The poultry value web in Zim

IN this write-up, we explore the wider ‘hidden middle’ at the centre of the growing small and medium-scale poultry industry in Zimbabwe.

With the switch away from beef as the main source of meat, poultry products are in high demand, and this has driven a growth of production.

Yet there are many who are also involved in supporting this huge, but largely hidden, industry, which connects rural and urban areas.

This blog explores those engaged in diverse markets, in feed supply, in input provision, in transport, in equipment manufacture and in finance. The network spreading from a single poultry production operation of say 1 000 birds can be large, generating significant income and employment.

In formal assessments of the ‘poultry industry’, which still remains focused on large-scale commercial operations, this diverse and complex value web remains hidden.

Multiple markets

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In contrast to large-scale commercial operators, the often hidden medium-scale producers operate across multiple markets. These range from the supermarkets and the major wholesalers that the big operators supply to a range of much smaller markets.

In recent years the types of markets for agricultural products have diversified massively in Zimbabwe. In the past, agricultural commodities were sold through very predictable, regulated, formal channels (marketing boards and the rest), but today there is much more choice.

This is in part a response to a liberalisation of the economy, but also its informalisation as a consequence of the on-going economic crisis.

These markets take different currencies, allow for barter, are based on trust relationships and are networked with producers in a much more intimate way than standard markets. They therefore operate efficiently, but also importantly flexibly.

The medium-scale producer in one of our resettlement area sites may sell some products to supermarkets for sure but may also make use of particular opportunities: a church gathering, a wedding or funeral or a political rally.

Personal connections allow access to such markets and some producers – for example those based in Chatsworth in Gutu where major church gatherings take place several times a year – adjust their production to supply at such events. In some places, such as Wondedzo near Masvingo, there has been a gold rush in recent years with a flood of artisanal miners coming into the area.

These people have cash and need food, and poultry suppliers are able to profit from such markets. Similarly, with national elections gearing up in Zimbabwe, there are opportunities to be had too, if you have the right connections.

More stable supplies are offered to particular institutions – schools, colleges, hospitals, hotels – where processed (dressed chicken, cut pieces etc.) can be supplied for a premium.

Regular supplies to collectives of teachers and other civil servants guarantee income and such arrangements are usually based on flexible terms as such customers are trusted and local. 

In Matobo, as discussed in the last blog, a contracting arrangement involves around 300 producers with a family business linked to markets in Bulawayo. This provides guaranteed sales and back-up support for production.

 Producers may sell to organised markets such as the formal municipal ones in town, such as the KuTrain market at the railway sidings in Masvingo, either selling directly or to vendors who take on products,

sometimes buying from the farm. Alternatively, they may sell in informal markets – such as by the roadside or at bus stops (as live chickens or as prepared meals) or at the now widespread Bacossi markets.

These are huge informal markets that have a rotation across sites (usually old cattle markets) and attract hundreds if not thousands of customers. In the increasingly informal economy of Zimbabwe, they have expanded massively, and the Covid period encouraged them too, as they avoided the lockdown constraints of formal markets in town.

Feed supply

While backyard road runners can survive off scavenging and the supply of scraps from kitchens, improved breeds, whether ‘indigenous’ (such as Saso or Bushveld) or ‘exotic’ (such as Cobb or Ross), require well managed feed rations. With the increase of poultry production, particularly broilers, the supply of feed is essential.

Purchasing this in town is prohibitive and farmers have now shifted their crop choice on their farms to supply poultry producers across our sites. Very often it’s men who manage the crops and women, who are central to poultry production, so within-family negotiations must occur.

There has been a large expansion of milling facilities, both in the rural areas and in town, that supply feed for the growing small and medium-scale poultry industry.

These allow producers to prepare maize/soya or maize/sunflower mixes or simple maize crushes for feed. Alternatively millers buy in the crops and sell mixed feed to poultry producers, packaged in various ways.

 Equipment and input supplies

Agrodealers and veterinary supplies merchants are vital for poultry production, as diseases are common, especially among the more highly bred varieties.

Agrodealers operate out of shops in small towns and are often skilled at offering advice both on the quality of the relevant medicines and the way they should be administered. Other input suppliers include those supplying day-old chicks. These may be small operation with specialised equipment, as well as agents who move around on behalf of larger commercial operators. 

Depending on the scale and level of sophistication, poultry production requires different sorts of equipment. This may range from a simple coup and run, which may be home-made or supplied by a local carpenter to more complex feeding systems, chicken sheds and heating for chicks and egg hatching.Some of these pieces of equipment can be bought off-the-shelf from agricultural equipment suppliers, but others are locally manufactured, requiring welders, metalworkers, carpenters and others.

Transporters

Chickens, dead or alive, and eggs have to be moved about. Again, depending on the scale of operation, there are different transporters and containers for carrying products, ranging from push carts to large haulage lorries.

Those who operate such transport are intimately connected to the value web and gain employment from producers who pay for their services. Those who manufacture or maintain the transport similarly gain livelihoods across scales of operation.

Financing

Poultry production can be quite expensive. There is the capital cost of the equipment and basic start up and then the range of input costs. Most financing is from farm production, with profits from crop sales pumped into on-farm poultry businesses.

Capitalisation of such businesses often needs a lump sum, and many farmers in our areas look for relatives who are in the diaspora to invest.

Many, many chicken projects are paid for by sons and daughters in South Africa, Botswana or the UK, for example.

Sometimes NGOs come into help, as women’s chicken projects are big favourites, and in the case of the Cunningham’s operation in Matobo a church/NGO project arrangements provides establishment costs for contractors.

In terms of marketing and sales, financing arrangements vary depending on the buyers. In many cases, as already discussed, local markets are deeply embedded in local communities and trust relations are important for supplying products on credit or linked to payment cycles of savings’ groups, pay cheque dates or term times for schools and colleges for example.

This type of arrangement is preferred by both buyers and sellers and allows for a flexibility in financing, with repayments guaranteed. As many commented selling to supermarkets may offer slightly higher prices, but the requirements for quality, hygiene and the payment systems that delay or go through bank accounts are disadvantageous.

In the final blog next week on poultry in the longer series on ‘hidden markets’ and the implications for development, we will look at a series of case studies, showing how these different elements are combined.

This article is from Zimbabweland, a blog written by Institute of Development Studies research fellow Scoones. Zimbabweland focuses on issues related to rural livelihoods and land reform in Zimbabwe.