Why its hard to make profit in Irish potato farming?

According to the Ministry of Agriculture, Irish potatoes are the second-most important staple food after maize, with over 800,000 growers in 2015. These numbers may increase as food systems change, which brings us to the cost of Irish potato farming in Kenya and whether there is a likelihood of making profits or losses come 2022.

Over fifty per cent of Irish potatoes consumed in Kenya come from Nakuru or Nyandarua County. An assessment of the cost of producing a 110-kg bag of Irish potatoes in these regions gives a clear picture of the general cost in Kenya.

An assessment by Tegemeo Institute of Agricultural Policy on the cost of producing Irish potatoes in Nakuru and Nyandarua counties, major Irish potato growing zones, found that a 110-kg bag costs KES 3,937 for farmers in Nakuru and KES 4,325 for those in Nyandarua.

The high cost was associated with low production per acre, costs of seeds and pesticides, and fungicides.

Regardless of the high market prices at the time of assessment (2018), farmers in Nakuru barely attained the break-even point, while those in Nyandarua made losses.

In the assessment, yield for farmers in Nakuru was 1.35 tons/acre (12.3, 110-kg bags/acre) while Nyandarua recorded 1.43 tons/acre (13,110-kg bags/acre). The per-acre cost of production in Nakuru was KES 48,234, while it was higher in Nyandarua at KES 56,221, bringing the cost per 110-kg bag to KES 3,937 and 4,325 for the two areas, respectively.

Planting, by far, was the most expensive activity in both zones due to seed cost. Notable differences in production costs between the two counties, as is the case across the country, were due to pests and disease control, where farmers in Nakuru suffered from a higher prevalence of pests and diseases mainly due to agroecology; land preparation since farmers used mechanized equipment due to availability of tractor higher services, which is not available in Nyandarua and cost of weeding.

Labour, seed, and pesticides contributed the highest costs in Nakuru, while in Nyandarua, seed accounted for the most significant cost component, followed by labour and fertilizer.   

Nakuru was more susceptible to pests and diseases than Nyandarua since it is warmer, thus increasing the costs of pesticides and fungicides.

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Typically, smallholder Irish potato farmers use their land for production; however, the costs are higher in a model where they lease the land. With average land rent being KES 10,000, the cost of production rises to KES 55,234 (KES 4,509 per 110-kg bag) and 63,221 (KES 4,863 per 110-kg bag) per acre for Nakuru and Nyandarua, respectively.

Causes of loss in 2022 from Irish potato farming

Simulations for 2022 indicate an even higher cost of production by over thirty per cent. This increased cost is associated with a higher inflation rate due to the effects of COVID-19, which means a higher cost of labour and low consumer purchasing power. A more than fifty per cent increase in the cost of fuel and fertilizer in 2022 compared to 2018 also means a higher cost of production.

Sadly, the market prices of Irish potatoes in a market dominated by brokers and middlemen remain lower than the cost. This means most farmers will make losses, and only a few will attain break-even points.

Reference: Policy brief No.33 An assessment of the cost of production for Irish potatoes for the 2018 main cropping season in Kenya-Tegemeo Institute of agricultural policy