CIP’s Seed Link to the Value Chain in Kenya

I was in Nairobi for less than 24 hours when I asked CIP Regional Operations Leader for Sub-Saharan Africa, Susan Corning, how she would define a value chain. The answer was similar to what I had heard before with a caveat or two and the common “most people think it’s linear but it’s not.”

What I learned in the next 24 hours was critical to my understanding of why a value chain is not so easily explained and why some want to simplify it by depicting it as linear.

The Dyer family in Nanyuki, Kenya runs a complex agribusiness called Kisima Farms. They have farmed this land since the 1920s when Charlie and Martin Dyer’s grandfather began a livestock operation there. Today the farm still has livestock as well as wheat, roses, and, of course, potatoes.

When it comes to the value chain, the Dyers have established themselves along its trajectory, while finding their niche at several key links. After my visit, I’d cautiously say that the value chain story for they Dyer’s starts with potato seed. That may be an oversimplification, because, to know what types of seed to target, one needs information in order to produce quality seed that meet local planting criteria, be disease-free, and, well, in the long run, produce a good tasting potato, too! All of this information is gathered through research, field trials, and feedback loops, but I’ve got to start somewhere so let’s just say that Kisima Farms produces high quality potato seed.

Kisima Agri Information CenterMost of the seed used by Kisima Farms are CIP varieties that meet the local planting criteria, produce high yields, and are disease free. The seed link in the value chain is critical to the success of local smallholder potato farmers. Most farmers buy (or save) their seed with insufficient knowledge. Currently, according to Martin, the farmers decide which potato variety to grow, largely motivated by what the middleman tells them, often disingenuously, is selling in the market.

Kisima Farms, through the Kisima Foundation, has identified this link in the potato value chain, seed, as its sweet spot and has developed a multipronged approach to help farmers avoid potentially devastating mistakes. The core of this effort surrounds the Agri Information Centre building that sits near an old gas station and serves as a focal point for farmers and other community members throughout the day. There, the Foundation has planted a variety of crop trials, including potatoes and beans, to demonstrate how different varieties fare, best cultivation practices, a systems approach to farming-all in the local environment. Beyond production, they also provide information on post-harvest handling best practices, including storage. They’ve built two different types of cold storage houses to demonstrate to visitors how storing potatoes can help them time the market and sell potatoes when supplies are low and prices are more to their benefit.

Now if you’ve read this far you might have noticed that I am referring to specific value chain links that are important to a farmer’s business success. I have mentioned good seed, market information, post-harvest handling, and now cold storage. However, we still have not identified a buyer. In our travel between the fields and the agricultural center we passed a number of roadside vendors with healthy-looking ware potatoes perched on white buckets. I saw several potato-laden motorcycles delivering product to these vendors. I didn’t see any buyers but that’s probably because we didn’t have time to stop and watch the comings and goings of customers. However, visibly, local producers were selling potatoes at least every kilometer along the main highway running through Nanyuki.

I learned from Martin Dyer, who leads the effort on potatoes at Kisima Farms, that the traders (buyers/middlemen) are a critical link in the value chain but not always a positive one. Historically, they feed the farmer with information on what variety is in demand. When the harvest is ready the trader returns with the bad news that the demand has changed or there is a glut in the market and the price has gone down. Left with no alternatives, the farmer sells his product at a greatly reduced price and the trader then goes on to sell at a higher price and receives the inflated profit. It’s simple trading theory: “buy low, sell high,” but with market misinformation all along the way.

Martin Dyer shows some ware potatoesIn an effort to bypass the trader’s misinformation campaign, Martin Dyer has launched an effort to identify who the end-users are in Kenya, and in particular to identify what varieties the processors want, and then feed this information back to the farmers. In turn, the farmers can source appropriate varieties from Kisima Farms in order to optimize profits. This introduction to an important link on the market end of the value chain, the processor, and the feedback loop that Martin proposes would effectively bypass trader manipulation and help the farmer reach a new market. The seed (remember the seed part of the value chain?) would be high quality and high yielding and give the farmers a greater return on their investments. Martin is working with the Syngenta Foundation to identify the processors and their preferred varieties. This is a win-win for both Kisima, the farmers, and the processors.

Most farmers in Nanyuki are smallholders. They have two potato harvests a year and might grow wheat, maize or beans as well. They typically save some seed from one year to the next and buy some seed depending upon what varieties are selling best. They likely produce a maximum 15 tons of potatoes per hectare and often times less. The Kisima Foundation has worked with farmers organized into groups: “Cluster Farmers,” who pool their resources to buy seed and cultivate crops. One member who uses Kisima seed has even built a cold storage unit to keep harvested potatoes fresh longer and to time the market but more on this later.

This story is not a complete explanation of a potato value chain but it does represent a fundamental part of it. A crucial link not fully addressed is the all-important “access to markets.” As mentioned, Kisima Foundation is researching access to the processors as one solution. They have come up with innovative ways to minimize the manipulative behaviors of the middleman, but have not completely bypassed them. Further, they are currently investing in infrastructure to improve effective market exploitation, which you will read about soon in another blog. However, even their current level of participation in the value chain has improved production quality and yields, hence incomes of small holder farmers in this region of Kenya.