Post-harvest storage and market performance in Eastern Uganda: a case of ware-potato value chains

Abstract

The Eastern region of Uganda is characterized by two potato cropping periods and highly seasonal market supply of ware-potatoes. The region has prevalent distinct periods of potato supply gluts and scarcity which may affect market performance along the value chain. There are suggestions that volatility in potato market supply can exacerbate the problem of price fluctuations and post-harvest losses (PHL) throughout the year. The use of post-harvest (PH) storage practices across ware-potato value chain can provide diverse marketing opportunities. The extent to which different value chain actors are embracing the use of PH storage is however not well understood. There is limited information on the use of ware-potato PH storage practices, level of post-harvest losses, and how PH storage helps to reduce market inefficiencies across ware-potato value chains in the country. This study therefore assesses the extent to which PH storage helps to guarantee consistent market supplies, higher prices, profits for potato Value Chain (VC) actors throughout the year. The study was conducted in four purposively selected districts of Kapchorwa, Kween, Mbale, and Kampala. Using a multi-stage sampling procedure and a semi-structured questionnaire, four quantitative cross-sectional data-sets were collected between the months of July and September 2015. Respondents were randomly selected and include: 116 ware-potato farmers, 72 ware-potato traders (including 34 wholesalers and 38 retailers), 34 processors, and 85 consumers. Descriptive statistics of key variables and market performance indicators were computed for each category of value chain actors basing on PH storage. A probit model was adopted to assess determinants of value chain actors’ decision to participate in the potato PH storage. The impact of participating in ware-potato PH storage on market performance of farmers was assessed using an endogenous switching regression (ESR) model. However, due to few observations, the ordinary least squares (OLS) model was adopted to estimate the effect of participation in ware-potato storage among traders and processor. The findings of the study show that ware-potato business was profitable for farmers, traders, and processors. Farmers in particular created an average added value of UGX 168 (USD 0.05) per kg when they are sold at farm gate. Farmers earned on average a gross margin of UGX 1,046,021 per acre. Relatedly, the value added by traders was on average UGX 212 (0.065) per kg, while their gross margin was estimated at UGX 671,293 (USD 204.663) per each trading route. The value added by processors was on average UGX 4999.5 (USD 1.515) per kg, and a gross margin of UGX 1,427,258 (USD 432.502) per each weekly processing operation. The value chain actors that engaged in ware potato PH storage added a higher value per kg of ware potatoes compared to their counterparts that did not participate in ware potato storage. Engaging in the practice of ware potato storage therefore creates opportunities for different actors to sell at higher prices. More than half of the farmers (56 percent) participated in ware potato storage, compared to 37 percent of traders and 41 percent of processors. The methods of storage used were mainly indigenous innovations with average storage periods of up to four weeks in case of farmers, six days for traders, and only four days for processors. Farmers stored up to one metric ton of ware-potato per each growing season, representing about 35 percent of total annual potato output. The study findings indicate that the likelihood to engage in ware-potato post-harvest storage at farming value chain node was negatively correlated with prior experience of post-harvest losses. Variables that are positively correlated with ware potato storage across farmers are land allocated to potato production, household size, distance to the market and group membership. At the trader node of the value chain, the study findings indicate that age of the household head, quantity of ware potato purchased, ware potato purchase price, ware potato selling price and economic losses significantly affected trader participation in ware-potato storage. The age of the household head, marital status, quantity of ware potato purchased, ware potato purchase price and physical loss incurred affected the participation of processors in ware-potato PH storage. In addition, results from the endogenous switching regression model for the effect of PH storage on market performance show that PH storage had a significant impact on gross margins of farmers. The findings show that farmers that stored ware-potato earned higher gross margins from ware potato production than those that do not participate in storage. The results confirm that ware-potato storage significantly increases the gross margins earned by farmers, traders and processors. The study findings highlights the need for widespread use of PH storage for ware potato to reduce Post-harvest losses, enhance market performance and stabilize incomes for VC actors along the potato value chains in Eastern Uganda. Notice the exchange rate was conducted at 1 US DOLLAR = UGX 3300.