftValley, Western and Nyanza provinces has remained depressed in both cultivated area and potato production despite the relatively better weather conditions. Such discrepancy can be attributed to the market. The major market for potatoes is in large urban areas such as Nairobi, Mombasa and Nakuru. Accordingly, Central and Eastern provinces benefit from being near these markets, given the high transport costs involved in transporting bulky and high moisture commodities such as potatoes.

Tables 2 a, b, c and d show the detailed potatoes production statistics for the years 1997, 1998, 1999 and 2000 respectively by districts in the provinces of Kenya, in acreage and tonnage, according to long and short rain seasons of their production.

Tables 3 a, b, c, d and e present the recorded monthly prices for red and white potato varieties for the years 1995 to 2000. Previous similar studies on potato prices by Durr and Lorenzl in 1980 lumped together potato varieties on the basis of whether red or white and found a very significant difference in prices between red or white varieties based on colour grouping. Figures1 a and b present the yearly price and production averages for the five most productive districts in potatoes in a graphic form for the period 1995-2000.


Table 1: Total Annual Potato Production and Yields In Hacterage and Metric Tonnes;

1997-2000

 

 Province            1997                             1998                                             1999                                     2000                                                                                                                                                                                                                    

                                                                                                                                                                                                                             

                  Ha                    MT     Ha                  MT                        Ha              MT                   Ha                MT             

 

Central          76,283       501,454(7)         52,335          395,948(7.5)          53,325       475,722(9)            48,670         277,729(5.7)

Coast                    25             250(10)             --                         --                       15              154(10)                  --                   --                         

Eastern          20,172       125,762(6)          14,064           69,298(5)             32,718       314,403(9.5)         22,310        133,440(6)

R. Valley       21,666      203,177(9)           22,851         204,730(9)             27,591      251,904(9)             36,442        253,118(7)

Western              450         4,565(10)               362            3,609(10)                 468          5,075(11)                609            5,704(9.5)

 


Total             118,596    835,208(7)           89,612          673,58(7.5)        114,117    1,047,260(9)           108,031          669,991(6)

 


Ha=Hectares      MT=Metric tonnes            Figures in brackets = Yield per hectare


Table 2a                                  Irish Potatoes 1997

 Annual Production

Central

District

Ha

Tons/ha

Tons

Kirinyaga

21,500

0.45

9,750

Muranga

2,380

4

10,210

Nyeri

16,450

5

83,850

Kiambu

10,834

9

94,364

Thika

5,480

5

24,934

Nyandarua

15,139

17

263,721

Maragua

4,500

3

14,625

Total

76,283

7

501,454

Coast

District

Ha

Tons/ha

Tons

T/Taveta

25

0.45

9,750

Total

25

4

10,210

Eastern

District

Ha

Tons/ha

Tons

Embu

1,750

10

17,100

Machakos

380

0

85

Mbeere

37

3

121

Meru

16,225

6

97,350

Nyambene

1,360

8

10,880

T/Nithi

420

1

226

Total

20,172

6

125,762

Rift Valley

District

Ha

Tons/ha

Tons

Baringo

54

11

602

Bomet

291

12

3,492

Kajiado

1,068

1

961

Keiyo

400

9

3,400

Kericho

850

10

8,500

Koibatek

842

12

10,104

Laikipia

3,236

9

29,124

Marakwet

1,800

9

16,200

Nakuru

7,843

8

62,117

Nandi

325

18

630

Narok

3,000

14

40,500

Samburu

8

5

40

TransMara

104

14

1,497

Trans Nzoia

460

9

4,140

Uasin Gishu

1,180

14

15,930

West Pokot

495

12

5,940

Total

21,666

9

203,177

Western

District

Ha

Tons/ha

Tons

Kakamega

35

9

315

M-Lugari

64

12

768

Mt. Elgon

337

10

3,370

Vihiga

14

8

112

Total

450

10

4,565

Summary

Province

Ha

Tons/ha

Tons

Central

76,283

7

501,454

Coast

25

10

250

Eastern

20,172

6

125,762

Rift Valley

21,666

9

203,177

Western

450

10

4,565

Total

118,596

7

835,208

Table 2b                      Irish Potatoes 1998 

Central

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

Kirinyaga

741

5,705

975

1,072

1,716

6,777

Muranga

400

1,100

400

880

800

1,980

Nyeri

7,235

71,626

8,880

48,840

16,115

120,466

Kiambu

5,695

15,3,340

3,340

11,935

9,035

27,598

Thika

3,795

18,367

2,254

5,372

6,049

23,739

Nyandarua

13,000

185,900

3,700

24,420

16,700

210,320

Maragua

960

2,956

960

2,112

1,920

5,068

Total

31,826

301,317

20,509

94,631

52,335

395,948

Coast

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

T/Taveta

13

130

-

-

13

130

Total

13

130

-

-

13

130

Eastern

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

Embu

750

4,500

500

40

1,250

4,540

Mbeere

14

98

-

-

14

98

Meru Central

4,600

23,000

7,250

36,250

11,850

59,250

Meru North

250

2,500

250

2,500

500

5,000

Meru South

200

160

250

250

450

410

Total

5,814

30,258

8,250

39,040

14,064

69,298

Rift Valley

 

Long rains

Short rains

total

District

 

Ha

   

Tons

Tons

Baringo

53

367

-

-

53

367

Bomet

150

1,200

406

3,250

556

4,450

Kajiado

700

1,830

432

1,670

1,132

3,500

Keiyo

190

3,420

90

1,620

280

5,040

Kericho

1,200

14,400

-

-

1,200

14,400

Koibatek

1,023

12,300

-

-

1,023

12,300

Laikipia

2,435

21,900

800

3,235

22.700

 

Marakwet

1,800

16,200

450

4,500

2,250

20,700

Nakuru

7,864

60,195

-

-

7,864

60,195

Nandi

30

288

-

-

30

288

Narok

2,000

18,000

700

4,000

2,700

22,000

TransMara

70

700

18

180

88

880

Trans Nzoia

656

9,470

-

-

656

9,470

U/Gishu

1,204

23,800

-

-

1,204

23,800

W/Pokot

580

4,640

-

-

580

4,640

Total

19,955

188,710

2,896

16,020

22,851

204,730

Western

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

B/Mumias

1

9

0

0

1

9

Kakamega

11

110

18

180

29

290

Malava-Lugari

53

530

-

-

53

530

Mt. Elgon

109

1,090

160

1,600

269

2,690

Vihiga

5

45

5

45

10

90

Total

179

1,748

183

1,825

362

3,609

Nairobi

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

 

220

862

125

177

345

1,039

Total

220

862

125

177

345

1,039

Nyanza

 

Long rains

Short rains

total

District

Ha

Tons

Ha

Tons

Ha

Tons

Gucha

34

510

25

375

59

885

Kisii

100

200

80

1,600

180

1,800

Migori

22

220

4

32

26

252

Nyamira

43

64

140

2,100

183

2,164

Total

199

994

249

4,107

448

5,101

Summary

 

Long rains

Short rains

total

Province

Ha

Tons

Ha

Tons

Ha

Tons

Central

31,826

301,317

20,509

94,631

52,335

395,948

Coast

13

13

-

-

13

13

Eastern

5,814

30,258

8,250

39,040

14,064

69,298

Rift Valley

19,955

188,710

2,896

16,020

22,851

204,730

Western

179

1,784

183

1,825

362

3,609

Nairobi

220

862

125

177

345

1,039

Nyanza

199

994

249

4,107

448

5,101

Total

58,206

523,938

32,212

155,800

90,418

679,738

Table 2c                      Irish Potatoes 1999 

Central

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Kirinyaga

800

7,200

900

7,560

1,700

14,760

Muranga

300

1,296

480

1,728

780

3,024

Nyeri

7,545

63,378

8,280

59,616

15,825

122,994

Kiambu

4,830

46,368

6,320

56,880

11,150

103,248

Thika

4,300

25,800

2,650

19,080

6,950

44,880

Nyandarua

12,260

147,120

2,580

30,960

14,840

178,080

Maragua

890

3,738

1,190

4,998

2,080

8,736

Total

30,925

294,900

22,400

180,822

53,325

475,722

Coast

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

T/Taveta

15

154

0

0

15

154

Total

15

154

0

0

15

154

Eastern

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Embu

750

4,500

7,500

58,500

8,250

63,000

Mbeere

20

140

650

43,050

670

43,190

Meru Central

8,750

87,500

400

3,200

9,150

90,700

Meru North

95

855

1,700

12,600

1,795

13,455

Meru South

103

2,060

12,750

102,000

12,853

134,060

Total

9,718

95,055

23,000

219,350

32,718

314,405

Rift Valley

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Baringo

23

258

0

0

23

258

Bomet

300

2,400

660

5,280

960

7,680

Buret

200

22,200

300

3,330

500

25,530

Kajiado

824

2,472

800

2,400

1,624

4,872

Keiyo

80

1,280

0

0

80

1,280

Kericho

602

4,334

90

586

692

4,920

Koibatek

836

12,540

0

0

836

12,540

Laikipia

2,000

16,000

600

4,800

2,600

20,800

Marakwet

2,000

20,000

1,460

14,600

3,460

34,600

Nakuru

6,098

40,244

4,672

30,784

10,770

71,028

Nandi

200

1,600

100

800

300

2,400

Narok

2,650

23,850

0

0

2,650

23,850

Samburu

8

0

0

0

8

0

TransMara

52

416

0

0

52

416

Trans Nzoia

564

6,768

0

0

564

6,768

U/Gishu

1,852

30,002

0

0

1,852

30,002

W/Pokot

400

3,200

220

1,760

620

4,960

Total

18,689

187,564

8,902

64,340

27,591

251,904

Western

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

B/Mumias

8

96

0

0

8

96

Bungoma

46

230

0

0

46

230

Mt. Elgon

150

1,800

200

2,400

350

4,200

Vihiga

10

100

13

130

23

230

Kakamega

6

54

10

90

16

144

Malava/Lugari

11

77

14

98

25

175

Total

231

2,357

237

2,718

468

5,075

Nairobi

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

 

290

248

195

64

485

312

Total

290

248

195

64

485

312

Summary

 

Long rains

Short rains

Total

Province

Ha

Tons

Ha

Tons

Ha

Tons

Central

30,925

294,900

22,400

180,822

53,325

475,722

Coast

15

154

0

0

15

154

Eastern

9,718

95,055

23,000

219,350

32,718

314,405

Rift Valley

18,689

187,564

8,902

64,340

27,591

251,904

Western

231

2,357

237

2,718

468

5,075

Nairobi

290

248

195

64

485

312

Total

59,868

580,278

54,734

467,294

114,602

1,047,572

Table 2d                      Irish Potatoes 2000 

Central

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Kiambu

4,730

39,220

5,050

40,400

9,780

76,620

Kirinyaga

800

880

1,200

4,200

2000

5,080

Maragua

1,170

18

1,100

4,000

2,270

4,018

Muranga

390

195

370

370

760

565

Nyandarua

7,780

74,688

2,380

17,850

10,160

92,538

Nyeri

8,100

24,300

8,500

68,000

16,600

92,300

Thika

4,300

3,440

2,800

168

7,100

3,608

Total

27,270

142,741

21,400

134,988

48,670

277,729

Eastern

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Embu

800

800

1,200

6,000

2,000

6,800

Meru Central

7,000

7,000

8,530

85,300

15,530

92,300

Meru North

1,880

6,540

2,500

25,000

4,380

31,540

Meru South

120

0

280

2,800

400

2,800

Total

9,800

14,340

12,510

119,100

22,310

133,440

Rift Valley

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

Bomet

9,000

7,200

200

1,600

9,200

8,800

Buret

150

12,000

200

20,000

350

32,000

Kajiado

750

0

900

6,300

1,650

6,300

Keiyo

200

4,000

120

1,920

320

5,920

Kericho

210

1,890

200

1,800

410

3,690

Koibatek

900

10,800

360

4,320

1,260

15,120

Laikipia

2,420

12,100

900

7,200

3,320

19,300

Marakwet

2,800

28,000

1,950

19,500

4,750

47,500

Nakuru

6,285

31,400

1,560

12,350

7,845

43,750

Nandi

227

1,816

425

3,400

652

5,216

Narok

2,500

13,750

644

3,542

3,144

17,292

Samburu

15

60

0

0

15

60

TransMara

56

560

0

0

56

560

Trans Nzoia

600

900

0

0

600

900

U/Gishu

2,320

41,760

0

0

2,320

41,760

W/Pokot

370

3,330

180

1,620

550

4,950

Total

28,803

169,566

7,639

83,552

36,442

253,118

Western

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

B/Mumias

5

50

2

20

7

70

Bungoma

41

246

0

0

41

246

Kakamega

8

64

3

24

11

88

Malava/Lugari

120

960

0

0

120

960

Mt.Elgon

214

2,996

204

1,224

418

4,220

Vihiga

6

60

6

60

12

120

Total

394

4,376

215

1,328

609

5,704

Nairobi

 

Long rains

Short rains

Total

District

Ha

Tons

Ha

Tons

Ha

Tons

 

290

248

195

64

485

312

Total

290

248

195

64

485

312

Summary

 

Long rains

Short rains

Total

Province

Ha

Tons

Ha

Tons

Ha

Tons

Central

27,270

142,741

21,400

134,988

48,670

277,729

Eastern

9,800

14,340

12,510

119,100

22,310

133,440

Nairobi

290

248

195

64

485

312

Rift Valley

28,803

169,566

7,639

83,552

36,442

253,118

Western

394

4,376

215

1,328

609

5,704

Total

66,557

331,271

41,959

339,032

108,516

670,303

Tables 3 a, b, c, d and e present the recorded monthly prices for red and white potato varieties for the years 1995 to 2000. Previous similar studies on potato prices by Durr and Lorenzl in 1980 lumped together potato varieties on the basis of whether red or white and found a very significant difference in prices between red or white varieties based on colour grouping. Figures 1 a and b present the yearly price and production averages for the five most productive districts in potatoes in a graphic form for the period 1995-2000.

The drastic fluctuation in production tonnage indicates the effects by drought. In 1996, production was very low due to the prolonged drought from 1995, which was followed by a bumper crop in 1997 as a result of El nino. Nyeri, one of the highest potato producer districts in the republic illustrates the production trend very well as influenced by the drought and rain patterns. The yields of 1997 came down slowly to levels in 2000, lower than those in 1996, again due to drought conditions. Examination of the prices trend over the same period shows that prices fluctuations over the years are not 100% dependent on production as would be expected. Only the pattern of change from 1999 to 2000 in both production and prices that reflect the normal inverse change relationship.


 

 

 

 

 

 

 

 


 

 


 

 



Fig 2 a, b, c, d, e and f shows the prices change trend for the white potatoes on monthly basis for the years 1995-2000 in the 5 high potato producing districts. Again typical bimodal peaked production is obvious only in 1997, and in Nairobi only in 1996 where commercial potatoes from most production areas in the country is destined. The same trend follows for the red potatoes, with an elaborate bimodal peakedness for prices in Nyeri in 1996. The mean monthly prices for the years 1995-2000 however show the typical bimodal seasonal effect, where the prices peak in the months of April and May, then dropping significantly thereafter to the lowest in August and September as potato crop is harvested following the long rains (Fig.3). Plotting the total potato production for 1995-2000 in the 4 districts versus the prices at Wakulima market Nairobi, the major destination market for potatoes from these districts, shows that droughts effects aside, the market is still distorted, indicating an imperfect market situation (Fig.4). Similar plots for potato production figures on Meru, Thika, Nyeri and Nyandarua versus prices at Wakulima market Nairobi show that only in Meru and Thika where near perfect market situation is implied, (but still with some distortional trends), where production can be said to have some direct effect on potato prices. (Fig.5 a and b).

Fig.6 shows the monthly potato buying prices in Nyandarua for the years 1997 to 2000. On the local situation, the prices indicate very much the typical production seasonality effect, with some significant distortional effect. The data for 1997 were unfortunately not all available, but as usual prices started high increasing to 1650/= per bag in March. The El nino rains set in during 1997 and it would be interesting to find out how the prices trends were affected by El nino. It has been established that despite improved potatoes supply during rainy season, producers prices are known to decline while those at the market outlets steeply increase due to muddy roads, which make it impossible to ferry the potatoes to the market. In 1998 prices remained above shs.700/= through out the year mainly because of the shortage in the country due to drought, and the same trend was maintained in 1999 except after June 1999 when prices dropped drastically to below shs.500/= until October. After October prices increased moderately, to December 1999, then dipping to below 500/= only to increase almost 4 fold in April, and remained so until after July 2000. These erratic and rather unpredictable prices fluctuations appear to be influenced not only by the drought conditions but also the potato production and supply from other parts of the country including the effect of road conditions in rainy seasons. The potato supply from different parts of the country to particularly Nairobi plus other towns such as Nakuru, Naivasha, Thika and Nyeri appear to be the main price setters for buying prices in Nyandarua and other major potato growing areas.

 


Figure 2 a Prices fluctuations 1995/96 - White potatoes                                                  


 


 


Figure 2b Price fluctuations 1997/98 - White potatoes


 


 


Figure 2c Price Fluctuations 1999/2000- White potatoes


 


 


Figure 2 d Price fluctuations 1995-96 red potatoes


 


 


Figure 2 e price fluctuations 1997-98 - red potatoes


 


 


Figure 2f Price fluctuations 1999/2000 - red potatoes


 


 


Figure 3: Mean monthly prices fluctuations 1995-2000


 


Figure 4: Total production in the 4 districts Vs prices at Wakulima


 


Figure 5a Potatoes prices in Nairobi vs Production in Meru and Thika


 


 


Figure 5b Potato prices in Nairobi vs production in Nyeri and Nyandarua


 


 



Figure 6: Average buying prices for Irish Potatoes in Nyandarua for the years 1997-2000


The implications of these findings are:

a.       The potato supply at the local production areas is not a direct determinant of the selling or buying prices for potatoes in the area.

b.      The potato producers in the growing areas lack the ability and mechanism to set or influence selling prices for their potatoes.

c.       The market forces responsible for determining the producer selling prices for the farmer are based in the marketing chains and operational efficiency by the market agents, prices prevailing at the major urban market outlets, and the supply of potatoes from other areas in the country, whose supply seasonality differ due to climate variation and specifically differences in the rainfall pattern.

d.      Accordingly, on-farm potato storage by farmers under the current potatoes market structure is unlikely to be viable in terms of availing better prices to the farmer, due to the unpredictable prices and lack of control of the prices by the potatoes producers.

Fig.7 presents the potatoes marketing channels in Nyandarua. In total 8 marketing channels for potatoes to the consumers exist. The consumers of potatoes include rural producers & consumers, urban consumers and institutional consumers namely Hotels/Restaurants, schools, hospitals, Processors and the army. A significant change from the marketing channel as identified twenty years ago by Durr and Lorenzl in 1980, is the creation of brokers as agents in the chain, at both producers and consumer levels. Over 80% of commercially marketed potatoes can be estimated to go through brokers at both ends of the marketing channels where they are involved. The little that does not go through brokers is either marketed directly to consumers (mainly institutions on contracts) by producers or producers /traders with on- farm storages or by transporters /distributors particularly those supplying sub-urban markets where there are no brokers.

Table 4 gives a summarized description of the marketing channels' agents in terms of their activities in the chain. From the data, it is clear that only producers are involved in some storage of potatoes on Farm. It was estimated that less than 10% of producers held on potatoes in form of" storage". The kind of storage ranged from simply covering heaps of harvested potatoes with grass and then soil to simple mud plastered wooden structures for a potato store. Part of doing this was as a matter of fact not deliberately meant to store potatoes but rather hold potatoes while awaiting brokers or buyers. 20 years ago Durr and Lorenzl (1980) reported lack of potato storage for speculative purposes, but instead gathering of large quantities in the field, enough to fill a lorry according to order or in fulfillment of a large contract. Producers said to store potatoes for speculative purposes reported storing potatoes for periods ranging from 2-6 months. However they pointed out that storage of potatoes was not preferred because of

a.       The need for cash

b.      High labour costs involved

c.       New harvest in other areas arrived before selling the crop, and storing did not guarantee better prices and

d.      A lot of wastage.

Those who did not store potatoes also cited lack of a guarantee for better prices on storing potatoes, and preferred to feed potatoes to cattle if they were unable to dispose them off during the glut season. The level of wastage cited ranged from 40 % and involved rotting, greening, loss of flouriness and watery development, germination plus shrinkage and weight loss. It was however pointed out that consumers did not object to germination in potatoes for consumption, and the potatoes, which developed greening, were set aside for seeds. The production yields per acre varied widely among the producers namely 20-120 bags, reflecting varied agronomic practices and use of agronomic inputs. This translated to drastic variable quantities handled per producer, ranging from 500-2000 bags per year depending on the acreage cultivated. Such data indicate the vast potential in increasing potato production by both acreage and yields, provided the necessary incentives are given to the farmers. In Nyandarua, producers reported that they could produce potatoes 2 to 3 times a year depending on weather patterns. Such incentives are best in form of prices that can guarantee the farmers' return for their investment, which should also be predictable.

The prices fluctuations in terms of highest and lowest fits in within the reported pattern in Fig. 5. However the lowest prices reported in 2001 were significantly lower ranging from shs.150-300/= per bag compared to those in Fig 5. The difference of course is due to the bumper crop in 2001compared to the poor harvest during the drought years following El-nino to the year 2000. The highest prices occurred during the months of November to May and early in the year 2001, then were depressed again because of the bumper crop to averaging shs.500 per bag. The sale unit bag is not standard and ranges in weight from 130 - 180 kg. The broker, who is responsible to bagging and loading transport vehicles, determines the weight. According to producers, the ideal price for their potatoes should range from shs.600- 800 /= in order to make profit. There is also need to standardize the bag size to say 90kg like in maize, or stick to the accepted size 130kg. The producer however has no say in this, and is under the buyer or broker's mercy so to speak.

As one moves up the channel, the prices increase due to the costs and operational margins for the marketing agents involved. The brokers charged shs.100- 120/= per bag for their services namely identification of suppliers, prices negotiation, potatoes bagging and loading. Depending on the prevailing producer prices, this amounts up to between 20-60 % of the prices offered to the producers. It was difficult to establish the exact margins for other agents although retailers reported that their target was making shs. 100 per bag. The wholesalers targeted shs.100- 150/= per bag. Various agents also paid various statutory fees in their marketing operations, namely county council cess, open air market space rent, cost of empty bags, and sewing sisal ropes. Most of the agents interviewed reported their business as being 100% based on potatoes. Only a few transporters reported being involved rarely in transportation of cabbages of even building sand. This is an indication that operations by the marketing channels agents for potatoes is a full time business for the agents involved. Towards the consumer level, the prices thus increase as expected. The lowest and highest price ranges reported by transporters /distributors are shs.150- 350/= and shs.500-1500/= respectively, during the corresponding peak and low supply seasons. At the wholesaler level the lowest prices recorded ranged from 400-500/= while the highest ranged from shs. 1000-1500/=. At the retailer level, lowest buying price of shs.350/= versus highest buying price of shs.1500 and above were reported.

Table 4:Descriptive characteristics of agents in the marketing channels for  Potatoes in Nyandarua.

 

Description

Item

Producers

Brokers

Transporters/

Distributors

Wholesalers

Retailers

1.

Marketing functions

Potatoes production and harvesting

·        Producers/suppliers identification.

·        Buying and prices negotiation.

·        Bagging and loading

·        Buy through broker.

·        Transport to market.

·        Sell through broker.

·        Buying from farmer direct or lorry via broker.

·        Bagging.

·        Hire transport.

·        Sell to retailers

·        Buying in bags from lorry or transporters cum distributors.

·        Repackage in buckets, display and sell to consumers or traders.

2.

Storage

By less than 10 per % of producers for 2-6 months.

Problems:

·        Germination

·        Rotting

·        "Kugacha"

·        Shrinkage + weightloss

·        Greening

·        Better prices not guaranteed

None

None

None

None

3.

Wastage

10-40%

None

0-5bags/40 bags(truck load)

0-10%

0-5%

4.

Quantity handled

500-2000 bags per year depending on acreage

Organises for 4-5 buyers per week at 40 bags per truck

Approx. 80 bags per week

10-60 bags per week

6-18 bags per week

5.

Varieties:

·        Tana

·        Tana(K)

·        Tigoni

·        Nyayo

·        For sale mainly

·        For sale mainly

·        For sale mainly

·        Household consumption

Commercial and house hold consumption

Mainly for chips and stew

Mainly Nyayo and Tana for stew and Chips

Mainly for stew and chips

6.

Prices fluctuation

·        Highest price: 500-1000(Nov-May)

·        Lowest price: 150-300(April-Nov)

·        Best price: 600-800

Charges 100/=per bag but usually can negotiate

·        Lowest price: 150-350 (April-Nov)

·        Highest price:500-1500( Dec-April)

·        Highest Buying Price: 1000-1500

·        Lowest Buying Price:400-500

·        Highest Buying Price:

       1500/=

       (Dec-Mar)

·        Lowest Buying Price:

       350/=

      (Dec-Mar)

7.

Supply seasonality

Production seasons: 2-3 times per year

Move to different production areas

·        Lowest season:

      Nov-May

·        Highest season:

     (April-Nov)

·        Lowest

·        Season(Nov-April)

·        Highest Season( May-Sept)

·        Lowest Season

(Jan-May)

·        Highest Season

      (May-July)

8.

Marketing Problems

·        Low prices determined by brokers

·        Sale bag unit too big(130-180kg)

·        High production cost.

·        Fewer buyers and over supply.

·        Diseases (blight and rotting)

·        Poor roads.

·        Drought.

Buyers may reject potatoes after bagging if price is unfavourable.

·        Poor roads.

·        High vehicle operation costs.

·        Erratic selling price hence losses.

·        No problem in buying price.

·        Insecurity during travel.

·        Poor erratic selling prices.

·        High council charges.

·        Perishability.

·        Lack of buyers.

·        Price fluctuation.

·        Rotting and wastage

Over the years various marketing agents reported occasional high spiky prices rising between 2000 and 6000 per bag during severe shortage times. These prices of course are negotiable and also depend on whether the purchase is direct from the farmer or not.

The bottom line is that: It is the marketing agents who control, determine and set the buying prices for the producer as well as the selling prices for the consumer. The consumer prices at the major urban market outlets are however subject to supply and demand forces due to competition among suppliers from different production areas of the country. Whatever prices are set at for example, Wakulima in Nairobi, they form the basis for setting buying prices for the producers in the production areas, via down the market chains. Only when there is severe potato shortages at the major urban markets followed by sharp increases in prices, is this effect likely to reach the producers, and only when the shortage is prolonged for example during droughts. If such prices spiky or short-lived then the producers miss the opportunity. During the drought situation, the farmer is unable to bag- in the opportunity since potato production in Kenya is 100% rainfed, unless one is lucky and benefits from the rainfall usually irregularly distributed over the country, during the prolonged drought periods. The producers thus find themselves in gambling situations where he produces potatoes first for home consumption and secondly for sale, and only make profit if they are lucky, else they feed them to the cattle. On being asked why the producers grow commercial potatoes without profit anticipation, the answer by most producers was that there was no other opportunity cost for the utilization of the land free from other enterprises, and in any case, there are times or years when they have been lucky and made some money.

The marketing problems encountered by the producers are:

·        Unpredictable low prices determined by the brokers that make the producer even unable to break even in the potato production enterprise.

·        The sale bag unit, which is too big and unstandardised (130 -180 kg) is exploitive and further depresses the real price for their potatoes.

·        High production cost due to expensive inputs.

·        Fewer buyers and over supply.

·        Potato diseases mainly blight and rotting.

·        Poor roads.

·        Drought

Those encountered by brokers include buyers or transporters rejecting potatoes after they have procured and bagged them from the farmer, if prices change unfavorably at the market outlets.

The transporters faced the problems of poor roads, high vehicle breakdown and operational costs, erratic selling price hence losses, and insecurity on the roads when transporting potatoes to the market. They expressed having no problems with the buying prices. The wholesalers on the other hand indicated having problems with erratic selling prices, high statutory council charges and losses due to potatoes perishability. The retailers complained of lack of buyers, again prices fluctuations, wastage and losses due to rotting of potatoes.

The results above show that the potatoes market in Kenya operates at near perfect conditions only at the level of major urban market outlets due to supply competition offered by potatoes from different production districts of the country. At the producer's level the market is imperfect with the prices determination and control being done by the marketing chain agents and in particular brokers. This is apparently done without consideration for the producers' economic performance in their potatoes production enterprises. Accordingly there is a strong need to restructure the market such that the producers can be empowered to repossess ownership of their potatoes which they lose once they have harvested their crops. Then they can have some control over determination of prices for their potatoes on a predictable basis; to enable them break even and make some profits with their potatoes. They would then increase production according to market demand. The on-farm storage has been shown to be ineffective given the different harvesting seasons in different parts of the country, and the variable erratic distribution of rainfall in the potatoes growing areas in the country. The only potential effective market restructuring that would incorporate the above element is having a national potatoes storage, preferably owned partially or fully by producers, and operated commercially as a private company, unlike the similar structure in marketing of cereals, where National Cereals and Produce Board is government owned. The Potato Storage Company would purchase and market the potatoes from the producers in competition with the existing market channels at prices favourable to both the producers and consumers, and even possibly in collaboration with the existing marketing channels agents. In this way the favourable prices offered to the producers would enable them produce more potatoes thus contribute towards evening out of prices fluctuation and amelioration of Food Insecurity in the country, particularly during times of maize crop failures.

  

3.2              Irish Potatoes Changes during Storage

The potatoes were set up for the storage experimentation on 6th July 2001, and have been tested starting from 6/07, 26/07, 16/08, 18/09and 15/10, in total, after 120 days. The last evaluation tests are due to be done on 14th Nov and 14th Dec, thereby completing the storage period of six months as planned. The storability experimentation was carried out on 4 potato varieties namely Tana for chips, Dutch for crisps, Meru for mashing &stew and Nyayo for chips.

Results:

a.      Sprouting:

After 51 days, sprouting was evident in the Dutch variety only. After 141 days Nyayo had shown slight signs of sprouting, but Tana and Meru have not yet shown any signs of sprouting. Also Tana and Meru have shown no change in their physical appearance. The Dutch variety has also not changed much by way of physical appearance except sprouting. Nyayo has however shown relatively more change in physical appearance than the rest.

b.      Weight Loss.

Table 5 shows the average weight loss for the 4 varieties.

  

Storage Days

Varieties

Tana

Nyayo

Dutch

Meru

Fresh

514.55

411.73

538.35

468.30

21

514.50

411.70

558.30

468.00

51

506.78

397.74

552.18

451.12

81

499.83

388.69

546.00

438.39

111

490.44

377.91

540.90

416.29

141

483.70

370.19

522.70

401.26

% Weight Loss

6

10

6.6

14.3

Meru appears so far to have lost the greatest weight of 14.3% compared to Tana, which has lost 6% less than half of the loss in Meru. Interestingly enough there is apparently no association between changes in physical appearance and loss in weight.         Weight loss would be expected to be associated with shrivelling.

c.       Sugar development

Table 6 shows the sugar development with storage by the varieties studied.

            Table 6: Development of Sugars on storage

Storage Days

Sugars Developed in %

Dutch

Tana

Nyayo

81

2

5

1

111

5

6

3

141

7

6

5

            Development of sugars is only expected to cause problems in varieties used for crisps and chips because of browning or colour change on deep-frying. Table 7 shows the colour development for the products made from the 3 varieties.

           

Table 7: Browning colour development on deep-frying with oil

Storage Days

Colour development in absorbance units at 420nm

Dutch(Crisps)

Tana(Chips)

Nyayo(Chips)

Fresh

0.126

0.114

0.084

21

0.140

0.147

0.103

51

0.366

0.366

0.140

81

0.490

0.864

0.323

111

0.792

1.338

0.561

141

1.992

1.506

0.858

From the results it is clear that Dutch variety which showed significantly more germination than others by as early as 51 days showed considerable colour development by 141 days. The sugars development pattern in the 3 varieties however appear not to be significantly different. It is difficult to standardise the cooking method to avoid errors due to temperature variation. Crisps however on account of their thin shapes are likely to achieve much higher temperatures for the same period

they are exposed to hot oil with chips. Accordingly one cannot draw from the data, a direct relationship between variable degrees of germination plus sugar development and browning colour development on cooking. However it was apparent that crisps from the Dutch variety developed bitterness after 81 days of storage.

From the results so far, one can conclude that except for the Dutch variety, all the others can be stored for the days so far experimented without compromise on the utilisation quality. It is significant to also note that contrary to what one would expect, acceptability improved with sweet taste development on storage of the varieties, (with the exception of bitterness imparted to crisps from Dutch variety) and in particular with Meru used for mashing and stew.

3.3              Viability of large-scale potato storage

With the collaboration with Netagco Tolsma, the necessary data is being collected for a feasibility analysis, according to annexture (III) questionnaire. This information plus a visit meant to gain an appraisal on the fixed Capital Investment, plus the up-to-date operational technology, will enable putting together all the necessary economic parameters for viability analysis of a commercially operated large scale potato storage facility in Kenya or for East Africa in general.

1.       Materials

1.1    Irish  potato varieties as under:

Product                                   Variety

Crisps                                       Dutch (Ngorof /Bomet)

Chips                                        Tana or Nyayo or Tigoni

Cooking                                    Kerrs pink (Meru)

1.2    Germination suppressant :  Prophan 1%CIPC dust

2.       Storage Conditions in Environmental controlled Cabinets.

q       Each variety in its own cabinet.

q       No light (day or artificial) in all cabinets thus must be light proofed.

q       Humidity maintained at 95%.

q       Storage temperature 500 F º 100C.

q       Potatoes are washed to remove soil and dipped into 50 - 60% ethanol solution to dry them off, and harden the skin.  They are then dusted with Propham.

q       Potatoes are packed in small crates and put into cabinets.

3.       Quality evaluation during storage.

3.1    Quality evaluation regime:

a)      1st one when freshly put in the cabinets.

b)      2nd one after 3 weeks.

c)      3rd one after 30 days.

d)      Thereafter analysis after 60, 90, 120, 150 and 180 days.

3.2(a)  Analytical Parameters:

q       Weight loss - to discuss method.

q       Note time when sprouting from the eyes begins.

q       Length of the sprout (average)

q       Greening.

q       Examination for storage rot.

q       Shrivelling - development of softness and compression.

(b)    Utilisation evaluation.

q       Crisps -     Colour development

-          Sugars development

-          Taste (bitterness)

q       Chips  -     Colour

-          Sugars

-          Oil uptake

q       Cooking - Flouriness check and mashy/ translucence development.

-          Taste compare with fresh control.

                                                                                                                                                                                                          Annexure 1

INTERVIEW GUIDE ON POTATO COMMERCIALISATION AGENTS IN NYANDARUA DISTRICT

Name and Address (Physical and Residential)

________________________________________________________________________________________________________________________________________________________________________________________________________________________

(a)               Describe the type of agent in the chain (according to the list below by ticking one of the descriptions).

(i)                  Producers/Storage - warehousing/Traders

(ii)                Transporters/Distributors/Wholesalers/Retailers

(iii)               Organizations   

·        Producer to Retailer (institutions/consumer)

·        Producer to wholesalers (stores) to traders to consumers

·        Producer to trader / transporter to wholesalers (Indians) to Traders to Consumers.

·        Producers to Traders to Institutions.

·        Importers/Exporters

·        Open air market

·        Others (name)

(b) No. of agents in (a) above (self assessment)

(c) Marketing functions of agents in (a). What functions do you perform?

(d) Quantity percentages of product flow in the chain and distribution channels (self assessment)

(e) What is the quantity of wastage at the various levels of the chain?

(f) What varieties are quite commonly traded and for what use?

USE

VARIETY

CRISPS

CHIPS

MASHING FOOD OR MAKING STEWS

(g) What no. of competitors do you have?

(h) No. of suppliers/sellers.

(i) How does price change within the year? What are the highest and lowest prices that you purchase and sell at within the year? (Price per kg).

Price change

PURCHASES (price per bag in Kshs)

SALES (price per bag in Kshs)

Lowest price

Average price

Highest price

(j) Monthly price changes per kg/bag in the past year.

(k) Price elasticity of supply (by calculation).

(l) How do you identify your market and how do you determine your prices.

(m) What are the constraints and problems you face during marketing?

(n) What are the credit facilities available to you?

(o) Do you market any other products/commodities?

·

·

·

(p) Do you have an all year round supply of your potatoes?

(p) During which months do you obtain your highest and lowest supply of

potatoes?

Any other comment/observation: ……………………………………………………

…………………………………………………………………………………………..

………………………………………………………………………………………….

………………………………………………………………………………………….

NOTES FROM PILOT TESTING:

It was noted that the most commonly traded potatoes at Kinangop region were:

            Nyayo- multipurpose

            Mugaruro- for cooking

            Tigoni- for chips

            Tana-Kimande- they last longer and are more storigible.

It is very difficult to get a constant pattern of monthly changes in the price of potatoes since in most of the cases, it is not the farmer who determines the price of the potatoes at any one point. In most cases, the price is determined by the outlet markets, and also the quantity of potatoes brought into the market from other regions. The price also varies depending on the variety.

No specific agent has specific competitors. For them, any agent automatically becomes a potential competitor. This, to some extent is due to the fact that the farmers do not have specific agents to whom they always go to.

Prof. S.K. Mbugua

DFT&N.