You are here  » Home   » Smart Harvest

Potato farmers sign deal for affordable loans

By Protus Onyango | Updated Fri, March 17th 2017 at 13:36 GMT +3

A total of 23,000 potato farmers in 13 counties have signed agreements with financial institutions and buyers for cheaper loans and ready market for their produce.

The farmers who must be members of a group or cooperative society will now be able to acquire a loan from Sh50,000 to one billion shillings at 14 per cent interest rate from African Finance Corporation and Kenya Women Finance Trust (KWFT).

The targeted farmers should own from one acre piece of land to hundreds of acres.

The two-year pilot project in Kenya will ensure that farmers are helped to develop business plans, adopt mechanised farming, use certified seeds for improved production and are assured of a ready market and guaranteed income.

Speaking last week at Nyandarua Potato Fair, Leah Kasera, Grow Africa's head of Regional Operations and Partnerships, East and Southern Africa, said the market for potatoes is huge and farmers should make use of the incentives to better their lives.

"Kenya has a growing middle class that is keen on potato products like chips, crisps and fresh cuts. But as a country, we are unable to meet the demand due to challenges farmers face," she said.

She revealed that her organisation, National Potato Council of Kenya (NPCK), Alliance for Green Revolution in Africa (AGRA) and county governments have come up with the pilot project to improve potato farming benefits for farmers, processors and others involved in the potato value chain.

"We want farmers to access inputs and storage facilities to help unlock investment. By formalising value chains, we hope that farmers will be able to produce more so that we don't import from South Africa and Egypt," Kasera said.

She noted that potato farmers have failed to reap benefits due to diverse production and marketing challenges.

"Challenges include lack of preferred seed varieties, high cost of seed production, poor prices at farm-gate, low adoption of mechanisation, high post-harvest losses and lack of policies to streamline the industry, especially with regard to raw potato packaging weight and size," Kasera said.

At the end of the two-year, Kenyan farmers will be able to produce 63,600 tonnes to meet consumer demand. The processors committed to be purchasing 2,650 metric tonnes per month from the farmers.

Wachira Kaguongo, the NPCK managing director said Kenya is only able to produce one million metric tonnes of potato, against an annual demand of three million metric tonnes.

He said the potato value chain in Kenya involves 2.7 million people among them 800,000 smallholder farmers and contributes Sh50 billion annually to the economy.

"Government is finalising on legislation to enable farmers pack their potatoes in a maximum potato bag weight of 50kg instead of the extended one of 90kg or 200kg. This will solve the problem of middle men who make money by exploiting farmers," Kaguongo said.

He added, ""Potato is the second most important crop in Kenya. It is an industry we have to protect, expand and add value for food security. Government cannot succeed alone. We need all the actors involved across the entire value chain to play their part. That is why we are delighted to be part of this consortium."

Nyandarua Governor Daniel Waithaka whose government organised the fair, said his county produces 40 per cent of the total potato production in the country and his government has put in place measures to ensure farmers get good money for their sweat.

"Our theme for this fair is:Enhancing technologies in potato value chains for food security and agribusiness. We want to make farming a profitable venture and that is why we have unveiled our new potato strategy, aligned to the National Potato Strategy to make sure that our farmers reap maximum benefits," the Governor said.

David Kimotho, a farmer from Mirangine in the county blamed brokers, bad roads, high prices for fertiliser and poor packaging for their losses.
"I have been farming on a five-acre piece of land for five years but most of my produce-almost 40 per cent-get spoiled on the farm. Brokers also force us to sell potatoes in extended bags at throw away prices," Kimotho said.

He added, "I know this contract farming will be good for us as we now know in advance that we have a market and will sell at agreed prices. Not like now where we are supposed to sell the 50kg bag at Sh7,000 but are forced to sell the extended 200kg bag at Sh2200."

Humphrey Mburu, a potato processor and the managing director of Sereni Fries located at Athi Business Park in Mlolongo, urged small-scale farmers to produce more.

"We specialise in fresh cut products like fries, bhajia and mashed potatoes for the hotel industry. But what we have isn't sufficient. We are forced to rely on large-scale producers," Mburu said.

He revealed that he works with 700 individual farmers from who he buys potato at Sh25 per kilo but it is still not enough.

"We have a capacity to process 15 tonnes of fresh cuts per day but currently we are processing only five tonnes of per day. We prefer the oval shaped varieties. I urge Government to reduce tax on processing equipment as it is expensive now. It costs Sh100 million to buy an equipment that processes a tonne per hour," Mburu said.

The farmers for the project are drawn from Nyandarua, Meru, Bungoma, Trans Nzoia, Bomet, Elgeyo Marakwet, Bomet, Kisumu, Migori, Kakamega, Nakuru, Uasin Gishu and Laikipia counties.

Provided with additional support, Kenyan farmers can increase potato production from the current five tonnes per hectare to 35-40 tonnes per hectare.