Despite having an immense potential, poultry farming is still at its infancy in Ethiopia. Commercial poultry production is characterized by a large number of small-holder farms, and few medium to large scale poultry farms. Production is concentrated mainly in the Addis, Bishoftu and Adama areas, with some small concentrations around northern and southern rural towns. Farmers lack basic knowledge on good poultry keeping practices and the inputs needed (feed, vaccines, drugs, and hardware such as drinkers and feeders) are scarcely available. Meanwhile, the demand for poultry is growing in a market which is characterized by seasonally fluctuating prices owing to religious fasting periods. EBR’s Ashenafi Endale explores.
In Ethiopia it is customary to prepare doro wot, a traditional chicken-stew, during special occasions and holidays like Christmas. In fact, Ethiopian holidays are unthinkable without doro wot.
This has been a habit for Yemisrach Fekadu, a single mother who works at a public institution. She usually enjoys buying live chicken from the market and carrying out the time-consuming as well as back-breaking task of making doro wot during holidays and family gatherings. However, she has lost her appetite for such an endeavor in recent years because of the soaring price of chicken and workload at her office.
“It takes close to ETB1,000 to prepare chicken stew these days, of which half is for the chicken and the rest for its input accessories like onion and butter. Besides the cost, it is difficult to spend so many hours preparing just one dish,” she told EBR.
Most Ethiopians consume doro wot only during major holidays, weddings and special occasions as a top cultural dish rather than an essential balancer of nutrition. According to the sample survey conducted by the Central Statistical Agency, poultry population in Ethiopia is estimated at 60 million. Yet in many African countries with a much less poultry population than Ethiopia, chicken is available at affordable rates for all classes.
It is after visiting other African markets that Ethiopians simply realize their chicken consumption is way below the average. “Poultry products are expensive in Ethiopia, but are very cheap and accessible on the streets, if you go to Rwanda, Kenya and Uganda. In Rwanda, chicken is sold for an equivalent of two Birr,” explains Getu Kebede, General Manager of Friendship Agro-industry. Formerly, he was manager of Ambassador Hotel.
Although demand for chicken has increased substantially, especially in urban Ethiopia, following the rise of disposable income the average annual per capita consumption of chicken in Ethiopia stood at 0.66 kilogram, which is below the 1.64-kilogram average consumption in eastern Africa as well as 6.73 kilograms continent wide. In fact, chicken consumption, which has not improved in Ethiopia over the past decades, constitutes only close to 9Pct of the total meat consumption, according to FAOSTAT.
The annual chicken demand in Ethiopia stands at 164 million kilograms. The huge gap between supply and demand is roughly estimated at 98 million kilograms per year and it is escalating the price of chicken in the local market.
The price of a live chicken has now skyrocketed to ETB 500, surpassing other meat prices. This is a big jump compared to the ETB 300 price five years ago.
The lack of supply in the local market is forcing star hotels and Ethiopian Airlines to import chicken from as far as Brazil. Ethiopia spent close to USD 1 million to import almost 500,000 kilograms of chicken from Brazil, Turkey, France, South Africa, USA and Norway in 2018. The import bill increased from USD 650,000 in 2015 and USD 106,000 in 2013. However, also featuring in the lack of supply is the export of chicken, mainly to neighboring countries like Somalia and Sudan. In 2018, export volume of chicken stood at close to 200,000 kilograms while the export value reached USD300, 000.
The limited chicken supply in the local market is mainly due to the absence of investments in poultry farms and an unstructured poultry industry.
Out of the total chicken population estimated to be found in Ethiopia, indigenous chickens constituting 94.4Pct, are the least productive but sought after by Ethiopians for their taste. On the other hand, commercial poultry production contributes close to 5Pct of the total poultry population in Ethiopia.
However, the local poultry landscape is slightly improving over the past few years driven by poultry farms emerging in Bishoftu (Debre Zeit), a town located 45 kilometres away from the capital. Currently, there are close to 40 medium and large poultry farms in the town, constituting 80Pct of the total farms in Ethiopia. These poultry and dairy farms operating in Bishoftu enjoy technological support and expert advice from the Debre Zeit Agricultural Research Center and Ethiopian Meat and Dairy Development Institute, both located in the town.
Alema Chicken Meat Processing Plant is the leading poultry farm in the country after Elfora Agro Industry. Alema has a single line broiler slaughtering and packing factory in Bishoftu, processing 5,000 chickens daily. Alema also sells day-old chickens to other poultry farmers. After going into business with 1,000 small chickens bought for ETB5, 000 in 1993, Alema’s capital has currently reached ETB 300 million, according to Lema Asfaw, Deputy General Manager of the Farm who established the business with Alemayehu Amdemariam.
According to Lema, absence of feed, veterinary medicine, and foreign currency to import enzymes and minerals are critical challenges. “Challenges in accessing land, vaccines, equipment, knowledge, technology, capital, tax breaks to import technologies, and absence of incentives have challenged investments in the sector.”
“We have to import parent stock of chicken and layers every six months from Holland and Germany. They do not give us grandparent chicken population. No African country apart from South Africa, Kenya and Nigeria has the grand stock that enables them to continually produce by themselves, “explains Lema.
Alema produces chicken meat ranging from 1.2 to two kilograms, under four price categories. A kilogram of packed chicken is sold for ETB115. “The price of a kilogram of chicken was ETB 90 until the price of feed inflated. Feed is a big problem. If the feed is interrupted during the middle of the rearing process, the chicken will never reach the right weight in time. The price of chicken is heavily determined by the price of feed. It takes five kilograms of feed for a chicken to reach over one kilogram of weight over 42 to 45 days. Power is also a problem. We usually use a powerful generator because if the skinning temperature, machine power, or chiller room temperature fluctuates, the chickens will be defective,” says Tariku Mitiku, Operation Manager at Alema.
Alema’s two trucks, equipped with cold rooms, distribute the 5,000 packed chickens to hotels and supermarkets in Addis Ababa every day. The company also exports to Hargeisa. Alema has poultry farms in major towns, in addition to its sister supermarket, restaurant and oil refinery businesses. Currently, the company has 200,000 meat chickens and 100,000 layers while employing 500 workers.
Just like Alema, companies like Maranata, Ethio Chicken, and Elfora have each developed the capacity to supply over 5,000 chickens and 100,000 table eggs daily. “There is a huge demand for chicken and table eggs in Ethiopia, as well as orders from neighboring countries. However, the supply cannot improve due to the bottlenecks in production. There is no land, power, water, and infrastructure for production and markets,” adds Lema. “The chicken market increases when there is stability, a vibrant hotel and tourism sector, as well as investment. Government support is highly critical for the infant poultry industry in Ethiopia to take shape.”
Chicken productivity of many developed countries emerged as an industry following the surplus in their grain production—the major source of poultry feed. Russia and Ukraine, once net importers of chicken, have become net exporters as their grain industries have grown. USA and Brazil, the world’s two biggest chicken exporters, are agricultural powerhouses that produce huge amounts of feed. In 2018, Brazil earned USD 8 billion from chicken exports, while also being the leading coffee exporter globally from which it generated USD 6 billion. Thailand and China, in contrast, dominate the processed-meat market, which requires cheap and skilled labor.
FAO projects trade in poultry meat to increase at faster rates, relative to consumption and production. This is because almost all the broiler breeds are imported from abroad as parent stock. Small scale commercial broiler farms source day old broiler and grow them for a period of about two months. The fact that different countries specialize in different kinds of production also boosts trade.
The extreme commercialization of poultry, intensive genetic researches, and technology improvements have increased the production and productivity in the Organisation for Economic Cooperation and Development (OECD) countries. In return, the supply increment has reduced the price of chicken, thus highly increasing the consumer base.
“Poultry is Ethiopia’s least utilized potential resource,” says Getu He has observed that most hotels and supermarkets in Addis Ababa have recently been substituting imports with local supplies. “Ethiopia could generate significant amount of foreign currency from exporting poultry. Why focus on only coffee? A coffee plant takes three years but you can produce chicken every 45 days.”
Getu emphasizes the business needs to expand into many poultry producing towns, similar to Bishoftu, to satisfy the demand in Ethiopia and beyond. “The livestock road map that envisioned producing four billion eggs by companies operating in Bishoftu by 2020 is far from achievable. Initiatives by international institutions like the Bill and Melinda Gates Foundation are supporting the poultry industry but their technology is not feasible. Yet, it is better than Ethiopia’s, in terms of variety.”
Getu says the government’s plan to increase poultry production via small and middle level enterprises (SMEs) has also failed due to the wrong approach. “The wrong approach in poultry farming was when they tried to do it in clustered format. Clustering poultry farms in one area means losing them all at once, if a disease comes. Poultry farms must be located far away from each other. I have seen all 30,000 hens die at once in Shire town.”
“There are no domestic sources of breeds of meat and egg chicken. And there is no foreign currency to import parent stocks every six months. So, a day-old chicken is sold for ETB 25 currently,” argues Getinet Asefa, former Director of the livestock department at the Ethiopian Institute of Agricultural Research (EIAR). He currently runs a non-profit organization that supplies chickens to poor families to encourage household poultry farming to improve their income.
Commercial poultry farmers have limited animal feed supplies. Currently, a quintal of feed, usually maize, is sold between ETB1, 300 and 1,600. The feed processing factories are located in remote areas in Wollega, Mekele, Bahir Dar, and Hawassa. The country’s logistics problem makes the cost of transporting feed to Bishoftu very high.
The poultry farms in Ethiopia are also highly exposed to epidemic disease and the veterinary vaccine system is severely lacking. Once a farm is hit by a disease, all operations in the area will be affected. The affected farmers then hike their prices to compensate for their losses. The absence of hatcheries in Ethiopia is also a fundamental problem in availing new chickens to farmers.
Many agree that solving the feed problem, which constitutes 75Pct of the cost of chicken production, can increase the chicken supply. “There are close to 30 animal feed processing cooperative plants in Ethiopia. But these plants have challenges in accessing input. The problem is with inputs like grain,” argues Usman Surur, Director of the Federal Cooperatives Agency.
Haileselassie Weres, Director General of the Ethiopian Meat and Dairy Development Institute, located in Bishoftu, admits there are problems blocking the emergence of a poultry industry in Ethiopia. “The problem fundamentally arises from the absence of due government attention to agro-industry. It is difficult to change the whole market system with a few farms. Currently, commercial poultry farmers are trying to do everything by themselves, because there is no value chain. Raising new, young and older chicken, availing variety breeds, and the processing and packing of meat and egg need separate business enterprises. It needs policy coordination and support to create the ecosystem.”
“Knowledge base, proper policies, strong research, and development and investment tools are critical in creating a well-structured poultry industry. We can maximize the benefit only if we are able to produce more with smaller inputs, and this needs technology, in addition to sufficient feed supply,” argues Wondimeneh Esatu, Animal Physiologist/Breeder and Geneticist working as a researcher and Deputy Director for Poultry, Fish, Apiculture and Sericulture Research at EIAR branch in Bishoftu.
This center is working and showing good progress in its efforts to replace low-productivity indigenous breeds with productive local and synthetic breeds. So far, the center has introduced a highly productive indigenous breed called Horro, which is nationally recognized by the Ministry of Innovation and Technology. The center also provides new findings and chicken strains to small-scale farmers, which has facilitated the mushrooming of poultry farms in Bishoftu.
Wondimeneh says Ethiopia’s poultry research program is good, except for the lack of manpower. “We test and approve technologies and improved breeds but the knowledge diffusion and implementation is minimal.”
9th Year • Jan.16 – Feb.15 2020 • No. 82