Viability of government funded small-scale broiler projects in Northern KwaZulu-Natal

Abstract

Broiler production is one of the largest segments of South African agriculture. The Kwazulu-Natal government of South Africa embarked on funding small-scale broiler projects since 2011/2012 financial year in the Northern region. This study investigated the viability (profitability) of government funded small-scale broiler projects in Northern KwaZulu-Natal. The aim of the study was to determine the viability and the factors that affect the profitability of government funded small-scale broiler projects in Kwazulu-Natal. The study employed a gross margin analysis to assess the viability of the government funded small-scale broiler projects and a multiple regression analysis to determine the factors influencing the profitability of government funded small-scale broiler projects. The data used in this study was primary data collected from 75 government funded small-scale broiler projects in Northern Kwa-Zulu namely in uMkhanyakude, uThungulu and Zululand Districts. Simple random sampling procedure was used. Social Package for Social Scientists (SPSS) program was used to analyse data. The results showed that production challenges included lack of technical knowledge of producing broilers, high input costs and marketing challenges included long distances to the market, low price of live broiler and lack of access to formal markets. The gross margins and gross profit margin analysis shows that the government funded small-scale broiler producers have a positive gross and profit margin however they are not as much profitable and not doing well when compared to Rainbow Chicken (alarge scale broiler producer). Results from the multi regression analysis indicate that gender, farm gate price, access to extension services all have a positive relationship to gross margins (used as a proxy for profitability) and access to market information had a negative relationship. The study recommends that the government funded small-scale broiler producers must use formal markets in order to sustain their broiler production.