Home to roost: MoFA/World Bank injecting $12m into poultry sector

Ghanaians have an over-the-top appetite for chicken: their hot chicken light soups or irresistible chicken stews and gravies; their globally acclaimed jollof rice – with chicken as an integral part of the whole scheme; and the eye-popping, extra-spicy, extra-crispy chicken barbecues (grilled or fried) - at all manner of occasions and locations.

Yet, this tongue-flapping appetite has not ignited enough excitement among local meat industry players to cash in.

The reason has forever been fierce competition from imported poultry, whose low prices and well-thought-out packaging (of frozen processed birds) make them outsell the homegrown lot.

Another reason is the absence of major capital injection into the poultry industry. These “excuses” indeed are not far from the truth. But then, why should the Ghanaian consumer care? 

Reliance on importation

All that matters is that there is, and there shall always be chicken for the people. Parties are poppin’! Mouths are watering - if we can’t breed them, we fly them in, right? Well, that right there, is where the problem lies.

Ghana relies heavily on imports to meet the soaring demand for poultry meat. As of 2021, imports of chicken and its products were in excess of $300 million – funds that could be ‘laid’ into the wallets of local business runners and to churn in even more businesses in other sectors of the economy.

Invariably, each time a Ghanaian bites into imported chicken, he clips the wings of the local poultry industry, while blowing winds under the wings of $300m in flight out of the country!

The total national consumption requirement for poultry in 2022 was 324,047 metric tonnes (MT). However, local production was only 15,000MT, representing five per cent and this gap was filled by importation, though the country has overwhelming potential to be self-sufficient in poultry production.

The question, therefore, is - what exactly is pecking at the local broiler industry? Why is it not thriving? And why is it losing ground to cheap, suspiciously unhealthy imports?

‘Headless chicken’

The Ghanaian poultry industry has been in a tailspin, barely making any headway, due to inherent production and postproduction challenges.

Among them are high cost of feed, unregulated and unstandardised hatchery operations, poor disease surveillance control and management systems, inappropriate infrastructural systems and inefficient management systems - all culminating in low productivity.

Beyond these are post-production ailments, which include the inadequate capacity of poultry processing facilities, inconvenient packaging - the current consumer lifestyle favours pre-packaged processed parts of the chicken; and weak marketing linkages. 

Counting the costs

Pricing is a major sore point for the local industry since there exists pricing against imported broilers - whose lower price tags make them more affordable to the local consumer.

However, the solution for local producers is not as simple as hopping down the ‘price-perch’ to compete.

Same as any other business, the price of poultry is drawn directly from its cost of production, the major among which is feeding.

In the case of a broiler, the older it grows (or the longer it stays on the farm), the more expensive it gets - senior birds have bigger appetites and are fed on more expensive adult feed types and quantities.

Again, after processing, the longer the bird stays in cold storage (due to the absence of ready markets), the higher the electricity costs – and that’s if producers stick strictly to the Ghana Standards Authority’s stipulated cold storage requirements: i.e., four degrees Celsius (for dressed poultry, for a max of seven days) and -18 degrees Celsius (for frozen poultry, for a max of nine months).

Hence, readily available markets are crucial, not only to make them affordable, but more importantly, to sell them fresh, healthy, nutritious and tasty.

To understand the poultry farmer, below are some nugget points on chicken production, costs and sales, as of November 2024 (date of this article). Let’s do the math:

Production

1) Broilers: 

Broilers are characteristically tender and are mostly used for stews or enjoyed grilled or fried. Hence, they are purposely bred for up to five to seven weeks.

Within the period, each of them consumes an average of 4.5 kg of feed within 6-7 weeks. The average cost of feed per kg is GH₵ 9. That brings it to GH₵40.5 per bird. Then follows processing.

2) Processing  

Processing involves slaughtering, dressing, chilling and immediate blast freezing. That comes at a cost of GH₵6 per bird. It’s worth noting that when a bird crosses a certain weight and size, automated processing facilities are unable to carry them through. Hence, manual or semi-automatic processing methods are to be deployed.  

3) Packaging

The boxes in which processed birds are packed must be robust enough to bear the weights of other boxes packed on them, and yet flexible enough to enable the chill to reach through the plastic, the flesh, bone and marrow of each bird. That costs GH¢24 each.

4) Cold transportation (VAN)

Ghana Standards Authority (GSA) and indeed best practices require that birds be transported from the processing facility to retail shops under specified temperatures.

That service is charged collectively at GH¢3,500 per five tonnes. A 140-footer container carries 2,500 boxes of chicken, weighing 10 kg per box. 

Cold storage [Ghana Standard GS 91:2015 3rd Edition]

Once in the retail shop, GSA and FDA regulations demand that ‘type A’ birds are to be chilled “so that the temperature of the deepest portion of the flesh near the bone shall be at least zero to four (0-4) degrees Celsius”.

That, therefore, comes at one cedi (GH¢1) per bird for the stipulated period. ‘Type B’ birds are to be “packaged in biodegradable bags and shall be frozen to a temperature of -18 degrees Celsius when delivered”. GSA regulations further dictate that “thawed frozen poultry shall not be refrozen”.

Other expenses include vaccines, space rental, labour, electricity and bio-security services, all add up to the costs of raising birds. 

Layers: 

Layers are raised purposely to produce eggs either for direct sale or for breeding. They are later sold out for consumption, mostly for soups after 75 weeks, when they are considered “spent”.

Those that produce eggs solely for consumption are raised separately from those that produce eggs for breeding. At all costs, in-breeding is avoided.

Feeding layers commences with concentrated meals for three weeks, after which the rationing is reformulated to prolong growth. 

Marketing

The cost of a live bird, weighing 2.8kg is GH¢75, while a processed bird of 2.0kg (dress-weight) sells at GH¢96.7 or GH¢49 per kg.

This covers processing, cold storage and profit margins. A Spent Layer of 75 weeks and at a live weight of 1.8-2.0 kg or above, sells at GH¢65.

These regulator-prescribed protocols are inescapable by the local farmer; hence, the pricing as quoted is almost unavoidable. Meanwhile, the average cost of imported broiler poultry is currently GH¢40 per kilo.

In that light, to be able to compete, the local producer would have to step down the price perch, while ensuring to sell-off within seven days of processing.

However, if there is a guaranteed sizeable market, the local producer could make huge profits at competitive marginal costs, making it reasonably profitable for the farmer and affordable for the consumer.

At that rate, imported broilers could face some hot, crispy and spicy competition from locally produced birds ... if there were ready Ghanaian buyers. 

The writer is the Communications & Knowledge Management Specialist of the World Bank's West Africa Food System Resilience Project (FSRP) under GoG/MoFA.