Getting business environment right is critical in the success equation of every enterprise. Setting a business at a suitable location has a relationship with access to certain essential infrastructure, inputs and ready market.
With the prevailing challenging macro-economic environment, inundating the poultry sector, the situation could be compounded for any investor who establishes a poultry farm in a remote community, where access to critical infrastructure and inputs is terribly difficult. In the Brong Ahafo Region for instance, Dormaa area is the hub of poultry farming, especially layers. Because of the benefit of synergies among others, farmers in the Dormaa enclave do relatively better than those who operate on peripheries of Dormaa.
A 41-year-old, Nana Kofi Amoah, is a poultry farmer at Hiamankyene, a village in the Tain District of the Brong Ahafo Region. The farmer, who started the poultry business seven year ago with just 20 birds, currently has over 16,000 birds (layers) amid plethora of challenges that have bedeviled his business in the isolated community.
The poultry farmer has two siblings-a medical Doctor and Revered Minister and the three inherited vast farming lands from their late father. Probably, by virtue of their professions, the Doctor and Pastor they were not interested in doing business on the farm lands and Nana Amoah who lack former education took over to commence farming.
In the last seven years, he has weathered the storm to make some level of progress in an alien poultry environment. Currently, the pen capacity of the farm, christened ‘El Shalom’ is about 30,000 but operational challenges has restrained him to 16,000 birds, engaging 18 permanent employees on the farm. On the average, the farm produces about 380 crates of eggs every day.
There is the huge potential for the farm to witness significant expansion but a number of challenges have tamed its progress. Below are highlights of the farm’s operating challenges:
High cost of maize
In an interview, Nana Amoah mentioned what he described as ‘escalating cost’ of maize-a major component of poultry feed as a worrying development. He said: “Not too long ago, a bag of maize (125kg) was selling at GH¢100, but as we speak, it’s around GH¢250, increasing significantly by 150%. The yellow maize, which supposed to be the ideal choice because of its rich nutrient content is much higher, selling between GH¢280 to GH¢300 per bag.”
Whenever maize price surges beyond noncompetitive level or there is shortage in supply, poultry farmers in the Dormaa Area team up and buy from Cote d’Ivoire because of their proximity to the border. Sources say maize is cheaper in the neigbouring country which helps to reduce farmers’ cost of production, but the location of Nana Amoah’s farm is a disadvantage for him access the cheaper maize.
Checks by the B&FT revealed that implementation of the ‘Free Senior High School’ policy and poor food distribution network have influenced skyrocketing of maize price on the open market. Mopping up of maize by National Buffer Stock Company for onward supply to Senior High Schools under the government’s flagship programme has left insufficient quantity of the commodity for domestic consumers and poultry farmers.
Maize is produced in abundance in areas like Atebubu, Nkoranza and Ejura but the producers find it difficult to reach out to end users like poultry farmers due to poor value chain system.
The Tain District Director of the Ministry of Food and Agriculture (MoFA), Samuel Yaw Appiga, told B&FT that “thanks to the Planting for Food and Jobs, maize production in the district increased by 30% but the commodity is not easily accessible in this area. The District has a 10,000 capacity warehouse but it is has been empty for a while because National Buffer Stock collects virtually all the harvest for the Free SHS, thus creating yawning local demand.”
Difficulty in procuring day-old chicks
Another impairment for operating a poultry farm in an isolated community has to do with difficult access to day-old chicks. According to the farmer, the cost to procuring local day-chicks is GH¢4 per bird as compared GH¢7 per bird for imported ones. The disadvantage in buying local chicks is that it comes with high level of casualties, thus compelling farmers to buy the imported chicks.
Unlike other cluster of small scale poultry farmers in the Dormaa area and other major poultry production enclaves where farmers can import day-old chicks in bulk to enjoy economies of scale, Nana Amoah in the Tain District has to solely shoulder the import cost, thus fueling overhead cost.
Buyers of poultry products mostly troop to places where there is guaranteed and large scale supply of the products. In this case, farmers in designated poultry communities barely struggle to access market, but a farmer in obscure environment such as Hiamankyene has to chase buyers with his products. The practice, adversely affects pricing as buyers sometime take undue advantage of desperate farmers wanting to trade off.
Operating off national electricity grid
The El Shalom poultry farm is located about two kilometers away from the Hiamankyene community which is off the national electricity grid. The farmer has to rely on an installed plant to power the farm. The plant consumes a minimum of five gallons of fuel per day. The farmer also has to supplement the plant with LPG powered lamps, especially for temperature control in the coops of chicks. Operating off the national grid, the farmer explained, has increased cost production by a huge margin.
Above all, lack of adequate funding to properly maintain and expand the farm is a threat to survival and growth. Financial limitation remains the major bane of all agribusiness players. Interest on bank loans is noncompetitive to keep businesses afloat while repayment terms are also not friendly to poultry farming. Due to his inability to access affordable credit, the farmer largely relies on plough back profit and skill of improvisation to keep the business going.
In an effort to reduce the impact of financial difficulty on the poultry business and life as a whole, Nana Amoah has diversified his agricultural income sources. He has broadened his farming portfolio with livestock and tree crops plantations such as cashew and teak. He has a total of about 335 acres of cashew farm, four acres of teak plantation, 60 pigs and 31 cattle. The 41-year-old farmer appealed to the government find innovative ways of meeting the needs of many farmers of his kind, scattered across the country. This, he noted, would make agriculture more attractive to the public, especially rural dwellers irrespective of one’s geographical location.
The DCE for Tain, Charity Oforiwaa Dwommoh, in an interview observed that lack of business exposure and formal entrepreneur skills on the part of Nana Kofi Amoah was thwarting the progress of El Shalom Farms. “He has confined himself, thinking that he has reached the peak, but I think he can break the ceiling; personally I think he’s just at the breakeven and much more could be achieved.
The Assembly has planned to organize a fieldtrip to Akati Farms in Kumasi for the farmer. This is to help him learn best practices and some rudiments in the poultry business. He has equity in land so he can leverage to secure financial support; the Assembly will explore how best to assist him in that direction.”