Feed & Grain Global Connection: Building The Tanzanian Poultry Industry

The U.S. Grains Council (USGC) is helping train poultry producers in Tanzania like Elizabeth Mwakajila, who is making the move from operating as a subsistence farmer into a commercial poultry business that offers local consumers affordable, high-quality quality meat.

Market development projects like this one are also helping build a strong domestic poultry industry in Tanzania by equipping producers with the knowledge they need to grow and an understanding of the advantages of using U.S. coarse grains to do so.

In September 2016, the Council sponsored Mwakajila’s training at the Kwazulu-Natal Poultry Institute (KZNPI) outside of Durban, South Africa. Upon returning from training at KZNPI and with the guidance and support of the Council’s local staff and consultants, she returned to Tanzania to undertake marketing her own chicken to local supermarkets and hotels.

“The Council gave me knowledge, which is the best gift,” Mwakajila said. “They gave me a story which I can continue to share with my fellow producers.”

Since the start of 2017, Mwakajila has increased production from 24,000 broilers per month to 40,000 broilers per month. She sells her frozen chicken under her own brand of Tanzanite Chicken to a dozen supermarkets, hotels and restaurants around Arusha, taking orders of 1,000 chickens per week on average.

Mwakajila is one of more than 1,000 Tanzanian poultry producers the Council has trained in farm management and business practices as part of a Food for Progress (FFP) program. The Council launched the Tanzania program in spring 2014, fully funded by a grant from the U.S. Department of Agriculture’s Foreign Agricultural Service (USDA’s FAS), to promote the development and professionalization of the country’s commercial poultry and feed sectors.

The program’s goal is to sustainably enhance the capacity of both the commercial poultry and feed milling industries in Tanzania. Upon returning to Tanzania from KZNPI training programs, 98 percent of participants have applied improved techniques to their production practices, and 522 poultry producers now purchase only quality feed for their operations.

Costa Mrema represents another important component of the Council’s work in Tanzania — developing effective, self-sustaining and professional national poultry and feed associations to strengthen the local commercial poultry and feed industries.

“I was introduced to a more advanced training to travel to South Africa, and that has made a complete difference in the way I do poultry,” Mrema said. “I can assure you, I will be involved in the poultry industry as long as I live, and no turning back as a result of USGC training.”

The growing Tanzanian poultry and animal feed industries flexed their burgeoning strength in the summer of 2017 when they collectively pushed to remove a cost prohibitive value-added tax on the sale of animal feed.

Feed accounts for as much as 70 to 80 percent of poultry production costs in Tanzania. Adding to this high input cost, the Tanzanian government instituted the 18 percent value-added tax on animal feed sales in July 2016.

The cumulative fiscal strain hit the local feed manufacturing industry, resulting in many millers going out of business temporarily or leaving the market permanently. Subsequently, poultry producers also halted production as the high costs and stagnant market price made profitable business impossible.

Since its inception, the Poultry Association of Tanzania (PAT) and its members, including the Tanzanian Animal Feed Manufacturers Association (TAFMA), have lobbied the government to remove the tax. The groups, supported by the Council, argued the tax was counterproductive to the growth of the domestic poultry and animal feed industries in Tanzania.

The removal of the tax on animal feed as of June 2017 allows for some poultry producers and feed millers to re-enter the market and compete in this growing industry. This was a huge relief to the industry at a time when it was already struggling with a severe regional drought that drove up the price of raw materials. In addition, the removal of the tax will ultimately benefit Tanzanian consumers by lowering the cost of poultry and eggs.

The associations’ success in working as a team to achieve the removal of this extremely restrictive tax further shows the impact organized local action can have on the ground for a growing feed industry.

An extension of the funding for the Council’s work in Tanzania through 2018 allows for new focus on the final piece of the program — finishing the development of a central veterinary laboratory as a self-sustaining feed quality lab, bolstered by effective feed industry marketing programs to teach poultry producers about the advantages of quality feed.

The positive results from all aspects of the Council’s FFP activities in Tanzania demonstrate how training seminars work as a building block toward helping local feed producers and farmers build successful commercial poultry businesses. A growing industry, in turn, generates increased consumption of both poultry within Tanzania and demand for the coarse grains — like U.S. corn — needed to feed them. This partnership with local industry to develop markets through trade is central to the Council’s work to improve lives for both U.S. farmers and customers, like those in Tanzania.

Editor’s note: A version of this article appeared in Feed & Grain magazine’s Global Connection section and is condensed here in Global Update. Find the full version of the article here.