Monday, December 21, 2009

Can the Poultry Industry Save Mozambique’s Poor?

No. That’s a dumb question to begin with, given that 75% of the population lives on less than $1.25 a day. But it can help a lot of them, which is exactly what TechnoServe’s (TNS) work over the past four years has shown. During my time here, I'm trying to paint a picture of how the effects of an emerging poultry industry are reaching everyone in the poultry industry, especially the poor. I’ll attempt to tell you a bit more about drumsticks and what I’ve seen so far.

If you’ve ever wondered how “development aid”, gets to (primarily African) countries, TNS is one of the conduits. Most people think of development aid as US tax dollars going into the black hole budgets of corrupt African governments. However, some aid is earmarked for organizations like TNS. TechnoServe is unique because it aims to make a broad-based impact across the economy using market-based approaches. It hauls in McKinsey consultants, investment bankers, and anyone else with outstanding experience and gets them to analyze the entire value chain of an industry to see what can be done. I told my friend it's the first time I've felt like the dumbest person in the room at any given time.

For example, in order to raise awareness for domestic chicken, TNS ran a huge marketing campaign, one TV ad of which you can see above. You'll see a sexy Mozambiquean hen strutting by ogling male chickens. It was so successful that a poultry company created their own animated ad to piggyback off the TNS idea. This is exactly what TNS wants. And its poultry work is spilling over into other industries. In Mozambique the highest cost in chicken production is the soy for the feed, so right now I’m in northern Mozambique talking with soy farmers who are now farming a crop that fetches 2-3x more than the corn they have traditionally planted.

I’m getting to talk with everyone to get their side of the story, from farmers in mud huts to some of the biggest businessmen and top politicians in the country. As a 22-year-old gringo who can’t speak Portuguese, to see me sitting down with these people is a sight to say the least. But I’m learning so much so quickly, about development in general and poultry specifically. I go to sleep thinking about hatcheries and wake up with images of outgrowers (picture 2: the poultry pad/TNS office). I know such inane things like the how many centimeters should be spaced between soya plants or what the normal feed conversion ratio is for chicken.

But it’s not just about high level delegating or policy making. TechnoServe specifically picks entrepreneurs with outstanding backgrounds who fit the mold of what they think will be successful and can serve as industry role models. This is what is most interesting to me. Jake Walter, the Country Director, told me, “The World Bank doesn’t like to pick winners. We pick winners…Sometimes it’s just so obvious.” TechnoServe doesn’t want to waste time or money on people or projects it knows will probably not work out in the long-run. Jake added that unfortunately, the people they are helping may not be the poorest of the poor. Experiments with the very poorest found that instead of feeding their poultry, the poor farmers often ate the chicken feed instead. It’s a sad reality these people resort to eating chicken feed, but Jake admits that these types of business approaches probably aren’t suited for the hard-core poor.

These ideas of entrepreneurship and approaches for the ultra poor reinforce what I’ve already seen and learned at LabourNet (entrepreneurship) and BRAC (approaches for the ultra poor). In effect, I believe that we should probably focus a bit more resources on promising entrepreneurs and a bit less on those with no hope; and at the same time we should probably forget about business approaches for the very poorest. What do you think?


  1. Rob, sounds like you're enjoying your experience at TechnoServe. I'm glad it's going pretty well. I'm still really jealous. I wish I knew about them before last summer. I'm having a great time reading your blog and am glad you posted that TV ad. It's amazing how effective they've been. I've talked to so many people in Moz, and they would randomly comment on how they started buying Moz chicken. Pretty cool stuff. It's really encouraging seeing TNS get money instead of exclusively going to the black hole. Keep me updated!

  2. I think that's a false dichotomy, Rob-Either extend business opportunities to the poorest or don't. I'm not sure it needs to be quite that cut and dried. I'd suggest that the idea of what counts as entrepreneurship might need to be rethought. At a minimum, I think what you're finding out is that a successful entrepreneur is worth more to a community than we ever thought which in turn means that we might be willing to invest substantially more money and time into the cultivation and identification of those people.

  3. Sorry for the long-windedness of this... First let me clarify that when I was talking about entrepreneurs and picking winners, I (and Jake) was talking about the big players in the industry, like New Horizons (NH), a poultry company that uses the poor as their chicken growers. The poor, in effect, are micro-entrepreneurs. I agree with what Josh is saying - I think defining what is an entrepreneurial activity is difficult.

    There are many shades of gray in this definition. Would you consider a street seller who is peddling women's shoes and belts to be an entrepreneur? Maybe. It's his own "business", certainly. I talked to one man worked in the feed mill at a poultry farm. He used to be a street seller before this job. On the one hand, he told me how he had to stay current on the latest fashions. However, in the same sentence that he mentioned his street selling, he told me his family rejoiced when he got the poultry job because he was jobless before. To him, street selling wasn't even a job. Was it entrepreneurial? It's hard to tell. It seems that at the end of the day he was simply trying to get by.

    Some of the poultry growers that NH uses are now starting to invest in a second chicken house. Now they're employing their children and even some neighbors to watch over their flocks. They are in a position where they can start to think ahead. To a certain extent, the success of these farmers isn't just due to having their heads above water, but also to education and innate ability, among other things. However, I think these are also factors that define poverty.

    I think that if we expand our definition of entrepreneurship, we should also adjust our expectations of what entrepreneurship will create. When I made the post, I suppose I was thinking in a more limited scope for the definition. I was thinking of entrepreneurship in terms of sustainable approaches by NGOs and social enterprises. I think sustainability ultimately requires the beneficiary to have some personal stake in the success or failure of the approach. It's hard for me conjure up such an approach when the beneficiary has nothing to lose. I'd love to hear more thoughts...examples always help too!