Team Leader: Ibrahim Kisungwe

Transcription

1 RLDC POULTRY SECTOR COMMERCIALIZATION OF PRODUCTION AND MARKETING CENTRAL CORRIDOR CHICKEN IN THE Team Leader: Ibrahim Kisungwe Advisor: Dr Ralph Engelmann Team Members:Braison Salisali and Ajuaye Sigalla 1

2 EXECUTIVE SUMMARY... 3 ABBREVIATIONS AND ACRONYMS INTRODUCTION PRODUCTION AND MARKET ANALYSIS NATIONAL DEMAND AND SUPPLY POULTRY VALUE CHAIN MARKET SYSTEM SLC IN CENTRAL CORRIDOR CONSTRAINTS AND OPPORTUNITIES PRODUCTION AND MARKET CONSTRAINTS Production Constraints Market Constraints OPPORTUNITIES BARIADI MODEL OF CHICKEN REARING DESCRIPTION OF THE ORIGINAL MODEL LESSONS LEARNT FROM THE IMPLEMENTATION IN BARIADI IMPROVEMENTS TO THE BARIADI MODEL EXPECTED OUTCOMES OF THE IMPROVED BARIADI MODEL PROPOSED STRATEGY FOR CHICKEN SECTOR DEVELOPMENT VISION FOR SECTOR DEVELOPMENT PROJECT OBJECTIVES Productivity Improvement Market Development and Advocacy PROPOSED INTERVENTIONS Productivity Improvement Market Development and Advocacy RISK ANALYSIS IMPLEMENTATION PARTNERS CO-FACILITATOR AND TRAINING PROVIDERS DEVELOPMENT PARTNERS BIBLIOGRAPHY ANNEXES PROJECT BUDGET IMPLEMENTATION SCHEDULE CAUSAL MODEL... 5 List of Tables Table 1: Comparison of meat prices. 6 Table 2: Percentage and number of households raising chicken. 11 Table 3: Estimated chicken sale and consumption in Table 4: Regional focus of strategy. 22 Table 5: Diseases and drugs availability 26 List of Figures Figure I: Poultry Value Chain... 7 Figure II: Poultry Market System.. 9 Figure III: Factors affecting Chicken Rearing Figure IV: Chicken Productivity and Sales Cycle

3 Executive Summary In its first phase, RLDC supported a project on Improved Production and Marketing of Poultry Products in Bupandagila and Mbiti villages in Bariadi District. The project served as a testing and demonstration by adapting the famous Bangladesh model into Tanzanian settings. After successful adaptations the model has now been modified into the current Bariadi model. The sector strategy proposed here is to some extent a replication strategy of the positive results of the Bariadi Model. Based on lessons learnt from Bariadi model as well as further local poultry sector assessment, RLDC wants to now replicate the model into a wider area in the central corridor. Through this project, RLDC is envisioning at both improving local poultry products consumption as well as commercializing of the local poultry industry in the next five years. While consumption levels are already higher in the rural areas than in urban centre, RLDC anticipates that urban consumption will increase by at least 10% per annum if prices of local chicken will be closer to those of exotic breeds. To achieve the above, the project at hand is planning to work into two different levels, the productivity improvement and market development and advocacy levels. Within the productivity improvement level, the following two replication interventions will be devised, 1. creation of awareness to improved commercial chicken rearing as well as raising the interest of traders and communities for replication and, 2. After awareness has been created there will be actual introduction of improved commercial local chicken rearing with a view to attain high sustainability by providing basic training on improved commercial local chicken rearing for communities. In regard with the market development and advocacy, the project is intending to carry out the following three interventions, 1. organizing workshops for traders from regional and urban traders associations 2. organizing topical workshops for traders of interested regional and urban traders associations on technical issues like improved transport, slaughtering and marketing of chickens 3. promoting establishment of a national chicken producers and traders association The project is expected to reach a total of 8,100 households in about 135 villages in 9 districts of 6 regions in the central corridor and spend a total of Tshs millions in the next 18 months. Poultry keepers in all 135 villages will benefit from interventions during the project period, however most of the outcomes will only be realised in Based on the achievements of 2010 there might be an additional funding request for extension services and market linkage at the end of the project. 3

4 Abbreviations and Acronyms BMO CRDB CVL DANIDA DOC EC FAO FDG GDP KIPOCOSO LGA LITI MITM MLD MoU NMB RFA SACCOS SLC SUA TVA TOT VETA VIC VSL Business Member Organisation Cooperative and Rural Development Bank Central Veterinary Laboratory Danish International Development Agency Day Old chick Executive Committee Food and Agricultural Organisation Focused Group Discussion Gross Domestic Product Kisutu Poultry Cooperative Society Local Government Authority Livestock Training Institute Ministry of Industry Trade and Marketing Ministry of Livestock Development Memorandum Of Understanding National Microfinance Bank Radio Free Africa Savings and Credit Cooperative Society Scavenging Local Chicken Sokoine University of Agriculture Tanzania Veterinary Association Training of Trainers Vocational Education Training Authority Veterinary Investigation Centres Village Saving and Lending 4

5 1.0 Introduction It is estimated that Tanzania had about 36.2 million chickens by 2008, out of which almost 95% are local chickens and the rest are exotic breeds and most of these local chickens are reared by rural households. In the central corridor it is estimated that there is about 9.2 million chickens kept by 60% of the rural households (or about 1.17 million households) of which the vast majority (98%) is local breeds. Most of these rural households keep local chicken for subsistence and income generation. In particular, relatively poor rural households and women keep chicken as chicken rearing does not require much resources and investment and in fact the local scavenging chickens (SLC) almost take care of themselves and still provide food and limited income for the family. Because of its character as subsistence activity, keeping SLC faces a number of problems and challenges. In particular the high mortality of local chickens makes chicken rearing a risky venture that most rural households mitigate by only maintaining a relatively small stock of chicken. Based on the lessons learnt from a successful Bariadi model, which was tested in Mbiti and Bupandagila villages in Bariadi district, this paper proposes to use the experience gained to solve the above problems and challenges and replicate the strategy to the wider region of the central corridor. Bariadi model has proved to be a useful tool in modernising traditional way of keeping local chickens as well as increasing income levels of village households and hence potential for the reduction of rampant poverty in the central corridor. In this paper, RLDC takes a different view and looks at the production and marketing of local chicken (kuku wa kienyeji) from a business perspective. In the first part, supply and demand of SLC is analysed as well as the current market system with its constraints and opportunities. In the second part of this document, the experiences of RLDC in Bariadi are reflected with a view to use an improved version of the so called Bariadi model for replication to about 8,100 households in the Central Corridor. The last part describes the project objectives and activities in detail. The annexes to this document include a detailed project budget and implementation schedule. The draft causal model for monitoring forms the third annex. 5

6 2.0 Production and Market Analysis 2.1 National Demand and Supply According to the Economic Survey , livestock contributes about 4.7% to the GDP, a contribution which is higher than the 3.5% from the mining and quarrying sector. About 70% of the livestock GDP contribution originates from cattle and about 16% relates to poultry rearing, which corresponds to about 0.75% of the total GDP. The national chicken population has been estimated to be about 36.2 million chickens in , out of which almost 95% are local chicken and the rest are exotic breeds. Most of the local chickens are reared by rural households, although local chicken are also kept by urban households. Many households keep chicken mainly for subsistence and limited income generation. They slaughter the chicken for special occasions and consume most of the eggs within the household. Only the surplus chicken and eggs are sold in the market. Based on FGDs carried out by RLDC 3, we estimate that a chicken rearing household consumes about 5 to 10 chickens per year. A recent study shows in respect of the Central Corridor that about 52% of total production is sold in an informal way to neighbours and another 42% is sold in local stores or markets 4. However in the same study it was revealed that only 40% of the households that keep chicken actually sold them in the year Based on our findings we differentiate three market levels: Informal Markets 6 : chicken and eggs are sold to neighbours or local markets within the same village or villages nearby. These sales are directly done by the households. Middlemen or traders from regional and urban markets often buy chickens on the local markets. There are numerous open village markets in each region. For example, there are about 19 weekly markets in Singida Rural District only Regional Markets: includes markets in district and regional centres. Chicken and to a lesser degree also eggs are ferried to the district or regional centres and sold there. The sales are done by traders and/or middlemen. The market volume is relatively in regional markets. For example, RLDC information indicates that the market volume in Singida is only about 90,000 chickens per year 7, out of which some of the chickens will be consumed locally whereas 1 Ministry of Finance and Economic Affairs, The Economic Survey, 2008, page 10 2 Estimated figure in 2008 based on FAO, Livestock Sector Brief, RLDC Report of Focus Group Discussions with poultry groups, Steadman Group : Crop & Livestock Management Central Corridor of Tanzania, Baseline survey Draft Report, Steadman Group, Crop & Livestock Management Central Corridor of Tanzania, Baseline survey Draft Report, Although there is some degree of formality in village markets, they can be called informal because sellers and buyers are not formally registered 7 RLDC workshop report with traders associations,

7 others will be bought by urban traders. However, there are no reliable official data on the market volumes in the regions Urban Markets: includes big cities Dar es Salaam, Arusha, Mwanza, Mbeya, and Morogoro. Chickens that reach the urban markets are mainly sold by traders who buy them from the regional markets and, in a few cases, from the informal open village markets. There are about five major chicken markets in Dar es Salaam (Kisutu, Manzese, Kinondoni, Tandika, Buguruni and Magomeni) that are operated by chicken traders associations. For example, KIPOCOSO (Kisutu Poultry Co-operative Society) has constructed facilities for slaughtering and dressing which is charged separately to customers. The market volume in urban markets is difficult to establish as there are no reliable official records. From interviews of individual traders, the market volume in Kisutu, the biggest market in Dar es Salaam, can be estimated to about 400,000 to 500,000 chickens only per year 8. According to FAO the average consumption of chicken is about 0.7 kg per capita per year 9 (and 13 eggs) in Tanzania which is relatively low in comparison to other African countries and the rest of the world which consumes about 6.8 kg per capita per year (and 108 eggs). Assuming an average weight of about 1.2 kg per chicken, the total consumption was about 22 million chickens in 2008, whereby the per capita consumption of chicken is relatively higher in the rural areas than in the urban centres, particularly in chicken rearing households where the research of RLDC indicates an average per capita consumption of about 1.6 kg per year. The latent demand for local chicken in urban centres is high as most people in Tanzania prefer the taste of local chicken over the taste of exotic breeds that are perceived as rather tasteless due to their rearing method. However local chicken is the most expensive meat available in urban centres. Although meat prices vary with location and seasons a comparison of prices per kg shows the following picture 10 : Table 1: Comparison of meat prices Location Local chicken Per piece Beef Per kg Pork Per kg Goats Per kg Dar es Salaam 7,000 4,000 5,000 4,000 Mwanza 5,400 3,500 3,000 Not available Arusha 6,700 4,000 4,000 3,500 Dodoma 6,800 3,600 4,000 3,500 Source: Assessment data compiled by RLDC In summary, there is a mismatch between demand and supply in the formal markets in urban centres and other urban areas in respect of price and quantity but also regarding reliability of delivery. One of the causes for the mismatch is the relatively low production and formal market sales. 8 Tuguni, B. D.Mlay, Local chicken sub sector study in Singida and Dodoma regions, 2006) 9 FAO & AGAL,2005 ; see also higher figures reported in The Guardian of 24 January 2009, page 3 10 Based on various statistics (Newspapers, MITM, 2009) 7

8 2.2 Poultry Value Chain The current value chain of the poultry sector indicates that the exotic breeds of chicken are marketed through agents and shops to household consumers, institutions, high profile and local hotels and restaurants. The exotic breeds are mainly sold in the urban centres. On the other hand, the local chickens go through a long chain of village markets, middlemen, ands regional markets until they reach the urban markets. Cost of transport, middlemen, and traders makes the local chicken relatively expensive in the urban market as mentioned above. Figure I: Poultry Value Chain Consuming High Profile Hotels Local Hotels and Restaurants HH consumers Institutions Urban Shops Retailing Agents Urban Market Traders Processing Wholesale Regional Market Traders Local Transport Transport Middlemen Open Village Markets Production Commercial Producers of exotic Breeds SLC Producers in villages Inputs Day Old Chicks Animal Feeds Veterinary Service Extension Service Source: RLDC While Commercial Producers of exotic breeds use various inputs, the producers of scavenging local chickens receive only very limited veterinary and extension services. The SLC producers do normally also not use hatching and animal feeds services like their commercial counterparts. 8

9 Commercial production of exotic breeds amounts to only about 5% of chicken population but to a much higher percentage of production and sales as exotic breeds are normally ready for sale after 7 to 10 weeks whereas SLC take up to one year before being sold. The common means of transport from the village markets to the regional or urban markets is pick ups or Lorries that either originate from within the regions or are on transit when returning to Dar es Salaam, Arusha, or other urban centres. Chicken are carried in local cages, known as tengas that have an average carrying capacity of 100 chickens per cage. Sometimes regional traders hire a seven tons truck to ferry chicken to urban centres but more often they collude with the drivers of trucks that return empty to the centres. Generally, transporters have not recognized the transportation of chicken as a business 11. Many chickens do not survive the transport and it is estimated that about 5% of them die. Transport charges to regional or urban centres are quite high, ranging from Tshs 1,500 Tshs to 25,000 per tenga, depending on the distance to be covered Which partly explains that local chicken are quite expensive in urban markets. The consumer market of chicken can be segmented into: High Profile Hotels: normally prefer exotic breeds as their supply is more reliable and less costly, however some of their customers demand local chicken Local Hotels and Restaurants (including bars and pubs and nyama ya kuchoma places): buy exotic and local chicken depending on their clientele, however they lament about the supply reliability and high costs of local chicken Households and institutions: buy exotic and local breeds of chicken depending on their location. In the more rural areas, they prefer the local chicken whereas in urban centres they buy both types of chicken. Exotic breeds are normally well-dressed and packaged and sold in urban super markets. Local chicken are mainly bought in urban markets and not in supermarkets. 11 Tuguni B, D.Mlay, Local chicken sub sector study in Singida and Dodoma regions,

10 2.3 Market System The main actors in the market system are illustrated in figure II below Figure II: Poultry Market System Source: Adopted from Springfield doughnut Important services of the poultry market system include: SUA and LITI are public institutions that provide research and training to the poultry sector but hardly directly to the poultry keepers and rather indirectly through other organisations and extension workers The Central Veterinary Laboratory is the sole manufacturer and supplier of Newcastle Disease vaccination, commonly known as Temeke 1-2 Thermostable. The vaccine is widely available and distributed through wholesale shops like the Farmers Centre and the District Veterinary Investigation Centres There are Vetshops in almost every district. While the supply through wholesale shops is sufficient to combat any poultry disease (see page 25), the local vetshops do not always stock adequate quantities due to low demand by poultry keepers 10

11 There are several manufacturers and suppliers of varies equipments for the chicken sector, i.e. feed mixers, incubators, etc. RLDC maintains a list of qualified producers The public extension services are provided to all livestock keepers in a given area through the public veterinary services. As most poultry diseases can be prevented by vaccinations and other preventive measures, like proper housing and feeding, these services would be most effective for the poultry sector if they would carry out vaccinations and train the poultry keepers in preventive measures. Unfortunately this is often not the case which renders the services as rather ineffective for the small poultry keeper in the rural areas. The main contributing factor is here that the actual number of public extension workers still falls very short of the planned and required number. Another possible reason for the limited service is the fact that poultry keeping is largely regarded as a subsistence activity. In respect of rules and regulations that constitute the business environment of the poultry sector, there is a notable lack of support by public and private organisations. There is no specific policy or strategy for the development of the poultry sector. Neither MLD nor MITM seems to regard the poultry sector as very important for rural development Although there are regional traders associations in every region and urban traders associations in all urban centres, they do not cooperate but rather perceive themselves as advocacy groups for local government or municipalities in their location. There is no umbrella organisation for the entire sector that focuses on the development of the sector The Tanzania Veterinary Association is a member organisation of all vets in the country. For the time being little has been done by this association for the SLC producers 2.4 SLC in Central Corridor According to a recent study by the Steadman Group about 60% of the rural households (or about 1.17 million households) in the Central Corridor keep chicken of which the vast majority (98%) is local breeds 12. It has been estimated that there are about 9.2 million chickens in the Central Corridor 13 Comparatively many households in Morogoro and Shinyanga keep chicken whereas only fewer households in Dodoma and Singida 14. Based on the average stock of 7.9 chickens per household the chicken population per region is given in table 2 below Steadman Group: Crop and Livestock Management in the Central Corridor, NBS: Livestock Summary Steadman Group, 2009, as above 11

12 Table 2: Percentage and number of households raising chicken Region DOM MOR SHY SIN TAB MAN Total Chicken 37% 81% 70% 46% 63% 59% 60% Households 140, , , , , ,000 1,166,000 Chicken no. 1,104,600 2,461,680 2,461, ,000 1,451, ,300 9,200,000 Source: RLDC extrapolation from Steadman group report and NBS data If one takes these figures as a kind of opening stock of the chicken population in a year, hatched chicks will increase the chicken population on the average to about 50 to However it has been conservatively estimated that about 60% of the chickens die, so that the households have effectively about 12 to 16 chickens for consumption and sales if the closing stock of the year corresponds to the opening stock, i.e. no annual growth in chicken population. Furthermore RLDC also found out in the same FGDs that households consume about 5 to 8 chickens per year, or about 1.2 kg to 2.0 kg per capita which is far much higher than the national average consumption of about 0.7 kg. This practically leaves only about 4 to 11 chickens for sale or about 7 chickens on average. Most of the chickens are directly sold by the households to neighbours 17 and on the local markets from where chickens are bought by local consumers or are taken to the regional and urban markets. Table 3 below indicates that indeed the formal SLC market is relatively small. Based on information from urban traders associations in Dar es Salaam, Arusha, Mwanza, Morogoro and Mbeya we estimate that the formal market of SLC does currently not exceed 3.5 million chickens Table 3: Estimated chicken sales and consumption in 2008 Region DOM MOR SHY SIN TAB MAN Total Households chicken sold Chicken consumed in households 25% 63% 44% 25% 41% 33% 40% 840,000 1,872,000 1,872, ,000 1,104, ,000 6,996,000 Chicken sold 245,000 1,375, , , , ,500 3,556,500 Chicken sold to neighbours Chicken sold on local markets 60% 68% 45% 21% 44% 54% 52% 40% 30% 45% 79% 44% 31% 42% Source: RLDC extrapolation from Steadman group report and NBS data 3.0 Constraints and Opportunities 3.1 Production and Market Constraints 15 See also OXFAM, Local chicken for local Market, where Shinyanga was even quoted as the region with the highest chicken population in Tanzania. However we prefer to base our analysis on the more recent research of the Steadman Group 16 Refer to RLDC report on Focus Group Discussions with chicken producers, Steadman Group, 2009, as before 12

13 3.1.1 Production Constraints Traditional chicken rearing faces several production constraints i. The single most important constraint of local chicken rearing is their high mortality as result of poor health control, poor housing, and inadequate feeding. Most chicken diseases can be controlled by vaccination (e.g. Newcastle disease) or timely administration of drugs. While vaccines and drugs are sufficiently available in the country (see below), the bottleneck is their distribution to the rural areas and professional administration in good time. Especially the survival rate of chicks is rather low, only 10% to 20%, however also 20% to 30% of the mature chickens do not survive and sometimes the entire flock is wiped out when disease strikes. Poor housing makes chicken and more so the small chicks vulnerable to predators on the ground and from the air. Traditionally SLC roam freely to find their own food; studies have shown that this practice results in many cases in poorly nourished chickens, slow weight increase, and may even cause death, Particularly mineral deficiencies, the third highest rated cause of death, is the result of poor feeding ii. iii. Although local breeds are well adapted to the harsh living conditions of SLC, in many villages not the most optimal chicken breed is being used. Having better suited breeds the survival rate, the weight gains, the number of eggs, and the fertility of the chicken stock can be improved. Because of the high risks associated with chicken rearing, most rural people do not regard chicken rearing as a serious business. Consequently chicken keepers do not invest in better chicken housing, improved breeds, vaccinations or drugs, and chicken feeds. This vicious cycle can be illustrated in the causal loop diagram below 13

14 Figure III: Factors affecting chicken rearing Chicken Breed Sales of Eggs Average Period of chicken rearing Feeding Eggs for Sale and Reproduction Eggs laid + + Eggs hatched Chicken Population Growth - + Death Chicken for Sale Sales of Chicken Consumption of Chicken Consumption of Eggs Chicken Housing Animal Health Investment Perception of Business Opportunity Explanations of causal loop diagram The causal loop diagram summarizes how factors of chicken rearing influence each other in a systemic manner. The chicken population per household is in the centre of the causal loop diagram; the average rural households have a chicken population of about 6 to 10 chickens. Depending on the chicken breed, each hen lays about 15 to 25 eggs per month; most of the eggs are sold within the village and hens are allowed to hatch only about 3 to 4 times which produces about 25 chicks per year and hen; the additional chicken population is therefore in total about 200 chicks; the sales from eggs amount to about Tshs 20,000. The rest is assumed to be consumed by the household. Chick mortality is quite high and various diseases affect the chicken population so that only about 10% to 20% reach maturity age when they can be sold or consumed; with normally now little additional chicken feeding it can take more than 12 months until chicken have reached that stage. About 5 to 8 chickens are consumed by the household, leaving in many cases only about 6 to 10 chickens for sale; based on an average sales price of Tshs 5,000 total sales amount to Tshs 30,000 to Tshs 50,000. The sales from eggs and chickens is less than Tshs 60,000 and does therefore not perceive chicken rearing as a profitable business for rural households and thus results in relatively low investment in chicken rearing (better breeds, chicken housing, vaccination and treatment) Market Constraints On the market side the main constraints are i. There is a mismatch between supply and demand which results in relatively high prices as mentioned above. The rising demand in urban centres has not been met by increasing production which has resulted in a rising price trend over the past six years 18. In addition, supply is sometimes not reliable that is a specific concern for hotels and institutions whose plans are based on regular supply. ii. There is a lack of concern for health and animal welfare. The chicken transport from the rural areas to urban centres does often lack concern for the health of the chicken and about 5% of the chicken die while on transport. 18 Refer to SLC prices data from MITM,

15 iii. iv. While there are adequate slaughtering and dressing facilities in some urban markets, similar facilities are lacking in regional markets which results in poor hygiene and sanitation. The SLC are basically marketed as a commodity: packaging is poor, there is no branding and product diversification (i.e. selling SLC chicken wings or legs), and there is hardly any market segmentation. v. The traders associations do not cooperate with each other to optimize the supply and bring down transaction costs, there is not even information sharing on supply opportunities. The lack of cooperation results in unreliable supply to urban markets. vi. There is no umbrella organisation that oversees the development of the sector, supports cooperation between different market actors and provides relevant information to various actors In summary the current sets of production and market constraints are reinforcing each other which is illustrated in the causal loop diagram below Figure IV: Chicken Productivity and Sales Cycle Productivity Production Volume Investment Sales Volume in Informal Markets Profit in Production and Trading Sales Volume in Formal Markets Sales Price Demand in Formal Markets Sales The low productivity causes low production volumes which, once the local rural demand in informal markets is satisfied, leave only small sales volumes for the formal markets. The low sales volumes and the high demand result in relatively high prices but only moderate sales which in turn cause low profits and investments. 3.2 Opportunities The causal loop diagram in figure III can be also used to highlight the opportunities of the sector. The main opportunities are: 15

16 i. Consumers prefer SLC because they taste better and are free from hormones. The toughness can be addressed by a longer preparation period. Moreover, reduced time to reach slaughter weight results in younger and less tough SLC. ii. iii. iv. Chicken rearing requires relatively low investment in comparison to other livestock. Developing the chicken sector therefore benefits relatively poor households in the rural areas. There is relatively high number of women engaged in chicken production and to a lesser degree in chicken trading. It can therefore be expected that the development of the chicken sector will benefit and empower a large number of women. The chicken feed is locally available in abundance and at low cost. Even if chicken keepers provide feed in addition to what the SLC find by themselves the costs are still quite low. v. In comparison to other livestock, chicken can be raised in a relatively short period which allows the households to better plan production. vi. vii. If productivity could be increased, it would create a win-win situation for chicken keepers and traders because the higher sales volumes will increase the total sales of traders even if the price would be lower than the current price. At the same time the higher production volume will increase the income for chicken keepers even if the traders will pay a lower price than the current price (see figure III). General availability of drugs and vaccines is an opportunity to reduce substantially the mortality rate of chicken if drugs and vaccines distribution and administration can be improved 4.0 Bariadi Model of Chicken Rearing 4.1 Description of the original model In its first phase, RLDC supported a project on Improved Production and Marketing of Poultry Products. Although the project was conceived as a market linkage project it already had features of the broader sector market development approach of the second phase. In particular, the project served as a testing and demonstration case in the context of the here proposed SLC Sector Market Development Strategy. The sector strategy proposed here is to some extent a replication strategy of the positive results of the Bariadi Model. The project was implemented in Bupandagila and Mbiti in Bariadi district in Shinyanga region. 16

17 The so-called Bariadi Model goes back to a community based model of poultry rearing that DANIDA introduced in Bangladesh. DANIDA realised that in poultry keeping everyone does everything which resulted in relatively low productivity. As the challenges and opportunities of chicken rearing are very similar in Tanzania compared with Bangladesh in this respect, RLDC introduced the Bangladesh approach and adapted it to the local situation. In terms of organisational set up, RLDC intended to establish in the two villages a large village group and as well economic subgroups whereby the members of each subgroup had their specific roles to play in the context of the larger group: i. Breeders: have a special parent breeding stock of the most suitable local breed. They sell fertilized eggs. ii. Hatchers: organise the hatching of fertilized eggs and they sell the day-oldchicks (DOCs). They may use an incubator or traditional hatching methods. iii. Chick Rearer: keep the DOCs until the chicks are about eight weeks old, provide safe housing, and get the chicks vaccinated. iv. Poultry Workers: are trained to do vaccinations and give advice in case of diseases v. Feed Mixers: grind and mix the chicken feed from locally available feed materials. They invest in a simple grinder and mixer. vi. Key (Chicken) Rearer: keep chicken from eight weeks until the chickens are sold after 8 to 10 months. They house the chicken and provide supplement feeding to the chicken. Chicken Rearers sell the chicken either directly to traders from town or in the local or regional markets. 4.2 Lessons learnt from the implementation in Bariadi The Bariadi model combined working in a village group with the input of subgroups that specialise on certain tasks of chicken rearing. However the originally intended subgroups were only partly established. The proposed first three groups were combined in one subgroup in which group members did breeding, hatching, and rearing of chicks as hatching with incubators was not used and it was found that traditional methods of breeding, hatching and rearing chicks are quite effective if better housing and animal health care are also considered. The other subgroups were implemented as originally planned, however it was also realised that other subgroups for marketing and financial services might have been very useful. Through the subgroups a higher degree of skills and investment was achieved from which the entire group benefited in terms of higher productivity and higher income. The most important aspect of the Bariadi model was therefore the introduction of division of labour within the community. The Bariadi model increases substantially income levels of village households (see below) and has therefore a huge potential for poverty reduction. As about 60% of the group members in both villages were women the Bariadi model has also the potential to create income opportunities for women. The impact on the overall market could not yet be seen as the application in Bariadi was insignificant for the entire market of local chicken. 17

18 Within the short period of one year, both groups in Bupandagila and Mbiti were able to record remarkable production improvements. i. Group Formation and Training Two community groups of 71 member households each had been formed in the two villages. In addition to the general training of the entire community group, subgroups had been trained for breeding / hatching, chick keeping, administering vaccinations and drugs (poultry workers), and feed mixing. Membership was relatively stable but decreased to about 50 members in each group. ii. Growth of Chicken Stock All group members increased their chicken stock tremendously. Some members increased from 40 to 300 birds, while others have increased from their stock from 3 to 150 birds. On the average, the groups increased their stock from about 600 to about 2,700 chickens which is an average increase of about 460% iii. Chicken Mortality Due to disease control and improved housing the mortality rate of mature chicken is now only 13.1% which is far much lower than previously experienced when the entire flock had been wiped out (almost 100%). Until the end of the project, only 79 mature chickens died in both villages. The mortality rate of chicks was 45% in Bupandagila and about 40% in Mbiti, which is still high, but sufficient for the large increase of chicken population. The mortality of chicks resulted from Ecto- and Endoparasites that were not diagnosed by veterinary services in good time iv. Disease Control Vaccinations were done by Poultry Workers against Newcastle Disease and Fowl Pox. After advice by the veterinary officers also other diseases (i.e. ecto-parasites, collibacilosis) could be controlled with appropriate measures although not in good time. v. Chicken Housing Most chicken rearers have considerably improved the housing and the compound protection of their chicken. The necessary investment has not been supported by the previous RLDC project but was totally made by the chicken keepers after the basic training course and the construction of a demonstration unit. vi. Hatching The original plan of using incubators failed as the electricity supply in both villages did not allow proper operation of incubators and kerosene operated incubators were not available in good time. Breeders therefore used traditional methods which had been introduced in the basic training. It was also found that incubators would increase production so much that other factors would become limiting, i.e. housing. 18

19 Incubators should be therefore only used in a second stage of developing productivity whereby the available energy is a restraining factor. vii. Chicken Feeding After the training, the two feed mixer subgroups produced chicken feed from locally available material by using feed mixers. Unfortunately they could not access grinders as the owners of existing grain mills did not want to use it for the production of chicken feed. Manual grinders are currently not available in Tanzania. viii. Market Linkage Although some linkage between traders and the groups were established, no business had been concluded before the end of the project at the end of The co-facilitator was however optimistic that most chickens would be sold in the open air village market. The now proposed project will follow up this matter and establish a better approach of linking producers to traders. ix. Household Income As mentioned before, there were only relatively few sales (about 100 chickens) before December 2008 so only little income has been realised. However the much higher chicken stock in both villages has the income potential of about Tshs million for each village (at a price of Tshs 4, ) which is about 243,000 per member on the average. The sale of eggs per member is estimated to be about Tshs 20,000 per year. However some of the members will be able to realise up Tshs 1 million income from the sales of chickens. x. Gender Relatively many women are involved in chicken rearing. This is can be attributed to the fact that chicken rearing is considered a household matter and that chicken rearing can be done with only a relatively low investment in comparison to other livestock. In the case of the Bariadi project, about 60% of the group members were women. Finally, another lesson learnt related to the performance of the co-facilitator who did not satisfactorily perform in several aspects. While RLDC will still use at least one co-facilitator for this project, precise TOR and work plans will be introduced to monitor the performance of the co-facilitator. 4.3 Improvements to the Bariadi model Building on the lessons learnt and the positive outcomes of the Bariadi model, RLDC envisages to further improve the model particularly in group organisation. Based on the approach of the award winning model of Commercial Village in Kenya, RLDC would like to structure the community group and the subgroups as follows: 19 Please note that this is a much lower than the current price of Tshs 6,

20 i. The community group is constituted by chicken keepers in a village. Each member must rear chicken from the age of one month until they are ready to be sold. Traders, chicken feed producers, para vets, and any other person are not allowed to become members of the community group unless they also keep chicken. In this respect the community group is a producer group. ii. iii. iv. Each member of the community group must be also a member in any of the six subgroups which means that each member has at least two roles to perform in the group. The subgroups focus on the following tasks: Breeding and hatching Rearing day-old-chicks (DOCs) Animal health workers Chicken feed producers Marketing and promotion Saving and lending The first two subgroups might also be combined into one group depending on the situation in the village. This will be discussed in the initial training on group formation. The breeding and hatching subgroup maintains the parent stock of a suitable local breed and they are also responsible for any cross breeding if required. Members of this subgroup apply traditional hatching techniques, however if at a later stage market demand requires a higher growth pf chicken population, the group may decide to invest into incubators. RLDC continues to collect information on locally available incubators and will make this information available to these subgroups on request. The rearing of DOCs from one day to the age of about 5 weeks is done by members of the second subgroup 20. During the first five weeks of their lives, DOCs are normally vaccinated against common chicken diseases. The members of the subgroup invest into DOCs vaccination and health care and special chicken houses that protect the delicate DOCs from predators, weather, and disease. After five weeks, some of the DOCs are then given to any other member of the community group who will raise the chicken until they are ready for sale. During that time chicken keepers require the services of two other subgroups, the animal health workers and the chicken feed producers v. The animal health workers have been trained to administer vaccinations and other drugs. They work in close collaboration with the local veterinary services and the vet shops. The members of this subgroup invest into drugs and cooling equipment (for certain drugs) vi. The chicken feed producers process locally available feed stuffs by ways of grinding and mixing them. The complementary feeding of chicken reduces the time until they have reached the target weight for sale. The members of this subgroup invest into manual grinding and mixing machines 20 See explanations above 20

21 vii. The marketing and promotion subgroup links the entire community group to traders and organizes local chicken markets in the village. While each member will be making his or her own sales of chicken and eggs, the members of this subgroup have a coordinating function only. They mainly invest by meeting expenses for travelling and local markets viii. The saving and lending subgroup takes the lead in organising and administering saving and lending in the entire community group. RLDC intends here to adopt the tested VSL model of Care International and introduce it by ways of training. RLDC will not lend on any money to the saving and lending subgroup. It will be proposed to apply compulsory saving from every external sale of eggs and chicken but it is up to each community group to agree with the proposal and set the rate of compulsory saving. On proposal of the S&L subgroup, detailed regulations for lending will be worked out and approved by the entire community group. The members of the S&L subgroup will then be charged with administering the saving and lending regulations. ix. Each subgroup will elect a chairperson and a deputy chairperson from among its members. The entire community group will elect as well a chairperson and a deputy chairperson who should not hold office in any of the subgroups at the same time. All chairpersons and deputy chairpersons form the Executive Committee (EC) that meets regularly, whenever required. The EC receives reports and proposals from the subgroups and has overall decision making power in the community group. In particular, based on proposals by the subgroups, the EC will decide on all transport prices within the community group, such as the price of day old chicks the price of five week old chicks the price for drugs and vaccinations the price for chicken feeds the fees for participating in joint marketing and promotion the regulations and interest rates for loans The decision on the pricing should be mainly based on costs (including amortization of investments) and the subgroups therefore should attach cost details with their price proposal Members of the entire community group and each subgroup will be trained for their various membership roles in respect of technical and management skills. There will also be written reference material available for the various roles. 4.4 Expected outcomes of the improved Bariadi model RLDC expects that the introduction of the improved Bariadi model will enable rural households to shift from traditional subsistence chicken rearing to a more business like approach that produces higher income for the producers. 21

22 Based on the pilot test in Bariadi, RLDC expects that a community group of about 60 households will be able to achieve at least the following results: i. Increase of chicken stock to about 3,600 chicken (from about chicken) mainly as a result of reducing mortality and using improved breeds ii Increase annual sales of chicken to about 3,000 chicken (from about 600 chickens) corresponding to a total sales turnover of about Tshs 13,500,000 at a price of Tshs 4, per chicken. This is about Tshs 225,000 per household on the average. In addition there will be income from the sales of eggs of about Tshs 20,000, so that total income will be about Tshs 245,000 per household on the average which is about four times more than the previous average income per household Another important expected outcome of the Bariadi model is the creation of income opportunities for women. While the traditional chicken rearing offers only limited income opportunities, the Bariadi model offers particularly income opportunities for women, because of i the relatively low investment required in chicken rearing in general and in any subgroup in particular ii the establishment of S&L operations from which women are expected to benefit considerably as they normally have a smaller asset and investment base than their male colleagues. We therefore expect that at least 60% of all group members are women. We shall specifically promote the participation of women who are the heads of households. 5.0 Proposed Strategy for Chicken Sector Development 5.1 Vision for Sector Development Our vision for the SLC sector has two main aspects: i. Although most Tanzanian like to eat local chicken, the actual consumption is only about 0.7 kg poultry meat per capita and therefore very low compared to the world average consumption of 6.8 kg of poultry meat 23. Similarly the consumption of 13 eggs per capita is much lower than the world average of 108 eggs. However it has been demonstrated in this paper that the consumption of chickens and eggs in the rural areas is already much higher. Based on the country actual consumption of 0.7kg of poultry meat per capita per annum, the current urban consumption in Tanzania is estimated at 3.4 million chickens per annum 24. Our vision foresees that the urban 21 Figures based on the Bariadi experience 22 Price based on the Bariadi experience 23 FAO & AGAL, According to UNDP 2008, Tanzania urban population is 24.2% of the country total population (40 mill), and according to Kitalyi and Mayer 1998, the average disposable weight for local chicken is 2kg. 22

23 consumption will increase by at least 10% per annum if the prices of local chicken will be closer to the prices of exotic broiler chicken (currently at about Tshs 4,000 retail price). ii. Production of local chicken is currently to a large extent quasi-commercial and our vision is that the sector will become much more commercialised in the next five years. In particular, we anticipate that producers of local chicken regard chicken keeping much more as a substantial business and not so much as side-business or even subsistence activity. This will result in much higher productivity which will enable the chicken keepers to sell their chicken at a lower price per unit and still make a much higher income from chicken rearing. We believe that the two aspects of our vision are reconcilable, in fact, even complementary. However we also want to point out that some producers who will not commercialise will find it probably difficult to compete in future and may even go out of market. 5.2 Project Objectives The project will work at two different levels, the level of productivity improvement and the level of market development and advocacy which will support each other as described in figure 3: Productivity Improvement Within the Central Corridor, RLDC aims at an outreach of 8,100 households in about 135 villages in 9 districts of 6 regions. The proposed distribution of households will be as follows Table 4: Regional focus of strategy Region District Villages HH Singida Singida Rural Manyoni Tabora Nzega Igunga Shinyanga 25 Shinyanga Rural Bariadi Dodoma Chamwino As OXFAM also wants to introduce a SLC project in Shinyanga, RLDC will coordinate the selection of villages with OXFAM in order to avoid having two projects in the same village 23

24 Morogoro Mvomero Manyara Babati Total ,100 The final distribution of households will depend on the response on the promotion. As described above in table 4, we anticipate that the 8,100 households will be able to improve their productivity of chicken rearing and increase their chicken stock to about 50 chickens per household and increase their sales volume (quantity sold in informal and formal markets) to 40 chickens per household on the average. RLDC will also aim at an overall percentage of at least 60% women participation in the project. It is also expected that this proportion is also reflected in the management of groups and subgroups Market Development and Advocacy The current market volume of the formal market is relatively small. RLDC therefore aims at increasing the market volume by at least 360,000 chickens. This will be achieved through establishment of active national chicken producers and traders association, awareness creation to traders, especially on the issues related to transport, slaughtering, packaging, and marketing of chickens, as well as forging a strong relationship and cooperation between RLDC, producers and traders association and other development partners who works in the subsector. Furthermore RDLC intend to improve cooperation between trader associations and producer groups and between regional and urban trader associations which is expected to result in more reliable supply of SLC. Lastly RLDC aims at establishing, in cooperation with other partners, a national chicken producers and traders association with a view to oversee development in the sector and act as an umbrella organisation for advocacy. The proposed interventions aim at commercialization of chicken production and marketing in the Central Corridor. The higher productivity and improved standards of chicken rearing will result in a more reliable supply of high quality local chicken to the various markets. 5.3 Proposed Interventions Productivity Improvement The aspect of productivity improvement has the characteristics of a replication project of the Bariadi model to other villages and communities. 24