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Untapped poultry value chain

Demand for poultry is rising rapidly around the world, signalling strong growth opportunities for indigenous chicken value chains in emerging markets. Global annual meat consumption per capita is expected to reach 35.3 kg retail weight equivalent (r.w.e.) by 2025, an increase of 1.3 kg r.w.e. compared to 2015, according to the OECD-FAO 2015 Agricultural Outlook report.

Poultry accounts for roughly 40% of this increase following a shift in market demand from red meat to chicken driven by health concerns and rising beef prices. Rapidly growing urban populations and the middle class are also increasingly concerned with the quality of meat products available for consumption. Total consumption growth in developed countries over the projection period is expected to remain small relative to developing regions, where rapid population growth and urbanization remain core drivers. This is particularly in Sub-Saharan Africa, where the rate of total consumption growth over the period 2016/2025 is faster than any other region, with projected consumption for poultry expected to be more than 3.8 million metric tonnes.

Indigenous chicken offers a low investment start-up enterprise to farmers and does not require a lot of space. The birds are more tolerant to harsh conditions and diseases than commercial breeds and can be fed on cheap, locally available feeds or free forage, with minimal care. These varieties present employment opportunities and income to women, youth and the rural poor, with a ready local market. Furthermore, the indigenous poultry industry has a recognized potential to generate higher income and transform living standards if appropriate interventions such as improved genetics, better feeding, housing and management for more meat and eggs are developed and implemented. The benefits of indigenous chicken to rural households are potentially quite high, yet the industry has not been adequately supported. In many African countries, for example, the sector remains in its infancy.

The Africa Enterprise Challenge Fund (AECF), managed by KPMG’s International Development Advisory Services, is working to change this. The AECF provides grants to innovative agri-businesses across Africa that have a strong social impact and has funded a number of promising companies in the poultry value chain. AECF aims to increase household incomes by making market systems work for the rural poor. One of the fund’s supported projects produces, markets and distributes poultry vaccine while another focuses on poultry breeding and distribution. On average, AECF poultry projects have performed well commercially and also shown very strong income benefits to individual farmers.

The value chain presents many other untapped opportunities, such as agro input suppliers, hatcheries, breeding farms, vaccine producing firms, improved feed manufacturers, manure aggregation, slaughtering, processing and improved housing equipment. Others include secondary bulking and transportation which may take the form of village-based and trading route-based brokers. Transportation to various retail outlets such as supermarkets and franchise outlets, chicken abattoirs as well as the growing hospitality industry all present strong opportunities for growth and investment. Support is needed from governments, the private sector, research institutions, the donor community and other stakeholders to develop this promising sector and capture the immense value opportunities at hand.

Vyone Mingate is a Manager, International Development Advisory services with KPMG Advisory Services Limited. (vmingate@aecfafrica.org). The views and opinions are those of the authors and do not necessarily represent the views and opinions of KPMG.

David Okwara

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