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
However, in the large producer market there is a great deal more stability and lower likelihood of
business failure. They are therefore generally a more reliable customer base than the informal
market.
Another great concern of many cooperatives is a lack of finance. Contract growers for large
producers are provided with all of the inputs required to grow broilers. If the basic start up
equipment is in place then the cooperative will not need to have any additional capital to buy feed
and inputs. Additionally, the money paid to growers is pure profit, as the cost of chicks and other
inputs is already deducted. This means that there is a decreased amount of financial planning
required from the cooperative and if profits are shared instead of reinvested it is not as significant a
concern as inputs have already been deducted from the revenue.
“They are not able to
offer the volume and
reliability which large
corporate farms are
able to offer”
The producer who did not have any interaction with small-scale
poultry farmers stated that they were simply not able to offer the
volume and reliability which large corporate farms are able to offer.
This producer did not have support structures in place to facilitate
the development of contract growers and did not have any plans to
develop these in the future.
The producers who used small-scale contract growers stated that if farmers wished to be considered
for contract growing they approached the producer. The information about this support programme
is generally disseminated through word of mouth. Once a farmer has approached the large
producer, their premises are inspected. An environmental assessment is conducted and premises
are inspected for sufficient housing quality, and access to water and electricity. In addition, the farm
must be within a reasonable distance to one of the producers’ abattoirs.
While not all large broiler producers make use of small-scale poultry farmers, this represents a good
opportunity for those cooperatives who are located near one of the large producers. A potential
constraint to this opportunity is the lack of transport, lack of sufficient equipment, suitable premises
and stable sources of electricity and water.
4.2.2.2. Large Egg Producers
Egg production is dominated by a number of large producers in the same way as in broiler
production. However, what is surprising in egg production is the diversity of business types. Of the
four large egg producers contacted, only two of these were large JSE-listed companies. The
remaining two were a family owned company and a cooperative respectively.
One of the three egg producers contacted declined the offer to participate in the interview as it was
against the privacy policies of their organisation. Table 4-10 below provides an overview of the
remaining three large egg producers’ responses when questioned on their interactions with
developing farmers. The table provides an indication on whether or not the producer questioned
deals with small-scale farmers. If the producer deals with developing farmers, the Table (4-10)
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