Study puts Malawi poultry value chain at K539 billion

Mwapata Institute shas established that Malawi can earn $308 million (about K539 billion) from the poultry value chain annually if targeted investments and necessary reforms are implemented.

The $308 million is more than the $282 million (about K494 billion) that tobacco, the country’s main foreign exchange earner, generated this year, but experts said government needs to play the central role for the recommended reforms to work.

Poultry value chain is said to be profitable. | Nation

Titled ‘Unlocking the full economic potential of Malawi’s poultry value chain through targeted investments’, the Mwapata study said reducing feed costs through targeted reforms in maize and soya bean markets can unlock substantial gains in poultry output and profitability, leveraging strong broiler genetics.

On trade reforms, the study highlighted that removing value added tax (VAT) on soya bean cake, improving foreign exchange access and formalising exports to Mozambique, can increase value addition, reduce price volatility and support sustained sector growth.

Reads the study in part: “At the aggregate level, the full reform stack, spanning input, broiler export, maize production and market reforms, is estimated to generate $308.3 million (about K539 billion) in additional gross domestic product growth.”

The study further indicated that the bulk of these gains are driven by maize and soya bean-related reforms, which account for approximately 88 percent of the total impact, reflecting their central role in determining feed costs and overall sector competitiveness.”

If effectively implemented, the study said reforms can lower feed and poultry production costs, stimulate private investment in grain, oilseed and feed processing industries and expand formal exports, thereby addressing the industry’s core structural constraints.

To implement this, the study has recommended three key strategies, namely reducing feed costs by zero-rating VAT on soya bean cake, stabilising maize markets through predictable, rules-based policies and unlocking regional export markets by streamlining export procedures and aligning standards with Mozambique.

Mwapata Institute chief executive officer William Chadza said that unlike in the past when such study outcomes were not being followed, it has partnered key institutions, including the National Planning Commission (NPC) to support implementation.

He said: “We are working with a number of institutions who are key in supporting implementation of these research outcomes so that they include the government, government ministries, departments and agencies.

“We also work closely with NPC so that the research which we are doing is relevant and also responsive to their needs.”

In an interview, Small and Medium-scale Poultry Farmers Association chairperson Moses Phiri said while the opportunities are there to tap more from the poultry industry, most of these strategies require government interventions to be implemented.

He said commercial banks have increasingly become open in terms of financing but industry players assess the risks that are there due to high production costs that are mainly driven by high cost of feed among others.

“Banks keep on calling people for loans, but the issue is, will you be able to market those products fairly so that you are able to repay the loan and you remain with something to keep you running,” said Phiri.

In an interview, Lilongwe-based smallholder poultry farmer Esther Manduwa said feed alone accounts for more than 60 percent of production costs.

She said with capacity of 220 chickens, she spends about K286 000 on day-old chicks, K50 000 on vaccines, K195 000 on three bags of starter feed and an additional K270 000 on four bags of grower’s feed.

Lilongwe University of Agriculture and Natural Resources agriculture economist Horace Phiri emphasised that the best way to unlock the poultry value chain is to ensure that raw materials are affordable.

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