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
indicator of the challenges facing cooperatives must also investigate factors affecting the industry
and challenges along the supply chain.
The industry at large presents a number of challenges which affect cooperatives. International
competition in the poultry sector results in high grain prices and increasing quantities of poultry
imports which compete for demand in the South African market. A number of reports highlight a
lack of management amongst cooperatives as a challenge facing their development. Competitive
prices in the market, however, is not the main factor preventing cooperatives from gaining contracts
with large producers and suppliers.
Interviews conducted with producers, retailers and fast food restaurants provide a more indicative
picture of the value chain in which cooperatives operate. Of the three groups, producers present the
greatest area of opportunity for business with cooperatives. Challenges for retailers and fast food
restaurants include the need for large quantities, transport to depots, and very specific quality
specifications. This creates an environment which most cooperatives are not able to enter. A
number of large producers, however, offer opportunities for cooperatives.
Producers within the egg and broiler markets present opportunities to purchase from cooperatives.
Two producers within the broiler market are even able to provide technical assistance, day old chicks
and feed to cooperatives. While some producer’s business model includes owning all functions along
the value chain, others offer opportunity for cooperatives in certain functions such as the sale of
chicken manure, the cleaning of cages or the selling of spent hens.
In the perspective of the cooperatives, a picture is often painted that solely focuses on the material
constraints within their business. The opportunities that exist in the industry are often outside of the
conception of the typical broiler farmer. A lack of clustering with cooperatives prevents them from
harnessing the opportunities of collaboration in some cases. Cooperatives’ lack of management and
financial skills is a large constraint to realising opportunities in the sector.
The chapter to follow will highlight recommendations based on the key challenges and opportunities
faced by cooperatives and collectively owned enterprises in the sector.
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