My take on the Kabondo Sweet Potato Value Chain Project

 The project has formed Kabondo Sweet Potatoes Cooperative Society

I have just chanced upon an interesting project going on in my home district, the Kabondo Sweet Potato Value Chain Project which is being implemented by ADS-Nyanza, the development wing of the Anglican Church of Kenya in the Nyanza region.

In summary, the project seeks to increase income levels of small holder farmers through market access, strengthening producer organizations, strategic alliances/partnerships creation and entrepreneurship development. One of its target regions is Kabondo division which produces 60% of the sweet potatoes in Kenya. The project seeks to organize farmers into producer groups, construct sweet potato collection centres. The aim of the project is to give farmers value by eliminating middlemen and giving the small scale farmers a conduit through which they can sell their produce at reasonable prices.

Sweet Potatoes

 Amongst the proposals in the project include instituting a market information mechanism to ensure farmers are aware of  prices, establish a credit system, strengthen farmer-trader partnerships. and help farmers move up the value chain through joint marketing via sweet potato collection centres.

A cooperative, Kabondo Sweet Potatoes Cooperative Society, will be put in place which will have a management committee in charge of implementing the business model. The management committee is to be supported by a production coordination unit in charge of the supply business and a marketing coordination unit in charge of marketing.

This is a very laudable initiative and it is the first time that the farmers are being seriously organized into a cooperative. The idea of a cooperative has been floated in the past including by politicians during campaigns who always use sweet potatoes as a campaign tool and once the campaign is over the idea is shelved under the frilly doilies for another five years. So I like the idea that this project is being spearheaded by a church non profit and not politicians and some groups and individuals with selfish interests.

I can however see a few gaps in the project proposal but before I continue with my rant, I will give some disclosure: I'm a sweet potato farmer in Kabondo and also a middleman at times. I'm also a mobile farmer(MPESA farmer) and that explains why I've heard of ADS-Nyanza for the first time. Now I will delve into some of what I think are the flaws in this well meaning initiative and how it may be improved for greater success in helping farmers in Kabondo.

I
According to the project proposal, "Middlemen still keep a tight control of crucial stages of marketing like bulking, transport to the roadside, linking/relating with traders and purchasing from farmers at low price. It is hence not easy for small farmers to delink themselves from the system controlled by middlemen. A sustainable, comprehensive alternative model should be in place." The proposal separates middlemen from farmers but as many will tell you, the majority of "middlemen" are also farmers in their own right in Kabondo and vice versa. There are also traders who are not farmers but "strict middlemen" in the sense of the word. Which means they come from outside Kabondo and buy potatoes from farmers through brokers.

90% of the middlemen are women :), well the word middlemen is not gender specific, is it? These middlemen are some of the biggest sweet potato farmers in Kabondo, they sell their produce and then move on to buy from some large scale farmers or numerous small scale farmers. The middlemen(farmer-traders) do not always control transportation. The transporters are independent players in the chain whom even the farmers themselves can hire. Some middlemen have their own transportation such as ox-drawn carts, pickups and donkeys and so do some farmers. This refers to transportation from the farm to the nearest highway where the sweet potatoes are also washed and packed.

When it comes to bulking or packing the sweet potatoes in the farm, there's normally an agreed sack size that every one accepts including the farmers since many of the farmers as we have discussed are traders/middlemen in their own right. But I must admit that in some cases, especially where the farmer is new to the business, there's merciless exploitation.

The middlemen do have some control in some stages such as bulking since there's a specialized labour force whose work is to pack these potatoes in the jumbo bags. In some cases, some middlemen do collude with these hands during the packing process to fleece the farmer but in most cases, where the farmer is present during the packing process, the process is normally fair and agreeable. The relationships between these middlemen and the hired hands involved in packing are normally forged by working together over long periods of time but these are hired hands which can work for anyone, including the farmer! There's no special bond or loyalty or an "axis of evil" between these hired hands and the middlemen to fleece the farmers.

When it comes to transporting the sweet potatoes from Kabondo to markets in Nairobi, again the Middlemen have an edge in that they have forged long business relationships with some of the transporters. The middlemen do not own the lorries and hence are still at a great disadvantage. The market is not a cartel and any farmer willing to go the distance can simply wash and pack their potatoes and wait for transportation by the roadside. Many farmers opt for this option. Most of the transporters only demand payment after the sweet potato has been sold in Nairobi so the barrier to entry(to be a middleman) is very low.

A sustainable alternative model can be put in place but it will still be running in competition with the system put in place by middlemen which is for the most part very market driven and very flexible both in terms of pricing and bulking. Prices for sweet potatoes fluctuate every week. I remember a time when a 130Kg bag of sweet potatoes was sold for Ksh.2800 and within two weeks, the price was at Ksh.4000. The farmers hear about this and they also hike their prices and the system goes through these booms and busts throughout the year. It's purely market driven. There's a time for the farmer to smile and there's a time or the middleman to smile. But as I have discussed above, the line between a sweet potato farmer and sweet potato middleman is very blurred.

II

The proposal has omitted some external factors such as competition from other regions and countries. Within Kenya, competition mainly comes from Kakamega and sometimes Busia with their seasonal harvests but the fiercest competition  comes from Tanzania. As a result of East African integration, the opening of the market has led to the seasonal flooding of the market by Tanzanian sweet potato farmers and traders who sell almost all their produce to Kenya. The Tanzanians are mass producers and sell at very low prices which normally takes the prices downhill for farmers in Kenya. Since the Kabondo Sweet Potato Cooperative cannot control these external factors, pre-fixing the prices ahead of the potatoes arriving at the market will normally lead to huge losses as prices can change within 24 hours when a huge consignment of sweet potatoes arrives from other regions. The cooperative will be forced to sell at lower prices to avoid incurring losses due to rot for example. How will the losses be covered?


I also think the business model proposed will need a huge number of paid staff that poor farmers will have to sustain unless the project will have external funding sources in the first few years. So perhaps this will be specified clearly in the future. From the organizational structure I can see there will be the Kabondo Sweet Potatoes Cooperative Society Manager (who will also be the accountant), the management committee, Collection Centre Manager, Production Coordination manager(?), Collection Centres Supervisors(?), tallying officers at collection centres(?), management Committee Secretary and Treasurer(?). I can see lots of salaries being paid here but by who? What for example will be the commissions per bag? Will the commissions be sufficient to fund administrative costs?

There is also the issue of enforcing binding agreements with farmers, hereby referred to as stronger partnerships with farmers. How will the Kabondo Cooperative enforce these binding agreements? What for example will prevent a farmer from selling their sweet potatoes to middlemen who offer prices slightly higher than that fixed by the cooperative in a particular day or week?

I think these are some of the issues of interest that I think need to be ironed out for a smooth operation of Kabondo Sweet Potatoes Cooperative. Instead of demonizing middlemen, the cooperative can also open its arms to partnership with middlemen who have deeper understanding of the market and have been trading in sweet potatoes industry for over a decade.

Also apart from the intervention at the distribution and marketing stage, I think the cooperative should have first intervened in the earlier stages of the sweet potato value chain. It seems to me that the cooperative is only interested in the finished product but not in the kitchen. I know the production unit addresses some of my concerns but it;s not conclusive. In fact, this "production" unit should actually be called a "collection unit". The production unit it seems simply notes the acreage and waits for the big potato.

A more value based intervention should have began before the sweet potato is even cultivated. I think what farmers in Kabondo lack is innovation and information. In spite of the employment of the "commercial" farming, the methods are still very archaic. We still use traditional seeds, have no clue on how to fight pests, diseases and weeds, we plant seeds that we can pick from our neighbours' farmers and we have no variety, we have no seed multiplication and preservation centres, no irrigation systems and instead rely entirely on rain fed agriculture, we have no clue on what the markets require; we are clueless on which are the most nutritious varieties;  there's no standardization, we have no clue about new markets apart from the Nairobi Gikomba market, we do not have linkages with supermarkets, we have no clue of what else to do with our sweet potatoes apart from produce, wash, pack and sell to Gikomba market.

I think to add value to the chain, Kabondo Sweet Potato Cooperative should go to the kitchen first. The model proposed here is an intervention at the middle and not at the root of the problem we have. So here are my proposals on where the intevention should begin:

• Buy a plot of land in Kabondo and set up a rapid multiplication centre for desired and nutritious sweet potato varieties. The centre can serve as a conduit for seed potato from organizations such as Kenya Agricultural Research Institute(KARI). Through this centre, latest seeds from research centres including the International Potato Centre can be rapidly transmitted to farmers who need them. The centre must have a demonstration farm and training facility for farmers. Farmers who want to participate must pay a small obligation fee to access latest seed varieties and training. Training should include awareness on better seed management practices including training farmers on how to preserve seeds and maintain their own mini multiplication sites. This will directly integrate the sweet potato research and extension services directly into the sweet potato value chain. Additional services can include sweet potato seed certification, storage to preserve various varieties to enable farmers produce the same varieties during the next planting season.
• Invest in small facility to explore new commercial uses of sweet potatoes apart from just consumption. Sweet potato can be used to make a few industrial products as well as be processed into biofuels, starch, biscuits and crisps, commercial animal feed, etc which can be sold in supermarkets and even exported. These are areas in the value chain which  can be developed urgently.
• Invest in small transport facility that can be used to subsidize costs of transporting the sweet potatoes to the market. While the proposal states that the middlemen control transportation, this is NOT the case AT ALL. The farmers/middlemen are at the mercy of transporters(lorry owners) who can charge them anything and currently charge  Ksh.700 to transport a bag of sweet potatoes from Kabondo to Nairobi. Imagine a farmer transporting 10 bags of sweet potatoes from Kabondo to Nairobi, it will cost them a whopping Ksh.7000 or almost $100. I think this is a place that  needs some intervention. A model can be devised where farmers can even buy shares from the transport farm or pay a standing monthly fee of say Ksh.1000 plus a subsidized standing charge of Ksh.350 per bag of sweet potatoes. There are various business models for this. The transport company will still make huge profits while putting more money into the pockets of farmers and middlemen.
• Line of Credit: This has already been included in the proposal but the interest rates should be merciful.

Sweet Potato Flour made in China

Sweet Potato Flour can be used to make any type of baked food such breads, cookies and muffins.  You can also use the flour as a basic thickener for sauces and gravies.  You can sell the flour at some health food stores or sell them online at Amazon.com.

I think these are the broad areas that need urgent intervention in my opinion but intervening "half way" without adding value at the bottom is likely to meet failure and stiff opposition, especially from the farmer-middlemen who play a pivotal part in the chain and who will see this as a threat to their very existence.

My tuppence.