Marketing system and channels for scavenging local chickens in Lilongwe, Malawi

T N Gondwe*, C B A Wollny* and W Kaumbata

Department of Animal Science, Bunda College of Agriculture, University of Malawi, P.O. Box 219, Lilongwe, Malawi;
^*Institute of Animal Breeding and Genetics, Animal Breeding and Production in the Tropics, Georg - August Universität Göttingen, Kellnerweg 6, 37077 Göttingen, Germany.
tgondwe@gwdg.de  or   tgondwe@bunda.sdnp.org.mw

Abstract

A study was conducted to identify marketing structure, players, prices and profit margins of local chickens in rural and urban Lilongwe, Malawi. One rural market (Mitundu) and two urban markets (Lilongwe and Kawale) were visited three times during the dry season and two times during the wet season from 2002 to 2003.

Male middlemen sold both male and female local chickens of all phenotypes at the three markets. Middlemen at Mitundu bought their chickens from farmers and trading centres in surrounding villages and from Mozambique. Middlemen at urban markets bought chickens from rural and district markets and used public transport for the chickens. Purchasing, selling prices and profit margins were higher for urban markets than for the rural market. Selling prices for all markets were higher during the dry season. Profit margins at urban markets were higher during the wet than the dry season. Chickens sold during the dry season were heavier (1.50 kg ± 0.03) than during the wet (1.38kg ± 0.03) season. Live weights positively influenced pricing and profit margins.

It is concluded that a marketing chain exists for local chickens. Farmers transact in form of cash and barter at village level, whereas afterwards male middlemen control the market.

Keywords: local chicken, marketing chain, profit margins, urban and rural market

Introduction

Selling of local chickens is one of the functions of keeping free-range chickens observed during surveys and monitoring studies (Gondwe et al 1999; Gondwe et al 2003). The cash from sales is used to buy household needs including food, to improve food security at household level (Kyvsgaard et al 1999; Kondombo et al 2003). Some farmers barter their free-range local chickens for food and household items. Missohou et al (2002) reported that in Senegal, farmers exchanged six local chickens for one goat. Regardless of the mode of sales, this function ranks among the top three most important roles (food, income and socio-cultural) that are played by local chickens for the wellbeing of the household and community (Dessie and Ogle 2001; Mwalusanya et al 2001; Ekue et al 2002).

Marketing channels for local chickens include selling of chickens and eggs at households within the villages, on road sides, during entertainment ceremonies and even in local and city markets (Safalaoh 1997; Ekue et al 2002; Missohou et al 2002). The market channels are described as informal and poorly developed (Branckaert and Guèye 1999; Mlozi et al 2003). On the other hand, free-ranging local chickens are claimed to be on demand and fetch high market prices in urban markets of Malawi, Nicaragua and many developing countries in Africa and Asia due to preferred attributes such as being tastier than improved broiler strains (Aini 1990, Safalaoh 1997; Kyvsgaard et al 1999; Branckaert and Guèye 1999).

Analysis of the marketing system for free-range chickens will help to determine the economic value and importance of local chickens. This information is required to characterise, conserve and develop the poultry genetic resource and to justify resource allocation to rural poultry improvement and conservation projects. Branckaert and Guèye (1999) reported that an established market structure for free-range chickens is a prerequisite for developing family poultry. Even in breeding program development, indices require appropriate economic values that could be derived from such market studies. The current study focused on the existing marketing structure of free-range chickens surrounding the catchments where community participatory village poultry studies were initiated (Gondwe et al 2003). The objectives were to: (i) identify marketing of free-range chickens in local and urban markets; (ii) analyse the marketing chains and players; (iii) determine market prices and estimate profit margins.

Materials and Methods

Choice of markets of study

The study was conducted at three markets, Mitundu, Lilongwe and Kawale between 14 July and 23 August 2002 (during dry season) and between 21 January and 5 February 2003 (wet season). The choice of these markets was to cover catchments of Mitundu and Mkwinda Extension Planning Areas (EPAs) of Lilongwe Agricultural Development Division (LADD) where monitoring studies on growth performance and constraints of free-range chickens were conducted (August 2002 to August 2003) assuming that at least a sample of the monitored chickens are sold through one of these markets. Mitundu is a local (rural) market open for sales of various food and non-food products. This market is within 15 km of  the furthest villages of Mitundu and Mkwinda EPAs. Most smallholder farmers in the area sell and buy their products from this market. The market is approximately 55 km distant from the Mozambique border. Informal cross border trade, especially of foodstuffs, is taking place. Lilongwe market is located in the centre of the city and the distance to the Mkwinda EPA is about 35 km. Kawale market is located on the outskirt of Lilongwe city, five km from Lilongwe market. Both Lilongwe and Kawale markets serve urban communities.

Study protocol

The markets were visited in the morning at between 8:00 and 10:00 a.m. once per week. Each market was visited three times during  the dry season and two times during thewet season. At the markets, locations where live free-range chickens were sold were identified with the help of market officials. After introductions, those selling chickens were briefed on the purpose of the visit. These sellers were asked questions written on a structured questionnaire. Information collected by asking or through observation included: (i) demography of the sellers in terms of their names, gender and education; (ii) number of chickens each seller had for sale; (iii) phenotypes and sex; (iv) sources of chickens; (v) selling price; (vi) purchasing price; (vii) mode of transport.

After requesting permission from the sellers, chickens were individually weighed using a digital scale (CA Kern, 5K5; Kern & Sohn GmbH, Germany) and prices, sex and phenotype were recorded. Based on interviews with traders, transport costs were recorded during the rainy season only. Market levies were fixed at MK5.00 (1 US$ = MK85.00) per seller per day. In total, 42 middlemen were interviewed during the study. Of the observed sales, 53 % were during the dry season; 47% during the wet season.

Price portfolios and profit margins

Since prices were pegged per live bird, these were converted into price per unit live weight for each chicken by dividing price by live weight. Transport costs and levies were considered as transaction costs. Mortality of chickens during transport was not reported by sellers and was, therefore, not included in the analysis as a form of loss. Sellers' purchase price of chickens at farmer level was taken as farm-gate price. Profit margins were calculated by subtracting purchasing prices and transaction costs from the selling price.

Data analyses

Quantitative data were subjected to analysis of variance using the general linear model (GLM) procedure of the Statistical Analysis System (SAS 1999). Qualitative data were analysed for descriptive statistics using frequency procedures and cross-tabulation (SAS 1999). Appropriate statistical tests were applied to see the effect of factors such as season, phenotype, market and sex of chickens, that may be associated with marketing of local chickens. The following linear model was used during analysis of quantitative data

y_ijklm = µ + m_i + s_j + p_k + ß_ijkl + ε_ijklm

Where:

y_ijklm is the market parameter (price, weights) estimate for bird m on market i

µ is the overall mean

m_i is the fixed effect of market (i = 1,2,3)

s_j is the fixed effect of season (j = 1,2)

p_k is the fixed effect of phenotype (k = 1,2,3,4,5,6)

ß_ijkl is the fixed effect of sex of bird (l = 1,2)

ε_ijklm is the residual error

Results

Market channels and players in local chicken marketing

Local chickens were sold at the three markets. In addition, live goats were also sold at Mitundu market, and sometimes at Kawale. Chickens were the only species sold alive at Lilongwe market. At Kawale and Lilongwe markets, live broiler and culled layer chickens were also sold. All other livestock were sold as meat at the three markets. Presence of local chickens showed that existing commodity markets are used to sell the chickens.

Only male middlemen were involved in selling local chickens (Table 1).  At Kawale market, the majority of middlemen had attained secondary education. The educational level of the middlemen was highly variable ranging from illiterate to secondary school and differed widely by market.

Number of chickens available for sale, their live weights and prices

Mean numbers of chickens sold per middleman per day on each market are shown in Table 2 while their live weights; purchasing and selling prices by season are presented in Table 3. Local chicken market prices per chicken at Lilongwe and Kawale were significantly (p<0.05) higher than prices at Mitundu. Kawale offered highest prices per live chicken. Seasonal selling price differences were significant (p<0.05) for Mitundu market only. For all markets, dry season prices for chickens were higher than wet season prices. Selling prices per kg followed the trend of live chicken prices during the dry season.

Sellers at Mitundu market bought their chickens at significantly lower purchasing prices than those who were selling at Lilongwe and Kawale. Wet season purchasing prices were significantly (p<0.05) lower than dry season prices.

Live weights did not differ significantly (p>0.05) between markets during the dry season. During the wet season, chickens found at Kawale market were significantly heavier (p<0.05) than those at Lilongwe and Mitundu markets. Chickens sold at Mitundu were significantly heavier (p<0.05) during dry season than wet season.

Sources and demography of chickens sold

Middlemen bought their chickens from 22 different sources (Table 4). It was found that these sellers bought chickens from different places. Buying appears to follow a pattern specific for each market. For example, common sources for chickens sold at Mitundu came from trading centres that surround the market. These are places within rural areas servicing village markets for rural communities that comprise several neighbouring villages.

For Mitundu, other chickens came from villages across the border in Mozambique. Chickens sold at Lilongwe and Kawale markets came mostly from local rural markets. Other sources were reported just as districts. The districts and other sources mentioned are far from the markets (Figure 1).

Demographic characteristics of chickens sold at the markets included description of their sex and phenotypes (Tab le 5).  Both sexes of chickens were sold at the markets. More females than males were available for sale at Mitundu and Lilongwe markets. All common phenotypes for local chickens were sold at the markets and included Yakuda, Kawangi, Mawanga, Yofiira and Yoyera. Chiphulutsa was least available in all markets. Kansilanga, Kameta and Kachibudu were only found at Lilongwe and Kawale markets.

Observations from Mitundu and Mkwinda EPAs showed that farmers sold chickens to fellow farmers and middlemen, either directly for cash or through exchange with household items. Female members of households dominated in selling chickens at farm level, especially where sales were through barter. Bartering took place at households especially between farmers and middlemen. Farmers themselves also sold their chickens at trading centres. Participation of farmers in marketing of free-range chickens is at their households and at trading centres. Middlemen control the rest of the channel.

Profit margins of the middlemen

Profit margins before and after transaction costs (TC, Table 6) at different markets are presented per live chicken and per unit of live weight (Table 7).