Vertical Integration By The Elite Is Killing Off Botswana's Small-Scale Poultry Farmers

Poultry farming, the main focus of this blog post being broiler production, is pretty much a monopoly in Botswana controlled by two major families, the *Dds, and the *Brnks. Every major activity in the broiler production supply value chain, from acquiring day-old chicks to acquiring feed for those chicks until they are fully grown to retailing those chicks after they are fully grown, requires one to do business with companies owned by or affiliated with the two families. 

Let us start with the first activity in the value chain—acquiring day-old chicks. Through a major company called the Associated Investment & Development Corporation (AIDC), the Dds have a 40% stake in Ross Breeders which has a 75% market share in the day-old chicks business. The Brnks, on the other hand, are affiliated with Irvine's which controls much of the remaining 25% of the day-old chicks market share. 

Moving on to feeds production, the Dds, through AIDC again, own Nutrifeeds which wields control over 90-95% of the feeds production market. In broiler production, the Dds have a stake in Tswana Pride and Dikoko Tsa Botswana which are major broiler chicken producers in the country. Both these companies then turn out to own shares in Coldline, which is the main player in the import of day-old chicks (and was for a while the only licensed importer of day-old chicks) and cold storage markets in the country. The Brnks also partly own Richmark, another major broiler producer in the country, as well as Goodwill Chickens and Boobsie's, which are other major broiler producers in the country.

Getting into retailing, in 2015, the Dds acquired all KFC franchises in the country, and lo and behold, Tswana Pride, owned by the Dds, supplies all the 12+ franchises with their chicken. The Brnks also have their fair hold in the retailing industry as they have stakes in numerous Spar supermarkets in the country which they supply with their chicken from Richmark and the other broiler producers they have stakes in.

Now, it would be unfair to blame the Dds and the Brnks for deciding to vertically integrate their poultry businesses because after all, there is nothing illegal about it and it also holds several business advantages like reducing costs and controlling the quality of their products. If a country's competition laws allow certain people to control the entire supply value chain of an industry, the main focus, I believe, should be on the laws enabling these anticompetitive practices because after all, if given the opportunity and the room, capitalists will always capitalize.

So what is the Botswana government doing to address this monopoly in the poultry production industry? Well, the irony is that policies enacted by the same government are actually the reason why the monopoly in the industry keeps getting stronger and stronger. In 2015, the Poultry Licence Committee (PLC) imposed a local procurement quota for retailers and fast-food restaurants which stated that only 30% of poultry products could be imported, reserving the remaining 70% for local producers.

On paper, this seemed like a foolproof plan. If these retailers and fast food outlets couldn't import their produce, they would then have to turn to the country's small poultry farmers for supply, right? Wrong. Because of their inability to meet the quality and quantity requirements of these outlets as a result of being reliant on the same monopolies they are competing for local procurement with, small poultry farmers, the intended beneficiaries of this quota, were taken out of business by none other than Tswana Pride, RichMark, and the other broiler producers owned by the Dds/Brnks who the outlets preferred because of their ability to meet their quality and quantity requirements.

One would think that the government would have learned a lesson from this failed initiative to boost local poultry production but alas, it seems like they learned not a single thing. In their much-touted "economic recovery and transformation plan", the government made clear its intentions to ramp up on subsidies for large-scale commercial farmers and scale down on subsidies for small-scale farmers in order to push its "export-led economy" mandate. All this is going to do is enable the already existing monopolies to cement their monopoly and further cripple small-scale farmers like how they did and are still doing with small-scale poultry farmers.

As a small-scale poultry farmer myself, I experience firsthand the effects of these cartel-like monopolies. Throughout the year, there is never a point where the supply of either day-old chicks or feeds is sufficient. If there is enough feed, there is a shortage of day-old chicks. If there is a sufficient supply of day-old chicks, the chicks themselves turn out to be of poor quality and don't grow well or there is a shortage of feeds and we are forced to buy them at exorbitant prices. It is like there are characters behind the scenes ensuring that there is never a point whereby small poultry farmers have all they need to run poultries that can eventually grow and scale.

Now, it does not take a conspiracy theorist to consider the possibility that these major players may be sabotaging local small-scale farmers by intentionally contributing towards these shortages so as to keep their monopolies going. I mean if you are controlling the entire supply value chain of an industry, why would you possibly allow your competition to prosper when you can just *legally* sabotage them? After all, the latter option is much more lucrative and as we have learned throughout the history of capitalism, capitalists will always capitalize.

It is clear after decades of failed policies that the government is unable or even unwilling to crack down on the poultry industry monopolies so it is in our hands, the citizens to stand up and fight these chicken cartels ourselves. The only way to do this is to support our local small-scale poultry farmers by buying strictly from them and helping them get to a point where their businesses becoming self-sustaining and eventually start to scale into large-scale enterprises.

Dismantling these monopolies is going to take a lot of work because of the amount of control that they have accumulated in the industry throughout the years as a result of the support they have enjoyed from the same government which is supposed to ensure a level playing field. However, if citizens and small scale poultry farmers come together and decide that enough is enough, not long from now, we get to a point where "motswana-wa-sekei" who works hard on their poultry farming business can have a fair chance of being a large-scale success story without being impeded on by a few individuals who continue to be given comparative advantages by a clueless government which does not recognize the importance and value of instilling a sustainable and healthy competitive environment.


*Names modified for legal reasons

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