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

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Outline

• Introduction and Background

• Objectives of the study

• Methodology

• Results and Discussion

• Conclusion and Implications

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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).

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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.

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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.

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MethodologyThe study sites were Gaborone, Kgatleng, Kweneng and South-East

Districts

Figure 1: Map showing research sites

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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

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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)

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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.

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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

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Botswana’s poultry value chain

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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.

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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.

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Results and discussion cont…

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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.

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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

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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.

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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.

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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.

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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.

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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.

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Acknowledgements

• Mr. P.G. Nthoiwa

• Statistics Botswana

• Ministry of Agriculture

• Farmers

• Extension Officers

• Retailers and Feed Stores

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