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KFC potatoes saga exposes how the State has let down its farmers

NEWS
By Dominic Omondi | Jan 6th 2022 | 5 min read
By Dominic Omondi | January 6th 2022
NEWS

One of the Kentucky Fried Chicken joints [Courtesy]

Lack of a legal framework is the main reason why US fast-food company KFC continues to import potatoes from Egypt and South Africa.

In fact, concern over the supply chain of food products needed by global fast-food companies - particularly meat products - is the reason why McDonald's, the world's largest restaurant chain, is yet to open an outlet in Kenya, according to a 2013 report that was financed by the Dutch Ministry of Economic Affairs.

This comes at a time when there has been furore after KFC announced that they had run out of fries even as local farmers continue to grapple with an oversupply of potatoes.

KFC set up its first outlet in Kenya in 2011, noting that they would be sourcing their potatoes from Egypt as Kenya did not have the quality control standards they demanded.

It was not until 2019 that Parliament came up with the Crops (Irish Potato) Regulations that demanded, among others, the registration of all potato farmers in the country.

Another study done in 2014 by the National Potato Council found that only 25 per cent of potato processors had some form of traceability, which was limited to tracking suppliers.

“The limited traceability is attributed to lack of suitable legal framework that provides for mandatory registration of all potato dealers and integration of information system among the relevant regulatory agencies,” read the report.

Besides requiring farmers to be registered, the law requires potatoes to be packaged in 50kg bags, not 90kg.

Brokers, major beneficiaries of the 90kg packaging known as “nyoka bila sumu,” have opposed the rule  and even went to court. However, their case was thrown out.

The rule on registration of farmers is also yet to be enforced.

KFC imports processed, pre-blanched, blast-frozen potato French fries from Egypt and South Africa because it has total traceability back to source. This is critical in case of any health and safety issue. 

Another problem that has hampered the entry of Kenyan farmers into the supply chain of these global food giants is lack of certified seeds.

The World Bank, in a 2021 report, noted the potatoes being imported could be grown locally.

“Only 5 per cent of varieties from Karlo and Kephis are suitable for processing, yet Karlo does not have the capacity to multiply enough seed of these top varieties, even when operating at full capacity,” said the World Bank. “Indeed, Kenyan processors supplying frozen chips to high-end hospitality chains are importing ware potato from these two countries – locking out local farmers from this high-value industry.”

Nonetheless, potatoes stakeholders have insisted that Kenya has the capacity to meet KFC’s standards.

One other fast-food company that had been reluctant to enter Kenya due to lack of proper supply chain is America's Burger King, which was quick to tell all and sundry that their potatoes are sourced locally.

Increased potatoes production is part of President Uhuru Kenyatta’s plan to ensure food security as part of the Big Four Plan. The plan is for the country to increase production from the current 1.6 million tonnes to about 2.5 tonnes by end of this year.

Charles Muteitha, programme manager, Seeds Systems and Partnerships at the Syngenta Foundation for Sustainable Agriculture, noted that it is wrong for KFC to continue importing potatoes.

Mr Muteitha wondered why authorities had not curtailed this.

KFC has since noted that it will find a way of sourcing its potatoes from the country.

Potato is a Sh50 billion sector, and is grown in over 16 counties.

The industry has been grappling with lack of certified seeds, poor distribution channels, lack of a market, expensive inputs such as pesticides and lack of cold storage facilities.

Moreover, because production of potatoes is rain-fed, everyone plants and harvests at the same time, thus the susceptibility to cycles of boom and bust.

The Nyandarua CEC for Agriculture James Karitu agreed that the rain-feed agriculture has disillusioned farmers.

In the first quarter of last year, Kenya had a potato glut, but around December there was minimal production and so companies were stuck with their seeds.

Admittedly, there has been major development of seeds.  The problem is access to the market, with a lot of farmers being left on their own devices.

There are about 25 seed-producing companies, both big and small, and they are spread in the counties that grow potatoes.

With devolution, counties are getting more involved in production and distribution of crops.

Potato is a highly perishable commodity. There is a very short window to stay with the crop after harvesting. Yet small farmers have not invested in storage facilities.

Mercy Kimani, the founder of Chaqula Ltd in Nyandarua, said while the sector is experiencing a lot of improvements, their efforts have in most cases been undone by the boom and bust cycles.

Demand, she said, is still unbalanced due to the cycles. Landing price per kilogram in Nairobi can go as high as Sh50 when demand is good, but dramatically falls to Sh25 when it is low.

Transport costs are also high.

Most farmers can’t stick with their crops until the market is good, not only because they don’t have the right storage facilities but also because they do not have multiple revenue streams.

And in areas like Nyandarua where potatoes, carrots and cabbages are the main crops, farmers keep coming back even after burning their fingers, said Kimani.

She admitted that they have not approached KFC, saying they have left that to large-scale farmers like Twiga Foods.

Chaqula's model, she noted, is to supply to gated communities, hospitals and small hospitals.

Even if they were to supply these eateries, they still have to ensure they make money after satisfying those standards.

Dr Karitu noted that the fast-food chains could use contract farming to source for what they want locally.

"Farmers go with the market. If KFC says this is what they want, the farmers will supply,” he said.

The most popular variety is Shangi, which is grown by over 80 per cent of farmers.

Potato is the second most important crop in Kenya after maize, and Nakuru has the most farmers that grow the crop.

Nyandarua produces about 550,000 tons of potatoes, about 33 per cent of the national production.

Karitu said the county has also introduced a lot of seed varieties, both table and processable varieties, adding that there is a seed multiplication centre being set up.

He admitted that storage is a problem, but noted that the country is coming up with a cold facility that will store 1,000 tons when complete. One, he said, is almost complete. “We are just waiting for the national government to put in the machines.”

They have also trained farmers to store potatoes without refrigeration, and organised them in co-operative societies.

Dr Timothy Njagi, a researcher at Tegemeo Institute, a public policy think-tank, wondered why it was difficult for Kenya to meet KFC’s standards if they have met the stringent European phytosanitary standards for flowers.

“It is simply cheaper for these guys to import,” said Njagi, noting that if the franchise was to define the standards, Kenyan farmers would have easily met them.

But even more critical, added Njagi, is that if you ask a farmer to produce to a particular standard, it has to be profitable

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