The distorted price of a chicken
Technical University of Madrid | December, 2023
In MATS’ case study 5, we explore three potential pathways for improving the competitiveness of domestic poultry products in Ghana and thus contribute to food sovereignty in terms of animal protein. Our study of possible interventions with the help of Causal Loop Diagrams (CLDs) allowed us to develop a feasibility participatory analysis with farmers and other stakeholders involved.
The CLD illustrates elements that explain the current situation in the poultry sector and its behavior over time. By visualizing the interrelationships between elements, the CLD allowed identifying levers for change to make the domestic poultry sector more competitive, which in addition to contributing to food sovereignty within the country, would improve the household’s economy and food security of the agents involved in it.
High import reliance and high production costs
Ghana relies heavily on imports to meet domestic demand for animal protein. One reason is that poultry value chains in the country cannot compete with imports, either in quality or prices. As a result, there is a missed opportunity to enhance and support local markets to improve the livelihoods of small farmers and others who are part of domestic poultry value chains.
70% of the costs for poultry farming in Ghana are allocated to feed the birds. Poultry feed – such as maize and other cereals – is mostly imported, making farmers subject to price volatility in international markets, driven e.g., by the Russian war in Ukraine. Thus, the production costs of national poultry products end up being very high weakening their competitiveness with imported products.
Enforcement of regulations along the poultry value chain
The CLD shows how the enforcement of regulations along the poultry value chain – subsidies for poultry feed – could, first of all, improve the farmers access to quality feed, but also their adoption of better practices and technologies. This would make their practices more sustainable and more competitive. It would also give them access to quality health services and products, including day-old chicks with better health and more resistant genetics to possible illness.
Increase selling prices
As a second way of intervention, we analysed the impact of increasing the selling prices of national poultry products. These would allow farmers to access better markets to sell their products. But in order to raise their selling prices (see in figure 3). they would need to comply with national quality standards; Their products should be differentiated, meaning, the chicken should be sold in pieces, frozen, and so on. Chickens with an adequate and healthy growth rate, raised under good sanitary and genetic conditions, would also allow farmers to raise prices, since they would be able to sell the chickens with less time in production process, meaning less costs; and the fowl will normally also weight more at the moment of the sell, increasing its price.
Farmers’ membership in associations
Our third recommendations (analysed in Figure 4) is for farmers to be part of associations. As a group, instead of being individual smallholders, farmers will have access to low interest loans, which will facilitate their access to all the “privileges” such as adoption of better practices, access to quality feed, and health services. Associations also have access to knowledge and technology services, which can help them to adopt more sustainable practices.
The Technical University of Madrid is a partner of the MATS project and leads case study 5. The UPM research team brings a food systems and system thinking approach to the MATS project, to guide the implementation of the 15 case studies. Their research experience combines systems thinking ideas and practices, with participatory methods and tools to inform food systems transformation.