Harnessing the dairy and meat potential in Africa

In November 2018, the German-African Business Association (Afrika-Verein der deutschen Wirtschaft), in co-operation with the German Agribusiness Alliance and the German Agricultural Society (DLG), held the international conference entitled Dairy and meat potential in Africa: partnerships for higher sufficiency and efficiency. The event took place in the exhibition grounds in Hanover, Germany, as a pre-start of DLG’s livestock trade fair EuroTier 2018.

Africa is estimated to have the highest population growth rate until 2050. A growing population also implies transition, urbanisation and globalisation influencing people’s daily diets and pressure on the food and nutrition sector. The demand for dairy and meat commodities is expected to increase – but what about regional supply?

From 2030 to 2050, between one tenth and one fifth of the beef, pork, poultry and milk consumed in the continent will be coming from outside Africa. Ferdinand Schmitt, Managing Director, ADT Project Consulting GmbH, Germany, told the meeting that growth in demand was expected to push production.

But scarce natural resources meant that the amount of animals could not be increased to the same degree. Therefore, productivity had to be further enhanced. Production would not keep pace with consumption. In addition, the livestock sector had not yet been at the focus of the international development co-operation.

Taking stock of Eastern and Southern Africa

One crucial development is the shrinking number of dairy farms in Zimbabwe. Milk now came from Cape Town in South Africa, where it was more cheaply produced, explained Zimbabwean farmer Vladimir Mukada. But Mukada had found a niche to sustain as a dairy farmer and is now producing functional food. He had started combining the already known Moringa powder, a well-known product in Africa, with milk and yoghurt to create a higher value product. Mukada claimed that, demand was enormous, since it tasted very good – and obtained important minerals and vitamins. Mukada was confident that he would be able to create jobs in Zimbabwe with his new product. He explained that his arable land comprised 550 ha, where he was currently planning to set up different plants. The first plant would produce, process and bottle the innovative nutritious food, and together with additional solar panels, the second one would generate energy in form of biogas. Mukada said he needed more energy for cooling and processing in order to further develop his business.

Thomas Veith is director of sales for Middle East and Africa, Big Dutchman International GmbH, Germany, a company operating in the pig and poultry sector. “Africa provides strategic markets, but nothing where you make big margins,” Veith told the meeting. “We from Big Dutchman co-operate with selected large-scale farms such as that of Vladimir Mukada. It is important to be present so that people have something to touch and to feel for future collaboration,” he added, referring to projects in Kenya.

Ferdinand Schmitt, Managing Director, ADT Project Consulting GmbH, Germany supports another approach. “We have to develop the livestock sector as a system and must not focus on special farmers or special niches in the sector,” Schmitt stated in Hanover, and presented projects of his company to underline his opinion. For example, ADT is setting up and designing a data base for an electronic certification system of livestock in Ethiopia to better organise traceability for export. “Animal health, traceability and quality assurance are becoming very important in Africa,” Schmitt said.

Looking at the poultry sector, the biggest cost factor is the feed. Furthermore, chicken demand a cooling system adjusted to between 20 and 22°C. This can be achieved by an electric ventilation system. Veith explained that the real investment problem lay in micro finance projects of around 10,000 to 15,000 euros. “You will not find investors to support small farm projects like this one. But if we are talking about investments of five million euros, it will be no problem to find investors and receive credits,” Veith added.

The poultry sector in Western Africa

The poultry sector in Ghana is dominated by smallholder farmers. Since the breeding system is weak, Ghana usually imports fertilised eggs. The production costs of chicken meat are rather high; 60 to 80 per cent of them arise in feed (maize, soy beans). Processing is minimal and is limited to only a small amount in convenience products.

Collins Asante-Addo, a researcher at the Thünen-Institute, Germany, and originally coming from Ghana, said that the Ghanaian government was only looking at the supply side in the poultry sector. It was important to understand the consumer side and identify gaps to better serve demand. The Ghanaian consumer’s preference was the price of the product, Asante-Addo furthered. Demand was high for cheap meat, so that the trade tariffs allowed imports of frozen chicken. Around 75 per cent of chicken meat sold in Ghana came from Europe or other countries, entered frozen into the market and was sold for three euros per kg, Asante-Addo said. Nationally produced chicken meat was not competitive against the imported supply and could only be sold for seven euros per kg. Looking at the consumer side, sales of frozen chicken were restricted to urban areas to ensure the continuous cooling chain depending on energy supply. Twenty-five per cent of nationally produced chicken, also at a selling price of seven euros per kg, was fresh meat and was consumed in peri-urban, rural and remote areas, he explained.

According to Asante-Addo, closing trade borders to stabilise the prices was not a solution. The problem had to be solved by reducing production costs.

The poultry breeding company Lohmann has been active in Africa for more than 20 years. Mohamed Chairi, Manager Africa and Middle East, Lohmann Tierzucht GmbH, Germany, notes that Africa was seen by many as the booming continent with regard to business and development. “But Africa is not booming – we still need time,” he said.

According to Chairi, eggs were the cheapest protein which could be produced. Less than 40 to 45 eggs per capita per year were consumed in Africa on average. Compared to the European consumption pattern, this was very low. Chairi added that he saw a high potential in this sector.

Daniela Boehm, editor, Rural 21