In this blog we return to the theme of the ‘hidden middle’; those activities that exist between the very small-scale and informal and the larger, more organised formal operations. As we discussed in relation to maize, these activities are vital for the new agrarian economy post land reform. In this short blog series, we look at poultry, a growing source of income and employment for many across the rural areas.
There are broadly three types of poultry production: the very large-scale, industrial producers; the small-scale ‘backyard’ producers and the increasingly important medium-scale producers, with flock sizes ranging from 50 to a few thousand. It is the latter that will be the focus of this blog series, as they are the operations that are often hidden from view yet are vitally important and very fast-growing.
Industrial poultry on the (relative) decline
The large-scale, industrial sector once dominated the Zimbabwe broiler and egg industry. Established in the 1950s, a few main companies dominated the market. They expanded to develop an integrated poultry operation with hatcheries, feed mills, commercial layers and broiler operations. Imported genetic material was central to these operations. Today, the Cobb broiler day old chick is produced mostly by Irvine’s and Charles Stewart in Chegutu (under the Dutch company, Hendrix genetics) and the connected company, Hukuru in Harare are the main suppliers of Ross broiler day old chicks. In addition, smaller scale hatcheries import Ross hatching eggs from South Africa, producing and selling day old chicks to local markets.
Commercial feed supply is offered through a number of companies, with poultry feed central to their business. Prices are highly dependent on production of maize and soya, as well as import costs (and so exchange rates) of antibiotics and other additives for mixes and grower pellets. In the past, abattoirs were largely under the integrated, large-scale operations, but these suffered the downturn in the 2000s and now offer walk-in facilities, with halal-certified toll slaughter, individual quick freezing and cold storage. Where such operations exist, local medium-scale producers of broilers make use of them.
All scales of operation are therefore interconnected. The big commercial producers may be a source of day-old chicks and the supply of improved breeds for other operators, and also now offer abattoir slaughter facilities and may be linked to feed mills supplying feed. The volume of production and their penetration of formal markets, such as supermarkets, by the large players frames the environment for the small and medium-scale producer. Meanwhile, backyard producers may be in the process of scaling up to larger operations, as people diversify out of ‘road runner’ chickens to other fowl (turkeys, quails and so on) to broilers, specialised layers or improved dual-purpose (meat and eggs) indigenous birds.
The growing poultry value web
The poultry industry in Zimbabwe has grown massively and especially amongst smaller scale producers over the last 20 odd years. Following land reform and especially in the period when the economy seriously contracted in the mid-2000s, large-scale industrial production declined in relative importance.
This was taken over by small and medium-scale production, with total volumes continuing to increase. The liberalisation of the economy has encouraged many to try their hand at poultry farming. Economic challenges in the past few years in particular have meant that poultry production is a good option – it has a quick turn over, with limited capital required, and so can beat inflation and wild currency swings that have characterised the Zimbabwean economy. In the COVID-19 period, small scale production also responded to demand as larger producers and longer supply chains stopped contracted during lockdowns.
To explore changes over time, the Livestock Meat and Advisory Council have kindly supplied some recent data from January 2013 to March 2022, from which I have extracted a couple of graphs – one of broiler slaughters numbers and the other of table egg production per month. Both graphs show a significant increase in ‘small-scale’ production especially after the major H5N8 avian influenza outbreaks that took place in 2017, centred on a major industrial producer. This has knock-on effects across the industry, which lasted for at least a year. Further dips in production occurred during the COVID-19 pandemic as markets closed and demand contracted, but the growth of the ‘small-scale’ sector has been impressive since.
For LMAC, ‘small-scale’ is recorded production mostly from operations that are not backyard but could be regarded as medium-scale commercial operations. These data are likely to be reasonably accurate for the large-scale sector, but probably massively under-estimate other ‘small-scale’ production, as sales slaughtered broilers and table eggs are only recorded for formal outlets. As we will see in the rest of this blog series, sales of live birds as well as informal sales of dressed chickens and eggs occur through multiple routes, most of which are not recorded by the data. The ‘small-scale’ sector is now significantly larger than the large-scale, industrial sector, even in the formal data. This is a major reversal from 20 years ago, with major implications as we shall discuss.
What is important about such small and medium-scale enterprises is that they generate a range of economic activity, linking farming (growing feed: maize, soya, sunflower), with transport (moving products to markets), with processing (dressed chicken supply to schools, hospitals etc. and links to restaurants and roadside food outlets), with retailing (of eggs, meat, live chickens and so on), as well as investments in technologies (for egg hatching/chick rearing, poultry pens and so on), credit/financing systems and so on. Across this ‘value web’, employment is generated, especially for women and young people, with value addition occurring at each step. It is this dynamism of the poultry market network that is impressive and is highlighted in the many cases from our sites across the country, which we will share a few over the coming weeks.
Supporting chicken projects is a favourite of NGOs, as well as wider ‘value-chain’ enhancement initiatives, such as the ‘Inclusive Value Chain Project’ under Zimbabwe’s Agricultural Growth Programme. Chickens are also political, with politicians loving to support such projects, with chickens important in attracting votes not only through local projects but also as food supplied in rural rallies. However, despite these high-profile activities, most new activity is generated through people’s own investments, both in the rural areas and increasingly in peri-urban settings.
Medium-scale production systems: a typology
Our investigations of the hidden markets surrounding poultry production from Mvurwi to Matobo to Chatsworth to Wondedzo/Masvingo to Triangle and Chikombedzi over the last month or so have highlighted just how complex the new poultry economy is. A number of different (although overlapping) medium-small scale producer systems were identified.
The contract outgrower. In Matobo in Matabeleland South, a project centred on a well-known farm owned by the Cunningham family has been involved in supporting producers across both communal and resettlement areas nearby. They are offered training, along with some basic investment support and a good market for broiler production. Operations range from 1000 to 3000 birds, and together a huge volume is produced, which is largely sold in the Bulawayo urban market. The contracting arrangement is held together by the farm owners who are well-respected in the area, linked through their Christian church and connections with local chiefs and community leaders. When an outsider tried to take over the farm, there were huge protests as the core commercial farm is central to a much wider economy in the rural areas beyond.
The commercial supplier. Operating on a fairly large scale, with hundreds if not thousands of birds, some operators have focused on commercial supply, competing with the big commercial operators such as Irvines. They invest in good poultry sheds, buy in veterinary care and produce high-quality products, usually either specialising in eggs or meat. Some have moved into improved indigenous breeds, such as Saso or Bushveld, as these have high demand in local markets, but the main target is urban retailers, restaurants and bulk buyers such as schools or hospitals.
The integrated value chain operator. On the land reform farms where there is sufficient land, it is possible to link farm production of feed crops (usually led by the husband) to poultry production (often run by his wife or resident sons/daughters). Investments in poultry farming (pens and other equipment) have been made from profits from farm production and an integrated system emerges. This reduces the cost of feed, which has risen dramatically and is hitting the standard commercial producers hard. Some will also engage in processing, producing dressed chicken for example for sale to restaurants and others, while some even set up small outlets for selling cooked chicken products, completing the value chain.
The specialist producer. While the majority of producers focus on chickens for meat or eggs, some diversify into other fowl, including turkeys, quail, pheasants, even peacocks. These provide specialist meat/egg products that can have particular, often seasonal, demand. They often require particular knowledge and equipment but may offer greater returns. Others specialise in day-old chick production, which requires heated areas and a high level of attention to disease control and management to prevent excess mortalities. With the growth of poultry production generally, there is now a large demand for chicks and local entrepreneurs have been able to fill this, often outcompeting the conventional chick producers in the large commercial operations.
The new investor. Many start up poultry production from backyard operations, with a few ‘roadrunner’ chickens. Building a chicken coup and run and buying in a few broilers does not take much investment, and the profits can be significant. Crucially, returns occur regularly – around 6 weeks for each batch – meaning that income is available perhaps 8 times a year. In the context of Zimbabwe’s high inflation economy having a flow of income over time that can be used for regular expenditures or investments is preferred. Many larger operations have built up from small beginnings, with the scale expanding bit by bit as profits are reinvested.
These profiles offer only brief glimpses of the wide array of players in the new poultry economy. Clearly with increasing production there are pressures on markets and prices, and competition is intense. The big players are increasingly at a disadvantage, as they are not able to respond agilely to changing conditions, such as during the market restrictions imposed during the COVID pandemic or during the severe avian influenza (H5N8) outbreak in 2017. In contrast, the medium-scale operator can up-scale and down-scale more flexibly, as most poultry operations are linked to arable farms and other sources of income.
In the next blog, we will look at the wider value web and the array of activities associated with poultry production, highlighting the complexities of these hidden markets.
Thanks to Felix Murimbarimba and the team in Mvurwi, Matobo, Chikombedzi, Masvingo, Triangle and Gutu for contributions to this blog.
This blog was written by Ian Scoones and first appeared on Zimbabweland