How brokers have potato farmers on the knife edge

After Festus Kiprono, a middleman buys potatoes directly from farmers in Lelan and Kapyego, Elgeyo Marakwet County, he transports them to Kisumu County where he sells them at Sh1,000 per bag.

“I transport the produce using my lorry to Kisumu where I sell it to a broker. The broker then sells them directly to a retailer at Sh1,200 per bag,” Kiprono says.

To make a killing, Kiprono buys 60 bags of potatoes at Sh500 per bag and delivers them to buyers in Kisumu.

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Interestingly, some 100 kilometres away from Lelan, a youthful potato farmer, Samuel Kipchumba is bitterly complaining, accusing Kiprono and tens of other middlemen of exploiting him by buying his produce at depressing prices.

With a web of brokers firmly in control of the market, Kipchumba and his fellow Irish potato farmers have resigned to fate. They always strive to negotiate for better prices but the likes of Kiprono and his fellow middlemen have the final say.

So what exactly is the problem and why have the prices sunk that low?

According to Kiprono, potato prices which have been oscillating between Sh1,000 to Sh3,000 per bag recently plummeted to a low of Sh500 in some areas and Sh400 other places. Middlemen who spoke to The Smart Harvest say the prices would even be lower had they decided to buy potatoes in 50-kilogramme bags.

Flouting packaging laws

The produce is still being bought in packaging above 50kg despite the Irish Potato law declaring illegal sale of the produce in quantities above the recommended (50kg) packaging.

Kiprono explains that with the glut in the market (caused by oversupply in main producing areas in Central and Rift valley), the prices will remain low for a while now.

Kiprono admits that after The Standard exclusively reported that farmers were selling a 50kg bag at Sh500 which equates to two plates of chips at a fast food restaurant, there was a small change in the market. But few days later, the situation became worse.

Taking big risks

“A few days ago, I agreed with a buyer in Kisumu that I would sell potatoes to him at Sh1,000 per bag. A day later, while I was on my way to Kisumu to deliver the produce, my buyer called to inform me that he would buy them at Sh900 per bag. He was adamant,” Kiprono says.

He adds: “I was devastated but there was nothing I could have done because I suspected he (the Kisumu broker) had found other middlemen who were selling at lower prices and I had no choice but to oblige. If I objected the price he suggested, it would mean I had to dump the potatoes and count my huge loss.”

But are middlemen the cause of the problem?

“Not really. There is a potato glut in the country resulting in a high supply of potatoes. Brokers who have been dictating the prices for years receive a lot and they are forced to buy the cheapest offer. To avoid total losses, the farmer and the trader must come to common ground. If I buy at a higher price, I will not make profit, and if I don’t buy from the farmers, they will suffer losses. This is a mutual relationship,” he further explains.

Another middleman, Kibet Chepnyerkil who sells potatoes to brokers in Kakamega and other Western Kenya towns says dealers who buy directly from farmers are taking big risks.

He buys potatoes from farmers in the Marakwet highlands.

Enticing cash offers

According to Chepnyerkil, middlemen deliver the produce to traders on credit, and wait for them to sell the perishable commodity directly to consumers and pay them (middlemen) after days of waiting.

“The farmer is lucky because we go to their farms and give them cash. We often don’t receive cash even after spending huge amounts of money in leasing and fueling lorries. The middleman is more disadvantaged,” Chepnyerkil says.

Kipng’etich Biwott, another potato dealer from Nakuru who buys the produce from parts of Keiyo South in Elgeyo Marakwet and sells them in wholesale prices in parts of Baringo (Mogotio and Kambi ya Moto) as well as his home county offers his insights.

Biwott claims that he makes a paltry Sh150 from buying a bag of potatoes at Sh500 per bag from farmers in Chepkorio and selling it at Sh800 in the neighbouring counties.

 “Potato prices are even lower in some areas in Nakuru and Narok, but the consumer, particularly those who make chips, want potatoes from Elgeyo Marakwet because they are bigger in size  and sweeter. In such a scenario, the farmer and the trader are bound to make losses,” Biwott says.

On the day of the interview, Smart Harvest finds Biwott buying potatoes at Samuel Kipchumba’s farm in Mwen village. Kipchumba is a 22-year-old farmer who ventured into potato farming in 2019, after completing his studies at Kapletingi Secondary School.

Middlemen using blackmail

Kipchumba and other farmers in his village, also accuse the middlemen of dishonesty and using blackmail while firmly dictating prices.

 According to Kipchumba, potato prices fell sharply from Sh2,000 per bag in June to Sh500 from July to date.

“I didn’t want to go to Eldoret town to look for jobs. I decided to grow potatoes on the one-acre farm I inherited from my parents. I have been selling my produce at between Sh2,000 to Sh3,000 per bag and employed a number of my friends during harvesting and loading, paying them Sh200 per bag of potatoes harvested. But now things are tough,” Kipchumba says.

He adds: “It has been difficult for us as young farmers to unite because the prices have been fair. We are now seeking to form associations and cooperative societies to champion our interests.”

From his farm, Kipchumba had harvested eight bags.

But potatoes in three bags were small in size and had cracks and cuts and were retained to be used as seeds ahead of the next planting season later this month.

“We have tried to negotiate with middlemen for better prices but to no avail. When we question the prices, the middlemen move to the next farm and they will buy at the price of their choice and you are left with your potatoes,” a frustrated Kipchumba says.

The challenges of bribes

But another middleman, Collins Kiprono observes that trouble started in June when the government started implementing new potato regulations under the Irish Potato law.

“The police started extorting middlemen in several police stops. Many middlemen now fear to transport potatoes to markets in far areas like the Coast because by the time you reach the market, you will have paid thousands of money in bribes.”

At Eldoret largest agricultural produce market, a bag of potatoes sourced from Keiyo South, which is less than 40 kilometres away from town, retails at between Sh900 to Sh1200 in wholesale prices.

Traders in main markets are also feeling the heat.

Sally Malakwen, a potato dealer at the Eldoret main market says she buys a bag of potatoes from the high producing areas of Elgeyo Marakwet at Sh700 and sells them to retailers (mainly mama mboga’s) at between Sh900 and Sh1,200.

But she admits that it has been a difficult season.

“The demand for potatoes has been low in recent months. There is low purchasing power among our traditional consumers. I have been forced to convert most of the potatoes into seeds, which I sell to farmers at Sh1,200 per bag,” Malakwen says.

Mary Nekesa, who owns a grocery just outside the market sells a 10kg tin of potatoes for Sh250.

“A bag is equivalent to five tins of potatoes. This means a bag of potatoes will retail at Sh1,250,” she explains.

So what is the way forward?

Eldoret-based agricultural economist Ronald Samoei says potato farmers can only defeat brokers in the sub-sector through the formation of vibrant cooperative societies.

Samoei says farmers can bypass brokers by accessing the market through Saccos.

Additionally, there is a need to embrace mechanisation in potato production.

“Potato farmers rely on manual labour, which is expensive. There is a need to mechanise production to maximise profits. For example, we don’t have to use manual labour during planting,” he says.

Head of partnership and business at the Agricultural Council of Kenya, Daniel Gichuhi says potato farmers have been reluctant in forming cooperatives to fight brokerage and exploitation since their produce has been enjoying a ready market for years. But it is time to embrace change, he notes.

Potato cooling stores

Another strategy according to Gichuhi, farmers, with support from the government and partners, can establish potato cooling stores as the produce awaits better prices.

“It is easy for a farmer to sell potatoes to brokers because the dealers offer quick money. Farmers also do not want to incur transport costs to the market. Brokers come to the farms at a time when the farmer urgently needs money. For example when schools are reopening. That way, they can easily dictate the prices because the farmer is desperate for cash,” Gichuhi explains.

He says Kenyan farmers can also export to international markets to increase their returns.

“Kenya has a great potential to export potatoes, but we are yet to grow the required varieties. We are still growing Shangi  which is more perishable and fragile. We also do not regulate the chemicals used in the sector which is a requirement for produce to access international markets,” he says.

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