Presented by Charity Masole, Gare K. Mphothwe and John C. Moreki at the Conference on Policies for Competitive Smallholder Livestock Production, Gaborone, Botswana, 4-6 March 2015

1. 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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2. Outline
• Introduction and Background
• Objectives of the study
• Methodology
• Results and Discussion
• Conclusion and Implications
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3. 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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4. 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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5. 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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6. Methodology
The study sites were Gaborone, Kgatleng, Kweneng and South-East
Districts
Figure 1: Map showing research sites
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7. 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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8. 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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9. 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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10. 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
Table 1: Socio-economic data of poultry farmers in the four districts
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11. Botswana’s poultry value chain
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12. 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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13. 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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14. Results and discussion cont…
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15. 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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16. 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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17. 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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18. 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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19. 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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20. 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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21. 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. 21

22. Acknowledgements
• Mr. P.G. Nthoiwa
• Statistics Botswana
• Ministry of Agriculture
• Farmers
• Extension Officers
• Retailers and Feed Stores
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