BFAP

Broiler production in South Africa: Is there space for smallholders in the commercial chicken coup?

It is agreed that agriculture provides avenues for impoverished households to produce and trade their way out of poverty.
However, this requires market access and value chain integration of small-scale farmers. This paper explores the possibilities for
integration of small-scale farmers into the mainstream commercial broiler value chain in South Africa. Production costs of small-scale
producers are evaluated within the context of their commercial counterparts, with a case study approach. It revealed that small-scale producers pay more for inputs but also receive a substantial premium for sales of live birds in the informal market. This results
in attractive gross margins for small-scale producers. There is, however, a production ceiling, due to demand and production
considerations, associated with small-scale broiler production. This ultimately results in a dualistic industry with an informal (live sale)
value chain at the one end of the spectrum and a sophisticated large-scale commercial value chain at the other. Given the salient
production features and investment requirements associated with large-scale broiler production, organic growth from the small-scale
value chain into the commercial value chain seems improbable. The dual nature of this industry should therefore be considered
when developing policy geared towards development, poverty alleviation and value chain integration.


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