Sep 1, 2016 - A value chain analysis framework figure 5 has used to assess the PPG in accessing the egg producers to market. Value chain analysis gives an ...
Improving urban market linkages for semi-scavenging backyard poultry egg producers A case study in Paghman district, Kabul province.
A Research project submitted to Van Hall Larenstein University of Applied Sciences in partial fulfillment of the requirements for the Master Degree in Agricultural Production Chain Management - Livestock Production Chains. By
Muhammad Baber Khan (Ahmadzai) September,2016 Velp. The Netherlands. © Copyright. Muhammad Baber Khan (Ahmadzai), 2016. All rights reserved
Dedication This work is dedicated to my mother Mrs. Fatima for her continuous motivation and prayers for me in my difficult time during studies. I love you mother.
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Acknowledgement First of all, my thanks to the Almighty Allah for giving me power and health to complete my course work and research. Secondly, my special thanks to The Netherlands Government through their financial support of Netherlands Fellowship Programme (NFP) that has given me the opportunity to pursue Masters Studies in Agricultural Production Chain Management (APCM) specializing in Livestock Production Chain (LPC). Special thanks to my supervisor, Mr. Jan Hoekstra whose support and guidance has helped me to finalize the Master’s thesis. I would like also to express my deep appreciation to all APCM teaching staffs for their valuable support provided during my study at Van Hall Larenstein University of Applied Science. My appreciation also goes to my specialization coordinator, Mr. Marco Verschuur who has been very dedicated in guiding me each and every day. The motivation and enthusiasm I got here is going to be a light for my professional career. My appreciation goes to fellow students in professional Masters at van Hall Larenstein, especially colleagues in livestock production chain management, for their encouragement and assistance during the preparation of this thesis project. The support given to me by staffs of National Horticulture and Livestock Project (NHLP) especially the technical veterinary team during the collection of my data is very much appreciated. Lastly, to all who were involved directly and indirectly to help with my thesis and I could not mention their names here, I am very grateful for your support.
Baber
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Table of Contents 1.
List of figures ............................................................................................................... v
2.
List of tables ............................................................................................................... vi
3.
List of Boxes ............................................................................................................... vi
4.
List of acronyms and abbreviations ...........................................................................vii
ABSTRACT .......................................................................................................................... viii CHAPTER 1: INTRODUCTION ................................................................................................ 1 1.0
Problem context .......................................................................................................... 1
1.1
Semi-scavenging backyard poultry egg sector in Afghanistan .................................. 2
1.2
Problem statement ...................................................................................................... 4
1.3
Problem tree ................................................................................................................ 4
1.4
Research objective...................................................................................................... 6
1.5
Problem owner: ........................................................................................................... 6
1.6
Research questions: ................................................................................................... 6
1.7
Definition of terms ....................................................................................................... 7
CHAPTER 2: LITERATURE REVIEW...................................................................................... 8 2.1 Value chain analysis ........................................................................................................ 8 2.2 Quantitative and qualitative analysis of the egg value chain ........................................ 10 2.3 Market channels ............................................................................................................. 11 2.4 Producer Organizations (PO) ........................................................................................ 11 2.5 Chain upgrading strategies ............................................................................................ 13 2.6 Value chain intervention strategies ................................................................................ 16 2.7 CANVAS Business Model .............................................................................................. 17 CHAPTER 3: RESEARCH METHODOLOGY ........................................................................ 18 3.1 Research design ............................................................................................................ 18 3.2 Conceptual design ......................................................................................................... 18 3.2.1 Research strategy.................................................................................................. 18 3.2.2 Desk research........................................................................................................ 18 3.2.3 The case study ...................................................................................................... 18 3.3 Data collection................................................................................................................ 21 3.4 Study area ...................................................................................................................... 21 3.5 Sampling and Sample size ............................................................................................ 21 3.6 Data analysis and processing........................................................................................ 22 3.7 Operationalization of research ....................................................................................... 27 3.8 Limitations of the studies ............................................................................................... 30 CHAPTER 4: RESULTS ......................................................................................................... 31 4.1
Semi-scavenging backyard poultry egg value chain ................................................ 31
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4.2
Characteristics of the current market linkages ......................................................... 33
4.3
Bottlenecks faced by stakeholders ........................................................................... 33
4.4
Costs and value share involved ................................................................................ 35
4.5
Perceptions of egg quality......................................................................................... 37
4.6
Favourable payment modalities ................................................................................ 38
4.7
Instruments to improve performance of PPGs ......................................................... 38
4.8
Overall assessment of the poultry producer groups for fours villages: .................... 39
4.9
Poultry producer groups’ assessment scale level .................................................... 40
4.10
Performance assessment of poultry producers groups............................................ 47
4.11
Promotion of egg in semi-scavenging backyard value chain ................................... 51
4.12
Stakeholder’s analysis .............................................................................................. 51
4.13
Sustainability aspects of the semi-scavenging backyard egg value chain: ............. 52
CHAPTER 5: DISCUSSION .................................................................................................... 54 5.1 Stakeholders and their roles .......................................................................................... 54 5.2 Characteristics of Market linkages ................................................................................. 54 5.3 Bottlenecks in semi-scavenging backyard poultry egg chain........................................ 55 5.4 Costs and Value share................................................................................................... 55 5.5 Perceptions of egg quality.............................................................................................. 55 5.6 Favourable payment modalities ..................................................................................... 55 5.7 Instruments to improve performance............................................................................. 55 i.
5.7.1 Production..................................................................................................... 56
ii.
5.7.2 Internal organization ..................................................................................... 56
iii.
5.7.3 Market ........................................................................................................... 57
5.8 Promotion of egg in semi-scavenging backyard egg value chain ................................. 57 5.9 SWOT analysis for poultry producer groups ................................................................. 58 CHAPTER 6: CONCLUSION AND RECOMMENDATIONS.................................................. 59 6.1 Conclusion...................................................................................................................... 59 6.1.1 Production................................................................................................................ 61 6.2 Recommendations ......................................................................................................... 63 REFERENCES......................................................................................................................... 66 Annex ...................................................................................................................................... 73 1.
Annex 1: Meeting with PPGs .................................................................................... 73
2.
Annex 2 MIDCA tool scale score (1-4) representation ............................................ 74
3.
Annex 3 MIDCA tool for % score ............................................................................ 77
4.
Annex 4 Check list used for different institutions:................................................... 81
5.
Annex 5 Questions/checklist for focus group discussions ..................................... 84
6.
Annex 6 Proposed Egg market channels ............................................................... 85 iv
7.
Annex 7 Ingredients for on farm feed formulation : ................................................. 85
8.
Annex 8 MIDCA tool dimentions for poultry producer groups .................................. 85
1. List of figures
Figure 1 Semi-scavenging backyard poultry egg producers..................................................... 2 Figure 2: National consumption and production trends of eggs through semi-scavenging backyard eggs ............................................................................................................................ 3 Figure 3: Problem tree for semi-scavenging backyard poultry egg producers ......................... 5 Figure 4: Value chain actors,supporters, and context............................................................... 8 Figure 5: Value chain analysis framework................................................................................. 9 Figure 6: Typology of Value chain upgrading strategies ......................................................... 15 Figure 7: Intervention strategies matrix ................................................................................... 16 Figure 8: CANVAS Business Model ....................................................................................... 17 Figure 9: Research Framework: .............................................................................................. 20 Figure 10: Map of the Paghman District.................................................................................. 21 Figure 11: Data interpretation for MIDCA tool ........................................................................ 24 Figure 12: Results interpretation for PPGs performance Likert-type scale ............................ 25 Figure 13: Current egg Value Chain for backyard poultry producers ..................................... 31 Figure 14: Overall assessment of the poultry producer groups .............................................. 39 Figure 15: Membership base ................................................................................................... 40 Figure 16: Poultry egg production ........................................................................................... 40 Figure 17: Service provision to members ................................................................................ 41 Figure 18: Staff capacity and leadership ................................................................................. 42 Figure 19: Management of financial resources ....................................................................... 43 Figure 20: collaboration and network ...................................................................................... 44 Figure 21: Sales and marketing............................................................................................... 45 Figure 22: Relationship with stakeholders............................................................................... 46 Figure 23 Entrepreneurial skills ............................................................................................... 46 Figure 24: Poultry producer group 1 Miakhail village .............................................................. 47 Figure 25: Poultry producer group village 2 Farsha ............................................................... 48 Figure 26: Poultry producer group 3 village Farsha ................................................................ 49 Figure 27: Poultry producer group 4 Miakhail Village ............................................................. 50 Figure 28: CANVAS business model ...................................................................................... 53 Figure 29: Proposed Value Chain for Semi-scavenging backyard poultry eggs .................... 63 Figure 30: Proposed CANVAS Business Model for Egg collection centre ............................. 65
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2. List of tables Table 1 : Definition of terms ....................................................................................................... 7 Table 2 : Poultry producer groups location and characteristics .............................................. 22 Table 3 : Sample size for target groups .................................................................................. 22 Table 4 : Data interpretation for MIDCA tool ........................................................................... 23 Table 5 : Results representation for MIDCA scale type .......................................................... 24 Table 6 : Operationalization of research ................................................................................. 27 Table 7: Market channels and price for eggs .......................................................................... 33 Table 8 : Gross margin per PPG (for 30 Chicken) ................................................................ 36 Table 9: Total variable cost for Egg Collection Centre (ECC) ................................................ 37 Table 10: Eggs sold via egg collection center costs and price ............................................... 37 Table 11: Value share by various chain actors ....................................................................... 37 Table 12: Poultry producer group 1 village Miakhail ............................................................... 47 Table 13 : Poultry producer group 2 village Farsha ................................................................ 48 Table 14: Poultry producer group 3 village Farsha: ................................................................ 49 Table 15: Poultry producer group 4 village Miakhail ............................................................... 50 Table 16: Stakeholder’s Analysis ............................................................................................ 51 Table 17 : Sustainability aspects of semi-scavenging backyard egg value chain .................. 52 Table 18 : SWOT analysis for poultry producer groups .......................................................... 58
3. List of Boxes Box1: Challenges faced by Poultry Producer Groups ………………………....………………34 Box 2: Challenges faced by Village Group Leader……………………………..……………....34 Box 3: Challenges faced by Retailers…………………………………………..……………..…35
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4. List of acronyms and abbreviations Afs
Afghan rupees
Ag-fare
Agriculture Fair
CARD-F
Comprehensive Agriculture and Rural Development Facility
CDC
Community Development Councils
DAIL
Department of Agriculture, Irrigation and Livestock
ECC
Egg collection centre
FAO
Food and Agriculture Organization
GDP
Gross Domestic Product
IFAD
International Fund for Agriculture Development
MAIL
Ministry of Agriculture, Irrigation and Livestock
MFI
Micro-financial Institute
MIDCA
Integrated Organisation Model applied to producer organisations
ND
Newcastle Disease
NHLP
National Horticulture and Livestock Program
PPGs
Poultry Producer Groups
QMS
Quality management system
RMLSP
Rural Microfinance and Livestock Support Program
VFUs
Veterinary Field Units
VGL
Village Group Leader
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ABSTRACT This study aims to link semi-scavenging backyard egg producers in Paghman district to the urban market in Kabul. Field research was based on a case study conducted in two villages of the Paghman district. The case study used four groups, two from low village Miakhail and from village Farsha which is located on highland. The study assesses the poultry producer groups by using the Integrated Organisation Model applied to Producer Organisations (MIDCA) tool. The MIDCA tool identifies the internal factors affecting the performance of poultry producer groups. Backyard poultry egg production system plays a major role in women economic empowerment. Since market and production context of egg production is changing rapidly over decades in remote areas; backyard sector is rehabilitating the market for local eggs. Due to the increase in demand for local eggs by end market, opportunities have also expanded. The nature of running a small-scale business is dynamic and economically viable, which helps in integration and mobilization of indigenous egg value chain. There is demand for the local eggs because of the high quality e.g freshness, more egg yolk contents, fertile and somehow bigger in size that white or imported eggs. Currently, there are constraints that poultry producers face such as limited access to the market in Paghman district, poor understanding of end market requirements such as quality attributes of eggs. Egg producers have limited skills in egg management such as collective marketing. Poultry egg producers are unable to negotiate for price due to weak internal organization and business skills. There is a fluctuation in market price which has reduced the trust amongst buyers and sellers in egg market hence there is an issue of side selling by producer groups. Due to poor market access, there is less opportunity to get necessary market information on the importance of their products such as demand for organic eggs. Findings showed that inadequate information on the product importance leads to low-income generation by egg producers by not supplying their product into high price market. Local buyer and retailers are exploiting rural poultry producers as they have weak market relations with buyers and limited market access. Poultry producer groups have poor egg storage facilities and this affects the quality of the eggs. For semi-scavenging backyard poultry producers, input management is another challenge. The poultry producer groups have the ability to produce eggs according to the market demand. Recommendations are given to link egg producers to urban market by establishing egg collection centres to strengthen the value chain relationship. Market linkage will also help poultry producer groups to gain access to credit. A new business model is suggested along with improved value chain for the economic sustainability of poultry producer groups. These interventions will help poultry egg producers to get linked to urban market and also receive stable prices for eggs.
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CHAPTER 1: INTRODUCTION 1.0 Problem context Afghanistan is a hilly and land-locked country located in the centre of Asia. The estimated population of Afghanistan is around 32.5 million.(Qazi, 2016 ). Afghanistan’s capital is Kabul with a total area of 647,500 square km. Major spoken languages are Afghan Persian or Dari (official) 50%, Pashtu (official) 35%, Turkic languages (Uzbek and Turkmen) 11%, 30 minor languages (Balochi and Pashai) 4%. Agriculture contributes 24% of the total gross domestic product (GDP) in 2014. Common Agriculture divisions are forestry, fishing, as well as cultivation of crops and livestock (Trading economics, 2016). Agricultural products include wheat, fruits, nuts, wool, mutton, eggs, poultry meat sheep, and lamb skins (Garabedian, 2006). Brown poultry eggs which produced locally are one of the major food item consumed at both urban and village level. The eggs sources are commercial and semi-commercial producers based in rural areas by all age people. In Afghanistan, there are more than 200 layer farms with operating capacity of approximately 470,000 layer hens. Farms with high capacity are situated in North region of Afghanistan. Backyard eggs also contribute to the national demand for eggs (MAIL, 2014). Employment and economic growth are dependent on security and political situation in the country. The economic growth in Afghanistan has reduced suddenly since 2013. There has been a decline in growth, from an average of 9 % during 2003-2012 to 4% in 2013 and 2 % in 2014, due to political instability in 2014 and slow pace of reforms; it has also reduced investor and consumer confidence in the economy (World Bank, 2015). According to Caracalla (2012), there is a high demand for locally produced poultry eggs as they have distinct characteristics e.g freshness, egg shell color etc. National Egg Coordination Committee (NECC), are currently shipping poultry products to Afghanistan, Kazakhstan, and Algeria to high demand (Trade Gayathri, 2012). Business opportunities for semi-scavenging backyard egg producers Indigenous breeds of chicken play an important role in poverty reduction and rural economies development for rural women (Ahuja and Sen, 2007) . It integrates well with other agricultural operations such as animal husbandry and kitchen gardening. Backyard poultry also helps in enhancing the soil fertility in backyards (30 chickens produce 1- 1.2 kg of manure/ day) (Pathak and Nath, 2013). Semi-scavenging backyard egg producers have an advantage in terms of competition to other products to high segmented market. Their product requires limited resources and inputs to develop (KIT and IIRR, 2006a). It is suitable for the small scale producers with less capital investment. There is also less risk involved in the poultry management. It is indeed a good source for women empowerment and involvement in business activities (Aberra, 2014). Poultry egg production systems in Afghanistan Following are most dominant practiced poultry production systems in Afghanistan. Commercial poultry egg production system developed over time due to the prevailing conditions in the country such as production skills development of the producers, availability of appropriate education and support services, and market demand for local products. This system of egg production also depends on exotic breeds and cross breeds of layers. This system is intensive with an average maximum of 10,000 egg-
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laying poultry. Commercial poultry egg production is mostly practiced in peri-urban areas of big cities. Backyard scavenging egg production system is the traditional system where the poultry birds are allowed to run free in the yards or surroundings. During the production period, mostly seasonal surpluses are sold in the village or to the neighbour .The birds are not fed with commercial poultry feeds and mostly rely on to scavenge for grains, grass, and food wastes from the kitchen. The mortality rate is high due to the poor husbandry practices by producers such as failure to vaccinate, poor housing, and poor feeding of pullets. This system is also called as an extensive system of poultry rearing for dual purpose. Semi-scavenging backyard egg production system: The term semi-scavenging is used to designate small poultry flocks that are raised partly under an intensive system of rearing. Semi-scavenging backyard egg production system involves dual purpose poultry birds (bred for meat and egg) are managed in traditional but improved housing with basic equipment, are supplied with commercial feed at least 50% of their feed needs. In this system poultry flocks sizes range from 10 to 150 birds with mixed breeds and average egg production in the range of 160 to 230 eggs per year. This system of egg production is also called as semi-commercial poultry production system (Afghan Agriculture, 2014). 1.1 Semi-scavenging backyard poultry egg sector in Afghanistan Backyard poultry production has always been a major contributor to family income and nutrition source in Afghanistan, where women have responsibility for rearing the poultry for egg and meat production. Backyard poultry including indigenous breeds (Sabzwari, Khasak, Gurdan, and Koolangi). Crossbred pullets, the Golden crossbreed, which is well adapted to the rural environment in Afghanistan, are locally available and popular. In Afghanistan, extensive (scavenging and semi-scavenging) and intensive poultry production system are practiced on a national level. Extensive system is village poultry production and intensive is commercial which concerns large-scale poultry eggs production. In 1991, FAO has 1st time started the semi-scavenging production in Badakshan province as a project for internally displaced people by distributing 5-10 birds /Households. Backyard poultry producers are village based groups and these groups’ members are limited to their households, therefore they have limited access to market information and services (MAIL, 2014) Figure 1 Semi-scavenging backyard poultry egg producers
Source : (Emal,2015) 2
Market opportunities for locally produced eggs: Afghan consumers prefer locally produced brown shelled eggs over imported white shelled eggs and are willing to pay a 30-40% premium in urban areas for locally produced eggs. Afghan consumer values egg freshness and will seek out farm fresh eggs from sellers. For example, the average retail price for local eggs in Kabul was 96 Afs per dozen and the average retail price for imported eggs in the same retail shop was 72 Afs per dozen.. Retailers sell about 15% local eggs and 85% imported eggs This is likely due to both the larger sales volume of imported eggs and the irregular availability of local eggs (Mohd , 2016). Figure 2: National consumption and production trends of eggs through semi-scavenging backyard eggs
Source: (Emal,2015)
Poultry production and NHLP The Ministry of Agriculture and Irrigation and Livestock (MAIL) is promoting smallholder poultry production as part of the national strategy for poverty reduction and food security in remote areas of the country. The National Horticulture and Livestock Project (HLP) is among one of the dominant agriculture development and support projects of the Ministry of Agriculture, Irrigation and Livestock (MAIL) in Afghanistan. NHLP started operation in early 2006 with the financial support of World Bank. The objective of the NHLP is to “improve the livelihoods of the rural households through stimulating production and productivity of marketable horticulture and livestock products” (MAIL, 2016). NHLP has two major components horticulture and livestock. Village-based poultry keeping is one the approach of sub-component of the livestock support program. Village-based poultry production system has been introduced by National horticulture and Livestock Project (NHLP) by establishing Poultry Producer Groups (PPGs) in villages . Each poultry producer group has its own leader called as Village Group Leader (VGL). This Village group leader provides capacity building and extension services to PPGs supported by NHLP. Village group leader is also responsible for market and marketing activities of the producer groups. PPGs number of members varies from 11-20 based on village location. In 2015 NHLP has introduced semiscavenging backyard poultry egg production system for 5000 households in 12 districts of 6 provinces including Paghman (MAIL, 2016) 3
Egg market in Paghman district Paghman district egg producers have availability of land for poultry rearing and livestock which contributes to their income generation. Eggs are most important commodity consumed by the household as well as on institutional level. It is also a source of micro-credit for women-led households. Surplus eggs are produced by the poultry egg business model implemented by NHLP. MAIL is focusing on small-scale village backyard poultry egg production, characterized by low-input production systems. In this system, indigenous chickens are managed by women. This system aims to achieve self-sufficiency at the household level and selling surplus in markets for economic sustainability. This system is unable to compete with the intensive or commercial poultry system, which mainly depends on import of inputs e.g day old chicks from Pakistan, Iran, and India (IFAD, 2012). In Paghman district female poultry egg producers lack marketing activities as they have been organized into poultry producer groups by NHLP. Poultry producer groups have the ability to produce eggs which have high demand in urban egg market for its freshness. PPGs are unaware of the market demand and quality requirements for the product due to inadequate market information. Poultry producers groups need to be linked the urban market for selling their poultry eggs (Emal, 2015). 1.2 Problem statement Semi-scavenging backyard poultry egg production is a good source of income and food for the poor rural households in Paghman district of Kabul province. In order to improve the rural livelihood and empower women, the NHLP is implementing village based semi-scavenging poultry egg business model in collaboration with International agencies by providing producers with basic inputs such as pullets, poultry feed and extension services (MAIL, 2014). Egg production has increased in the past few years by the mentioned activities. There is the surplus amount of eggs produced by rural women through semi-scavenging backyard egg production system. Demand for the poultry products such as poultry meat and eggs have been increased in past few years (AAZIM,2015). Currently, the main challenge faced by poultry producer groups is poor linkage to market. This is attributed to limited entrepreneurial skills, poor inputs management, insufficient information on markets requirements and demand (Emal,2015). Poultry producers are looking for a better market outlet to get more profit for their product in order to manage inputs required for backyard poultry egg production (Caracalla, 2012a). 1.3 Problem tree Problem tree has been formulated to shows the causes and effect of market linkages for backyard poultry egg producers. Figure 3 shows that market linkages are related to the weak PPGs organization and poor entrepreneurial skills of the PPGs. Problem tree helps the researcher to have enough background on information to find out the real cause of the problem.
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Figure 3: Problem tree for semi-scavenging backyard poultry egg producers
Effect
Poor Urban Market Access for Producers Organizations
Main Problem
Weak market linkages of PPGs
Main casuses
Inadequate quantity of eggs available for urban market
Poor motivation to sell to VGL
Causes
Side selling
Loss of quality
Weak entrepreneral skillS of PPGs
Production losse
Inconsistent egg collection by VGL
Weak business relationship
Weak PPGs organization
Source: Emal (2015)
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Poor handling of eggs by producers
Poor skills development of PPGs
1.4 Research objective The objective of the research is to recommend strategies based on the research findings to National Horticulture and Livestock Project (NHLP) to improve the urban market linkages for semi-scavenging backyard poultry egg producers in Paghman district of Kabul province.
1.5 Problem owner: National Horticulture and Livestock project (NHLP)
1.6 Research questions: Main Question 1: What is the current situation of semi-scavenging backyard poultry egg chain in Paghman district of Kabul province? Sub-questions: 1.1 What are the stakeholders and their roles in the semi-scavenging backyard poultry egg production system? 1.2 What are the characteristics of market linkages poultry producer groups with stakeholders in backyard poultry egg value chain? 1.3 What bottlenecks the stakeholders have in the semi-scavenging backyard poultry egg chain to reach the urban market? 1.4 What are the productions, sale volume, costs, and value shares involved for different stakeholders in semi-scavenging backyard poultry egg production system? 1.5 What are the perceptions of stakeholders for the quality of eggs in semi-scavenging backyard poultry egg production system?
Main Question 2: What upgrading strategies improve the egg value chain for semi-scavenging backyard poultry egg producers in Paghman district of Kabul province? Sub-questions: 2.1 What are the favourable payment modalities to upgrade the egg produced through backyard eggs production system? 2.2 What are the instruments to improve the performance of poultry producers groups? 2.3 What ways can be used to promote eggs production through the semi-scavenging backyard poultry egg production systems?
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1.7 Definition of terms The following terms were used in the study and their definitions are given in table 1 Table 1 : Definition of terms Economies of scale
Economies of scale are reductions in costs for each unit produced. (Penrose-Buckley, 2007)
Functional upgrading
Increase value added by the mix of activities conducted within the firm or any other level in the value chain.
Horizontal integration
Horizontal integration is the cooperation with horizontal partners in the chain e.g formation of producer’s organisations and cooperatives. Horizontal coordination is the process of greater intra-nodal organisation, often in the production and processing nodes, in some form of collective structure (typically a producer group).
Marketing channels
Marketing channels are alternative routes of product flows from producers to consumers. Thus poultry marketing channels are different outlets through which poultry products are distributed to consumers. (Mnenwa, 2010)
Poultry producers groups
These are the target beneficiaries who are the primary producers and each group has 11-20 members, All of them are women.
Value chain upgrading
Chain upgrading means acquiring the technical, institutional and market capabilities that allow communities to improve their willingness to move to higher-value activities (Mitchell, Coles, and Keane, 2009).
Vertical integration
Vertical integration means selection of the right choice for the producers, the activities of the producers and buyers are more interdependent and activities are more aligned.
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CHAPTER 2: LITERATURE REVIEW 2.1 Value chain analysis Value chain includes a full range of activities of production factors that create a marketable product or service from production to the final consumption. This includes activities figure 4 such as input supplying, production, processing, distribution, and support services to the final consumer. In each and every step there is value addition in the product (Mayoux and Mackie 2008). Figure 4: Value chain actors,supporters, and context
Source: (KIT and IIRR., 2010a) A value chain analysis framework figure 5 has used to assess the PPG in accessing the egg producers to market. Value chain analysis gives an opportunity to identify the constraints and upgrading options. A value chain map also gives the overview of information flow, chain actors’ relationship and intervention points for upgrading current chain activities (Trienekens, 2011).
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Figure 5: Value chain analysis framework
Value chain analysis framework Value chain constraints Market information and access and Resources
Value chain upgrading Upgrading Strategies Value Chain Structure Value Share Governance structure
Adapted from: (Trienekens, 2011) 2.1.1 Value chain actors Value chain actors are people or institutions involved in producing, processing, trading, or consuming a particular agricultural product. They may be direct chain actors e.g producers, traders, retailers, consumer, and indirect actors such as bankers and credit agencies, business service providers, government, researchers and extensionists etc. Producers: Producers are the persons who are involved at the initial stage of the c hain to make some tangible products from the raw materials. Collective buyers: Collective buyers are individuals and firms involved in the transformation of agricultural commodities e.g egg producer, collectors, and processors. Buyers can be small household enterprises or fairly large formal firms. In egg value, chain processing activities are cleaning, packaging etc. Large processors tend to have significant stocks of raw material to ensure continuous processing activity and high utilization of installed equipment during the off season (Ferris et al., 2008). Retailers: Retailers include a wide range of businessmen and women, from prosperous stallholders in major markets to wandering peddlers who circulate between a few remote villages. In between are retailers at roadside stands and small markets in villages or urban neighbourhoods. The larger retailers buy in wholesale units from established wholesalers. 9
Small-scale retailers often buy in smaller amounts from these larger retailers (KIT and IIRR 2008). 2.2 Quantitative and qualitative analysis of the egg value chain Value chain has been divided into qualitative and qualitative measures for complete analysis. 2.2.1 Quantitative analysis The quantitative analysis represents the money that an actor in the value chain contributes and the money that an actor in the value chain receives in return of selling or buying a specific quantity of a product. Cost and gross margins study help to find out current and future financial trends of a value chain (Aaron, 2012). Value share is computed using the equation given Value share = Added value *100 /Final retail price Source :( KIT and IIRR, 2008) 2.2.2 Qualitative analysis Attributes of egg quality Consumers may prefer white eggs or brown eggs. In such circumstances, characteristics for preference include egg shell quality, texture, and size, the colour of the eggs shell and shape of the egg. A good quality egg must show characteristics that include cleanliness, free of cracks and smoothness (Seidler, 2003). Intrinsic quality attributes preferred by consumers are disease free, healthy, acceptable taste, the darkness of yolk, shelf life e.g freshness after storage period (Luning, 2015). Gender and value chain Women are typically concentrated as producers at the bottom of the chain. They can find it difficult to take on more profitable roles as buyers, sellers and processors for number of reasons - women’s unpaid household roles and responsibilities consume much time, which means that there is less chance for increasing the amount of labor time they can devote to production; in some countries, socio-cultural customs are constrained for women to participate in agricultural activities (Eyben, 2011). Women’s economic participation is recognized as an essential part of women’s rights and as a vital source of women empowerment at national level e.g family support. There is an opportunity for women to show their potential to play a major role alongside men. Women lead producers groups and associations, needs to be nurtured and strengthened in the small and medium enterprise, particularly in horticulture and agri-business (Ganesh, 2013). All women cannot be treated as 'a special case' but their needs and interests must be an integral part of any development policy. Enabling women to realize their full potential requires removing gender inequalities and discrimination which constrain them at every level. It also requires affirmative action to enable women, to promote and benefit from this change (Mayoux and Mackie, 2008). Sustainability of value chain Sustainability profile covers the economic, social (people) and environmental aspects of a value chain. Economic aspects include when required activities at the level of each actor or support provider are profitable for commercial services and they are commercially viable. It is also related to the distribution of the benefits and costs associated with the increased value creation. Social aspects cover people or society members involved in value chain 10
activities which are socially and culturally acceptable by the community members e.g child labour. Environmental aspects include when value chain activities show a positive impact on natural environment and very little or no negative impact (FAO, 2014). Contract based market Contract based market has been practiced for many years in agricultural production. There are many advantages with these business relations for producers and buyers e.g on time supply of the quality products. There are drawbacks associated with ensuring that production is to the required standard, and in organizing the supply of inputs to producers and the collection of outputs. Same time if the producers are unable to meet the demands of the markets it may lead to termination of contracts (Shepherd, 2007). When producer groups gain new marketing skills, they also need to take on new arrangements to ensure a more consistent supply of their products to a known buyer of a predetermined quality, volume, and price (Ferris et al., 2008).
2.3 Market channels A marketing channel is an exchange relationship that creates buyer value in production, distribution, and consumption of products. Channel members must come to the marketplace well equipped to address changing market needs and wants (Pelton, Strutton, and Lumpki, 2014). Common market channels are rural primary markets, assembly markets, wholesale markets, retail markets, direct markets; rural primary markets (White, 1999).In Paghman district common market channels for eggs are rural primary markets, retail markets, direct markets. 2.4 Producer Organizations (PO) Producer organization is an association, a society, a cooperative, a union, a federation, or even a firm that has been established to promote the interests of producers (Bijman and Wollni, 2008). Producer’s organizations help to identify markets, both for selling the products as well as for accessing inputs and support services, assist in ensuring the quality management and improved bargaining power. PO also helps in lowering of transaction costs as a result of collective action and values adding by proper storage facility provision (Caracalla, 2012b). Producer organizations are united willingly to meet their common financial and social needs. Producer organizations are also engaged in economic activities like access to credit, the supply of necessary inputs such as feed, medicines, and vaccines (Kumar, Wankhede, and Gena, 2015). Semi-scavenging Backyard egg Poultry Producer Groups (PPGs) Village-based Poultry Producer Groups (PPGs) are women-led, community-based bodies organized for the mutual benefit of the members. The main activities carried out by these groups are to organise input supply and assist with marketing of eggs in the value chain. NHLP organises village meetings to disseminate and provide details on purpose and functions of the PPGs to the villagers. PPGs provide a strong base from which to develop other community and social strengthening activities. Each PPG selects a woman Village Group Leader (VGL) in with according to criteria such as willingness to cooperate with trainers, high interest and commitment to developing poultry at the village level, reputation for honesty and respect in the village, permission from families to move within and out the village for training or marketing purposes. The selection process includes a first phase in which candidates are identified. Afterward, the community development councils of the village are consulted for the final selection process and PPG’s members vote for the final candidate. The VGL provides essential services at village level such as maintaining regular 11
poultry vaccination, input provision and marketing the surplus eggs produced by the PPGs. NHLP female extension workers work with the VGL and PPGs to provide specific training and information about poultry egg production (MAIL, 2016).
Some of the characteristics of the PO are described Membership base Producer organization is independent whereby each member has one vote and has open membership. Unpaid membership is another obligation; thus it reduces the risk of resourcefulness for its members. .PO needs to adopt organizational strategies to well respond to their members and fulfil their needs (Mangnus, 2010). All producer organization shares some mutual features: they are rooted in rural areas, they are member-based organizations, and they have a democratic structure that allows members to control the operation of their organization (Bijman, 2007), (Wennink , Nederlof and Heemskerk 2007). Producer organizations and collaboration with stakeholders PO work as Realistic and creative facilitators in the field together with producers, local business persons and other value chain supporter and influencers. (Pyburn and Woodhill, 2014). An agreement is used to harmonize both parties and to enforce the parties’ obedience to the terms of the agreement. Contracts are used to solidify partnership on different levels: between a PO and its producers, between a PO and a firm but also directly between a firm and PO members. PO enables flexible collaboration and coordination between numbers of small-scale businesses (Mangnus, 2010). PO improves the member’s interest in cooperation as this helps them in future for cooperative behaviour (Bijman, 2008) Producer organizations and access to finance and inputs Producer organization and farmers’ associations are considered to providing credit. However, like other semi-formal institutions, challenges faced by PO include poor managerial controls, inadequate decision making, and the high cost of operations (KIT and IIRR. 2010b). Producer organizations offer them an extensive range of services and financial opportunities i.e. credit facility such as term loans (Kelly, 2012). In addition, provide a range of services to their members, particularly access to productive inputs, output markets, information, and communication. Producer organizations and entrepreneurial skills POs continuously search for new ways to improve smallholders’ competitiveness through joint actions such as collective marketing, financial support to members, and contractors for marketing of produce. PO allows their members to obtain access to natural resources e.g land for agriculture and voice in decision-making processes that affect policies and regulations by chain influencers (FAO, 2016). Sitewriter (2016) states that entrepreneurship skills of PO are based on behaviour, taking initiative, identification of social and economic mechanisms to minimize the risk for their business. Mangnus (2010), states that producer organizations are conventionally limited to service provision and membership representation becomes more involved in business purposes. Producer organization is not a public service and it needs entrepreneurs who can assure the existence of the enterprise in a marketplace. It is achieved through the provision of skills on strategic marketing which are required for a sustainable marketing of products, to obtain consistent market information and partnerships with value chain actors. Penrose-Buckley (2007), collective marketing gives an opportunity to PO to play a dominant role in value chains in the marketplace. The problem of market 12
information is also stated by POs always focus on increasing the volume of producers and raising the total output of POs. No PO will survive long enough without recognizing customers and buyers need. Kelly (2012) stated that PO organizes all its value chain activities, including individual production and collective marketing to fulfil the market demands. For PO there is another strategy to lower the marketing risk e.g producing a product for different markets. Another risk identified is the type of the market linkages, i.e. relationships between POs and buyers e.g open market, which is a short-term relationship. Poppe and Bijman, (2011), role of PO is to help to realize the quantity of market demand, a reduction of transaction costs, pooling market risks and marketing innovation Producer organizations and marketing of the products: PO serves to improve the marketing system for its members. It is organized to pursue one or a combination of the economic objectives, e.g to provide services at a lower cost, to offer a substitute market channel to balance monopoly in the local market, to provide new or improved marketing services, innovative production practices, inputs to producers and better coordination for marketing (Siddique,2015). Mangnus (2010) also states that formation of producer organization aims to improve the collaboration and business relations of members in various ways e.g provision of market information. In marketing, there often established a relationship between the end market or buyers and PO. For these producer groups, it can be beneficial to work with marketing institutions since these are closely linked with the market information (Kelly, 2012).External support e.g business relationships promote PO as a way to support the poor rural population and facilitate the transition to market-oriented production (Mangnus, 2010). Producer organization plays an important role in helping producers to capture a higher share of the value added in the food supply chains. The key functions of producer organization are improving the bargaining power of their members and letting members benefit from economies of scale (Bijman et al., 2012).Producer organization plays an important role in providing information about market requirements and supporting their members in linking with end market (Saarelainen and Sievers, 2011). Producer organization and long term perspective: The technical and financial viability of a PO is vital for its accomplishment of the business goal. A PO with a proper business plan, both with the short and long term vision and required investment to be made is essential for the success of the PO (Koopmans, 2006). 2.5 Chain upgrading strategies The chain upgrading strategies which can be used by smallholder producers in the value chain development and hence improve the market linkage is summarised in figure 6. 2.5.1 Horizontal coordination Horizontal coordination of chain is very important in rural areas because coordination allows producers to achieve economies of scale in supplies and to reduce transaction costs. Often, horizontal coordination is the first step in a sequence of interventions that ultimately result in access to the market (Redd, 2013). Critical to the success of horizontal coordination strategies are the entry rules to join the group and the quality of management of the group structure. Self-help groups are good examples of the horizontal coordination. Small scale poultry producers groups in many peri-urban areas also come under horizontal coordination, which increases economies of scale in production and marketing (Mitchell, Coles and Keane 2009). Horizontal coordination among PO also promotes a sense of competitive advantages as well. It also helps large numbers of small value chain actors increase their bargaining
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power, reduce their transaction costs, and attain the scale necessary to attract high prices (Haggblade et al., 2012). 2.5.2 Vertical coordination Vertical coordination involves longer-term inter-nodal relations, for instance, contract farming, whereby a processor has been in contract with producers. This form of upgrading is important because it can result in greater certainty about future revenue flows for PO. In practice, vertical coordination is often a slow and difficult process because it involves the building of trust relations between the buyer and the seller e.g side selling because of the higher price offered by alternative markets (Redd, 2013). Higher profits can be obtained through vertical integration, i.e. producers taking on additional activities in the value chain (like processing, grading, and packaging) and horizontal integration, i.e. producers becoming involved in chain management (KIT and IIRR ,2006). 2.5.3 Functional upgrading Functional upgrading refers to changing the mix of functions performed by actors in the value chain – increasing or reducing the number of activities performed by individuals. For instance, value addition by processing and packaging. Often, horizontally coordinated PO is best able to provide these value-adding activities (such as grading and packaging of produce). Functional upgrading strategies help to shorten the value chain by excluding too many intermediaries involved in the chain.
2.5.4 Process upgrading Process upgrading involves improving value chain efficiency by increasing output volumes or reducing per unit cost of production e.g use of efficient poultry feed. 2.5.5 Product upgrading Product upgrading means introducing a new product or improving the old product faster by considering the end market. Product upgrading is increasingly important when started are considered for a product. Some standards are driven by lead buyers (i.e. supermarkets requiring traceability) and organic demands by final consumers. Process and product upgrading are closely related because improving product quality often involves improvements to the production process.
2.5.6 Inter-chain upgrading Inter-chain upgrading is the use of skills and experience developed in one value chain to productively engage with another value chain which usually results in the more profitable value chain. Examples of this include the shift from producing a product for traditional to high price market (Mitchell, Coles and Keane 2009).
2.5.7 Upgrading of the enabling environment These are Improvements to the support, services, institutional, legal and policy frameworks in which value chains operate are often a productive area in which stakeholders can intervene to improve the functioning of a chain (Mitchell, Coles and Keane 2009).
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Figure 6: Typology of Value chain upgrading strategies Various value chain upgrading strategies mentioned above are given. The figure 6 shows that these chain development strategies lead to improve business performance.
Adapted from: (Mitchell , Coles and Keane 2009)
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2.6 Value chain intervention strategies KIT and IIRR 2006 pointed that Value chain development is a two-dimensional process as shown in figure 7. A combination of vertical and horizontal movements would push the PO to improve its performance and empower them in the value chain. Figure 7: Intervention strategies matrix
Source: KIT and IIRR 2006 Chain actor, when producers engage only in farming and have no influence over the management of the chain. Farmers in conventional contract farming schemes are also chain actors. Adding value by vertical integration occurs when PO moved from just production into other activities in the chain. Chain activity integrators may be organized into groups and organization (such as marketing PO) to buy inputs e.g bulk buying , process or collective marketing of the product. But at this stage PO have less managerial control over the value chain activities. Developing value chain partnership is possible when PO specializes in production through association and exerts influence over value chain management. Chain partners mean developing a long-term chain partnership with chain actors and chain supporters. Developing chain co-owners is the phase when PO has moved upstream in the chain and has increased both their activities and their influence. At this stage, PO should have adequate entrepreneurial and marketing skills. (KIT and IIRR 2006).
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2.7 CANVAS Business Model Canvas business model has given nine key coverage areas which play an important role in the business for PPGs Figure 8: CANVAS Business Model Key Partners
Key Activities
Value Proposition
Customer Relationships
Customer Segments
What type of relationship does each of our Customer Segments expect us
What Key Activities do our Value
to establish and maintain with them?
Propositions require? Our
Which ones have we established?
Distribution Channels? Customer
How are they integrated with the
Relationships? Revenue streams?
rest of our business model? How costly are they? What value do we deliver to the customer? Which
Who are our Key Partners? Who are our Key Suppliers? Which Key Resources are we acquiring from partners? Which Key Activities do partners perform?
Key Resources
one of our customer’s problems are we helping to
Channels For whom are we creating value? Who
solve? What bundles of products and services are we offering to each Customer Segment? Which customer needs are we satisfying? What Key Resources do our Value
Through which Channels do our
are our most important customers?
Customer Segments want to be reached? How are we reaching them
Propositions require? Our
now? How are our Channels
Distribution Channels? Customer
integrated? Which ones work best?
Relationships? Revenue Streams?
Which ones are most cost-efficient? How are we integrating them with customer routines?
Cost Structure
Revenue Streams
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
Source : http://businessmodelgeneration.com/canvas/bmc?_ga=1.198107887.154088062.14672
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CHAPTER 3: RESEARCH METHODOLOGY This chapter discusses the process used to carry out the research. It gives an overview of the type of research, the data collection, data processing, and analysis and limitations of the research conducted. 3.1 Research design The framework of this research is based on semi-scavenging backyard egg value chain and poultry producer group assessment. The research has focused on the backyard poultry producer groups to assess performance to access market. The research also aims to identify the available strategies from the field to improve value chain and inclusive business model. The framework also looked at the perception of end market for the quality of the eggs. (See figure 9) 3.2 Conceptual design 3.2.1 Research strategy This research uses the case study and desk study strategies to analyze the urban market linkages for semi-scavenging backyard poultry producers in Paghman district, Kabul province. It is a descriptive qualitative research about the importance and assessment of the role of producers’ organization in Paghman district, Kabul province. 3.2.2 Desk research Prior to the commencement of the fieldwork, desk research has been done to obtain secondary data on the semi-scavenging backyard poultry egg production systems, market linkages; enabling and disenabling environment. The data has been obtained from online books, scientific journals, issues papers, and the ministry of agriculture and International Fund for Agriculture Development (IFAD) websites and annual published and unpublished reports by the ministry of agriculture. Furthermore, manuals from various departments of MAIL also been reviewed to gather the relevant information. 3.2.3 The case study The research is the qualitative type of research supported by data obtained from various sources. Qualitative data is also obtained by application of PPGs assessment through applying MIDCA tool and checklists made for key informants. Quantitative data has been obtained from semi-structured face to face interviews with PPGs and key informants e.g VGL for NHLP team. The research questions have been translated into local language to make it better for understanding for respondents. Interviews with poultry producers groups For an interview with the PPGs,there are 4 PPGs selected. PPGs have been selected based on having 30 or more egg-laying hen that they have /household .MIDCA tool has been used to collect the quality data from PPG. MIDCA tool has different aspects of assessment for any poultry producer group. Interview with the poultry producers groups representatives For each of the four selected poultry producer groups one, one representative has been selected based on their activities. Village group leader has been selected as a representative for each one of the Poultry producer group. 18
Interviews with National Horticulture and Livestock Project (NHLP) NHLP technical team (project manager and female extension worker) members have been also interviewed to identify the available strategies for semi-scavenging backyard egg producers as an implementer of the business model. Interviews with retailers Retailers have been also being interviewed to collect data on various aspects of the chain. Three retailers have been interviewed based on involved in the business of eggs for local traders and village poultry egg producers. They have been selected to get information about the current market situation and competitors marketing strategies Interviews with chain supporters and influencers Stakeholders have been interviewed from various departments Non-Governmental Organization (NGO) and commercial poultry feed suppliers. A technical veterinary team of the Rural Microfinance and Livestock Support Program (RMLSP) and Comprehensive Agriculture and Rural Development Facility (CARD-F) has also been interviewed. Interview with directorate of animal husbandry A key informant from the directorate of animal husbandry was also interviewed as they are directly involved in policy making and visiting field as an evaluator with various project implementation teams. In addition, the director has more technical background on semiscavenging backyard business model program. Interview with directorate of private sector A key informant from the directorate of private sector has interviewed for benchmark the challenges faced by PPGs and identify the available points for improvements in PPGs production and semi-scavenging backyard egg value chain.
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Figure 9: Research Framework
Reasearch Framework
PO(PPGs) assessment Results analysis
Theory on PO(PPGs) Inclusive business model
Results analysis
Value chain analysis framework
Theory on gender
Women empowerment
Theory on value chain upgrading
Results analysis
Results analysis Value chain development
Source: Author construct (2016) 20
New value chain and business CANVAS model
Theory on market linkages
3.3 Data collection Research data was collected during the face to face interviews (annex 4); focus group discussions (Annex 5) by using the MIDCA tool by (Bakengesa, 2011). Semi-structured interviews with stakeholders in the semi-scavenging backyard egg value chain of Paghman district. 3.4 Study area The Paghman district is situated in the western part of Kabul .Paghman district is a small town in the mountains near Kabul city. Its population is around 120,000 of which 70% are Pashtun and 30% are Tajik. Paghman district borders Wardak and Parwan provinces to the west, Shakardara District to the north, Kabul to the east and Char Asiab district to the southeast. Its headquarters is the town of Paghman, which is situated in the north-eastern part of the district. Building and infrastructure have been destroyed by the war. Water irrigation system is mostly by kariz system in Paghman. The soil is type ranges from mostly clay loam to sandy loam. Soil pH and calcium carbonate contents are high. Apart from destruction agriculture, animal husbandry, and other daily labor works are an important source of employment. Agriculture and livestock are growing from the last decade in this village. Paghman has several villages which include Adam Khel Kala, Hatam village , Seeno Kala, Miakhail , Farsha village , Pajakk Tappa, etc (Wikipedia, 2016).
Figure 10: Map of the Paghman District
Study area
Source: https://en.wikipedia.org/wiki/Kabul_Province 3.5 Sampling and Sample size The villages for the study were randomly selected within the Paghman district, Miakhail and Farsha. Subsequently, the poultry producer groups were purposively sampled, 2 PPGs from each village. Poultry producer groups located in the lowland and poultry producer groups in highlands. There were several poultry producers groups in the District. Among the mentioned groups, 4 groups have been selected for research. 21
Table 2 : Poultry producer groups location and characteristics Village groups details
Location
Name of the village
Poultry producer group 1 and 4
Low-land
Miakhail
Poultry producer group 2 and 3
High-land
Farsha
Source: Author construct (2016) The target groups have been selected bases upon the following criteria for research: The Poultry producer group (PPG) must be involved in practicing semi-scavenging backyard poultry production system. The target group must have least 30 poultry layer per households for eggs production. A total of 27 persons have been interviewed as respondents shown in table 3. In planning, a total of 28 were proposed but could not be achieved in the field due to the unavailability of local trader for an interview within the timeframe of the fieldwork. The respondents include PPGs, key informants for poultry producer groups, implementation parties, representatives of national and international NGOs and Commercial poultry feed providers. This has been used based on the value chain and from a market linkage perspective. This was guided by checklist with openended questions to get in-depth understanding. Table 3 : Sample size for target groups Sample size for target groups (Individual level) Male Female Total Poultry producer groups 0 3 3 Village group leader 0 1 1 Retailers 3 0 3 Commercial poultry feed suppliers 1 0 1 NHLP central office Kabul 2 1 3 RMLSP central office Kabul 2 0 2 Directorate of animal husbandry 1 0 1 Directorate of private sector 1 0 1 Total 10 5 15 Source: Author construct (2016)
No of groups interviewed 4 4 0 0 0 0 0 0 0
Total 12 4 3 1 3 2 1 1 27
3.6 Data analysis and processing For interpretation of results of MIDCA tool, Bakengesa (2011) method has been applied. MIDCA tool uses two types of results representation and separate type of questions for all dimensions of producer organization assessment. One type in scale (1-4) as shown in annex 2 which is used for PPGs assessment from bottom to top approach and another type is % of the score obtained by PPGs, as the components are shown in annex 3 .This % is used for the assessment of the PPGs from VGL perspective .Score described in scale on the average basis of the score received for each PPGs interviewed. The tool divides the poultry producer groups for assessment into the following categories and subcategories respectively as given in table 4. The first category is production includes membership base, poultry egg production, and producer groups services 22
the Second category is internal organization includes staff capacity and leadership, financial resource handling, long-term perspective. The third category is about the market which includes sales, and market and relationship with stakeholders. Table 4 : Data interpretation for MIDCA tool
Category
Subcategory Total Score obtained % score for obtained Membership Base 15 8 80 30 16 53 Production Poultry egg production Producer groups services 15 8 53 Staff capacity and leadership 25 13 52 Financial Resources handling 35 3 60 Internal Organisation Long term Perspective 15 0 57 Sales and market 25 14 56 Market Relationship with stakeholder 25 13 70 Adopted from: Modderman (2010) and (Bakengesa, 2011) Subcategory differs for scale level of the questions as it also includes entrepreneurial skills and collaboration and network dimension for assessment of PPGs. The final score is represented in percentage as shown in figure 11. It shows the score collected for each poultry producer group and shown in the graphical form for final results interpretation from VGL. Results interpretation for MIDCA tool on percentage level A. Less than 50% Shows a very low score, caused by the disagreement of the respondents with the statements. Meaning that the aspect of the PO performance was unsatisfactory and there is an urge for improvement or change. B. Between 50% and 62.5% Shows a low score, dissatisfaction of the respondents is present; therefore improvement is necessary to meet the needs and wishes of the respondents. C. Between 65% and 75% Shows a positive score. The satisfaction of respondents is not optimal. Improvement of the PO performance is not obligatory, but advisable in order to increase satisfaction level. D. Between 77.5% and 87.5% shows that respondents are satisfied with the PO performance. But there is still a possibility to make positive changes in performance of PO. E. 90% or more shows that A very high score, the average respondent fully agrees with the statement and indicates a high level of satisfaction Modderman (2010) and (Bakengesa, 2011).
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Figure 11: Data interpretation for MIDCA tool
Source: http://www.progreso.nl/en/programme-description/midca-model Results interpretation for MIDCA tool on Scale level For Likert-type scale questionnaire, there is a statement given to express the agreement or disagreement of the respondent. Each category as shown in table 5 has a statement to which members of the producer organizations have to indicate their agreement or disagreement with the statement on a four-point Likert-type scale (Vagias, 2006). Table 5 : Results representation for MIDCA scale type Performance assessment of the PPGs 1 Membership base 2 Poultry egg production 3 Producer groups services 4 Staff capacity and leadership 5 Financial Resources handling 6 Collaboration and Networks 7 Sales and market 8 Relationship with stakeholders 9 Entrepreneurial Skills Source: Adopted from (Bakengesa, 2011).
Average score (1-4) 1 1 1 1 1 1 1 1 1
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2 2 2 2 2 2 2 2 2
3 3 3 3 3 3 3 3 3
4 4 4 4 4 4 4 4 4
On the four-point Likert-types rating scale, selecting the following means 1 = Strongly Disagree. 2 = Disagree. 3 = Agree 4 = Strongly Agree. This tool helped to point out the areas in the poultry producer groups that are strong or weak and requiring improvement or building on from the perspective of market linkage. The rating scale serves as performance indicators for PPGs to score which parts of the organization are performing well and where the gaps are. Each subcategory has a number of questions to be answered, with a minimum of score 1 and a maximum score of 4 for each question. For each statement in a category, the scores of the 3 respondents from PPG were collected and the average was found. The total averages for all the statements in a category were summed up to calculate the final mean. The final means of the various categories were represented in the graph(Bakengesa, 2011). Given figure 12 also represents the final results for PPGs performance on a Likert-type scale. Figure 12: Rresults interpretation for PPGs performance Likert-type scale
Source: Adopted from (Bakengesa, 2011). As discussed above the following are the indications of how the results were interpreted. Data obtained from analysis of the performance of the PPGs is presented. As mentioned before, MIDCA tool is have given two types of data representation, scores interpretation for scale level is as follows: A. Mean score lower than 2: Shows a very low score, caused by the disagreement of the respondents with the statements. Meaning that the aspect of the PO performance was unsatisfactory and there is an urge for improvement or change. B. Mean score 2 and 2.5: Shows a low score, dissatisfaction of the respondents is present; therefore improvement is necessary to meet the needs and wishes of the respondents. C. Mean score 2.6 and 3: Shows a positive score. The satisfaction of respondents is not optimal. Improvement of the PO performance is not obligatory, but advisable in order to increase satisfaction level. D. Mean 3.1 and 3.5: The respondents are satisfied with the PO performance. But there is still a possibility to make positive changes in performance of PO. E. Mean score 3.6 or more: A very high score, the average respondent fully agrees with the statement and indicates a high level of satisfaction.(Modderman 2010) 25
CANVAS Business Model: CANVAS business model has been applied to identify the customer’s relationship and segmentation, Value proposition revenue streams and marketing channels for semi-scavenging backyard egg value chain. Value Chain Map: Is applied to know about the various chain actors and channels for the eggs produced. Value Share analysis: Indicates the value added, and value share by various actors of the chain. SWOT analysis on the basis of the results obtained from MIDCA tool.
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3.7 Operationalization of research
Table 6 : Operationalization of research Research Question
1.1
1.2
1.3
Sub Question
Key concepts covered/list of topics
What are the stakeholders and their roles in the Semi- Gender, support services ,actors ,supporters scavenging backyard ,influencers ,sustainability poultry chain and their roles?
What are the characteristics of market linkages poultry producer groups with Horizontal and vertical linkages Stakeholders in backyard poultry value chain?
Research Strategy
Desk study Case study
Desk study Case study
What bottlenecks the stakeholders have in the Semi-scavenging PPG role ,skills development, market linkages backyard poultry egg chain to reach the urban market?
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Desk study Case study
Source of information PPG Members , Published report
Tool used Research for method collection Literature VC map review Checklist Interview
PPG Key informants
Focus group
Stakeholder analysis
Published reports ,Books and Journals Traders PPG Member
Literature review Interview
PPG Members , Published reports PPG Key informants
Literature review Interview
Checklists
Focus group
Checklists/
Tool for processing VCA
Stakeholder analysis
Checklist MIDCA tool and Excel worksheet
MIDCA tool and Excel worksheet
1.4
What are the production, sale volume, costs, and value share involved for different Price of eggs , no.of eggs sold produced , stakeholders in Semi- economics parameters scavenging backyard poultry production system?
1.5
What are the perceptions of stakeholders for the Quality, size, nutritive value, gender quality of eggs in involvement Semi-scavenging backyard poultry production system?
2.1
What are the favorable payment modalities to upgrade the egg Existing payment modalities, value chain finance ,credits sales produced through backyard eggs production system?
2.2
books and published reports Desk study Case study
Desk study Case study
What are the instruments to improve the performance of Chain upgrading, business development poultry producers ,internal organization of PPG groups?
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Desk study Case study
Desk study Case study
PPG Key informants
Literature review Interview
Value share analysis Checklist
Focus group
,PPG Key informants and Books
Literature review Interview
Checklist
Published Reports Traders
Literature review Interview Focus group
Checklist
Literature review Focus group Interview
Checklist
PPG key informants PPG members and Secondary stakeholders Books and published reports
SWOT MIDCA and Excel worksheet
PPG key informants
2.3
What ways can be used to promote eggs production through the Semi-scavenging backyard poultry Value proposition,producers production capacity, production systems?
Source: Author construct (2016)
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Desk study Case study
PPG members Members of PPG and Secondary stakeholders Published reports, and scientific journals PPG key informants
Checklist Focus group
Literature review Interview
Checklist
Focus group
Checklist
CANVAS business model
3.8 Limitations of the studies Limited available time for discussions with target group for research due to cultural barriers that do not permit women to stay longer out of houses. Interviews have been conducted with the special permission of the CDCs involved. Interviews were in group form and in individual basis with the help of female extension worker. Respondent's reluctance to engage in discussions citing that such previous discussions have never yielded any fruitful outcomes. The commissioner had earlier promised to provide transportation during data collection exercise but this was not fulfilled resulting in changes in planning for field visits for data collection. Research findings are applicable to poultry producer groups who are living in a radius of two km from the road and located in hilly part or in plan area away from the urban market almost 15-20 km. Limited information available on PPGs level about volume sold and value share for different market channels.
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CHAPTER 4: RESULTS This chapter describes the results of the research obtained from the field by analysing the value chain, an assessment the PPGs for semi-scavenging backyard poultry producers groups (PPGs), and related information for market access from various chain actors. The chapter presents the research findings which include the stakeholders and their roles, characteristics of linkages, bottlenecks experienced by stakeholders, the production ,sale volume, costs and value shares involved for different stakeholders and the perceptions about the quality. In addition, the favourable payment modalities, instrument to improve the performance of PPGs and promotion of egg production. Findings are also results from interviews conducted, use of MIDCA tool and results from focus group discussion. 4.1 Semi-scavenging backyard poultry egg value chain Target PPGs are rural women and the business also belongs to rural women. Women use eggs for home consumption 10% of their total produce. 30% of the total produce goes to urban sports clubs located in Kabul , 20% of to the rural shops located in villages. Women sell a major percentage of the eggs to the neighbours in the village. Figure 13 shows the current value chain for PPGs. Figure 13: Current egg Value Chain for backyard poultry producers
ChainFunctions
Chain Actors
Consuming
Rural consumers
Retailing
Rural Retailers
Collecting
Village Group Leader
Chain Supporters
Neighbours
Kabul sports clubs
40%
Producing
Input Supplying
Poultry Producer Groups
Commercial poultry feed suppliers
Source: Interviews with key informants
31
30%
Local Government and CDCs,NHLP
20%
Different stakeholders of the semi-scavenging poultry egg production system. Semi-scavenging backyard poultry production is supported by World Bank ,NHLP, MAIL, directorate of livestock .Important stakeholder involved are described as follows 4.1.2 Commercial poultry feed suppliers: Commercial poultry feed suppliers located in Kabul. They sell poultry feed to commercial as well as village-based poultry keepers. The price of the poultry feed available is 30 Afs/kg .They source the feed from Jalalabad and from neighbouring countries.VGL buys the feed for it PPGs. 4.1.3 Poultry Producer Groups: PPGs are village-based poultry egg producer. The number of poultry producers in one group differs in size from group to group but normally they range from 11-20 or in some case more than 20. PPGs are non-formal producer groups with non-registered status. Within the PPGs, one woman is selected as the Village Group Leader (VGL). The PPGs are usually trained by the VGL on poultry eggs production and related activities. 4.1.4 Village Group Leader (VGL): VGL is a woman who is more active socially than other females present in the PPG in the village . VGL is selected by village women in the PPGs and is respected by their neighbours and able to visit other PPGs in the village freely. They act as a middle woman as well as a leader for PPGs. Hence, each PPG has a VGL within the group who also owns a semi-scavenging backyard production business. The VGL plays an important role in the procurement of inputs supply and marketing of the eggs. The VGL is key to network development for PPGs. The VGL is able to travel to urban market to conduct procurement and marketing activities on behalf of their poultry producer groups. The VGL receives a monthly incentive of 2000 Afs from the NHLP for her activities. In addition, the VGL gives a monthly progress report which consists of activities she performed such as a list of topics about poultry husbandry she has discussed with PPGs. Other activities performed by VGL include the following; Provision of technical knowledge on egg production to PPGs Arranging of PPGs weekly and monthly meetings when necessary Marketing of eggs for PPGs Besides natural hatching, VGL helps PPGs to procure 1.5- 2 mmonths old chicks Financial resource handling for PPGs 4.1.5 Retailers: There are two types of retailers based on the location; urban and rural retailer. Rural retailers get the eggs from PPGs, through the VGL and also buy from wholesalers from urban market. The distance between the rural retailer and PPGs in the lowland is less compared to PPGs in highland. The sale of eggs varies between the urban and rural retailers. An average of 3 dozen/day is sold by urban retailers; while an average of 1 dozen/day of eggs is sold by rural retailers. 4.1.6 Market channels: Market channels are diversified for the semi-scavenging backyard egg producers. The current market channels are local retailing shops, urban sports clubs located in Kabul, and neighbours. Findings from focus group discussion noted that PPGs poultry lay eggs at 60% laying rate. They get 18 eggs/days from the flock on /day basis. 10% of the production means 54 eggs they use for home consumption. Rest of the details are given in table 7.
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Table 7 indicates the volume and price for various market channels for semi-scavenging backyard egg producers that they are practicing now. Table 7: Market channels and price for eggs Market channel
% of eggs sold
Eggs sold / month on average base
Selling Price
Village Retailer
20
108
6-7 Afs
Neighbors
40
216
6-7 Afs
Urban sports clubs
30
162
6-7 Afs
Home consumption
10
54
-----
Source: Interviews with key informants 4.1.7 Chain supporters Community Development Councils (CDCs): CDCs are community-based village elders group part of the governance structure .Community development councils play an important role as an entry point for the identification of beneficiaries for the implementation of the semiscavenging backyard poultry egg business model. CDCs helps to identify the target group as they have close contact with the community members. National Horticulture and Livestock Project (NHLP): NHLP is the key implementer for the semi-scavenging backyard poultry egg business model. The NHLP provides extension and support services to the poultry producer groups via the VGL. They also provide support in terms of initial inputs supply such as feed, pullets and medication to the PPGs. NHLP also supports VGL for activities such as capacity building and training for the production of eggs organized for PPGs. Veterinary Field Units (VFUs): VFUs are para-vets trained for basic veterinary care and emergency situation handling. Findings from the focus group discussion stated that only one para-vet exists in the lowland village. This para-vet supplies medicines and vaccines to PPGs when needed. 4.2 Characteristics of the current market linkages Results from focus group discussion showed that PPGs sells their product to rural retailers, urban sports clubs and to neighbours . PPGs incur no cost for transportation when produce are sold to rural shops in the villages. In the case of the sports clubs in Kabul centre, PPGs pay for transportation. Marketing of produce exists mainly by verbal contracts between PPGs, local retailers, and urban sports clubs. If they sell via VGL, PPGs has to pay commission to the VGL, in this case, VGL will not buy the product but will act as a facilitator for marketing of eggs. In addition, the women responded that instances when eggs are not sold via the VGL, they are also paid in cash or installments by the local retailers. 4.3 Bottlenecks faced by stakeholders The results in this section address the bottlenecks faced by stakeholders, data obtained by interviewing various key informants and focus group discussion on the semi-scavenging backyard poultry egg value chain. Challenges faced by various chain actors are mentioned. (See 4.3.1) 33
4.3.1 Poultry Producer Groups Box1: Challenges faced by Poultry Producer Groups Poor access to the market information. Producers have less information about the value of eggs in the market due to cultural boundaries. PPGs have less knowledge about the quality requirements by end market e.g in end market there is a high preference by fresh eggs. From research, it was revealed that they have poor business skills. Challenges faced by egg producers are poor technical knowledge about good husbandry practices. There is also less knowledge sharing about good practices among the groups at the village level. PPGs have poor access to credit and have no linkage with any financial institution e.g Micro financial institutes. PPG have poorly organised collective marketing of their produce and poor bargaining power to negotiate on the price offered by local buyers e.g local retailing shops. Poultry producer groups have no vision, mission, and long-term strategic planning to grow their business . PPGs have poor flock replacement, as they have poultry with old age due to poor availability of day-old chicks (DOC). Poor poultry breeds availability for maximum production e.g Golden crossbreed. There is no proper storage and collection of eggs by the poultry producers groups. Mistrust between the PPGs and leaders. Higher feed price, which affects their gross margin level. Poor transportation facilities arranged by PPGs/VGL for poultry producers to take the eggs to Kabul retailing shops. Source: Focus group discussion and Key informants 4.3.2 Village Group Leader: Findings on the bottlenecks faced by the VGL, is shown in box 2. Box 2: Challenges faced by Village Group Leader Poor market linkage of the VGL with eggs buyers for a profitable price such as linkage with the urban market retailer. In addition, there is limited information on market price and demand. There is an insufficient financial support to the VGL by the implementing partner NHLP such as the provision of the monthly payment. Poor entrepreneurial skills of the VGL such as improper record keeping system about production, supply, and sales by the market Inadequate follow-up programs for capacity building of the VGL by NHLP such as winter feed management techniques. 34
Weak business relationship of the VGL with PPGs and commercial feed suppliers Less collective marketing action of the PPGs, as VGL has to collect eggs of the each poultry egg producer.
Source: data from focus group discussion 4.3.4 Retailers Box 3 shows the bottlenecks faced by retailers in Paghman district. In total three retailers have been interviewed one in Paghman and two in Kabul egg market Box 3: Challenges faced by Retailers There are false labeled eggs available such as colored eggs in the market that have reduced the level of trust for locally produced eggs. There is uncertainty about the on-time delivery of the product to the market by the semi-scavenging backyard poultry producers. Seasonal price variation effects on customers relationship. Weak business relationship with VGL and semi-scavenging backyard egg producers Source: data from focus group discussion 4.4 Costs and value share involved 4.4.1 Costs involved Currently, PPGs are practicing semi-scavenging feeding program for their egg producers. Poultry egg producer offers the poultry commercial feed available 50% of the total feed offered. Given table 8 shows the costs and net results per PPG.
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Table 8 : Gross margin per PPG (for 30 Chicken) Production Costs and sales per month (Afs) Variable cost Feed requirement/chicken 55 gm /chicken = 0.055kg/chicken /day Feed unit price 30 Afs Total feed required in day in 30 chicken*.055= 1.65 kg Kg Total feed cost for one 1.65 kg *30 Afs = 49.5 Afs producer/day Total feed cost for / egg 49,5*30=1485 Afs producer /month Vaccination cost/ egg 90 producer/month Sales Eggs 480 eggs/month @90% of the 480 total production Price for eggs @6 Afs 480*6= 2880 Afs Gross margin/producer 2880-(1485+90)= 1305 / egg producer Gross margin/PPG for 11 1305*11 members = members 14,355/PPG Source: Interviews with key informants
Costs and sales per month (Afs)
17,820 1080 Eggs sold /Year 5760 34,560 34,560-(17,820+1080)=15,660
172,260/PPG
4.4.2 Egg Collection Centre (ECC) costs and gross margin involved In table 10 profit made by the egg collection centre is given and it depends on the number of poultry egg producers to deliver their poultry eggs. PPGs are going to rent a room for storage of eggs to be used as egg collection center with basic equipment supplied by NHLP. Based on the data collected from key informants using checklist given table 9 shows the total various costs involved in running the egg collection centre. Egg sold via ECC, eggs sold/month, selling price and total sale per year is given in Table 10. At the end the gross margin has been calculated for ECC for the owner of the ECC.
36
Given table 9 shows the total variable costs involved at ECC level. Table 9: Total variable cost for Egg Collection Centre (ECC) Production Costs per month (Afs) Variable cost Transportation cost 1200 Packaging cost 1000 Total variable cost 2200 Source: Interviews with key informants
Costs per month (Afs) 14,400 12,000 26,400
Table 10: Eggs sold via egg collection center costs, price and net results
Chain actor 5% Village retailers 5% Neighbours 55-60 % Kabul retailers 30% sports clubs Total sale of eggs Payback to PPG Net Amount Variable cost Gross margin of ECC Rent /month Net Results for one PPG Net results for 2 PPGs
Eggs sold /month 267 267 2940 1604
2200
Total Sale Total Sale Average Selling month /Year (Afs) Price/unit (Afs) 6-7 1869 2,482 6-7 1869 2,482 7 20580 246,960 7 11228 134,736 35546 426,552 31680 380,160 3866 46,392 26,400 1666 19,992 500 6000 1166 13,992 2332 27,984
Source: Interviews with key informants 4.4.3 Value share by various chain actors Table 11 shows the value share by various actors of semi-scavenging backyard egg value chain actors .PPGs the who are the primary producers gets a price of 6 Afs/ unit of the egg produced and share value of 75 present. Added value at ECC is packaging of eggs. Table 11: Value share by various chain actors Value chain Actor Buying Price PPGs Egg collection centre Kabul Retailers Source: Interviews with key informants
Added value 6 7 8
Value Share % 6 1 1
75 12.5 12.5
4.5 Perceptions of egg quality Based on interviews conducted with key informants, it was said that consumers prefer locally produced eggs. This they noted is free from fish meal smell and has high yolk content; it is fresh and easily available. The size of the locally produced egg is bigger than imported eggs. The colour of the eggs also matters in marketing; brown coloured eggs are more preferred by customers for some religious occasions in Kabul. These eggs are free from any drug residues
37
such as antibiotics. However, PPGs have poor egg quality management during transportation, leading to cracked eggs and a reduction in the volume delivered hence selling price for PPGs. 4.6 Favourable payment modalities Findings during the interview showed that the PPGs usually receive cash payments. However, they also experience credit sales of eggs especially to neighbours, which often lead to delayed payment. In addition, installment payments usually occur depending on the purchaser and volume supplied. Findings from focus group discussion showed that PPGs preferred cash payments, which they responded would enable them to buy more inputs for egg production. 4.7 Instruments to improve performance of PPGs In this section, data from the four selected PPG from two different villages, two PPG from lowland (village Miakhail) and two PPG from the highlands (village Farsha) are assessed on 9 dimensions of PPGs using the MIDCA tool. The findings presented were obtained from interviews conducted with PPGs.
38
4.8 Overall assessment of the poultry producer groups for fours villages: Figure 14 shows overall assessment of the PPGs from 4 villages for an average score for scale 1-4. A score below the line graphs (i.e target score ) shows the challenge areas for the PPGs. Figure 14: Overall assessment of the poultry producer groups
Source: Interviews with poultry egg producers (2016) 39
4.9 Poultry producer groups’ assessment scale level In this section, the assessment of the poultry producer groups is presented for MIDCA tool using scale level (1-4) for data interpretation. A score below the line graphs shows the challenge area for each statement (see annex 2). 4.9.1 Membership base Results of the mean score are shown in figure 15 for all 4 PPGs. Target score on membership openness to all members is lower than the target score 2.5 for all PPGs. Figure 15: Membership base
Source: Interviews with poultry egg producers (2016) 4.9.2 Poultry egg production Findings indicated in figure 16 shows, that for all PPGs, the mean score for all statements is above the target score of 2.5. The PPGs are able to produce a good quality egg; increase in egg production is observed, and they have the ability to identify the poultry diseases. Figure 16: Poultry egg production
Source: Interviews with poultry egg producers (2016)
40
4.9.3 Producer groups services: Results shown in figure 17 shows that services provided to members varied in responses. In statement 3.6, the low score indicating un-satisfaction in the sale of eggs by PPGs. However, satisfaction is shown in training, inputs, and feedback by the PPGs. Figure 17: Service provision to members
Source: Interviews with poultry egg producers (2016)
41
4.9.4 Staff capacity and leadership: Results obtained shown in figure 18, that PPGs have inadequate records keeping, poor internal communication and collaboration with other members and poor problem-solving capability. Figure 18: Staff capacity and leadership
Source: Interviews with poultry egg producers (2016) 42
4.9.5 Financial Resources handling Figure 19 shows the mean score for the financial resources handling. This indicates the mean score for all statements is lower than the target value 2.5. The PPGs are dependent on external financial support, lack of control on how expenditures are carried out and how the financial books are kept. Figure 19: Management of financial resources
Source: Interviews with poultry egg producers (2016)
43
4.9.6 Collaboration and networks Results on the analysis of collaboration and networks represented in figure 20 indicate that PPGs are weak in collaboration, such as exhibiting fewer exchange visits and less wellestablished agreements with input suppliers and egg buyers. However, only group 1 scored above the target 2.5, indicating having well-established agreements with buyers. Figure 20: collaboration and network
Source: Interviews with poultry egg producers (2016) 4.9.7 Sales and market Results on sales and market in figure 21 shows that PPGs are unable to sell their eggs all the time; have less information available about market channels, members are unhappy with the price received for their poultry eggs and are unable to calculate the costs involved in egg production.
44
Figure 21: Sales and marketing
Source:Interviews with poultry egg producers (2016)
45
4.9.8 Relationship with stakeholders Results analysis on relationship with stakeholders shown in figure 22 show that there is less coordination among the PPGs and stakeholders, the district authority, and VGL level. Overall score for the relationship with stakeholders is low for PPGs. Figure 22: Relationship with stakeholders
Source: Interviews with poultry egg producers (2016) 4.9.9 Entrepreneurial skills Figure 23 PPGs members are not regularly trained for business skills and lack competencies to perform their tasks. In addition, they are unable to identify market opportunities for their groups. Figure 23 Entrepreneurial skills
Source: Interviews with poultry egg producers (2016) 46
4.10 Performance assessment of poultry producers groups Data from four selected PPG is shown in figure 24, 25, 26, and 27 from two different villages. Two PPG are from lowland (village Miakhail) and two PPG belongs to another Village living in highlands (village Farsha) are assessed from a market linkage perspective. The MIDCA tool is used to analyse the PPGs on the performance based on market linkages. The results are based on the interpretation of the dimensions measured in percentage (Annex 8 MIDCA tool dimensions for PPGs ). A score lower than target score as mentioned in the methodology section 3.6, is considered as a challenging area for PPGs. The questionnaire for MIDCA has been used shown in annex 3 for each of the village group leader selected. Data interpreted in spider chart (see 24, 25, 26, and 27 )shows that score received below than target score are the challenging areas and they remains the dominant constraint for PPGs. 4.10.1 Poultry producer group 1 village Miakhail: In this section, score in percentage is obtained from MIDCA tool question from an interview conducted with VGL for his PPG. Table 12 shows that PPGs have scored less than target score of 50-62.5% in membership base, poultry egg production, producer groups services, financial resources handling, long-term perspective, sales and market relationship with stakeholders. This is also indicated in the spider diagram figure 24. Table 12: Poultry producer group 1 village Miakhail Category Sub Category Group 01 Production Membership Base 15 Poultry egg production 30 Producer groups services 15 Internal Staff capacity and Organization leadership 25 Financial Resources handling 35 Long Term Perspective 15 Market Sales and Market 25 Relationship with stakeholders 25 Figure 24: Poultry producer group 1 Miakhail village
Source: Interviews with VGL (2016)
47
Score Obtained 8 16 9
% Score 60 53 60
17
68
6 0 15
17 0 60
13
52
4.10.2 Poultry producer group 2 village Farsha: Results table 13 show that PPGs have received a lower score than the target value of 50-62.5% in membership base, poultry egg production, producer groups services, staff capacity and leadership, financial resources handling, long-term perspective, sales and market, and relationship with stakeholders. This is also indicated in the spider diagram figure 25. Table 13 : Poultry producer group 2 village Farsha Category Sub-category Group 02 Production Membership Base 15 Poultry egg production 30 Producer groups services 15 Internal Staff capacity and Organization leadership 25 Financial Resources handling 35 Long Term Perspective 15 Market Sales and Market 25 Relationship with stakeholders 25 Figure 25: Poultry producer group village 2 Farsha
Source: Interviews with VGL (2016)
48
Score Obtained 9 16 8
% score 60 53 53
11
44
6 0 14
17 0 56
13
52
4.10.3 Poultry producer group 3 village Farsha: Table 14 shows that PPG has scored low for overall assessment in membership base, poultry egg production, producer groups services, staff capacity and leadership, financial resources handling, long-term perspective, sales and market, and relationship with stakeholders. This is also indicated in the spider diagram figure 26. Table 14: Poultry producer group 3 village Farsha: Category Sub-category Group 03 Production 1 Membership Base 2 Poultry egg production 3 Producer groups services Internal Staff capacity and Organization 4 leadership Financial Resources 5 handling 6 Long Term Perspective Market 7 Sales and Market Relationship with 8 stakeholders Figure 26: Poultry producer group 3 village Farsha
Source: Interviews with VGL (2016)
49
Score Obtained
% Score
15 30 15
8 16 8
53 53 53
25
13
52
35 15 25
3 0 14
9 0 56
25
13
52
4.10.4 Poultry producer group 04 village Miakhail: Table 15 shows that village Miakhail PPG scored above 64% and 68% for stakeholder relationships and staff capacity and leadership respectively. However, membership base, poultry egg production, producer groups services, financial resources handling, long-term perspective, sales, and market scored below target score. This is also indicated in the spider diagram figure 27. Table 15: Poultry producer group 4 village Miakhail Statements Group 04 Category Production 1 Membership Base 15 Poultry egg production 2 30 Producer groups services 3 15 Internal Staff capacity and 4 25 Organization leadership Financial Resources 5 35 handling Long Term Perspective 6 15 Market Sales and Market 7 25 Relationship with 8 25 stakeholders Figure 27: Poultry producer group 4 Miakhail Village
Source: Interviews done with VGL (2016)
50
Score Obtained 8 16 9 17
% score
6
17
0 15 16
0 60 64
53 53 60 68
4.11
Promotion of egg in semi-scavenging backyard value chain
Findings from key informants stated that eggs can be promoted in the market by proper packaging and transportation. Proper packaging will enhance shelf life; reduce losses during handling and transportation. The amount of the eggs supplied to the market is also very important as it determines the production capacity of the PPGs. Provision of an opportunity to participate in agriculture fair and local exhibitions held on a yearly basis under MAIL supervision to the backyard poultry producers will help to promote the eggs as a product. Kabul International AgFair and Farmers Festival are among the current fairs and exhibition organised by MAIL in Afghanistan. 4.12
Stakeholder’s analysis
Following table 16 results have been obtained for stakeholders analysis according to their interests on backyard poultry production . Table 16: Stakeholder’s Analysis
Stakeholders Ministry of Agriculture Livestock (MAIL)
,Irrigation
Roles and
Extension services
National Horticulture and Livestock Project (NHLP)
Extension services to the PPGs and VGL Support in term of initial inputs supplies to PPGs such as poultry feed, pullets Make sure the participation of PPGs in vaccination campaigns Provide incentives for the VGL
Commercial poultry feeds sellers
Supply of poultry feeds to PPGs
Community developing councils
Help NHLP to select the PPGs
Poultry producer groups
Poultry keepers Egg producers Selling of eggs Extension service to PPGs Marketing of eggs Poultry health management Capacity building of the PPGs Extension services about Poultry health management Poultry health management
Village group leader
Veterinary Field Units
Source: Results of Interviews with key informants (2016)
51
4.13
Sustainability aspects of the semi-scavenging backyard egg value chain:
Value chain sustainability aspects for backyard poultry production systems are indicated in table 17. It includes the people, planet and profit aspects of the sustainability. Table 17 : Sustainability aspects of semi-scavenging backyard egg value chain Aspect Semi-scavenging backyard egg value chain
People
Women handle the backyard egg production system which gives them an opportunity for empowerment. Egg produced through semi-scavenging backyard egg production system are fresh and healthy.
Planet Profit
Backyard poultry producers use the manure as fertilizers for their agricultural field. Unlike intensive poultry producer’s backyard provides open scavenging availability for poultry. Less space and water required for keeping poultry. The continuous source of income from eggs produced.
Source: Interviews with key informants (2016)
52
CANVAS Business Model: Given figure 28, shows the different aspects of the current CANVAS business model for PPGs Figure 28: CANVAS business model Key Partners Key Activities MAIL, Poultry rearing and CDCs egg producing VGL ,NHLP Selling Commercial egg producers World bank (Donor)
Value Proposition Local eggs Brown color eggs
Key Resources Land for Semiscavenging Trained project staff Chicken for egg laying eggs
Customer Relationships Business relationship with neighbours and Sports clubs
Channels Village Group leader Poultry producer groups
Cost Structure Revenue Streams Feed cost Sale of the eggs Medication and vaccinations cost Source: Interviews with Key informants (2016)
53
Customer Segments Village consumers Urban Sports clubs Neighbours
CHAPTER 5: DISCUSSION This chapter discusses the research findings in light of the literature study. The discussion focuses on the findings of the assessment of poultry producer groups in Paghman district of Kabul province. This chapter focuses on stakeholders and their roles, characteristics of market linkages, bottlenecks in semi-scavenging backyard poultry egg chain, cost and value share, and perception of egg quality. In addition, favourable payment modalities, instruments to improve performance and promotion of egg in semi-scavenging backyard egg value chain are discussed. 5.1 Stakeholders and their roles Different stakeholder exists within the semi-scavenging backyard egg value chain as mentioned in chapter 4 section 4.1. The findings indicate four chain actors in the chain which are the commercial poultry feed suppliers, PPGs, VGL, and retailers. The NHLP provide initial inputs to start the business by commercial poultry feed suppliers; which occurs once. The PPGs are at the producer level in the chain and are usually women. Findings indicating women in backyard poultry production is supported by Emal (2015), who noted that 93% of poultry ownership in the villages are in the hands of women and in many cases is the major asset of the village women. The PPGs are guided by the VGL on poultry egg production and marketing of products. The VGL is selected from within the PPGs by the members, and they are to facilitate egg production by the PPGs by procuring inputs and marketing of eggs for the PPGs. This is shown in studies conducted by Nessar (2002), noting that the VGL provide services such as regular vaccinations, selling of mixed feed, treatment of sick birds and marketing of eggs. Currently, findings indicate a level of poor chain coordination from the input supplier to the retailer level. However, based on an interview conducted the relationship between the VGL and PPGs currently leads to side-selling on the part of the PPGs, due to irregular visits by the VGL to collect the eggs produced. Findings from interviews show that rural retailers buy and sell eggs in small quantities within the district. This, however, can result in low revenue which is experienced by the PPGs and thus a need to improve market linkages. Other stakeholders identified are the community development councils, who have close contact with community members. They act as an entry point for the identification and mobilization of beneficiaries for semi-scavenging backyard poultry production. The collaboration of the various chain actors helps to improve market linkages, chain upgrading opportunities and distribution of risk and benefit among the chain actors (Pietrobelli and Staritz, 2013). 5.2 Characteristics of Market linkages The markets open to the PPGs via the VGL are rural retailers and urban sports clubs. In addition, eggs are sold to neighbours within the village. Findings on existing market linkages show that PPGs eggs produced within the value chain are mainly marketed to the rural retailers which are sold at a lower price but incur no transportation cost. Similarly, Kryger et al (2010) relate the significance of transaction costs incurred in relation to distance from markets. This according to findings may be responsible for the sale of eggs within the rural markets (rural retailers) than to urban retailers which are far from the PPGs. PPGs are also involved in side-selling in cases when the VGL does not visit the PPGs. Marketing of produce exists mainly by verbal contracts between PPGs, local retailers, and urban sports clubs. However, challenges faced by retailers with such contracts are the untimely delivery of eggs which consequently leads to the dissolution of contract with PPGs. This is noted by
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Shepherd (2007) be an associated drawback when producers are unable to meet the demands of the markets leading to termination of such contracts. 5.3 Bottlenecks in semi-scavenging backyard poultry egg chain Bottlenecks exist at PPGs, VGL and at the retailer level; this is mentioned in chapter 4 section 4.3. Findings from key informant interviews and focus group discussion revealed several bottlenecks experienced by the chain actors. Major challenges are poor access to market information, poor collective marketing, poor access to credit, lack of vision and mission for business, and inadequate collaboration and network with stakeholders.The challenges in the poultry production are a lack of market linkages and lack of access to input supplier among others (DCA, 2010). Challenges experienced by the PPGs, VGL, and retailers have impacted on the viability of the semi-scavenging backyard poultry egg production. 5.4 Costs and Value share According to study result, 75 % of value share at poultry egg producer level, where this shows the high cost and risk that producers incurred in the poultry business. According to KIT (2006), state opportunities of introducing producer organisation may reduce transaction cost in terms of transportation cost and other service related cost. In addition, the producer organization mitigates risks; build up market power through economies of scale. So in this study also the poultry producers are grouped to reduce costs related to poultry feed and risk related with gross margin for them. 5.5 Perceptions of egg quality Results of the research showed that PPGs had a poor egg quality management system during transportation and as such unable to offer a quality product to the end market. Findings from key informants indicated that the consumer's preferred eggs which are brown coloured, fresh and free from fish smell. Seidler (2003) supports this finding when he stated that “concerning end market demand consumers in some markets may prefer white eggs or brown egg; which in such circumstances that preference criteria include soundness, freshness, cleanliness, the colour of egg shell and shape of the egg. Being a semiscavenging backyard poultry, an egg produced are fresh within the village, which can be transported to the market. 5.6 Favourable payment modalities Cash payments are the preferred mode of payment for PPGs; however, experiences of deferred payments occur as was noted during the interviews and focus group discussions. This is one of the disadvantages of using a leading farmer such as the VGL as linkage to markets. The probability of the VGL pulling out of the venture poses a hindrance in the market links. Shepherd (2006) similarly noted that market linkage promoted by lead farmer such as the VGL may often experience deferred payment by the buyers and the PPGs may experience the eventual pullout of the VGL from the venture. However, the VGL is in the position to negotiation power with large quantities of produce. In addition, installment payments usually occur depending on the purchaser and volume supplied. Findings from focus group discussion showed that PPGs preferred cash payments, which they responded would enable them to buy more inputs for egg production. 5.7 Instruments to improve performance The MIDCA tool was used to assess the performance of poultry producer groups which is shown in chapter 3 (methodology). The dimensions of PPGs are the membership base, 55
poultry egg production, producer group services, staff capacity and leadership, financial resources handling, collaboration and networks, sales and market, relationship with stakeholders and entrepreneurial skills. The following discussions show the main categories and subcategories of the PPGs performance assessment. i. 5.7.1 Production Following discussions are related to the factors or activities related to production performance of the PPGs. Membership base Findings show that PPGs membership is not open to everyone (section 4.9.1); this was recorded in the four PPGs interviewed showing similar results. This contradicts the open membership stated by Wennink, Nederlof and Heemskerk (2007). However, groups are known to set criteria for membership despite been termed “open membership”. The production level sets a standard for membership. In addition, most members actively participate in the activities of PPGs. To have an effective group member should act as one in dealing with issues of PPGs management and egg production. This similarly reflects Shiferaw et al (2006), where he noted that such groups can only be effective when they come together and form a group to solve common problems. Producer groups services Producer organization offers a range of services such as input management (section 4.9.3). These services include extension services e.g technical advice on production and transportation of product to end market. These services aimed at improving their production and market linkage. Findings show that PPGs received unsatisfactory responses on the sale of eggs. This suggests their inability to meet the market their products. Studies by Kelly (2012) notes the important roles played by PPGs in overcoming the barriers faced by smallscale egg producers. This, however, cannot be recorded as occurring in the groups under study. Research shows that PPGs are unable to meet the marketing needs of the poultry egg producers, as they have received a score below satisfaction level. ii. 5.7.2 Internal organization Financial resources handling Analysis of results section 4.9.5 shows that PPGs have no committee for financial handling. Handling of finance is crucial for any group and such a group requires skills and competencies. This is similar to FAO (2012) studies which recognise that a good leadership of POs must have knowledge about transparent financial management. PPGs are dependent on external financial support. Hence, they lack monthly contribution as savings and could be the reason why they depend on external financial support. Ferris et al (2008) suggested that simple savings methods such as merry-go-round credit saving methods which start with very low inputs are one way to introduce the idea of credit savings. This would go a long way towards meeting the needs of the PPGs. Ton and Bijman (2006), supports the use of PO to meet the needs of members within such an association. According to Ton and Bijman (2006), PO is a community basis association which make self-help groups, based on rules and regulations to meet the demands of PO. Long-term perspective Results of the MIDCA tool used shows that PPGs from both villages had no long-term perspective to run the business. The PPGs lack vision and mission; no strategic plan. The lacks of collective vision can be said to relate to the poor development and planning of the 56
PPGs in the research area. Penrose-Buckley (2007), concurs when they pointed out that it is essential for PO to develop sustainable plans for their business when they are at early stage of development. This collective plan is however not present among the sampled PPGs. iii. 5.7.3 Market Collaboration and networks Results of research (section 4.9.6) section showed that PPGs were not satisfied with the current level of collaboration. This is seen that PPGs had limited cooperation and partnership with other stakeholders in the chain and participation in meetings with other PPGs. This shows different results as described by Poppe and Bijman (2011) who stated that POs can easily establish vertical coordination within the chain. It is noted that a PPG works well when they are connected to each other which is relatively poor under the current PPGs analysed. Identification and collaboration of stakeholders have been known to enhance the production performance of PPGs. Based on the findings; this has not been well established within the PPGs. Studies conducted by Mangnus, 2010 states that agreements are one of the strategies to coordinate between chain actors and partners. Sales and market of eggs Research findings (section 4.9.7) indicate that PPGs were unable to sell their poultry eggs. This may be attributed to limited available information on the market and market channels. The need for the market of produce cannot be overemphasized. The POs are known to be in a position to link produce to market. The PPGs sell majorly to the local market, which currently cannot generate the necessary revenue desired. Studies conducted by PenroseBuckley (2007), states that producer organization helps in improving the volume of produce by helping to find new market channels for the product. Thereby suggesting the need for a more active market search by the PPGs, in order to increase revenue generated. Interestingly, findings from the interviews noted that within the PPGs studied only Group 1 and 3 indicated to search for a new market. Siddique (2015) concurs with studies that PO offers a substitute market channel to members. Research findings also indicate that PPG sells eggs to local buyers which support the reason noted by Ferris et al (2008) local collectors works in short distance they buy limited volumes and offer a limited amount to the sellers. Entrepreneurial skills The results indicate (section 4.9.9) that PPGs have inadequate skills to run the business. They received inadequate training on business skills. Hence, PPGs were unable to identify the market opportunities and risks. An improved business skill through training is known to contribute to the sales and other tasks of PPGs. Conversely, Ferris et al (2008) concur that business skills help PO to gain insights on, understand the relationship of production and market and awareness about seasonal price volatility.This also helps to manage input supply. It is also stated that in the rapidly growing business world requires an efficient and knowledgeable group leader by PO. 5.8 Promotion of egg in semi-scavenging backyard egg value chain Findings from key informant interview noted that PPGs lack proper packaging of poultry eggs. Packaging reduces the physical damage to the product. The packaging also provides producers with the opportunity to differentiate their product e.g. eggs available in open market. Ferris et al (2008) explained that perishable products need to be packaged well to be marketed widely and efficiently. Improving the egg production within the value chain, calls 57
for a promotion using fairs and exhibitions. As stated by MAIL (2016), agricultural fairs and exhibitions are carried out in Afghanistan such as the Kabul International AgFair, to boost trade and increase market for agricultural products. These strategies are applicable for promotion and advertising purposes, making the product more attractive and available to the consumer. 5.9 SWOT analysis for poultry producer groups Data obtained from MIDCA tool e.g Strengths, Weaknesses, Opportunities, and Threats of PPGs summarized using SWOT analysis matrix in table 18 for semi-scavenging backyard poultry producer groups. SWOT analysis is helpful to identify the strategies towards improving the linkages of PPGs to the urban market. SWOT analysis is derived from results obtained from MIDAC tool applied for assessment of the PPGs and focus group discussion. Table 18 : SWOT analysis for poultry producer groups Strengths
Weakness
Egg produced through semi-scavenging backyard poultry are free of any kind of disease Quick money return by selling of eggs PPGs have other activities along with Backyard poultry production e.g cattle rearing and agriculture PPGs have technical knowledge about poultry rearing. Low input production system Land availability for scavenging to poultry
Opportunities
Demand for brown eggs on national level is high Priority of MAIL to develop poultry sector. Long shelf-life of eggs produced The willingness of consumers to pay a premium price. Climatic conditions are favourable for poultry production On-farm feed formulation by PPGs for their egg-laying poultry. Job opportunities for rural women Source: Results interpretation of Key informants
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Poor market opportunities identification by PPGs Less access to financial resources Weak entrepreneurial skills Weak egg handling skills during transport Less internally organized PPGs Limited access to the quality inputs and market information Poor collective marketing of eggs Poor transportation arrangement by PPGs to Kabul retailing shops Lack of long term perspective Poor problem-solving skills Threats Import of eggs by traders There is less developed policy for backyard poultry producers Less follow up of the capacity building programs by NHLP for PPGs and VGL Price fluctuation in the market. High input cost e.g commercial feed. A low tax on imports of poultry inputs, eggs and other poultry products.
CHAPTER 6: CONCLUSION AND RECOMMENDATIONS 6.1 Conclusion The purpose of the research study based on the findings is to recommend strategies to National Horticulture and Livestock Project (NHLP) to improve access to the urban market for semi-scavenging backyard poultry egg producers in Paghman District of Kabul province. The conclusion seeks to address the two main questions. What is the current situation of semi-scavenging backyard poultry egg chain in Paghman district of Kabul province? Currently, semi-scavenging backyard poultry egg value chain involves NHLP, Ministry of Agriculture Irrigation and Livestock (MAIL), PPGs, VGL, rural retailers. The main inputs are provided by commercial poultry feed suppliers located in Kabul. PPGs are characterized by operating on a trust-based business relationship and verbal contracts with VGL and sports clubs located in Kabul. In addition, the backyard poultry egg value chain faces bottlenecks to reach the urban market. The current bottlenecks are limited market information, poor savings of credit, inadequate management of the egg quality, poor availability of the inputs, inadequate entrepreneurial skills, and record keeping by PPGs. Findings from research indicate that the major costs involved are input, medication and transportation cost. The perceptions of stakeholders on the quality of eggs in semi-scavenging backyard poultry egg production show a preference for the local egg. However, consumers prefer a local product that is fresh, free of fish meal smell and free of cracks. Stakeholders and their roles Different stakeholder exists within the semi-scavenging backyard egg value chain .The NHLP provide initial inputs to start the business via commercial poultry feed suppliers. The PPGs are guided by the VGL on poultry egg production and marketing activities. The VGL to facilitate egg production by the PPGs by procuring inputs and marketing of eggs for the PPGs. Currently, level of poor chain coordination from the input supplier to the retailer level. Findings from interviews show that rural retailers buy and sell eggs in small quantities within the district. Other stakeholders identified are the community development councils, who have close contact with community members. Characteristics of Market linkages Findings on existing market linkages show that PPGs eggs produced within the value chain are mainly marketed to the rural retailers which are sold at a lower price but incur no transportation cost. PPGs are also involved in side-selling in cases when the VGL does not visit the PPGs. Marketing of produce exists mainly by verbal contracts between PPGs, local retailers, and urban sports clubs. However, when producers are unable to meet the requirements this may lead to termination of verbal contracts and potential buyers may search for new suppliers. Bottlenecks in semi-scavenging backyard poultry egg chain Bottlenecks exist at PPGs, VGL and at the retailer level. Major challenges are poor access to market information, poor collective marketing, and poor access to credit, lack of vision and mission for business, and inadequate collaboration and network with stakeholders. 59
Costs and Value share Semi-scavenging backyard egg value chain major costs involved are input, medication, and transportation cost. Value share at poultry egg producer level 75 %. This shows the high cost and risk that producers incurred in the poultry egg business. So in this study also the producers can be in a group and reduce cost related to poultry feed and risk related with gross margin for them. Perceptions of egg quality by end market Egg quality has an important role in the backyard egg value chain. End market gives more preference to the brown eggs because they are produced locally, has more yolk contents. It is also fresh, free of disease e.g Newcastle Disease (ND). Locally produced eggs are also free from fish meal smell and free of cracks. Due to these reasons, backyard poultry eggs hold a potential to fetch better prices in comparison to commercial white eggs. What upgrading strategies improve the egg value chain for Semi-scavenging backyard poultry egg producers in Paghman district of Kabul province? In order to upgrade the egg chain in backyard poultry production system, favorable payment modalities such as prompt cash payments are required and installment payments usually occur depending on the purchaser and volume supplied. The roles identified during the research played by PPGs are; management of Inputs, provision of technical knowledge on egg production, management of PPGs weekly and monthly meetings, marketing of eggs through VGL, PPGs has also a role in the storage of the eggs for the short term, linking potential producers with buyers and provision financial support. Instruments for PPGs need to improve are membership based, producer groups services, financial resources handling, long-term perspective, stakeholder collaboration, sales and market of eggs and entrepreneurial skills development of the PPGs. Egg as a product can be promoted by packing it properly. Proper packaging will enhance shelf life eggs as a product. Provision of an opportunity to participate in Ag–fare and local agriculture exhibitions held on a yearly basis under MAIL supervision will also help to promote local eggs. Based on research results and discussion, important aspects for improvement are listed to tackle the challenges identified for semi-scavenging backyard egg value chain. Favourable payment modalities Cash payments are the preferred mode of payment for PPGs, however, experiences of deferred payments occur as was noted during the interviews and focus group discussions. In addition, installment payments usually occur depending on the purchaser and volume supplied. Findings from focus group discussion showed that PPGs preferred cash payments, which they responded would enable them to buy more inputs for egg production. Instruments to improve performance The MIDCA tool was used to assess the performance of poultry producer groups for dimensions such as membership base, poultry egg production, producer group services, staff capacity and leadership, financial resources handling, collaboration and networks, sales and market, relationship with stakeholders and entrepreneurial skills.
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6.1.1 Production Following discussions are related to the factors or activities related to production performance of the PPGs. Membership based Results of the research indicate that PPGs have poor organizational structure, there is a VGL selected by PPGs. VGL is controlling the PPGs and also getting trained for good husbandry practices. PPG is dependent on the technical capacity of the VGL. PPG membership is not open to everyone as shown under section 5.7.1 in the discussion. Financial Resources handling The poultry producers have no well-established savings and credit services for members at the group level to fulfil their operational costs. Thus PPGs are dependent on external financial support. Long term perspective PPGs and VGL have no proper vision and long-term perspective to run their business, thus PPGs need to have a financial business planning and a shared vision to run business in long term. Collaboration and networks There is a limited collaboration between PPGs and as VGL .PPGs members are unhappy with the current collaboration networks that they have .There is a need for a business relationship through collaboration between PPGs and VGL. Having collaboration networks with other stakeholders in the chain will help the PPGs will help them to be more efficient in the production of eggs. for instance collaboration with female extension worker who works for NHLP in providing training on good poultry husbandry practices . Sales and market of eggs PPG are unable to identify the profitable market channel for their poultry eggs. They also have less developed marketing strategy e.g the identification of the target market to improve their business performance. Instead of selling eggs to individual buyer’s e.g neighbours and local retailers PPGs need to sell to VGL. There is a different type of costs involved but the major one is input costs e.g. feed is 30 Afs, PPGs have the opportunity to make poultry feed at PPGs level to improve gained margin at PPGs level. PPGs are having no proper records to calculate the costs and benefits involved in their business. Entrepreneurial skills Poultry producer groups have less well-developed business skills hence are unable to identify the market opportunities and risks. PPGs need more motivation to take advantage of the available opportunities and continue the egg business .This is possible by innovation in the current egg production trend e.g scaling up the egg production. Eggs promotion through semi-scavenging backyard egg chain egg Results of the MIDCA tool analysis shows (results sections 4.9.1-4.9.9) that general management practices have received a low score for PPGs from both villages. Urban retailers and consumers are willing to pay a premium price for the eggs produced by backyard egg producers. PPGs have inadequate skills in proper handling of eggs such as packaging the eggs in the current value chain. This involves the egg losses at both collection 61
and transportation level. Hence, egg promotion as a product is an area that requires improvement. As an overall conclusion, PPGs are village-based local egg producer women groups. PPGs have the ability to produce quality eggs. However, PPGs faces challenges such as limited access to the market, poor transportation facilities arranged by PPGs for egg producer to take eggs to Kabul retailing shops, inadequate entrepreneurial skills of the PPGs, poor input supply management, poor credit availability for inputs buying, and poor record keeping. Therefore, there is need to improve the urban market linkages for backyard semi-scavenging egg producers in Paghman district, Kabul province.
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6.2 Recommendations This section presents recommendations based on the conclusions drawn from the research and identified challenges faced by semi-scavenging backyard poultry egg producers in Paghman district. Recommendations are given to improve the role of PPG in the collective marketing of eggs, hence improve market linkages. Some of the available strategies and intervention points are described. The following recommendations are made for National Horticulture and Livestock Project, Ministry of Agriculture Irrigation and Livestock, for consideration and adoption. Establishment of two small-scale Egg Collection Centre (ECC) , each under the control of village group leaders both in low land and high land for the PPGs. This will include the introduction of new chain activities such as packaging and collective marketing of the eggs to meet end market demands. These ECC will operate on a regular collection of the eggs from PPGs. Poultry producer will take their poultry eggs to the ECC. New chain activities will help to promote the eggs marketability, promoting the consistent and stable supply of eggs at a more stable price. In figure 29 is the proposed value chain for semi-scavenging backyard poultry egg. Figure 29: Proposed Value Chain for Semi-scavenging backyard poultry eggs
Consuming
Chain Supporters / Influencers
Chain Actors
Neighbours
100%
100%
Village retailer
Kabul Retailers
Urban Sports clubs
Home consumers
30%
60%
Collecting
5%
Egg Collection Centre 5%
5%
90%
Producing
Poultry Egg producers
Input Supplying
Commercial poultry feed suppliers
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Product flow
Kabul Consumers
CDCs, World Bank, NHLP and VGL
Retailing
Local consumers
Money flow
Chain Functions
Linking ECC to the retailer located in Kabul by NHLP through value chain business platforms. Kabul retailers and other actors in the value chain deliberate on stakeholder interests affecting the semi-scavenging backyard poultry egg producers for marketing of their poultry eggs. In order to improve the skills of the PPGs and VGLs in poultry husbandry practices, introduction of capacity building programs by NHLP female extension worker on natural hatching of eggs for flock replacement because it is more economical compared to buying pullets replacement flock, on-farm feed formulation using locally available feed ingredients such as maize and wheat grains this reduces costs of feeds (Annex 07) Establishment of merry-go-round savings for micro financial support for PPGs by NHLP female extension worker. This would give them an opportunity to save and access credit; hence promoting financial independence. By introducing a training program for the PPGs and ECC on the use of available financial resources handling and mobilization of the PPGs for saving scheme. Financial records will be kept by VGL or any member elected by PPG and to be monitored by the NHLP. Development of chain cooperation by a shared vision by NHLP between PPGs and egg collection centre to address the above-mentioned challenges facing the PPGs that will eventually lead to value chain development. Proposed CANVAS Business Model Figure 30 shows a new proposed business model adopted from CANVAS business model for ECC. Activities include proper packaging of the eggs, delivery of eggs to ECC, introduction urban retailer and trust-based relationship for ECC to supply eggs.
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Figure 30: Proposed CANVAS Business Model for Egg collection centre Key Partners MAIL NHLP CDCs VGL Commercial feed suppliers World bank (Donor) Veterinary field unit
Key Activities Egg producing Packaging (New) Transporting eggs (New) Selling of eggs
Value Proposition Fresh Competitive market price Eggs free of fishmeal smell Free of risk e.g Disease free (New)
Channels Poultry egg producers travel and manual delivery of eggs to Egg collection centre (New) Local car for transportation to Kabul retailing shops
Key Resources Land for scavenging Chicken for egg production Technical poultry producers Egg collection centre Cost Structure Variable cost Feed cost Medication and vaccinations cost Transportation cost Packaging cost Fixed cost: Rent of ECC/month Monthly wage of ECC owner
Customer Relationships Business relationship with ECC Trust based relationship of ECC with Kabul retailers by meeting their volume demand and quality requirements Contract with buyers (New)
Sustainability People: Healthier product and empowerment of rural women .Also, contributes to household’s food security. Planet: Poultry manure for fertilizer, less space, and water required for poultry keeping. Profit: continuous Source of income egg produced through backyard is profitable to sell.
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Revenue Streams Sale of eggs produced
Customer Segments Kabul retailers Institutional consumers (New) Village consumers Neighbours
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