Egg Production
Egg Production
Business Model Description
Set up chicken houses and install wire cages, feeding and watering units, and put in point-of-lay chickens for egg production for supply to local supermarkets, hotels, retailers, caterers, public institutions, tertiary institutions and government school feeding programme, and integrate disposal/culling of stewing hens and production of manure as part of the business revenue stream.
Expected Impact
Improve food security and contribute to job creation and household incomes for poverty and hunger reduction, particularly for poor rural households.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Lesotho: Countrywide
Sector Classification
Food and Beverage
Development need
Lesotho has high poverty levels recorded at 49.7% in 2018 (2). It also has low food production, together with perpetual shortages of cereals (largely staple food), which adversely affect food security, particularly for the rural population whose livelihoods depend on subsistence farming (3, 7, 12, 13).
Policy priority
The National Strategic Development Plan II and the Comprehensive National Agriculture Policy (2022 - 2026) aim to improve food security through production of staple foods, high value crops and livestock, targeting long term market opportunities, including export markets, and adopting climate-smart cultivation (3, 4).
Gender inequalities and marginalization issues
NSDP II notes that another key challenge in agriculture sector is access to land for agricultural production as it is constrained by unequal gender and generational exclusion due to cultural constraints (3).
Investment opportunities introduction
Low national food production and high food imports provide an investment opportunity for local food production (7).
Key bottlenecks introduction
Investment opportunities in agriculture are undermined by, among others, soil erosion, fragmented and under-developed value chains, lack of harvesting and post-harvest technology and infrastructure, limited access to agriculture finance and insurance for risk-sharing (3).
Food and Agriculture
Development need
Lesotho’s poultry industry, particularly egg production, highly depends on annual imports of over 11.3 million one-day chicks and parent stock from South Africa, including feed, which occasionally do not meet demand and consequently restricts local egg production (11).
Policy priority
Through the National Agricultural Investment Plan (2022 - 2026), the Ministry of Agriculture plans to improve extension services; access to improved and resilient livestock breeds; affordable and high quality feeds; value addition of livestock products; improvement of livestock infrastructure, such as, abattoirs, slaughterhouses, and sale yards and access to finance (5).
Gender inequalities and marginalization issues
There is evidence of gender disparity in livestock ownership in Lesotho. Of the eight most common stocks (cattle, sheep, goat, donkey, horse, mule, pig and poultry), six are largely owned by men, while women mostly own just two stocks, pigs and poultry (1).
Investment opportunities introduction
Import restriction of eggs provides an opportunity for local egg production, which still runs short of demand (9, 10).
Key bottlenecks introduction
Poultry production is challenged by lack of critical poultry value chains, like parent stock chickens, affordable feeds, including inaccessible investment financing (5).
Meat, Poultry and Dairy
Pipeline Opportunity
Egg Production
Set up chicken houses and install wire cages, feeding and watering units, and put in point-of-lay chickens for egg production for supply to local supermarkets, hotels, retailers, caterers, public institutions, tertiary institutions and government school feeding programme, and integrate disposal/culling of stewing hens and production of manure as part of the business revenue stream.
Business Case
Market Size and Environment
< USD 50 million
Although the recent government decision (2018) to restrict import of eggs and promote local purchase, has boosted local egg production and relatively captured the local market demand for locally produced eggs, local egg production still falls short of demand. Current consumption is estimated at M 409 million (USD 22.7 million) (9, 10, 12, 25).
Indicative Return
15% - 20%
Since its established in 2014, Riverside Fresh Produce has realized ROI of 15% - 20%, and increased its egg production by close to 1000%, which still falls short of market demand. (10)
Government's policy stance on nutrition has also boosted national egg consumption and local production (24).
Investment Timeframe
Short Term (0–5 years)
Eggs have traditionally been imported, and import restriction (2018) has boosted local production. This helped accelerate the return in less than 5 years, which took advantage of an already existing local market (9, 10, 25).
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Business - Supply Chain Constraints
Business - Supply Chain Constraints
Impact Case
Sustainable Development Need
Lesotho's poultry industry is dominated by imports from South Africa with an annual volume of over 11.3 million one-day chicks, which undermine the country's foreign reserves, as well as local production of layers and broilers (3, 11).
58% of Lesotho's population lives in the rural areas with 70% of the households depending on crop and animal farming, and 67.8% poverty rate, compared to 24.7% in the urban area and 49.7% nationally (3, 4, 5).
Gender & Marginalisation
Evidence of disparity in livestock ownership in Lesotho constitutes gender inequality, with women owning just two types of livestock -pigs and poultry - out of eight of the most common stocks (cattle, sheep, goat, donkey, horse, mule, pig and poultry) (1).
Low investment, especially in agriculture, undermines potential for job creation - particularly for the population living in rural areas, women, and youth (including those not transiting to tertiary education which is more than 65% of the total youth population) (3).
Expected Development Outcome
Investing in egg production will reduce imports of eggs from South Africa and help preserve forex for the national economy, improve food security and provide affordable nutrition (3).
Egg production has the potential to create jobs and generate household incomes to the majority of households already involved in farming. The investment will also reduce overall poverty and close the poverty gap between the urban and rural areas (3, 4, 5).
Gender & Marginalisation
Egg production will benefit mostly women with high probability for success, including for youth, considering that chicken ownership is already skewed towards women (1).
Egg production has the potential to create jobs for the rural population - especially for women and youth - including youth not transiting to tertiary education, which are more than 65% of total youth population (3).
Primary SDGs addressed
1.1.1 Proportion of the population living below the international poverty line by sex, age, employment status and geographic location (urban/rural)
National poverty rate 49.7% (2018); Urban 24.7% and rural 67.8% (2).
Reduced by 50% by 2030 (3).
8.6.1 Proportion of youth (aged 15–24 years) not in education, employment or training
Youth (15-35 years) Not in Education, Employment or Training (NEET) is 11.9% (30).
NSDP II projects creation of 9,900 additional jobs annually (2).
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Outcome Risks
Health risks from possible bird disease outbreaks resulting from increased bird population.
Poor management of egg production facilities could cause olfactory pollution in the vicinity through chicken waste/emissions.
Impact Risks
Impact of egg production may still not reach some households with low or no incomes, resulting in possible lower impact.
Impact Classification
What
Eggs are an inexpensive source of high-quality protein, essential vitamins, and minerals that are needed for a healthy diet and a healthy life (28).
Who
Workers in the production plant and consumers, including institutions through feeding programmes and better education outcomes.
Risk
Households with low or no incomes may still not have access to eggs, resulting in the widening of inequalities and undermine the impact of the IOA.
Contribution
Egg production contributes to food security and better nutrition, including better school attendance through school feeding programme.
How Much
Sustainable egg production impacts the general public given that eggs are relatively affordable and constitute staple food.
Impact Thesis
Improve food security and contribute to job creation and household incomes for poverty and hunger reduction, particularly for poor rural households.
Enabling Environment
Policy Environment
The National Strategic Development Plan 2018/19 – 2022/23 identifies agriculture as a priority sector for food security and employment creation, and proposes several policy actions, including a list of investment opportunities to turn around the sector (2).
Comprehensive National Agricultural Policy (CNAP 2022-2026) has been developed to improve the agricultural sector, facilitate and promote commercialization and diversification of the sector (4).
Lesotho Instrument Based National Agriculture Investment Plan (L-IB-NAIP) 2022-2026 seeks to support and ensure sustainable agriculture sector growth, decent jobs, and food and nutrition security for the Basotho people, including establishing public-private partnerships (5).
Lesotho Food and Nutrition Policy (LFNP) 2016 - 2025 seeks to shape and guide planning and implementation of nutrition interventions in the country, particularly for human capital and development, including effective workforce (24).
Financial Environment
Financial incentives: Smallholder Agricultural Development Project (SADP) provides technical and startup financial support to smallholder farmers to help improve agricultural productivity, as well as transform and diversify agriculture into a market oriented sector (14).
Fiscal incentives: Corporate Income Tax rate in the agricultural sector is 10 percent compared to 25 percent standard rate. There is also an input subsidy of up to 60% for both fertilizer and seeds, which facilitates in-house production of animal feed and can help lower the production costs (26).
Other incentives: Competitiveness and Financial Inclusion Project aims to increase access to business support services and financial products targeted at MSMEs and entrepreneurs, especially for women and youth (6).
Regulatory Environment
Basotho Poultry Farmers' Association acts as regulatory body in the poultry subsector in promoting and providing training and technical skills among the poultry farmers to achieve set standards in the subsector, which is important for consolidation and competitiveness of the industry (25).
NSDP II commits to fostering agriculture production and its commercialisation, by developing regulatory framework for range management, water sheds, environment protection and biodiversity, and reverse environmental degradation that has aggravated the food insecurity situation (2).
Marketplace Participants
Private Sector
Lesotho National Farmers Union, Standard Lesotho Bank, NedBank Lesotho, FNB Bank, Pick'n'Pay Supermarket, Shoprite Supermarkets, Enrcich Supermarket, Lesotho Flour Mills, Itau Animal Feeds.
Government
Ministry of Agriculture & Food Security, Ministry of Trade & Industry, Ministry of Finance & Development Planning, Ministry of Education and Training, Basotho Enterprises Development Corporation, Lesotho Post Bank, Revenue Services Lesotho.
Multilaterals
World Food Programme, Food and Agriculture Organisation, United Nations Development Programme, World Bank, International Food & Agricultural Development, African Development Bank.
Rural Self-Help Development Association, Joining Hands Against Hunger Network, Development Peace Education, World Vision, Mineworkers Development Agency.
Public-Private Partnership
Ministry of Agriculture & Food Security has a partnership with private sector in the distribution of subsidized agricultural inputs across the country (4).
Target Locations
Lesotho: Countrywide
References
- (1) Government of Lesotho, Livestock Statistics, 2019/20
- (2) Government Lesotho, Lesotho Poverty Trends and Profile, Bureau of Statistics, 2019
- (3) Government Lesotho, National Strategic Development Plan II (2018/19 - 2022/23)
- (4) Government of Lesotho, Comprehensive National Agricultural Policy 2022-2026
- (5) Government of Lesotho, Lesotho Instrument Based National Agriculture Investment Plan 2022-2026
- (6) World Bank, Competitiveness and Financial Inclusion Project Proposal, 2022
- (7) World Bank and Bureau of Statistics, Lesotho Poverty Assessment: Progress and Challenges in Addressing Poverty, 2019
- (8) 2017/18 Mapping Subnational Poverty Report, August 2021, Govnernment of the Kingdom of Lesotho
- (9) Ministry Agriculture, Food Security and Nutrition Consultations (2023)
- (10) Riverside Fresh Produce Stakeholder Consultations (June, 2023)
- (11) Mothoebe Poultry Hatchery Project Proposal, 2020
- (12) Thakadu Poultry Stakeholder Consultations, August, 2023
- (13) World Food Programme, Lesotho Annual Country Report, 2023. https://www.wfp.org/countries/lesotho
- (14) Government of Lesotho, Smallholder Agricultural Development Project Report, 2023
- (15) Government of Lesotho, Economic Roadmap (2018/19 – 2022/23)
- (16) Lesotho Suppplier Development Programme, Innovative Financing Instruments for Smallholder Farmers – Focus on Botswana and Lesotho, 2022
- (17) Government of Lesotho, Labour Force Survey, 2019
- (18) World Bank, Private Sector Solutions to Helping Smallholders Succeed: Social Enterprise Business Models in the Agriculture Sector, 2018
- (19) Government of Lesotho, Annual Budget Strategy Papers (2020/21 - 2022/23)
- (20) FinMark, Lesotho Finscope Micro, Small and Medium Enterprises Survey 2016
- (21) Government of Lesotho, Rapid Private Sector Assessment, 2022
- (22) Government of Lesotho, Annual National Accounts 2020
- (23) Government of the United States of America, Privacy Shield Framework, Lesotho Country Commercial, 2023 Guide. https://www.privacyshield.gov/article?id=Lesotho-Agricultural-Sectors
- (24) Government of Lesotho, Food and Nutrition Policy 2016 - 2025
- (25) Lesotho National Farmers Union Consultations, February 2023
- (26) Revenue Services Lesotho, 2023. https://www.rsl.org.ls/tax-rates
- (27) Trading Economics, Lesotho Inflation Rate, 2023. https://tradingeconomics.com/lesotho/inflation-cpi#:~:text=Inflation%20Rate%20in%20Lesotho%20is,according%20to%20our%20econometric%20models
- (28) Journal of Food Nutrition and Metabolism, The Role of Chicken Eggs in Human, 2023 Nutrition. https://www.sciencerepository.org/the-role-of-chicken-eggs-in-human-nutrition_JFNM-2020-3-102#:~:text=Chicken%20eggs%20are%20one%20of,needs%20of%20adults%20and%20children
- (29) American Egg Board, Landmark 50-Year Study Documents U.S. Egg Industry Reduced Environmental Footprint.
- (30) Government of Lesotho, Lesotho Labour Force Survey, 2019