Trade and Industry

Wednesday, 29 April 2009

The Impact of Imported GMO Chickens on Zimbabwe's Poultry Industry

  • Year: 2009
  • Organisation: Trade and Pro-Poor Growth Thematic Working Group; TIPS, BIDPA
  • Author(s): Evengelista Mudzonga
  • Countries and Regions: Zimbabwe

The paper has attempted to contribute to a key issue in the current debate on economic development: the link between trade and poverty. The paper focused on the impact of imported chickens on Zimbabwe's poultry industry. The general aim of the study was to find the impact of imported chicken on producers, consumers, retailers and government. The study relied on primary data collected through a survey. Questionnaires and interviews were used to gather information on the impact of imported chickens on producers, consumers and government. The method of ordinary least squares to estimate the model suggested to explain the linkages between trade and poverty. Quantity of domestically produced chickens, quantity of imported chickens and a dummy variable have been used as explanatory variables top rice of chickens, the depended variable. The quantity of domestically produced chickens and the dummy have been found to be significant in influencing the price of chickens on the local market. The quantity of locally produced chickens has been found to have an insignificant effect on the rice of the chickens

The results emanating from the study indicated that the imported chickens have had varied impact on the relevant players in the poultry industry. The consumers and retailers benefited, while producers lost. From the study the consumers benefited from a price reduction of chickens as a result of the influx of imported chicken in Zimbabwe. This translated to an improvement in welfare and hence has poverty reduction effect. The consumer surplus gain was estimated to be $24 334. Producers generally faced stiff competition from imported chicken and hence their production was reduced. Retailers benefited most from price differential margin. They imported chicken at lower price and tried to match though generally at lower price the local producer's prices. Other significant results found were that the imported chickens have an impact on employment. There was an increase in unemployment as a result of closure of companies which are directly linked to poultry production.

The paper concludes with proposing strategies that can be adopted to deal with the supply side constraints of the poultry industry so as to improve its competitiveness and production.