Livestock Research for Rural Development 15 (2) 2003

Citation of this paper

Marketing of free range local chickens in Morogoro and Kilosa urban markets, Tanzania

M R S Mlozi, A V M Kakengi, U M Minga, A M Mtambo  and J E Olsen*

Sokoine University of Agriculture, Box 3000, Morogoro, Tanzania
*The Royal Veterinary and Agricultural University,
Box 1870 Frederiksberg, Copenhagen, Denmark
daee@suanet.ac.tz
mmlozi@yahoo.com


Abstract

This study investigated the quantity of local chickens supplied and sold in four markets in Morogoro urban and rural areas. The gross margin analysis and determination of who benefits in the marketing chain of chickens were established. Also, price competitiveness of local chickens with other alternative sources of protein is also reported.

The quantities of chickens supplied and sold in the markets were elastic and varied significantly  with sex and month of the year. More cocks than hens were supplied in the markets. Prominent quantities were in the months of July and September, and lowest in the month of January. The profit margins realised by farmers and middlemen were significantly influenced by the months in which both parties sold chickens and the sex of the chickens. Cocks earned higher profits  than hens. 

Middlemen benefited more and earned 65% of the total profit generated in the local chicken market chain. Significant and higher profits were obtained during the months of December,  November  and October.

Local chickens competed better than other alternative protein sources implying that the marketing of local chickens was still unsaturated. Despite the higher prices of local chickens they are higher demanded than any other alternative protein sources such as beef, broiler, fish and beans. Middlemen play a major role in the local chickens marketing chain.

Key words: Free range local chickens, marketing, middlemen, profit margin, protein substitute


Introduction

In Africa, free-range local chickens (FRLC) are found everywhere in most smallholder African households. Generally, FRLC are raised in free-range and/or backyard systems in traditionally extensive husbandry. Because of low productivity of FRLC,  farmers, most livestock and agriculture, veterinary and extension officers, and policy makers have denigrated or even ridiculed FRLC. For example, farmers consider FRLC as an insignificant secondary occupation when compared with other agricultural activities. Despite the small flocks reared by rural families, the contribution of this traditional poultry sector to most African countries national egg and meat production is substantial. They supply most of the meat and all eggs in villages and 20% of urban and peri-urban demand (Melewas 1989; Minga et al 1996). FRLC provide eggs and meat for farmers’ own consumption, are sold to earn money, serve as savings, investment, insurance and serve in traditional medicine. In most African urban areas, FRLC eggs and meat are more expensive than the intensively reared poultry because the former are considered free of antibiotics, hormones and other harmful chemicals. Urban consumers talk about the meat of FRLC chicken being more delicious than that of broilers. 

FRLC numbers in Africa are increasing annually despite the menace of diseases such as Newcastle, Fowl typhoid and other problems such as poor management, endo-parasites and vermin attack. Gueye (1998) writes that between 1984 and 1990, Ivory Coast, Sudan, Tanzania, Togo, The Gambia, and Zimbabwe had 15.4, 21, 21, 3.9, 0.9, 10.7 million FRLC respectively. And, between 1991 and 1997, Ethiopia, Kenya, Lesotho, Mali, Nigeria, The Central African Republic, Senegal, and Uganda had 55.9, 16.1, 1.6, 18, 123.9, 2.2, 11.1 and 16 million, respectively. Boki (2000) estimated the FRLC numbers in 1995 at 26 million, while for Kenya, Nyange (2000) estimated them to be 22 million for 1997. Evidence shows that most consumers prefer FRLC than commercial ones derived from imported flocks and that FRLC fetch premium prices. For example, in Dar es Salaam, an indigenous chicken egg is sold at TShs 300 while that of a layer at between TShs 80 and TShs 100 and such eggs are plentiful in the streets (Business Time, Tanzania, Friday, August 17th, 2001, p. 5).  

Studies on marketing of free range local chickens  (FRLC) can provide clues for management strategies of these birds especially in reducing annual chicken losses that smallholder farmers experience annually due to the menaces of diseases, especially Newcastle disease. Of the 27 million chicken populations in Tanzania, free range local chickens (FRLC) accounts for about 93.3%, which are mainly kept in rural areas (MOA 1995). This sector supplies almost 100% of poultry meat and eggs in rural areas and about 13 – 20% of the product to urban dwellers (Melewas 1989; Minga et al 1996). Elsewhere in Africa, scavenging local chickens contribute a significant portion of the rural as well as national economy (Sonaiya 1990). In Tanzania, rural and urban marketing of FRLC and its contribution to the national economy is not known.  

Recent studies on FRLC have been carried out mainly on diseases (Minga et al 1989; Yongolo 1996;  Mdegela 1998), productivity and nutritional status (Mwalusanya 1998), and little on transportation (Mlozi et al 2000). The intention of this study was threefold: first, to determine the quantity of FRLC supplied and sold in four urban markets in Morogoro and Kilosa; second, to identify the main beneficiaries in the marketing chain; third, to examine the price competitiveness of FRLC with other alternative protein sources in the urban markets.


Methodology 

Study area and duration 

The study covered four major chicken selling markets in urban Morogoro (Morogoro central and Saba saba markets) and in Kilosa district (Koba and Kilosa Msagara markets). The study was conducted for 10 months,  from January 2000 to December 2000, and missed data for May and June. 

Quantity supplied and sold 

Fifteen FRLC sellers (middlemen) were identified and interviewed every Tuesday and Friday to indicate the total number of chickens bought from various sources of Tanzania hinterland. The quantities of chickens supplied to the markets by the middlemen (who were also the sellers) from rural areas for the 10 months were recorded including the buying and selling prices. 

Profit margins 

The interviewer asked each of the 15 FRLC middlemen to mention the prices they paid to the smallholder farmers in the village for the cocks and hens bought. The farm gate prices of selling a hen and a cock was regarded as profit realised by a farmer. An assumption was made that farmers used family labour and chickens were reared under free-range system, in which there was minimum cost involved. Then the middleman was asked to mention the price that he was going to sell the cocks and hen. The researcher cross-checked this by posing as a prospective buyer of cocks and hens in the markets and asking other chicken sellers the prices of cocks and hens. This exercise also verified the weekly actual prices for cocks and hens in the markets. Also, the FRLC seller was asked to give information about the cost paid for transporting and handling such as market levy, chicken feed and paying for the night watchman. Given this information, the middleman’s profit was estimated as follows: 

MP = SP - FGP – TC – HC 

Where: MP = Middleman’s’ profit;
FGP = Farm gate price;
SP   = Selling price;
TC  = Transportation cost;
HC = Handling cost (levy, chicken feed, watchman) 

Prices of other protein sources 

The interviewer collected prices of beef, fish, broiler and beans for 10 months of the study. The mean market prices for each protein sources were compared statistically to check their monthly differences. 

Statistical analysis 

Data for quantity of FRLC supplied and sold, profit margins and prices for other protein sources were analysed using the general linear model (GLM) procedure of Statistical Analysis Systems (SAS) of 1990. The mean differences were compared using probability of differences.


Results and discussion

Chickens supplied and sold 

Data for quantity of FRLC supplied and sold in 10 months are indicated in Table 1 and Figure 1.   

Table 1. Averages of FRLC supplied and sold in the four markets

Month

Daily/seller

Weekly/seller

Monthly/seller

Monthly/15 sellers

Supplied

Sold

Supplied

Sold

Supplied

Sold

Supplied

Sold

Jan  *C

.**H

6.4±0.4

6.1±0.4

25.7±1.6

24.4±1.6

102.8±6.6

97.8±6.2

1541.5±98.2

1466.9±93.4

4.9±0.4

4.3±0.4

19.6±1.7

17.4±1.6

78.5±6.6

69.6±6.3

1183.0±98.7

1023.9±93.8

Feb  *C

.**H.

7.9±0.4

7.2±0.4

31.7±1.7

29.1±1.6

116.4±6.6

77.2±11.6

1887.2±104.3

1728.0±99.1

6.3±0.4

5.4±0.4

25.6±1.8

21.9±1.7

102.5±7.1

87.6±6.7

1523.2±105.4

1285.8±100.1

Mar *C

     **H.

8.1±0.5

7.6±0.4

32.5±1.8

30.4±1.8

129.9±7.4

121.4±7.0

1948.6±110.9

1821.4±105.4

6.4±0.5

5.8±0.4

25.4±1.9

23.6±1.7

101.4±7.5

94.2±7.1

1524.9±112.2

1396.1±106.7

Apr. *C

.     **H

8.3±0.5

8.1±0.5

33.3±2.0

29.1±1.7

133.2±7.8

129.9±7.4

1997.6±117.3

1948.0±111.5

6.3±0.5

6.0±0.5

25.2±2.0

21.9±1.7

100.7±7.9

95.7±7.5

1509.9±118.9

1435.1±113.0

Jul.  *C

.**H.

12.6±0.6

6.8±0.6

50.42.4

27.0±2.6

201.5±9.7

108.2±10.2

3021.8±145.6

1622.7±153.2

11.9±0.6

6.0±0.6

47.4±2.4

24.0±2.6

189±9.7

96.0±10.2

2844.5±145.6

1440.0±153.2

Aug *C

.**H

7.2±0.6

5.7±0.6

29.0±2.4

22.7±2.6

116.0±9.7

90.7±10.2

1740.0±145.6

1360.9±153.2

6.4±0.6

5.2±0.6

25.7±2.4

20.8±2.5

102.8±9.6

83.1±10.1

1541.3±144.0

1246.7±151.5

Sept *C

.**H

9.8±0.5

5.5±0.6

39.1±2.1

22.1±2.3

156.3±8.6

88.3±9.1

2344.3±129.1

1324.3±135.8

7.6±0.5

4.3±0.6

30.9±2.2

17.5±2.3

123.4±8.7

70.2±9.1

1831.1±129.1

1033.9±135.8

Oct  *C

.**H

6.9±0.6

6.1±0.6

27.5±2.3

24.5±2.2

110.2±9.3

98.1±8.8

1652.8±139.9

1471.7±132.7

4.3±0.6

5.3±0.6

22.4±2.4

18.6±2.5

89.4±9.6

74.4±10.1

1247.5±149.4

1055.7±148.2

Nov  *C

**H

9.1±0.7

6.5±0.7

36.3±2.9

25.9±2.7

145.3±11.5

103.5±10.8

2178.9±171.8

1553.1±163.2

6.8±0.7

4.6±0.7

27.2±2.9

18.5±2.8

108.7±11.8

73.8±11.2

1630.9±176.9

1107.3±168.1

Dec  *C

.**H

7.0±0.7

5.9±0.6

28.0±2.6

23.5±2.5

111.8±10.1

93.8±9.9

1677.1±156.8

1407.1±149.0

4.7±0.7

4.2±0.7

19.3±2.9

17.3±2.8

77.2±11.6

69.1±11.0

1124.6±171.8

1018.3±163.2

Mean C

         H

7.4±0.2

7.0±0.2

29.8±0.7

28.2±0.7

119.0±2.6

112.7±2.8

1784.4±39.8

1689.2±41.9

6.0±0.2

5.5±0.2

24.1±0.7

22.3±0.7

96.5±2.8

89.0±2.9

1429.9±41.4

1324.5±43.6

Overall mean

6.6±0.1

6.4±0.1

26.8±0.1

25.6±0.1

107.2±0.2

102.3±0.2

1594.6±0.9

1527.6±0.8

Grand Total

 

 

 

 

9,364

7,360

140,460

110,400

Source: Survey data, 1999-2000;  NB: *C = Cock, **H = Hen

The quantity of FRLC supplied and sold varied with months and sex. An average of 29.8 cocks and 24.1 hens were supplied out of which 28.2 cocks and 22.3 hens were sold in the four markets per week per seller for 10 months (Table 1). Table 1 shows the average FRLC supplied and sold in the four Morogoro and Kilosa markets. An average of 7.4, 29.8 and 119 cocks were supplied, and 7.0, 28.2 and 112.7 cocks were sold per day, per week, per month per seller respectively in the four markets of Morogoro and Kilosa. An average of 1,784 and 1,689 cocks were supplied and sold by the 15 sellers in a month of the study period, retailed at 1,689x1,500= (US$ 1.7 average price) 2.5 million TShs (US$ 2,815) (at US$ 1 = 900 TShs). Table 1 also indicates that 6, 24.1 and 96.5 hens were supplied and 5.5, 22.3 and 89.0 hens were sold per day per week, per month, and per seller respectively. The values of these were 2,500, 33,000 and 133,500 TShs, respectively (US$ 8.3, 37 and 148). More cocks were supplied and sold per day than hens. Regardless of the sex of the FRLC, a total of 6.6, 26.8 and 107.2 chickens were supplied to the market and 6.4, 25.6 and 102.3 were sold per day, per week and per month per seller respectively. In totality, 140,460 and 110,400 chickens were supplied and sold by 15 sellers in the 10 months of the study (Figure 1). At an average price of 1,500 TShs (US$ 1.7) these were valued at 1.6 million TShs per seller. This meant that each seller earned about 165,000 TShs (US$ 183) per month from selling FRLC. This amount was twice the monthly salary of a senior government officer earning about 80,000 TShs before taxation, and four times for a minimum wage earner (40,000 TShs or US$ 89).


Figure 1. Average of chickens supplied and sold  per week of a month in Morogoro and Kilosa markets

Table 1 and Figure 1 shows that supplies and sales of FRLC were inelastic for the months of January to April. An elastic supply of FRLC to the markets was observed for the month of June and reached a peak in July and was turbulent for the months of August and September. Supplies and sales of FRLC levelled off in October and increased in November levelling off in December. Higher supplies of FRLC were in the months of July, September and November. Perhaps this was to dodge Newcastle disease outbreak, which occurs during the onset of the dry season (Yongolo 1996). Also, it could be due to the household food deficit during the dry season compelling most smallholder farmers to sell their chickens to get liquid cash. Newcastle disease has been reported as the number one killer disease of scavenging local chickens (Minga et al 1989; Musharaf 1990). 

Profit margins of farmer and middleman 

The profit margins that farmers and the middlemen realised in 10 months are indicated in Figure 2. Profits that both farmers and middlemen made varied with month of the year. However, a middleman benefited significantly (P<0.01) more by earning an average profit of TShs 2,276.50 (US$ 2.5) than a farmer who earned an average of TShs 1,218.70 (US$ 1.4). A middleman earned more than 65% of the total profits generated from selling a cock and a hen.


Figure 2. Profit margins of FRLC realized by farmers and middlemen in ten months in Morogoro markets

Smallholder farmers earned more from selling FRLC in the month of December realizing an average of TShs 1,671 (US$ 1.9), earning least  in March with TShs 1,373 (US$ 1.5). A number of reasons could perhaps have contributed to constant gross margins that smallholder farmers got in six months. First, end of March is a harvesting period in most areas in which FRLC originated and smallholder farmers may have sold culls or unwanted chickens because of not being in need of money. Second, in June was the onset of the dry season and most smallholder farmers may have been compelled to sell sick and lighter chickens hence earning low gross margins from their birds. Middlemen’s profit margins were always above the farmers’ with the exception of the month of March.  

These equal margins of farmers and middlemen could possibly be due to an increased bargaining power resulting from farmers having enough household food and not compelled to sell chickens to buy food. Lower profit margins that middlemen got in July were probably due to smallholder farmers selling more chickens because of anticipating an outbreak of Newcastle disease. This appeared to lower the prices of chickens in the markets hence lowering the gross margins. Middlemen got higher profit margins in September to December because smallholder farmers sold fewer chickens to them hence creating a high demand that increased market prices of FRLC (Figure 1 and 2). This probably resulted from massive deaths due to Newcastle disease during the dry season. According to principles of demand and supply, in a free market low supply of a commodity results into high price. Also, it could probably be due to increased demand of chickens due to festivals like Christmas, New Year and Idd el Fitri  

Prices of FRLC and other protein sources 

Another objective of this study was to examine the prices of protein sources that consumers in four markets substituted for local chickens. The mean prices of FRLC compared with other protein substitutes such as beans, beef, broiler and fish are presented in Table 2 and their prices for ten months of the year are shown in Figure 3. 

The study found that important consumable protein substitutes for local chickens were broiler, beef, fish and beans. Mean prices of all consumable protein alternatives to local chicken were lower than for FLRC ( P<0.01). A cock averaging 1.5 kg live weight was sold at significantly higher prices (P<0.01) than any other consumable protein substitute, followed by a hen which averaged 1.2 kg live weight. One kg of beans was sold at the lowest price compared to other protein sources. Raymond and Richards (1970) proposed that the quantity of a commodity that a consumer purchased depends on a complex of factors including the individual taste and preferences, the price of other commodities and her/his income.  

Table 2. Mean prices of FRLC and other alternative protein sources (per 1 kg except for cocks and hens)
Protein source

Mean ± SE in TShs

In US$

Cock

2705±6.146a

3.0

Hen

2057±6.199b

2.3

Broiler

1592±6.161c

1.8

Beef

996±6.161d

1.1

Fish

787±6.161e

0.9

Beans

315±6.161f

0.4

Means bearing different superscript along the column are statistically different at P<0.01

In the present study the prices of FRLC were higher than other protein substitutes even when the supply of FRLC was low. This could probably be due to better taste of FRLC than some other substitutes Horst (1990) reported that scavenging local chicken have superior taste than the commercial type. It was further commented by Bell (1992) that the local chickens’ products are preferred because of their pigmentation, leanness, taste and suitability in preparation of special dishes. Also, with exception of beef, FRLC are popular gourmet in both modern and local drinking places most of which are either cooked in a so called ‘’soup’’ or roasted and eaten with roasted or boiled plantains. Women vendors either cook or roast pieces of FRLC and sell them. These multiple uses of FRLC appear to keep their prices higher than other protein substitutes. 

The prices for FRLC were elastic in the months of January to March, and then increased gradually from April to the end of the year (Figure 3). Prices for broiler, fish and beans were almost constant throughout the year with little increase from October through December. The price of beef remained constant from January to August then fell down in September and increased from October through December.

Figure 3.  Prices of FRLC and other protein sources (per 1 kg except for cocks and hens [see text])

A number of reasons could be given. First, Morogoro urban markets are well supplied with beef, especially from the Maasai pastoralists in the two districts of Morogoro and Kilosa. Second, perhaps the demand for beef is highest in the month of October through December as fewer cattle are brought to the market because of the dry season in which thin animals are disposed off to get money to buy food. These intermittent changes in prices could probably be due to demand and supply, which are the dictating forces of price of a commodity in question in any given liberalized marketing system.

Studies on marketing of free range local chickens  (FRLC) can provide clues for management strategies of these birds especially in reducing chicken losses that smallholder farmers experience annually due to the menaces of diseases, especially Newcastle disease. In Africa, free-range local chickens (FRLC) are found everywhere in most smallholder African households. FRLC numbers in Africa are increasing annually despite the menace of diseases such as Newcastle, Fowl typhoid and other problems such as poor management, endo-parasites and vermin attack. 

The quantity of FRLC supplied and sold varied with months and sex. In the ten months of study, an average of 29.8 cocks and 24.1 hens were supplied out of which 28.2 cocks and 22.3 hens were sold in the four markets per week per seller in Morogoro and Kilosa urban markets. The number of FRLC supplied and sold were inelastic for the months of January to April, and were elastic for the month of June and reached a peak in July. But supplies and sales were turbulent for the months of August and September. Furthermore, profits that both farmers and middlemen made varied with months of the year. However, a middleman benefited significantly (P<0.01) more than a farmer. A middleman earned more than 65% of the total profits generated from selling a cock and a hen. Study findings indicate that a cock averaging 1.5 kilograms live weight was sold at a significant higher price (P<0.01) than any other consumable protein substitute, followed by a hen which averaged 1.2 kilograms live weight. For example, one kilogram of beans was sold at the lowest price compared to other alternative protein sources. 


Conclusions  

From this study the following conclusion are made:


Recommendations 

In the marketing of FRLC, the middlemen appear to benefit more than smallholder farmers. Therefore, smallholder farmers should form marketing groups to increase their bargaining power. High and constant supply of FRLC to the urban markets is recommended to meet urban demand to increase smallholders' and the national income. However, this cannot be achieved without improving the health and productivity of FRLC, particularly controlling the Newcastle disease--that occurs annually during the dry season. Therefore, the government should increase efforts in developing the ‘heat stable vaccine’ to control the disease.


Acknowledgement

The authors wish to thank DANIDA through the ENRECA Project ‘’Improving the Health and Productivity of Rural Chickens in Africa (IHEPRUCA)’’ for financial support that made this study possible. We wish to thank Sokoine University of Agriculture and our respective Departments for allowing researchers' time off. The cooperation of the chicken middlemen in the four urban markets in Morogoro and Kilosa is highly acknowledged.


References 

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Received 2 July 2002; Accepted  4 November 2002

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