Just put all the political affiliations, liking and disliking aside and examine the chicken model presented by our populist Prime Minister Imran Khan from the point of view of poverty alleviation in economic terms.The media in Pakistan is attributing this idea to richest man in the world Bill Gates. But this is factually incorrect. African Country Mozambique initiated similar model ten years ago which failed. Bill Gates floated this idea in June 2016 and announced to give 100,000 chickens to the poor because chickens are “easy to take care of” and with just five hens African women can earn up to $1000 per year.
Five hens model has failed
If the government of Prime Minister Imran Khan is serious to help the poor rural population than it needs to look beyond the five hen solution which has failed in Africa and Latin American countries even refused to accept free hens and chickens from Bill Gates. Just handing over few hens or eggs will not solve the problem. To reduce or abolish the poverty and hunger, the government needs to undertake the most serious economic and social reforms in the socio-economic structures.
Bill Gates put forward a vague idea and model of small scale chicken farming. The experiments around the world shows that this model of handing over five hens to a family failed to reduce the poverty. It can help poor people to increase their meager incomes but cannot lift them out of poverty. These measures basically kept people in the poverty but with better incomes. It can save them from starving.
But they cannot complete the journey from poverty towards decent life and better living standards. The direct support of the state and sustainable models can help. The small farmers need protection from blind market forces. Small farmers cannot compete with big players in free market mechanism. They need protection and only state can provide it.
According to Duncan Green, senior research fellows at London school of Economics Josef Hanlon and Teresa Smart, African country Mozambique experiment this chicken model a decade ago. They did brilliant research on Mozambique’s experiments on small scale chicken farming. If the PTI government is serious to introduce program on family chicken farming then it should learn important lessons from this research. Mozambique has had its district development loan fund, known locally at the “7 million” because the initial fund was Meticais 7 million per district.
Most farm families have chickens running around, and one of the most common requests for loans from the fund is from people who agree with Gates that chickens are “easy” and they want to expand to commercial production. Nearly all fail, and cannot repay their initial loan. Perhaps the problem is not the initial five hens.
Ed Wethli, an expert of small scale chicken production in Africa, thinks that Bill Gates is not completely correct. The true ‘free-range’ chickens in that they wander around wherever they like with no boundaries, often roosting in trees at night. They find most of their own feed, are good at hatching and mothering young chicks and they have the ability to survive under harsh conditions.” They are an important part of local life, and are a valuable food source as well as being used as gifts and for ceremonies. And a few are sold to neighbours.
The problem is scaling up to commercial production, with larger flocks that no longer live in trees but require coops, feed, and treatments to prevent parasites and Newcastle disease. And they require markets. Small chicken growers in Mozambique usually fail because they cannot produce at a cost below those of the larger growers. In even remote local markets, frozen chickens produced in Mozambique or imported from Brazil and South Africa are cheaper than local live chickens.
Local chickens taste better, but they are a luxury product. And margins are tight – to make a profit a farmer must be able to grow and sell the chicken in five weeks; if it takes just one extra week, then all the profit is lost to extra feed costs. With veterinary and other technical support, village chicken production can be made profitable, although more at the level of $100 per year rather than $1000. But in Mozambique, that kind of support is rarely available.
Brazilian model worked
According to this research, over three decades, Brazil developed an entirely different model. With intensive support by the Brazilian development bank BNDES and tight regulation by the government, Brazil has become the second largest chicken producer in the world and the largest exporter. The chickens are raised by tens of thousands of family farmers, but on a contract basis to large companies which provide day-old-chicks, feed, medication, technical assistance and, most importantly, a guaranteed market.
There are two lessons here. First, this industry was not created by the private sector, but by long term intensive investment by the government – it is the state the builds capitalism. Second, small family farmers can be more effective than large producers, if they are integrated in a value chain.
Fifteen years ago most chickens on the market in Mozambique were imported, mainly from Brazil.But two US NGOs, Techno Serve and Clusa (Cooperative League of the USA – many people do not realise that in the capitalist US, a majority of farmers are members of cooperatives), began work to build local chicken production and local soya growing to feed the chickens cheaply. By 2008 local chicken production exceeded imports.
It took another four years of intensive, on the ground, work – cutting costs and losses and introducing more productive chicken breeds – to build the industry up to the point that the private sector was interested. Now the most effective producers follow the Brazilian out-grower model, with families rearing the chickens and a central company providing day-old-chicks, feed, medication and markets.
The best family farmers are now earning $750 per year, which in Mozambique is a lot of money. Unlike Bill Gates’ five hens or the families who try to expand with loans, these farmers receive hundreds of day-old-chicks, an effective support package, and are sure of being able to sell what they produce. And those chickens on the market are less costly than Brazilian imports, providing an inexpensive source of protein to local people.
As usual, the aid industry can only see the two extremes and ideas that come from outside – Bill Gates’ five hens or Odebrecht’s millions of chickens. The successes in the middle, and the successes developed locally, are ignored. In Mozambique thousands of Mozambican farmers are already raising their income by producing good value chickens – but that does not grab headlines. So let us hand out hens instead.
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24 August, 2019