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Study outlines strategies to revamp poultry value chain

Agriculture think-tank Mwapata Institute has outlined a set of policy reforms to unlock the poultry value chain and unleash its potential for the export market.

In its policy brief titled ‘Malawi’s poultry value chain can unlock widespread economic benefits with appropriate policies and investments’, Mwapata Institute notes that the poultry value chain has potential for growth considering that Malawi already uses the most productive broiler breeds and the increased preference for chicken meat.

The study indicates that Malawians on average consume about 3.16 kilogrammes (kg) of chicken meat every year, with the potential to increase to four kg if local authorities and relevant stakeholders implement the right policy interventions and reforms.

The local poultry industry has
potential for growth

However, the researchers note that high costs of production, inefficient administrative processes, as well as high transaction costs on imported inputs and foreign exchange constraints limit the growth potential of the poultry industry.

Reads the report in part: “Poultry feed prices in Malawi are extremely high and volatile due to the inherent volatility of maize and soya bean prices, the two critical ingredients in poultry feed.”

Esther Manduwa, a local smallholder poultry farmer based in Lilongwe, said in an interview that poultry feed accounts for more than 58.05 percent of production costs.

She said with a current capacity of 220 chickens, she spends about K286 000 on day-old chicks, K50 000 on vaccines, K195 000 on three bags of starter feed and an additional K270 000 on four bags of grower’s feed.

In an interview on Monday, Mwapata Institute research fellow and co-author of the study Creston Nyondo said the reforms in the poultry sector can allow farmers and traders to capitalise on the export market.

However, Lilongwe University of Agriculture and Natural Resources agriculture economist Horace Phiri said in an interview on Monday the best way to unlock the poultry value chain is to ensure that raw materials are affordable.

He said: “Local farmers are buying chicks and feed from big companies such as central poultry, who are their competitors.

“These big companies can capitalise on economies of scale. They can sell to the smallholder farmers at retail prices while they are using their products at factory prices.”

The Mwapata Institute policy brief, therefore, outlines a series of reforms, including repealing value added tax on chicken feed to bring down production costs, creating one-stop shops to improve export processes for poultry, remove farm-gate prices for soya beans and maize, and improving production efficiency to catalyse growth in the poultry sector.

It notes that the proposed reforms have the potential to supercharge the growth of the sector.

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