Writes Daniel Polihali
IMPACT OF COVID-19 ON POULTRY SECTOR IN LESOTHO
Poultry Farming is one of the biggest sector in agricultural industry in Lesotho, yet the most delegate as poultry farmers have since independence been struggling to access the formal market inside the country. Marketing functions (Exchange, Physical, Facilitative and Physical functions) are the contributing factors which do not meet the prerequisites and the inconsistent supply by farmers due to lack of capacity as to date, it is still not easy for poultry business to access finance because of the high risk it poses, the biggest and obvious being no formal market which makes poultry farming informal business.
During Lockdown, and post lockdown the poultry industry is thriving due to the fact that the borders are closed and no more chicken products entering the country as such chicken product consumers have no option but to buy from local farmers at the prices above inflation. Unlike pre-lockdown when people used to source eggs from SA at the price far lower than the market price and out compete the local producers. Poultry sector falls under competitive market structure and it has many firms in it, hence why there is an ease of entry and exit. Due to increased quantity demanded of eggs during lockdown, producers were forced by the rules of demand and supply to increase the market prices (above inflation), which resulted to catastrophic market price to the eggs consumers who had to spend more while still bearing the negative impact of lockdown as most of the people were not getting salaries save for government employees.
Furthermore, the food parcels which were offered to the needy was another market for producers and in most packages either the braaipak or a tray of eggs was included and poultry farmers enjoyed such a market.
Be that as it may, because of the opportunities which came by due to Covid-19, a lot of people are coming in to saturate the industry (ease of entry and exit – Competitive market structure) of which will be evident post Covid 19 if there will ever be such a time. Provided we come across post Covid 19 era, the country will witness several collapse of poultry Farming businesses because the market for Produce will be severely reduced. Also, closing of borders deter New entrants to the industry because they find it tough to get poultry produce such as point of lay birds and broilers chicks from outside the country as big local companies producing birds like Agribusiness Network Lesotho doesn&001;t have adequate stock to meet the demand.