Mini-feed mills make a viable SME

 By Michael Dom

While large scale agriculture production provides an important contribution to Papua New Guinea’s international earnings on commodity markets (coffee, cocoa and palm oil), it is vital to keep in mind the fundamental role of small-scale mixed crop-livestock farming to rural livelihoods.

Mixed farming by smallholders makes the most significant contribution to food and nutritional security, rural incomes and entrepreneurship in many developing countries, and PNG is no exception.

The vast majority of PNG’s population survives and thrives in village-based economies, not far removed from the subsistent lifestyles of their ancestors. 

This may be considered their strength–resilience over the millennia with less reliance on overseas imports of food and feed products. 

Poultry, pig and fish farmers are very reliant on large scale producers of food by-products, which are key ingredients in commercial livestock feed. 

For example, Lae Feed Mills manufacture livestock feed using fish meal which is produced locally. 

The wheat millings from flour manufacturers such as Flame are repackaged into relatively cheap feeds such as mill-run, while copra meal is available as a bulk concentrate feed. 

Other by-products, such as rice bran, palm kernel meal and even coffee pulp, have similar value as feed ingredients.

Smallholder poultry, pig and fish farmers tend to use their sweet potato and cassava staple crops as a source of high energy feed for managing all classes of stock. 

But real gains in animal productivity can be ensured by blending the starchy roots with protein concentrates available in processed livestock feed. 

Where livestock feed is concerned there is common ground to be reached between large and small-scale agriculture production. 

Mutually beneficial relationships between large and small scale enterprises should be supported. 

Instead, we have the controversial importation of fresh broiler meat for the first time in PNG history. 

Although the full repercussions of imported broiler meat have not yet been assessed, it is clear that both groups have lost a slice of the domestic market.

A similar story may be found in the local pig industry. 

Here most large scale pig producers are operating at or close to their maximum potential for expansion, by comparison to the growing market for pig meat products. 

An increase in the number of small piggeries was a response to the growth in the domestic market brought on by rising incomes at urban centres and around mine sites.

Smallholder pig producers may pose little threat to the business of bigger farms and may be an additional pathway for the large scale producers to gain cost-benefit efficiency in a similar manner to that achieved in the broiler bird industry.

One identified place for sha­red benefits to be obtained by large and small scale agriculture is at community based mini-feed mills. 

This avenue is being investigated through a research and development project conducted on-station and at selected locations in the country where poultry, pigs and fish are intensively farmed. 

Poultry and pig concentrates were formulated to complement sweet potato or cassava in nutritious feed for broiler birds and grower pigs. 

Similar concentrates were tested for fish, particularly tilapia. 

The nutrition provided to animals from the tested least-cost diets was effective for good growth rates, feed efficiency and for viable economic benefit-cost ratios.

Sweet potato and cassava may be grown and processed by farming households or at community level, as boiled feed or into dry chips and meal, or as ensiled feed. 

The latter two methods allow feed to be stored for much longer periods and require planned production and harvest of crop for processing.

Feed ingredients sourced from local farmers along with protein concentrates from commercial feed manufacturers may be bulked before processing at local mini-mills and this will reduce other costs of transportation and storage. 

Local mills may receive more competitive prices when buying in bulk from feed importers. 

The level of investment required for establishing and running mini-feed mills makes them a viable category for small-to-medium enterprise, particularly at district level. 

A start-up capital for a medium sized mini-mill is estimated to be K118,826, with annual running cost of K15,847, whereas, operating cost (fuel, municipal rates, labour, etc) is about K54 to K58,000 at lowland and highland locations respectively.