Potato Processing in Ethiopia

Goal of the project

This project aims to improve food security in Ethiopia by driving market efficiency and value chain sustainability, ultimately leading to increased local availability of affordable potatoes. The project objective is to establish the Ethiopian Potato Processing Company (EPPCO) that will directly link smallholder potato farmers to the market for quality fresh potatoes and processed potato products in Ethiopia.

Project number

FDOV14ET06

Country

  • Ethiopia

Location

  • Addis Ababa
  • Oromia
  • SNNPR

Sector

  • Food processing
  • Potatoes

Project budget

€ 7,333,484 (FDOV contribution = € 3,000,000)
 

Partners

  • Solagrow PLC
  • Wageningen UR
  • Ethiopian Potato Processing Company PLC (to be established)

Project description

The potato availability in Ethiopia is low and volatile, despite the large potential of potato production. Yields are estimated around 20% of the potential. Potato processing is the missing link in the potato value chain.
The project objective is to establish the Ethiopian Potato Processing Company (EPPCO), that will directly link the smallholder potato farmers to the market for high quality fresh potatoes and processed potato products. Off-take guarantees with fair and consistent prices will result in an improvement of the smallholder incomes, and will start the fly wheel of more investment, higher quality and more productivity. The project covers the complete value chain: supply, processing and marketing.
The project’s first focus will be on the development of a supply chain, a processing facility and a market for fresh potatoes. The potatoes will be bought from the farmers and then cleaned, sorted and packed before being distributed to the market. This is a high volume, but low margin business that would not be commercially sustainable stand-alone. Therefore, in order to make the project financially viable, 15-20% of the total potato input will be used to make crisps. The company will sell its products in the Ethiopian market, which is currently a large existing but unmet market (high quality fresh potatoes) and/or served by imports (high quality crisps).
In the short term, EPPCO will provide 2,500 farmers stable, transparent prices while rewarding them for quality produce. This will incentivize the farmers to invest in productivity and quality. In the long term, market efficiency and value chain sustainability will lead to increased local availability of affordable potatoes.

Note:

The Ministry of Foreign Affairs is formal partner in this project.

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