Kenyan Potato Processor Midlands Limited adds value...also to the farmgate

In Kenya, in the heartland of Nyandarua County, an old building is changing the fortunes of thousands of farmers from Meru, Nyeri, Laikipia, Nakuru, Narok, Bomet and Kiambu.

In the building potatoes are peeled, chopped and packaged in vacuum packs for individuals, eateries and, very soon, supermarkets.

Welcome to Midlands Ltd, a potato factory.

The firm not only adds value at the processing level but also from the farm gate. It provides land in case one has none, cultivates and offers advisory services during planting, dressing and harvesting.

Justus Nderitu is one of the 3,000 Irish potato farmers who have reaped from the potato- processing firm. The farmer, who used to grow potatoes on half an acre five years ago, has expanded the acreage to four.

When the factory was set up in 2007, Nderitu was among the few farmers who accepted to give it a try amid fears that it was another plot to exploit the already heartbroken farmers by greedy brokers.

“When I was told that I would be provided with seeds and the land cleared of bushes besides planting, and harvesting services and a ready market, I did not hesitate,” says Nderitu. He has two children in university and two others in secondary schools.

“For sure, these potatoes will take them to the highest institutions of learning,” he says.

The Zangi variety of potato seed goes for Sh3,000 per 100-kilo bag. To plant an acre you need 10 bags (Sh30,000). Ploughing the new land costs Sh6,000.

Production costs, including fertiliser and harvesting expenses, amount to Sh50,000 an acre. Harvesting can be done over four weeks as the crops do not mature at the same time. After the first harvest, the cost of ploughing on the same land falls to Sh3,500.

Seeds Cleaned

The market loves the Zangi variety for chips and crisps but the seed price is too high for the farmers. Midlands encourages farmers to keep their seeds for three seasons after which they are “cleaned” at the Kenya Agricultural Reserach Institute (KARI). Cleaning refers to a process through which the seeds are chemically treated to kill disease-causing organisms.

One acre of the improved Zangi potatoes produces between 8,000kg and 10,000kg each season. Local varieties yield between 4,000kg and 6,000kg each season.

“These seeds are resistant to pests and disease. They don’t peel or crack during harvesting like other potato types,” says Junghae Wainaina, Midlands chairman.

But the quality Zangi comes with a new challenge — scarcity and cost of seed.

“The initial cost of the seeds from KARI is too high for the small scale-farmers,” says Wachira Kaguongo, the National Potato Council of Kenya Chief Executive Officer.

With firms such as Midlands, farmers can invest without feeling the pinch given the profits and a ready market.

Mr Nderitu earns an average of Sh100,000 a month from each of his four acres. His monthly profit is about Sh200,000 after the factory deducts its expenditure.

Brokers pay Sh3 per kilo during glut and up to Sh60 when supply is low. Midlands pays farmers Sh12 even during glut. Midlands sells between 1.5 billion kilos and 2.5 billion kilos of processed potatoes in a year and hopes that consumption will rise to five billion kilos if there is adequate supply.

The price could rise to a minimum of Sh15 ($0.16) per kilo by the end of the year. The factory will next month install machinery worth Sh4 million for packaging ready-to-eat foods including mashed potatoes and chips. The machinery includes a dehydrating and a boiling facility. The dehydrating facility drains water from the potatoes giving them a longer shelf life.

“We are in talks with the supermarkets, hotels, hospitals and schools for possible markets,” says Wainaina.

Being a short cycle crop, with high productivity per unit of land and time, the potato might be Kenya’s leading staple in the coming years as the government seeks to replace maize with a less risky crop.

According to industry experts, the country loses up to Sh3 billion along the potato value chain to pests and disease. That is from planting to the final consumer.

Other challenges facing the crop production include high disease incidence, uncoordinated activities, low value addition and pre- and post-harvest management problems.