Benchmarking Local Potato Processing in Developing Countries: The Case of French Fries in Lima, Peru

Declining tariffs and exchange rate appreciation have raised concerns about the competitive position of local potato processors in developing countries. Yet, relatively little is known about these processors, their competitiveness under current market conditions, how that might change with future tariff reductions or shifts in exchange rates, or what might be done to improve their efficiency over time. This study focuses on the market for French fries in Lima, Peru. Estimates based on field work carried out among local, small-scale processors indicate that locally made, peeled and cut fresh potatoes cost considerably less than imported, industrial-scale, frozen French fries under various tariff and exchange rate scenarios. A series of recommendations are put forward to continue to improve the efficiency of local processors and the quality of their finished product as well as some topics for future research. © 2010 EAPR.