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
Policies for Competitive Smallholder Livestock
Production
4-6 March, 2015, Gaborone, Botswana
1
Outline
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•
•
•
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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.
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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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Methodology
The 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 minor
challenge, 4 to 5 (major challenge) and 3 for
average.
• The participants’ perceived levels of working
relationships were estimated using an index
derived from their scores on Likert-type of scales
that showed how strongly they agreed or
disagreed with the statements under each
relationship feature with a score of 4 for strongly
agree and 1 for strongly disagree.
• Data were analysed using Statistical Package for
Social Sciences (SPSS version 16.0)
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Results and discussion
• Seventy-five per cent of the respondents were
males while the remainder was female (Table 1).
• The reason could be that chicken production in
Botswana has become one of the major
commercial and value adding industries.
• The results showed that 45% of respondents were
aged 31-40 years followed by ≥51 years.
• About 33% of the respondents said they had been
in business for less than a year while 40% had ≥10
years’ experience in running a business.
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Results and Discussion cont…
Table 1: Socio-economic data of poultry farmers in the four districts
Variables
Frequency
Gender
Male
Female
Age (years)
20-30
31-40
41-50
51 and above
Citizenship
Motswana
Non-citizen
Marital status
Single
Married
Divorced
Education level
Non-formal
Primary school
Secondary school
Tertiary
Production experience
<12 months (a year)
Percentage
30
10
75
25
9
18
3
10
22.5
45
7.5
25
27
13
67.5
32.5
30
10
Nil
75
25
7
Nil
13
20
17.5
32.5
50
13
32.5
10
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 suggest
low levels in the working relationship (Table 2).
• The scores for poultry officers ranked 2.25 on
joint-problem
solving
and
3.67
on
communication, which calls for improved
relations between officers and farmers.
• Grocery stores selling poultry products scored a
minimum of 1.25 and a maximum of 4.00 on joint
problem solving.
• A minimum of 1.33 and a maximum 4.00 was
scored by feed stores on communication, joint
problem solving and trust aspects of the
relationship.
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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…
Table 3: Ranking the key challenges by the four district’s poultry value chain players
Challenge
Farmers
Ranking of challenges
Retail stores
Feed stores
No government production incentives
Unfavorable climatic conditions
Crime
Lack of skilled personnel
3
5
4
14
6
6
3
1
5
6
3
10
5
5
5
5
Increased competition from mushrooming firms
Inconsistent market information
8
16
2
9
2
11
13
5
High interest rates
Long distance to the market
6
12
11
13
4
14
15
15
Availability of resources
13
9
13
13
Expensive machinery and replacement costs
Lack of commitment from employees
9
15
11
3
11
6
5
5
Low price selling of goods
Pests and diseases
Transport challenges
7
2
10
13
6
13
8
15
8
5
3
3
High raw material prices
Halaal
1
11
5
16
1
16
1
2
Poultry
officers
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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…
• The industry employs more males than females.
• It was however, indicated that during slaughter times
temporary labour is employed most of who are
women.
Table 4: Number of people employed in feed stores, retailers and poultry
farms (values in brackets are percentages)
Sex
Feed stores
Retailers
Farms
Males
99(83)
27(64)
877 (62)
Females
20(17)
15(36)
545 (38)
Total
119
42
1422
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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 smallscale 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 by
the few industry players.
• Both the public and the private sector should
partner and finance those who enter the industry
up until when they can operate on their own.
• The government should give incentives to local
entrepreneurs to provide alternative supply of
poultry input facilities.
• It must be made mandatory for retailers to buy a
certain potion of
poultry from smallholder
farmers provided that they meet certain safety
standards.
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Acknowledgements
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Mr. P.G. Nthoiwa
Statistics Botswana
Ministry of Agriculture
Farmers
Extension Officers
Retailers and Feed Stores
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