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

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  • Marlene Louw
  • Tracy Davids
  • Nico Scheltema

Abstract

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.

Suggested Citation

  • Marlene Louw & Tracy Davids & Nico Scheltema, 2017. "Broiler production in South Africa: Is there space for smallholders in the commercial chicken coup?," Development Southern Africa, Taylor & Francis Journals, vol. 34(5), pages 564-574, September.
    • Handle: RePEc:taf:deveza:v:34:y:2017:i:5:p:564-574
    DOI: 10.1080/0376835X.2017.1335593
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    Cited by:

    1. Renato A. Villano & Isaac Koomson & Nkhanedzeni B. Nengovhela & Livhuwani Mudau & Heather M. Burrow & Navjot Bhullar, 2023. "Relationships between Farmer Psychological Profiles and Farm Business Performance amongst Smallholder Beef and Poultry Farmers in South Africa," Agriculture, MDPI, vol. 13(3), pages 1-22, February.
    2. Ullah, Ayat & Arshad, Muhammad & Kächele, Harald & Khan, Ayesha & Mahmood, Nasir & Müller, Klaus, 2020. "Information asymmetry, input markets, adoption of innovations and agricultural land use in Khyber Pakhtunkhwa, Pakistan," Land Use Policy, Elsevier, vol. 90(C).
    3. Tumelo Francinah Ramukhithi & Khathutshelo Agree Nephawe & Takalani Judas Mpofu & Thomas Raphulu & Karen Munhuweyi & Fhulufhelo Vincent Ramukhithi & Bohani Mtileni, 2023. "An Assessment of Economic Sustainability and Efficiency in Small-Scale Broiler Farms in Limpopo Province: A Review," Sustainability, MDPI, vol. 15(3), pages 1-26, January.
    4. Setene, Letlama & Jordaan, Daniel du P.S., 2021. "The trade-off between chain performance and fragility considering coordination strategies of agri-food chains: a South African egg chain's case study," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 24(3), March.
    5. Bureau for Food and Agricultural Policy, 2018. "Economic impact of the 2017 Highly Pathogenic Avian Influenza outbreak in South Africa," BFAP Reports 279770, Bureau for Food and Agricultural Policy (BFAP), BFAP Reports.
    6. Lindikaya W. Myeki & Nkhanedzeni B. Nengovhela & Livhuwani Mudau & Elvis Nakana & Simphiwe Ngqangweni, 2022. "Estimation of Technical, Allocative, and Economic Efficiencies for Smallholder Broiler Producers in South Africa," Agriculture, MDPI, vol. 12(10), pages 1-14, October.

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