Assessment of Cooperatives in the Poultry Industry - 2013.pdf - Seda

Research Report: Addressing the Needs, Opportunities and Challenges of Cooperatives
and Collectively Owned Enterprises in the Poultry and Related Industries
these concerns feature in the analysis of failed cooperatives and, as is shown below, represent a
significant barrier to entry for many small producers.
4.2. Analysis of other Stakeholders along the Value Chain
Analysis was conducted on the interactions of cooperatives with large producers, chicken food
chains and retailers. This facilitates an improved understanding of the challenges faced by
cooperatives, not only internally, but also along the value chain.
4.2.1.
Stakeholder Identification
The poultry industry can be broken down into two smaller industries: egg and broiler production.
Egg production in South Africa is 51% dominated by large producers. In broiler production, large
producers even further dominate productions, accounting for 72% of total domestic production.
Large producers were interviewed in both sub-sectors in order to understand the challenges faced in
partnering with small producers and also to ascertain whether there is any opportunity along the
value chain for cooperatives to participate.
To provide a well-rounded understanding of the demand side of the value chain, interviews with
large retailers and with chicken fast food chains were conducted. The stakeholders were identified
based on their presence in the marketplace, with the most prominent producers being contacted.
4.2.2.
Key Findings
Three large retailers were interviewed on their buying process in order to gain a better
understanding of the relationship between retailers and their poultry suppliers.
4.2.2.1. Large Broiler Producers
The broiler market consists of a number of large producers who dominate the market. There are
significant barriers to entry in this environment due to the health & safety and environmental
regulations concerning the running of an abattoir. Additionally, as is highlighted in the cooperative
survey results above, specialised vans and refrigeration equipment is needed in order to supply
broilers to market.
Table 4-9 below provides an overview of large broiler producers’ responses when questioned on
their interactions with developing farmers. The table provides an indication on whether or not the
producer interviewed deals with small-scale farmers. If the producer deals with cooperatives, the
table identifies the way in which this interaction takes place and where the producer does not deal
with developing farmers, it provides the reason for this.
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