Supply Chain Of Ware Potatoes 1
Stage
On-Farm Production
Packaging / Transport
Processing
Wholesale / Retail Trade
Consumption
- A value chain is defined as the sequence of related business activities from the provision of specific inputs for a particular product to primary production, transformation and marketing, up to the final sale of the particular product to the consumer;
- The set of enterprises that perform these business activities, i.e. the producers, processors, traders and distributors of a particular product (e.g. potatoes). Enterprises are linked by a series of business transactions by which the product is passed on from primary producers to end consumers (GTZ 2007)
1 Potatoes can be in two forms; ware potatoes or seed potatoes. Ware potatoes are potato tubers that can either be used as boiled vegetables (called table potato) without any form of prior primary processing, or used for processing into crisps/chips.
Currently, potato production is largely a smallholder activity. Average cultivated land sizes are less than two hectares in Kenya, and farmers mostly perform farm operations manually with traditional farm tools and production techniques. This situation results in low yields (of about 8-10 tons/ha of potatoes in Kenya), high losses, and poor quality of produce. The market for potatoes mostly operates under free market conditions in Sub-Saharan Africa. Potato marketing is mostly done in three forms; seed potatoes, ware potatoes for the fresh market, and potatoes earmarked for processing.
The bulk of potato produced is marketed as ware potato, which is sold directly to consumers. Most of the potatoes produced by smallholders are sold through informal marketing channels and the vast majority goes to fresh consumption (see figure). The market for potatoes is progressively diversifying and offering opportunities for value addition and income generation in local potato supply chains. This includes the processing industry that specializes in food products such as frozen potato chips (e.g. French fries served in restaurants and fast-food chains) and potato crisps as well as supermarket chains that focus on higher quality fresh and processed products for the emerging urban middle class.
At production level, producers need to particularly increase their productivity to be competitive with imports and to benefit from growing demands for value added products in their region. However, African smallholders usually run traditional, low input potato management regimes which are resulting in decreasing soil fertility and low yields. Sustainable intensification and closer coordination between producers and processors is needed to increase smallholders’ margins and to satisfy markets demanding steady supply of high quality potatoes. Healthy seed potatoes and suitable varieties are the basis for a high quality end product. However, in Kenya, only 2 per cent of the potato cultivated areas are planted with certified seed potatoes and local seed multiplication systems don’t have the capacity yet to produce sufficient quantities of seed potatoes.
Further hurdles to agricultural modernization are lack of training and technology transfer to farmers as well as lack of access to finance and smallholders’ general risk aversion. The latter is partly based on smallholders’ weak financial situation, which does not allow cushioning potential crop failures or volatile prices at spot markets. So, agricultural modernization may only be successfully realized among smallholders if risks are mitigated. Potatoes are a perishable product, so postharvest management is as important as good agricultural practices. Inappropriate handling of harvested produce causes deterioration of tubers. Apart from careful handling, grading and sorting, storage is a crucial issue. The latter can offer farmers the opportunity to catch higher prices when selling in the off-season. There is, therefore, the need to tackle these challenges to enable the potato sector in Sub-Saharan Africa to realize its potential of contributing significantly to income generation and food security.