value chain analysis of botswana poultry industry: the case of gaborone, kgatleng, kweneng and south...
TRANSCRIPT
Value Chain Analysis of Botswana Poultry Industry: The Case of
Gaborone, Kgatleng, Kweneng and South East Districts
Charity Masole, Gare K. Mphothwe, John C. Moreki
Conference on Policies for Competitive Smallholder Livestock Production
Gaborone, Botswana, 4-6 March 2015
1
Outline
• Introduction and Background
• Objectives of the study
• Methodology
• Results and Discussion
• Conclusion and Implications
2
Introduction and Background• Agriculture plays a vital role in Botswana and the
rural dwellers depend on it for survival.
• While other agricultural sub-sectors have not
performed well in terms of production volumes, the
poultry subsector has experienced tremendous growth
over time and remains the most celebrated example of
import substitution.
• The commercial chicken holding in Botswana has
generally increased substantially over time (Transtec
and BIDPA, 2010).
3
Introduction and Background cont…
• Value chain is a range of activities conducted by
organizational stakeholders of the same chain to
provide product or service from the beginning to the
end user (Nguyen 2010).
• The poultry industry in Botswana is dominated by
relatively small number of large-scale broiler farmers
and so it is oligopolistic (Grynberg and Motswapong,
2011).
• These producers are vertically integrated along the
value chain all the way from production to distribution.
4
Objectives
• Evaluate and characterize the current structure of the
poultry value chain of the four districts
• Identify the different actors in the poultry value chain
and how they are linked with each other
• Identify challenges faced by the poultry industry and
how to overcome them to ensure real profits and
sustainability of the industry.
• Assess the relative importance of specific flows of
poultry and poultry products.
5
MethodologyThe study sites were Gaborone, Kgatleng, Kweneng and South-East
Districts
Figure 1: Map showing research sites
6
Methodology cont…
• A random sampling technique was used to select
participants from a list obtained from the Ministry of
Agriculture.
• 40 poultry farmers, 10 input dealers, 10 retail stores
and five poultry officers were selected. A total of 65
respondents were interviewed. Both primary and
secondary data were used.
• Data were collected using a well-structured
questionnaire and by observation
7
Methodology cont…• Respondents ranked the challenges they faced on
a Likert-scale, with 1 to 2 indicating minorchallenge, 4 to 5 (major challenge) and 3 foraverage.
• The participants’ perceived levels of workingrelationships were estimated using an indexderived from their scores on Likert-type of scalesthat showed how strongly they agreed ordisagreed with the statements under eachrelationship feature with a score of 4 for stronglyagree and 1 for strongly disagree.
• Data were analysed using Statistical Package forSocial Sciences (SPSS version 16.0)
8
Results and discussion
• Seventy-five per cent of the respondents weremales while the remainder was female (Table 1).
• The reason could be that chicken production inBotswana has become one of the majorcommercial and value adding industries.
• The results showed that 45% of respondents wereaged 31-40 years followed by ≥51 years.
• About 33% of the respondents said they had beenin business for less than a year while 40% had ≥10years’ experience in running a business.
9
Results and Discussion cont…
Variables Frequency Percentage
Gender
Male 30 75
Female 10 25
Age (years)
20-30 9 22.5
31-40 18 45
41-50 3 7.5
51 and above 10 25
Citizenship
Motswana 27 67.5
Non-citizen 13 32.5
Marital status
Single 30 75
Married 10 25
Divorced Nil
Education level
Non-formal 7 17.5
Primary school Nil -
Secondary school 13 32.5
Tertiary 20 50
Production experience
<12 months (a year) 13 32.5
<10 years 11 27.5
Table 1: Socio-economic data of poultry farmers in the four districts
10
Botswana’s poultry value chain
11
Results and discussion cont…• Index scores above 3.5 indicate high levels of
good relations while an index value of 1.5 suggestlow levels in the working relationship (Table 2).
• The scores for poultry officers ranked 2.25 onjoint-problem solving and 3.67 oncommunication, which calls for improvedrelations between officers and farmers.
• Grocery stores selling poultry products scored aminimum of 1.25 and a maximum of 4.00 on jointproblem solving.
• A minimum of 1.33 and a maximum 4.00 wasscored by feed stores on communication, jointproblem solving and trust aspects of therelationship.
12
Results and Discussion cont…• Small-scale farmers scored an average mark of 2.60
showing weak business relations.
• They do not have direct access to supermarkets probably
due to weak links and this finding is supported by
(Grynberg and Motswapong 2011) .
• A minimum score of 3.00 on commitment, joint-problem
solving and trust was captured with a high of 3.67 and 4.00
on all aspects of the relationship in medium and large-scale
poultry operations.
• The stronger links observed in medium and large-scale
operations could be attributable to vertical integration,
which is common in these enterprises.
13
Results and discussion cont…
14
Results and discussion cont…
• Respondents ranked higher input prices
especially feeds as number 1 challenge (Table 3).
• Badubi et al. (2004) and Moreki (2010) also
reported high feed costs as a major challenge.
Higher feed prices squeezes farmers profits.
15
Results and discussion cont…Challenge Ranking of challenges
Farmers Retail stores Feed stores Poultry
officers
No government production incentives 3 6 5 5
Unfavorable climatic conditions 5 6 6 5
Crime 4 3 3 5
Lack of skilled personnel 14 1 10 5
Increased competition from mushrooming firms 8 2 2 13
Inconsistent market information 16 9 11 5
High interest rates 6 11 4 15
Long distance to the market 12 13 14 15
Availability of resources 13 9 13 13
Expensive machinery and replacement costs 9 11 11 5
Lack of commitment from employees 15 3 6 5
Low price selling of goods 7 13 8 5
Pests and diseases 2 6 15 3
Transport challenges 10 13 8 3
High raw material prices 1 5 1 1
Halaal 11 16 16 2
Table 3: Ranking the key challenges by the four district’s poultry value chain players
16
Results and discussion cont…
Broiler value chain
• The main producers are Goodwill, Moleps Poultry, Tswana pride,
Medina, RICHMARK, Dikoko tsa Botswana and Bobbsies.
• These companies are vertically integrated along the value chain.
Egg value chain
• The main producers are; Notwane, East, Star poultry and Egghead
poultry.
• Primary products in this chain are table eggs and spent hens.
• Most of the inputs required for egg production are imported from
RSA.
• A number of actors are involved in this egg value chain,- from
hatcheries, breeders, farmers, extension services, feed stores,
poultry officers, retail stores and final consumers of eggs.
17
Results and discussion cont…
Sex Feed stores Retailers Farms
Males 99(83) 27(64) 877 (62)
Females 20(17) 15(36) 545 (38)
Total 119 42 1422
Table 4: Number of people employed in feed stores, retailers and poultry
farms (values in brackets are percentages)
• The industry employs more males than females.
• It was however, indicated that during slaughter times
temporary labour is employed most of who are
women.
18
Opportunities
• Production of further processed chicken meat.
• There is need for government to intervene in order to
reduce the market power possessed by the few
industry players.
• The establishment of pullet rearing facilities.
• Expansion of broiler breeding facilities in order to
meet the country’s hatching egg requirements.
19
Conclusion
• The majority of commercial poultry producers are
males.
• The study identified different actors in the poultry
value chain, how they are linked with each other and
further analysed how they relate with each other.
• Medium to large-scale farmers showed stronger
working relationship links when compared to small-
scale farmers.
• High feed costs remains to be the major challenge in
poultry production.
20
Recommendations• There is need for government to intervene in
order to reduce the market power possessed bythe few industry players.
• Both the public and the private sector shouldpartner and finance those who enter the industryup until when they can operate on their own.
• The government should give incentives to localentrepreneurs to provide alternative supply ofpoultry input facilities.
• It must be made mandatory for retailers to buy acertain potion of poultry from smallholderfarmers provided that they meet certain safetystandards.
21
Acknowledgements
• Mr. P.G. Nthoiwa
• Statistics Botswana
• Ministry of Agriculture
• Farmers
• Extension Officers
• Retailers and Feed Stores
22