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Poultry Value Chain Analysis in Lesotho - Egg Production
- 1. Poultry Value ChainAnalysis in Lesotho Egg Production Planning, Monitoring and Evaluation Department
- 2. Outline – Introduction – Background –Industry developments – Lesotho Poultry Sector Value Chain Analysis – Findings – Challenges – Opportunities – Business Opportunities – Recommendations
- 3. Introduction • The PlanningMonitoring and Evaluation Department through its research division conducted an Egg Production Research • This research was aimed to inform BEDCO programme development and the public on business opportunities and challenges in the poultry sector • Literature Review • One on one interviews were conducted with the MSBCM marketing department officials • A country wide survey of producers was also conducted ( 3 farmers/ District) • A draft report has been compiled
- 4. Background Commercial poultry industryin Lesotho, six distinct time periods Prior to 1941 – small scale raring of indigenous breeds 1941-1952 – Department of Agriculture - Poultry Improvement Scheme - Introduction of improved breeds 1953-1962 – Poultry plant was built in Maseru which produced improved chickens which were sold to farmers
- 5. Background – Cont. 1963-1972 – Establishment of Applied Nutrition Programme and the egg marketing co-operatives 1973-1994 – Regulated egg marketing system Post 1994 – Free market system: poultry farmer’s appealed to the Ministry of Agriculture to be allowed to sell eggs directly to wholesalers, retailers and consumer
- 6. Industry developments • Priorto Deregulation – From 1941 to 1987/88 3 635 farmers keeping 229 400 commercial layers 3 million dozen eggs per annum • Post Deregulation – By 1994/95 number of commercial layers dropped to 169 217
- 7. Industry developments –Cont. • The average trend in the years shows an increasing demand for imports into Lesotho. • Doubling in imported trays from 96 533 trays to 194 626 trays from 2012/13 to 2013/2014 signals an increased national demand for eggs which is being met by imports.
- 8. Industry developments –Cont. • During 4Q 2016, a total of 4 183 tonnes of eggs and egg products left South Africa, at a declared FOB value of R88.9 million ( 7.56 million – Lesotho) • Lesotho being the second largest export market for South African Eggs.
- 9. Lesotho Poultry Sector -Value Chain Analysis Value Chain Analysis.docxValue Chain Analysis.docx
- 10. Findings – Challenges –There is no Hatchery in Lesotho this creates logistical costs for farmers who have to order from South Africa – There are limited suppliers of bird cages in Lesotho, and the few that exist produce substandard cages – Farmers claim that Lesotho Flour Mills offers lower grade layer hen feed which limits produce and is out competed by brands from South Africa – Vet clinics are generally understocked – There need for development of infrastructure specific to layer hen farming as pollution is a challenge in community-based projects
- 11. Findings – Challenges –Water supply is a challenge in the highlands, where a community tap is shared this normally creates clashes when water is scarce, and the farm suffers. – There is a high cost of entry into the egg production business (Inputs are expensive), – The cold weather conditions ( longer winters) in the highlands limits egg production. – Need for skills development in the business – Lack of a readily available and accessible National Supplier Database
- 12. Findings – Opportunities –There is an abundant demand for eggs in Lesotho that has not been met – Imported eggs are less preferred to locally produced eggs, despite the fact that imported eggs are cheaper – The main competitive advantage that Lesotho eggs have over imported eggs is freshness, this advantage has created an abundant and growing demand for eggs in Lesotho from local producers – South Africa is participating actively in input supply industries include hatchery, cage production, and feed. Creation of businesses in input specific industries will enhance local production – There is a growing demand for Layer Hen Chicken Meat as it is considered healthier than packaged and imported chicken meat – There is a growing demand for free range hens and their eggs, where a tray of free range hens is normally twice the price of cage breed hens
- 13. Business Opportunities • Expansioninto Value chain opportunities such as: Operating national feed depots Feed production Cage production Sale of mechanised systems Opening a hatchery Opening an abattoir Packaging and distribution of Layer Hen Meat Hen House Construction Borehole drilling Egg tray production and sales Manure production Business Development Services (Business Plan Development)
- 14. Recommendations • BEDCO shouldintroduce layer hen specific training programmes. • The Government of Lesotho should work towards creating a national hatchery that will meet the point of lay hen supply needs of the country. • A national database of all value chain practitioners in the egg production business of Lesotho should be created; with readily available and accessible supplier information starting an egg production business will become easier. • Quality checks should be frequently conducted on national Feed suppliers • Quality checks should be frequently conducted on egg farms
- 15. Recommendations– Cont. • Trainingson innovative technologies in the egg production sector should be pursued so as the scale up production for those aspiring entrepreneurs • Equipment Leasing for Start ups will aid in lowering the barriers to entry into business • Access to Start up Finance - It requires close to 500 hens to make reasonable profit in the business, coupled with the high costs for cages, infrastructure and feed • Restrict egg imports through Branding Lesotho Eggs.