ASSESSMENT OF THE MARKET FOR POULTRY BY-PRODUCTS AND THEIR CONTRIBUTION TO POULTRY FARMERS’ REVENUE IN GHANA BY ETRIAKOR KOFI GBORDZOE (10877042) THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF PHILOSOPHY IN AGRIBUSINESS DEGREE DEPARTMENT OF AGRICULTURAL ECONOMICS & AGRIBUSINESS SCHOOL OF AGRICULTURE COLLEGE OF BASIC AND APPLIED SCIENCES UNIVERSITY OF GHANA, LEGON DECEMBER 2022 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh ii DECLARATION I, Etriakor Kofi Gbordzoe, the author of this thesis, “ASSESSMENT OF THE MARKET FOR POULTRY BY-PRODUCTS AND THEIR CONTRIBUTION TO POULTRY FARMERS’ REVENUE IN GHANA” do hereby declare that, with the exception of the properly listed references, all work done for this thesis was done by me at the Department of Agricultural Economics and Agribusiness, University of Ghana, Legon. ............................................................. .................................................... Etriakor Kofi Gbordzoe Date (Student) This thesis has been presented for examination with our approval as supervisors: ................................................................... ..................................................... Prof. Akwasi Mensah-Bonsu Date (Major Supervisor) ................................................................. ..................................................... Rev. Dr. Edward Ebo Onumah Date (Co-Supervisor) University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh iii DEDICATION This thesis is dedicated to my parent, Rev. Dr. & Mrs. Gbordzoe and my siblings for their undaunted support, love and encouragement throughout my studies. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh iv ACKNOWLEDGEMENT I sincerely owe the Almighty God my gratitude for giving me the tenacity, courage, and drive to accomplish this master's program and thesis work in particular. My heartfelt gratitude goes to Professor Akwasi Mensah-Bonsu, whose encouragement, technical support, guidance, supervision, and excellent judgment have enabled the effective completion of this work. Despite having a busy schedule, Professor Akwasi Mensah-Bonsu always made time to attend to me and guided me through the thick and thin of this work. My sincere gratitude also goes to Rev. Dr. Edward Ebo Onumah who provided my thesis with continuous support, constructive criticism, revisions, guidance and encouragement during the course of this thesis. I also want to express my gratitude to the Senior Members of the Department of Agricultural Economics and Agribusiness for their constructive comments during seminars and to the other members of the Department for their many forms of support. I wish to thank my family for their support throughout my studies. Again, I thank my fellow students and friends, who through various ways helped me to complete this thesis especially Ernest Kuranchie, Derrick Armah, Collins Tutu Boahen and Eli Andreaws Akorsikumah. Also, I appreciate West Africa Centre for Crop Improvement (WACCI) for their support towards this thesis. I truly appreciate everyone who responded and gave the information I needed for this project, especially the executives of Dormaa Poultry Farmers’ Association and Ejisu-Juaben Poultry Farmers’ Association. Finally, special thanks goes to the Directors of Agriculture and their extension officers at the Dormaa Central, Dormaa East, Dormaa West, Ejisu and Juabeng district assemblies. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh v ABSTRACT The study set out to assess the market for the poultry by-products and their contribution to poultry farmers’ revenue in the Ashanti and Bono regions of Ghana. The study identified poultry by- products being commercialized by poultry farmers in the study area and estimated how much in revenue the by-products are contributing to their total revenue from poultry production. The study analyzed the factors influencing the revenue proportion contributed from the by-product. The study finally, identified and ranked constraints poultry farmers encounter in marketing their poultry by- products. The study employs descriptive statistics and a diagram to assess the nature of the poultry by-products market, and uses a Tobit model to analyse the factors that influence the proportion of revenue contributed from poultry by-products. A Kendall’s Coefficient of Concordance (W) was used to measure the level of agreement between the identified constraints. Data was collected from 120 poultry farms located in the Bono and Ashanti regions. The findings revealed that, the poultry by-product market in the Ashanti and Bono regions has only one poultry by-product (poultry dropping) being commercialized of which Côte d’Ivoire is the largest end user. Côte d’Ivoire consumes about 7000 metric tons of poultry droppings annually representing 75% of the total annual production. The findings indicated that the average price for which poultry dropping is sold per 80Kg is GHS 6.00. The results also revealed that, the average revenue accrued by a poultry farmer from the sale of poultry droppings annually is GHS 6,730.00, with standard deviation of GHS 8,338.00. This constitutes less than 1% of their annual revenue from poultry production. Analysis from the Tobit regression model indicate that ownership, litter size, membership of PFA and number of spent layers sold are variables that influence the proportion of revenue contributed from poultry droppings. The four most prevalent constraints among respondents in the study area, in order of magnitude, are low prices for droppings, lack of processing and storage facilities for poultry dropping, seasonal demand, and buyers’ distance. Government should support the development of value chains that would purchase, process and sell poultry dropping and other poultry by-products to expand the market under the circular economy framework. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh vi TABLE OF CONTENTS DECLARATION ............................................................................................................................ ii DEDICATION ............................................................................................................................... iii ACKNOWLEDGEMENT ............................................................................................................. iv ABSTRACT .................................................................................................................................... v LIST OF TABLES .......................................................................................................................... x LIST OF FIGURES ....................................................................................................................... xi LIST OF ACRONYMS ................................................................................................................ xii CHAPTER ONE ............................................................................................................................. 1 INTRODUCTION .......................................................................................................................... 1 1.1 Background ........................................................................................................................... 1 1.2 Problem Statement ................................................................................................................ 6 1.3 Research Objectives .............................................................................................................. 9 1.4 Justification of the Study ....................................................................................................... 9 1.5 Organization of the Study ................................................................................................... 11 CHAPTER TWO .......................................................................................................................... 13 LITERATURE REVIEW ............................................................................................................. 13 2.1 Introduction ......................................................................................................................... 13 2.2 Agricultural Markets and Marketing ................................................................................... 13 2.3 Agricultural Marketing Channels ........................................................................................ 15 2.3.1 Definition of Agricultural Marketing Channels ........................................................... 15 2.3.2 Determinants of Agricultural Marketing Channels ...................................................... 15 2.4 Overview of Poultry Sector in Ghana ................................................................................. 17 2.4.1 Nature of the Poultry Sector ........................................................................................ 17 2.4.2 Poultry Production Trends ........................................................................................... 17 2.5 Agricultural By-products..................................................................................................... 20 2.5.1 Overview of Agricultural By-products ........................................................................ 20 2.5.2 Benefits of Agricultural By-products .......................................................................... 22 2.6 By-product from Poultry Production .................................................................................. 23 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh vii 2.6.1 Overview of Poultry By-products ................................................................................. 23 2.6.2 Prospects for Products .................................................................................................. 23 2.7 Empirical Studies On Poultry By-products ......................................................................... 25 2.8 Farm Income ....................................................................................................................... 27 2.8.1 Farm Income Generation .............................................................................................. 27 2.8.2 Poultry Production as an Income Generation Activity ................................................. 29 2.8.3 Agricultural Income Diversification ............................................................................. 30 2.8.4 By-product Based Income Diversification ................................................................... 32 2.9. Theoritical Frameworks Underpinning the Study .............................................................. 33 2.9.1 The Production Theory ................................................................................................. 33 2.9.2 Circular Economy Framework and Theory of By-product Synergy ............................ 35 2.10 Economic Tools for the Study ........................................................................................... 37 2.10.1 Tobit Model (Censored Regression Model) ............................................................... 37 2.10.2 Kendall’s Coefficient of Concordance ....................................................................... 41 2.11 Conclusion ......................................................................................................................... 42 CHAPTER THREE ...................................................................................................................... 44 METHODOLOGY ....................................................................................................................... 44 3.1 Introduction ......................................................................................................................... 44 3.2 Conceptual Framework ....................................................................................................... 44 3.3 Theoretical Framework ....................................................................................................... 46 3.3.1 Theory of By-product Synergy ..................................................................................... 46 3.4 Analytical Framework ......................................................................................................... 47 3.4.1 Method of Analysis ...................................................................................................... 47 3.4.2 Software for Data Analysis ........................................................................................... 57 3.5 Data Description .................................................................................................................. 58 3.5.1 Study Area .................................................................................................................... 58 3.5.2 Sampling Technique and Sample Size ......................................................................... 61 3.5.3 Method of Data Collection ........................................................................................... 62 3.5.4 Research Design ........................................................................................................... 63 CHAPTER FOUR ......................................................................................................................... 64 RESULTS AND DISCUSSIONS ................................................................................................. 64 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh viii 4.1 Introduction ......................................................................................................................... 64 4.2 Socio-economic Characteristics .......................................................................................... 64 4.2.1 Gender of Respondents ................................................................................................. 64 4.2.2 Education Level of Respondents .................................................................................. 65 4.2.3 Age of Respondents ...................................................................................................... 65 4.2.4 Litter Size ..................................................................................................................... 67 4.2.5 Ownership ..................................................................................................................... 67 4.2.6 PFA Membership .......................................................................................................... 68 4.2.7 Access to Veterinary Service ........................................................................................ 68 4.3 Nature of Poultry By-product Market ................................................................................. 69 4.3.1 Availability of poultry by-products .............................................................................. 69 4.3.2 Mapping of Actors in the Poultry By-product Market ................................................. 70 4.3.2 Distribution of Poultry By-product to Marketing Channels ......................................... 74 4.4 Contribution of Poultry Droppings to Poultry Farmers’ Revenue ...................................... 77 4.4.1 Respondents’ Rank on How Beneficial the sale of Poultry Dropping is ...................... 80 4.5 Determinants of Revenue Proportion Contributed by Poultry Droppings .......................... 82 4.5.1 Ownership ..................................................................................................................... 83 4.5.2 Quantity of Poultry Dropping Sold .............................................................................. 83 4.5.3 Member of Poultry Farmers’ Association (PFA) ......................................................... 85 4.5.4 Litter Size ..................................................................................................................... 86 4.5.5 Number of Spent Layers Sold ...................................................................................... 87 4.5.6 Price of Poultry Dropping............................................................................................. 87 4.6 Constraints Faced by Respondents in the Poultry By-product Market ............................... 88 4.6.1 Low Price ...................................................................................................................... 89 4.6.3 Seasonal Demand ......................................................................................................... 91 4.6.4 Distance from Buyer ..................................................................................................... 92 4.6.5 Lack of Market Information ......................................................................................... 92 4.6.6 Access to Credit ............................................................................................................ 93 4.6.7 Poor Road Network ...................................................................................................... 94 CHAPTER FIVE .......................................................................................................................... 95 SUMMARY, CONCLUSION AND RECOMMENDATIONS ................................................... 95 5.1 Introduction ......................................................................................................................... 95 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh ix 5.2 Summary and Major Findings ............................................................................................. 95 5.3 Conclusions ......................................................................................................................... 97 5.4 Recommendations ............................................................................................................... 99 REFERENCES ........................................................................................................................... 104 APPENDIX 1: Questionnaire ..................................................................................................... 121 APPENDIX 2: Determinant of Poultry Farmer’s Choice of Channel for Selling Droppings .... 128 APPENDIX 3: Proportion of Revenue Contributed by Poultry Dropping (By Region) ............ 129 APPENDIX 4: Variance Inflation Factor for Independent Variables in the Tobit Regression Model .......................................................................................................................................... 130 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh x TABLE LIST OF TABLES PAGE Table 2.1: Domestic Chicken Supply Against Imported (2000-2016) ......................................... 20 Table 3.1: Description, Measurement and A Priori Expectation of Variables ............................. 52 Table 3.2: Distribution of Sample Size ......................................................................................... 62 Table 4.1: Socio-economic Characteristics of Respondents ......................................................... 66 Table 4.2: Total Quantity of Poultry By-product Forms Sold.......................................................69 Table 4.3: Distribution of Poultry By-product to Channels .......................................................... 75 Table 4.7: Determinants of Revenue Proportion Contributed by Poultry Droppings................... 84 Table 4.8: Ranking of Constraint in the Poultry Dropping Market .............................................. 90 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh xi TABLE LIST OF FIGURES PAGE Figure 2.1: National Poultry Production ....................................................................................... 19 Figure 3.1: Conceptual Framework of Overview of the Poultry By-products ............................. 45 Figure 3.2: Map of the Study Area ............................................................................................... 60 Figure 4.1: Channels of Marketing Poultry Droppings ................................................................ 74 Figure 4.2: Benefits of Poultry Droppings .................................................................................... 82 University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh xii LIST OF ACRONYMS CAGR Compound Annual Growth Rate CI Commercializing Indices FAO Food and Agriculture Organization GDP Gross Domestic Product IFDC International Fertilizer Development Centre Kg Kilograms MFA Ministry of Foreign Affairs MoFA Ministry of Food and Agriculture Mt Metric Tonnes PFA Poultry Farmers’ Association PMR Persistence Market Research ROI Return on Investment SME Small and Medium Scale Enterprise SSA Sub-Saharan Africa TMR Transparency Market Research UNEP United Nations Environmental Program University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 1 CHAPTER ONE INTRODUCTION 1.1 Background Agriculture continues to play an essential role in contributing to socio-economic development in several countries of which Ghana is no exception (Abban et al., 2021). Ghana's economy is based on agriculture, as it is a developing and emerging country. In 2017, the agriculture sector in Ghana produced around 19% of the country's GDP and employed 34% of the labor force (Ferreira et al., 2022). Although sector performance has declined over time, it nevertheless contributes significantly to achieving national and international policy objectives ((Ferreira et al., 2022). Agriculture is the primary source of food, employment, and livelihood for most rural people (Assa, 2012). “In 2019, the agricultural sector contributed to about 20% of Ghana’s gross domestic product (GDP)”. The GDP growth rate in Ghana in 2018 was 8.4%, whiles that of agriculture was 6.3% indicating the level of importance of the agricultural sector (Nyamekye et al., 2021). The GDP growth rate also suggests that the general economic growth and development of Ghana depends on how well the agricultural sector is performing (Nyamekye et al., 2021).This is because the sector provides food, raw materials, and foreign exchange, which propels industrialization. Livestock production is an essential subsidiary of the agricultural sector of most developing countries, which is a source of income for most smallholder farming households and most rural folks in entirety (Anang et al., 2013). Examples of predominant livestock productions in Ghana include cattle, goat, sheep, poultry, pig, rabbit and grasscutter. Poultry production has gained reputation among all other commercial livestock activities, with enormous prospect for rapid economic growth (Anang et al., 2013) . Poultry production in rural areas is an important University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 2 agricultural activity for most communities in Africa, providing animal protein in the form of meat and eggs as well as being a reliable source of income (Awuni, 2002). A study by Rajendran & Mohanty (2003) revealed that poultry production has become a leading agricultural occupation because, it guarantees quick returns and involves minimal space and investment. According to Assa (2012), poultry production is the fastest growing subsector of the global meat production sector. Global consumption of poultry product has been on the rise with the global economies like United States of America, China, and Brazil leading in per capita consumption (Lasekan et al., 2013). In the last decade, global poultry production has increased drastically due to the world population growth and the high demand for poultry products (Ayoo et al., 2019). With the large production ongoing globally, tons of organic by-product are generated in the form of excreta (dropping), viscera (internal organs), feet, heads, bones, blood and feathers (Zhu et al., 2010), which brought about development processes such as rendering, composting, chemical, microbial and thermal microbial treatment of poultry and other animal wastes (Salminen & Rintala, 2002). In developing countries, the use of some poultry by-products like the dropping and feathers is not a new development (Onibokun & Kumuyi, 1999). It has being a tradition technique farmers have used to provide plants with required nutrients and improve soil quality (Onibokun & Kumuyi, 1999). The global market for chicken manure is expected to rise at a Compound Annual Growth Rate (CAGR) of 10% to 12% between 2021 and 2031 because of its high content of nitrogen, phosphorus and potassium (Persistence Market Research, 2021). One of the principal drivers for chicken manure industry is the growing demand for organic farming, organic products and the increased growth of agro-based industries globally. Chicken manure is considered as a rich source of nitrogen, which is a widely used fertilizer nutrient after potassium and phosphorus (Boateng et al., 2009). The desire of governmental bodies to manage waste also serves as a driving University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 3 factor in increasing the demand for chicken manure and as a result, most governments globally are introducing diverse initiatives to encourage the usage of poultry manure as organic fertilizers by engaging in organic farming (Kumar, 2012). The changing way of life of the people; increase in household gardening (vegetables, flowers, shrubs, trees), rapid urbanization, infrastructure development in terms of public parks and jogging tracks, fuel the global poultry manure market (Cofie et al., 2006). Currently the global poultry manure market is being dominated by Asia pacific and is expected to expand its market size owing to the massive growth in agro-industries and the increase agricultural activities with North America closely behind them in the market (Transparency Market Research, 2020). The United States is expected to witness significant demand growth owing to the reputation of organic foods among consumers. Currently, some of the key players in global manufacturing and supplying of poultry manure fertilzer include Kreher Family Farms, Italpollina, Komeco, Olmix Group, Farm Choice, Stutzman Environmental Products, Rocky Point, Fertagon, Apple Agro, Fabon Agro, Samruddhi Green Crop Care Pvt Limited, Asis Agrochemical Industries and Gen-Ee Corporation SDN BHD. These manufacturers usually process the poultry manure fertilizer into the form of pellets, powder or liquid which are targeted at mainly residential gardeners, commercial gardeners and commercial crop producers for use on their field crops, fruit and vegetable fields, trees and shrubs and flowers amongst others. These manufacturers are focused on the production and supply of high-quality organic fertilizers from poultry manure and expanding their capacity by inducing strategic partnerships with local players in different countries to gain more geographical presence and market share. In developing countries, especially in Africa and Asia, where smallholder livestock production is predominant, livestock farmers have often failed to achieve their production target as a result of University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 4 their inability to supply adequate feed to their livestock (Banda & Tanganyika, 2021). High livestock feed cost is restraining them to supply adequate feed to their livestock (Lawrence et al., 2008). Hence, the potential of using by-products such as poultry feather in the compound feed drastically reduces the feed costs and therefore creating sufficient feedstocks at a global level . The global poultry feather meal market in 2021 was worth USD 359.5 million and is estimated to reach USD 820 million by the year 2027 (Transparency Market Research, 2020). The global poultry feather meal market is therefore expected to experience a CAGR of around 8.8%, mainly due to the traction gained by the costs of feed ingredients in recent years in developing countries. While feathers are often considered a by-product of poultry production, some producers raise poultry specifically for their feathers(Ockerman & Basu, 2014). Poultry feathers are used in a myriad of products such as pillow stuffing, diapers, plastics, boas, feather fans, masks, costume accessories, and flowers. Aside animal nutrition and decorative products, poultry feathers can also be used in manufacturing organic fertilizers, which is known as feather meal fertilizers (Thyagarajan et al., 2013). Feather meal fertilizers are prevalently replacing synthetic liquid fertilizers used in horticultural and gardening applications (Transparency Market Research, 2020). The feather meal possess the needed amount of nitrogen for the growth of plants. Currently, North America has the largest market share of the poultry feather meal globally and is expected to continue to lead the world market. Europe is second placed, occupying a substantial portion of the global market for poultry feather meal. The Asian feather meal industries are booming recently especially in production and processing, having the poultry population of more than 14.6 billion (Transparency Market Research, 2020). Thus, the poultry feed meal is currently their source of low utility protein in the region (Ockerman & Basu, 2014). University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 5 Poultry by-products can be utilized as an income-generating activity globally and in the African region. There are several concerns at the global level that make the utilization of poultry by- products for income generation a viable option (Mishra et al., 2015). Firstly, cross-country demand studies have shown that income elasticities of demand for food items, including meat products, tend to decline as per capita income increases (Zhou et al., 2020). This implies that as people's incomes rise, their demand for meat products, such as poultry, may decrease. Therefore, finding alternative uses for poultry by-products, such as generating income through value-added products or by-products, can help sustain the poultry industry and ensure economic viability. In the African region, there are specific concerns related to the poultry value chain that make the utilization of poultry by-products for income generation important. One of these concerns is the governance structure of the poultry value chain. A study analyzing the governance structures in the poultry value chains in Botswana, South Africa, Zambia, and Zimbabwe found that the governance structure is a factor that determines entry into and success in a global value chain (Ncube, 2018). By utilizing poultry by-products for income generation, stakeholders in the poultry value chain can enhance their participation and success in the global market. Additionally, there are environmental sustainability concerns associated with poultry supply chains. Designing reverse logistical loops in poultry supply chains can contribute to environmental sustainability (Shamsuddoha et al., 2021). By utilizing poultry by-products for income generation, such as through the production of biochar or other sustainable products, the poultry industry can reduce waste and contribute to a more sustainable and circular economy. Furthermore, socio-demographic factors play a role in the income generated from poultry farming. A study conducted in a rural area of Ciamis Regency found that socio-demographic factors, such as gender and social class, influence the income University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 6 generated from poultry production (Setiana et al., 2020). This suggests that utilizing poultry by- products for income generation can be particularly beneficial for certain socio-demographic groups, providing them with additional income opportunities. In conclusion, globally and in the African region, there are concerns related to income elasticities of demand for meat products, governance structures in the poultry value chain, environmental sustainability, and socio-demographic factors that make the utilization of poultry by-products for income generation a relevant and important activity. By finding alternative uses for poultry by- products, stakeholders in the poultry industry can address these concerns and ensure the economic viability and sustainability of the industry. 1.2 Problem Statement Commercial poultry production in Ghana has been experiencing a massive decline despite being a vibrant industry which supplied about 80% of poultry meats and eggs in the country within 1980s- 1990s and 2000 to 2007 (Randon & Ashitey, 2011). Currently, the local producers of poultry tend to face intense level of competition from the imported chicken whose prices are about 30%- 40% cheaper (Ahiale et al., 2019). Poultry farmers in Ghana insisted the government end the importation of chicken meat since local production is being undermined (Kusi et al., 2015). Aning (2006) also reported that Ghana's decline in poultry production is associated with higher cost of labor, feed, day-old chick, and other variable input costs. Yevu & Onumah (2021) have also reported that feed cost and labour cost reduce profit levels of poultry producers in Ghana. These high costs are compelling most poultry farmers in Ghana to exploit addition streams of revenue. First and foremost, poultry farmers in Ghana have being able to ascertain the growing demand for organic fertilizers and have offered the poultry dropping as an alternative to inorganic fertilizers University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 7 for crop farmers (Drechsel et al., 2000; Martey, 2018). Inorganic fertilizer supplies fall as a result of price hikes, causing a national scramble for farmer (IFDC, 2021) . Inorganic fertilizers (nitrogen, phosphorus, and potassium) have been responsible for the triplication of global grain production and has aided the greatest human population growth the world has witnessed (Bourne et al., 2002). International Fertilizer Development Centre (IFDC) indicates that official inorganic fertilizer imports by Ghana have reduced from about 618,638 Metric tons (Mt) to 239,062 Mt representing a 61% reduction from 2020 to 2021 alone (IFDC, 2021). The reason for the low imports volumes include price hikes and the preference of the international fertilizer suppliers for more lucrative markets who make payment upfront (IFDC, 2021). In the short supply, farmers, fertilizer companies, and governments organizations in Ghana are scrambling to prevent an obvious inevitable fall in crop yields as about 85% of the Ghanaian market is driven by subsidy (COCOBOD and Planting for Food and Jobs), and have not being able to secure intended volumes of the inorganic fertilizer in 2021 and 2022. The price for inorganic fertilizer has more than doubled(APRI, 2022). Crops farmers in Ghana have no other substantial solution to address the looming shortage and hike in prices of inorganic fertilizer than to switch to using poultry droppings and other readily available forms of organic fertilizers. Nkansa et al. (2020) have revealed that some poultry producers in Ghana sell off poultry by-products to organic fertilizer manufacturing companies, vegetable farmers, tree crop farmers, commercial parks and garden developers amongst others as currently there is a growing demand for organic foods and produce (Dubey & Dubey, 2010). The use of organic fertilizers has being shown to significantly increase productivity and crop revenue by 1.43 and US$132 respectively (Martey, 2018). Nkansa et al. (2020) indicates that whiles majority of poultry farms in Ghana sell their poultry by- products about 30% of them still dispose their by-product off into forest in their localities. This University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 8 practice often builds up cost of production as a poultry farmer is required to bear labor and transportation costs involved in moving poultry by-products from farm to dumping sites. This phenomenon can be attributed to poultry producers’ lack of sufficient information on the nature of the poultry by-product market in Ghana. In addition, improper poultry by-product disposal can contribute to climate change. One way is through the release of greenhouse gases, such as methane and carbon dioxide. When poultry by-products decompose, it produces methane, which is a potent greenhouse gas that is approximately 28 times more effective at trapping heat in the atmosphere than carbon dioxide. These present local poultry producers with myriad of opportunities to cut down their cost of production and diversify revenue sources in poultry production while managing waste which has been for years, an issue of major concern (Nwakaire et al., 2016). Unfortunately, there is inadequate knowledge on the poultry by-product market in Ghana, how the markets have evolved, who the key actors in the market are and how they operate. Also, there is absence of knowledge on where the demand and supply is concentrated, what quantity of poultry by-product is distributed to available channels in the market, how much in revenue poultry by-product contributes to a poultry farmer, how the market players add value to the by-product, how the key players store the by-product prior to sale and who the regulatory bodies involved in the market are. To make the sale of poultry by-product easy to expand beyond subsistence level and more rewarding to local poultry producers while meeting demand and solving waste management issues concurrently, it is necessary to bridge the knowledge gap to help identify the right policy frameworks and technologies to improve markets for poultry by-product. These are vital issues whose investigation can be useful for the formulation of policies to strengthen and improve the poultry by-product market. The above gap makes the following questions relevant; University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 9 i. What is the nature of the market for poultry by-products in the Ghana ? ii. What proportion does poultry by-products contribute to a poultry farmer’s revenue in Ghana and what factors influence the proportion? iii. What are the constraints poultry farmers encounter in the poultry by-products market in Ghana? 1.3 Research Objectives The main objective of the study is to assess the markets for poultry by-products in Ghana. Specifically, the study seeks to: i. Identify and describe the role of actors in the market for poultry by-product. ii. Estimate the proportion of revenue contributed by poultry by-products to a farmer’s revenue and its determinants. iii. Identify and rank constraints poultry farmers encounter in the poultry by-product market. 1.4 Justification of the Study Ghana's poultry industry plays an important role in ensuring food security and contributing to economic growth. However, while research into primary poultry products such as chicken meat and eggs is well documented, there is still a significant gap in knowledge about the country's poultry by-product market. Poultry by-products include various non-food components, including droppings, feathers, blood and viscera which have a significant economic and environmental value if used appropriately. Thus, the aim of this study is to conduct a comprehensive assessment of the poultry by-product market in Ghana, with a special focus on market characteristics, revenue University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 10 contribution, determinants of the revenue contribution and constraints faced by poultry farmers within the poultry by-product market. Understanding the nature of the poultry by-product market is key for all stakeholders in the poultry industry. Poultry farmers can benefit significantly from a comprehensive analysis of the market, as it would enable them to identify lucrative outlets for by-products, diversify income sources, and reduce waste in their operations (Ayoo et al., 2019). For traders and processors, insights into the market dynamics would inform investment decisions and value-addition processes. Policymakers can utilize the study's findings to formulate targeted policies that promote sustainable utilization of poultry by-products, thereby minimizing environmental pollution while maximizing economic gains. Additionally, consumers will benefit from the knowledge that poultry by-products are efficiently managed, ensuring quality and safety throughout the entire poultry value chain. Estimating the proportion of revenue contributed by poultry by-products is essential for poultry farmers to gain a comprehensive understanding of financial viability of commercializing poultry by-products. This information will enable them to optimize resource allocation, prioritize investments, and strategize their poultry value chain management. Furthermore, identifying the determinants influencing the revenue contribution from by-products will empower farmers to adopt appropriate management practices to increase their revenue from poultry by-products, such as waste reduction strategies and value-adding techniques. Provided with this knowledge, farmers can enhance the economic sustainability of their poultry by-product operations and attract more investments to the sector. The government can also leverage this information to design targeted support programs that encourage efficient by-product utilization, ultimately improving the incomes of poultry farmers and enhancing the overall welfare of the poultry industry. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 11 Identifying the challenges faced by poultry farmers in the by-product market is crucial for developing effective solutions that address these issues (Shabani et al., 2013). By ranking these constraints in order of magnitude, stakeholders can prioritize interventions based on their potential impact on farmer livelihoods and the poultry industry as a whole. Policymakers can design suitable initiatives that improve market infrastructure, access to information, and value chain linkages, creating a conducive business environment for poultry farmers. Processors and traders, armed with insights into the specific hurdles faced by farmers, can provide targeted support and establish mutually beneficial partnerships. A more efficient and profitable poultry by-product market will benefit the entire poultry value chain, driving overall growth and prosperity in the agricultural sector. In conclusion, the proposed study to assess the poultry by-product markets in Ghana is of utmost importance for various stakeholders in the poultry industry. Bridging the knowledge gaps surrounding the market characteristics, revenue contribution, determinants, and constraints faced by poultry farmers will empower them with vital market insights, ultimately leading to the adoption of sustainable and profitable practices (Batista et al., 2015). Policymakers, industry players, and farmers alike will benefit from evidence-based decision-making, resulting in improved livelihoods, environmental sustainability, and overall growth of Ghana's poultry by- product sector. With the findings of this study, stakeholders can collaborate to implement targeted interventions that enhance the poultry by-product market and contribute to the broader development of the agricultural sector in Ghana. 1.5 Organization of the Study The thesis is divided into five chapters. Following the chapter one, the rest of the study is structured as follows. Existing body of knowledge significant to the study is reviewed in Chapter two. The University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 12 second chapter presents a brief description of agricultural markets and marketing, poultry production trends in Ghana, the poultry by-product market and its prospects. The methodology of the study is presented in Chapter three. This includes a discussion on the conceptual and theoretical frameworks. It also discusses the method of data analysis, study area and sampling technique. The results analysis and discussions for each study objective are presented in the fourth chapter. The summary of findings, conclusion and policy implications of the study are presented in Chapter five. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 13 CHAPTER TWO LITERATURE REVIEW 2.1 Introduction This chapter provides a review of existing literature in relation to markets for poultry by-product and their contribution to poultry farmers’ revenue in Ghana. The chapter begins with the description of agricultural markets and marketing, agricultural marketing channels. This chapter further describes the nature of poultry industry in Ghana, production and consumption trends. In conclusion, this chapter reviews studies on the agricultural by-products, poultry by-products, their markets and prospects. 2.2 Agricultural Markets and Marketing The commercial world has the general concept of what a market constitutes as a place or environment where selling and buying occurs. This seems to satisfy the definitional requirements of descriptive studies, which are concerned physical facilities, institutional processes and the product characteristics (Khanna et al., 2005). In general, this concept is insufficient from the viewpoint of economics (Khanna et al., 2005). In the modern day economics concept, market is defined as a space or sphere where the forces of supply and demand are at play to determine or alter price, as ownership of a given quantity of good or service is transferred where certain institutional and physical arrangements may be evident. Agricultural markets are a very essential component of every economy around the globe at national, regional and global levels although they mostly constitute a lesser part of gross domestic product (GDP) of most developed nations (Rezitis et al., 2013). Agricultural markets encompass the entire food system ranging from input supply to farm production, harvest, processing, packing and packaging, transportation, and all the way up to final consumer (Myers et al., 2010). Myers et al. (2010) further stated that activites that University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 14 occur in the agricultural market happen over a space and time, linked by interregional trade and storage. (Degaga, 2020), also explained agricultural market from the viewpoint of being a potential agent of change, stating that they provide a way to apportion resources ensuring the highest production value and maximum satisfaction of consumers. Agricultural markets possess the ability to stimulate growth through the promotion of technological innovation and increasing demand and supply (Degaga, 2020; Scarborough & Kydd, 1992). Agricultural markets also play a central role in the management of risks related with demand and supply shocks by aiding in regulating net export flows resulting in the reduction of the price variability encountered by both producer and consumers (Barrett & Mutambatsere, 2008). Agricultural marketing was defined by the United National Commission on Agriculture as a process that begins with the choice to produce a marketable farm product and involves all aspects of the marketing structure or system, both financially and institutionally based on the market structure and economic considerations that are at hand (Kamble, 2019). A different definition for agricultural marketing which does not include the input side of agriculture, explains agricultural marketing as a composition of all the operations and agencies in a market involved in the movement of farm produced food (raw materials and its products or by-products) from the farms to the final consumer (Bressler, 1952; Tavva & Anantharaman, 2019). Yadav (2010) also described agricultural marketing as a chain of services involved in moving an agricultural product or commodity from a point of production to a point of consumption. This is a definition numerous organisations and governments have recognized as it describes their activities in the agricultural commodity market. However, Yadav’s definition omits two vital elements of marketing which include customer orientation and inbuilt sustainability. Vargo & Lusch (2014) provided an alternative definition which overcomes the issues in Yadav’s definition describing agricultural University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 15 marketing as a management orientation centering all activities of the organisation on satisfying customer needs and wants, thereby helping achieve the organization’s long-term objectives. 2.3 Agricultural Marketing Channels 2.3.1 Definition of Agricultural Marketing Channels Agriculture Marketing Channels are defined as interdependent organisations involved in the distribution of agriculture produce, products and services. According to Coughlan et al. (2006), earlier definitions of marketing channels were primarily concerned with the specific activities that channel actors like distributors, wholesalers, and retailers carried out on behalf of the producers to make the produce, products, and services available to the final consumers. Gundlach et al. (2006) also added that, previous definitions focused on the function perspective of agricultural marketing channels which were largely concerned with planning, organizing, directing and controlling the efforts put in by the various channel members in order to minimize transaction costs and leverage specific functions (Coughlan et al., 2006). Currently, marketing channels have been viewed from the consumer perspective, where every member of the channel is considered to add value in one way or the other to the consumer (Gundlach et al., 2006). 2.3.2 Determinants of Agricultural Marketing Channels The selection of a marketing channel is a vital decision taking process which when made by farmers, has significant impacts on their farm profitability by creating unique value chains and input costs, potentially helping farmers to maximize profit whiles minimizing risks (Lee et al., 2020). There are many agricultural marketing channels and are dependent on the kind of commodity (Davis et al., 2017). According to Davis et al. (2017), the factors responsible for the variation in marketing channels include; distance between the producer and the consumer, training University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 16 producer has undergone, market characteristics (i.e. local or distant market), strength of marketing agencies, and perishability of the produce or product. Davis et al. (2017) also stated that, weight and bulkiness, market information, produce quantity, membership in producer marketing groups and access to extension services also influence farmers’ choice of marketing channel. Study by Srinivas et al. (2014) revealed that producers' choice of marketing channels was influenced by elements like price, mode of payment, speed of payment, and amount produced. Farmers' choice of marketing channel is influenced by payment methods, particularly speed of payment (Ogunleye & Oladeji, 2007). They argue that farmers only provide their produce to marketing channels that would pay them on the spot and that farmers typically sell their produce in response to personal emergencies. This is meant to imply that if a marketing channel offers a producer a high price but is unable to pay them immediately, the producer will search for an alternate outlet where, sometimes even at a lower price, they feel they can be paid immediately. Farmers’ preference for particular market outlets depend on the different price arrangements and payment agreements they make with commodity buyers (Niemi et al., 2016). Udimal (2015) studied factors influencing the choice of marketing outlets by soybeans farmers in the Saboba District of the Northern Region. A multinomial logistic model was used to analyse the effects of economic and non-economic factors on the producers’ choice of marketing outlets. The study revealed that; age, gender, marital status, educational attainment, cooperative membership, experience, and contractual agreement were the factors that influenced farmer’s choice of marketing outlets. The study also revealed means of transportation as a key determinant of marketing outlets. Lack of transport services limit the farmers’ ability to explore other marketing outlets operating in distance locations. This compels them to sell their produce at farm gate. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 17 Therefore, the farmer must select the channel that offers the most profit margin and hence takes into account a number of considerations when making this decision. 2.4 Overview of Poultry Sector in Ghana 2.4.1 Nature of the Poultry Sector Most businesses owned in Ghana especially commercial poultry businesses are referred to as Small and Medium scale Enterprises (SME’s) and are mostly privately owned (Kusi et al., 2015). Commercial production of poultry in Ghana is catogorized into large-scale production, medium- scale production, and small-scale production based on the available number of birds an enterprise keeps. A poultry enterprise is classified to be operating on small-scale with 50-500 birds whiles between 500-10,000 birds is classified as medium scale production and above 10,000 birds is reffered to as large-scale production (Mensah-Bonsu et al., 2019). The poultry sector in Ghana is highly gender-segregated implying, men and women cluster at different stages of the poultry value chain (Mensah-Bonsu et al., 2019). Men dominate the production level of the value chain while the the women dominate the processing levels of the value chain. Mensah-Bonsu et al. (2019) also reported that value addition and returns on investment (ROI) is higher for producers in both the layer and broiler productions respectively. Layer production is generally preferred industry-wide due to better prices producers receive for their product as there is no competition with the imported table eggs (Nti, 2018). 2.4.2 Poultry Production Trends In the 1960s, the government of Ghana identified the poultry subsector of the livestock sector as huge potential for bridging the supply gap in animal protein and unemployment and went ahead to establish an integrated poultry project (FAO, 2014). Although initial growth was slow as a result University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 18 of inconsistent supply of day-old chick and other inputs such as feed and vaccines, poultry disease outbreaks, the government of Ghana in the 1970s removed customs duties on poultry inputs and made provision for veterinary services as part of their support toward the development of the poultry industry (Kusi et al., 2015). The poultry industry in Ghana began to grow very fast in the 1980’s to 1990’s emerging into a vibrant industry in Ghana supplying about 95% of chiken meat and eggs until the sector’s abrupt decline from between 2000 and 2010 (Flake & Ashitey, 2008). This lead to losing about 80% of the market supply (Kusi et al., 2015). Kusi et al. (2015) described the nature of the poultry sector in Ghana as a private entity with minimal support from the government where the main industry players are left to figure out unfriendly marketing systems, mostly emanating from foreign businesses. Over a decade, the demand for broiler has being increasing (Netherlands Enterprise Agency, 2019). Meanwhile, the local supply of broiler meat has remained stagnant, permitting imports to fill the gap (Netherlands Enterprise Agency, 2019). Ghana’s import of frozen chicken has shot significantly from 13,865 tonnes from 2000 to over 68,000 tonnes in 2013 as reported by the Netherlands Enterprise Agency in 2020 (Table 2.1). In 2020, poultry meat imports quantity for Ghana was estimated to be 287,930 tonnes (Knoema, 2021). Poultry meat imports quantity of Ghana increased from 421 tonnes in 1971 to 287,930 tonnes in 2020 growing at an average annual rate of 49.86% (Knoema, 2021). Ghana imported 254 million dollars in poultry meat making it the 24th largest importer of Poultry Meat in the world whiles Poultry Meat was the 6th most imported product in Ghana (Knoema, 2021). University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh https://oec.world/en/profile/hs92/poultry-meat https://oec.world/en/profile/hs92/poultry-meat https://oec.world/en/profile/country/gha 19 Figure 2.1: National Poultry Production Source: FAOSTAT (2017) 0 10000 20000 30000 40000 50000 60000 200020012002200320042005200620072008 2009 2010 2011 2012 2013 2014 2015 2016 To n n es Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Table eggs 22790 23310 24340 25370 26150 25670 27820 31270 33650 36700 36700 39750 40000 42000 41190 46150 46240 Chicken meat 19500 20963 23400 25545 28275 28763 31393 41730 44460 33790 37247 41008 46308 50985 54809 57276 57276 Table eggs Chicken meat University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 20 Table 2.1: Domestic Chicken supply against imported (2000-2016) Year Domestic (tonnes) Imported (tonnes) Total (tonnes) Value of Imported in (000’ USD) 2000 19,500 13,865 33,365 10,656 2001 20,963 11,278 32,241 8,303 2002 23,400 24,782 48,182 17,120 2003 25,545 54,238 79,783 24,111 2004 28,275 44,851 73,126 34,657 2005 28,763 49,916 78,679 67,304 2006 31,393 51,403 82,896 41,673 2007 41,730 75,373 117,103 61,936 2008 44,460 71,731 116,191 78,473 2009 33,790 109,179 112,627 72,745 2010 37,247 155,056 146,426 104,746 2011 41,008 154,366 196,064 175,401 2012 46,308 154,366 200,674 185,996 2013 50,985 168,235 219,220 197,392 2014 54,809 135,356 190,165 167,298 2015 57,276 115,335 172,611 115,731 2016 57,276 93,108 150,384 103,899 Source: FAOSTAT (2016) 2.5 Agricultural By-products 2.5.1 Overview of Agricultural By-products Agricultural by-products are considered very valuable resources that can be gainfully harnessed to develop products of economic value which can improve the efficiency of farms, increase farm revenues, and encourage rural economic development (Ayoo et al., 2019). The use of agricultural by-products is deemed very crucial. In many countries the disposal of agricultural by-product is costly and can have lethal impacts on the environment (Zhu et al., 2010). The United Nations Environmental Program (UNEP) in 2009 estimated that, the amount of biomass generated globally is about 140 billion metric tonnes each year (Zhu et al., 2010). (Shabani et al., 2013) indicated that even though agricultural by-products are abundant in supply, their degree of utilization has being low and that this has restricted the realization of the benefit that could be derived from their utilization. attributed the low level of utilization and non-realization of the benefits of agricultural University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 21 by-products to challenges in gathering and hauling these by-products for value addition. Ayoo et al. (2019) however suggested that, for social, economic, and environmental reasons, innovative approaches need to be propagated to address the challenges to intensify the utilization of agricultural by-products believing that instigating these approaches can contribute positively in the direction of the reducing environmental pollution, protecting natural resources, increasing economic value and over-all revenue of farmers. In some countries, inventive approaches have been developed for extracting beneficial products from nutrient-rich agricultural by-products and also manufacturing their goods for which considerable market demand exists (Jayathilakan et al., 2012). Examples of agricultural by-products include; straws from rice, wheat and corn can be used as a growth media (substrate) for growing mushrooms and some leafy vegetables in places where the soil is poor in supporting their growth. Also poultry and cattle manure can be used to manufacture organic fertilizers or can be used in conjuction with other agricultural by-products in the preparation of composts which helps in the improvement of the soil structure when applied to the soil. Feathers from poultry production can also be processed together with feed as a protein component for fishes and livestock. The demand for Value-added products which are manufactured from agricultural by-products is high and growing and its’ global market is expected to catapult from $388 billion in 2013 reaching over $700 million in 2018 (Hinai et al., 2022). Countries which possess good technological abilities will be able to efficiently transform agricultural by-products into value added products that would meet consumer preference. Meanwhile, projections have indicated an increase in revenue to about $867.7 billion by 2025 at a compound annual growth rate of 8.1% for the period of 2020-2025. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 22 2.5.2 Benefits of Agricultural By-products There are a wide variety of benefits that can be obtained from processing and commercializing agricultural by-products and these include ; Revenue generation and rural Economic development; Golden et al. (2015) indicated that, the U.S. biobased product industry contributed a total value of US$369 billion to the U.S. economy in 2013. However, Ayoo et al. (2019) has reported that there has been no direct evaluation of how much revenue is accrued from the commercialization of agricultural by-products only. By-products from the production of corn, rice, sorghum, pineapples, bananas, and coconuts amoongst other, are good and inexpensive sources of biofibers that are appropriate for various industrial applications such as the manufacturing of composites, textiles, pulp and paper (Ayoo et al., 2019). The establishment and utilization of industries for such value addition to generate useful consumer products generate revenues and also provide employment opportunities. The increased and continuous use of agricultural by-products can offer a sustainable basis for individuals, small and medium industries in rural areas to stimulate rural economic development. Improvement of Environmental Quality; disposing agricultural by-products without utilization releases carbon dioxide and other harmful gases into the atmosphere which intensifies the risks of climate change and poses significant threat to the health of humans (Ayoo et al., 2019). According to FAO (2014), about one-third of the land surface is being used for agriculture. Hence, a significant amount of waste from the agricultural sector is produced each year (Sommer et al., 2015). This confirms report by Zhu et al. (2010) indicating that due to the large production of poultry globally, tons of organic by-product are generated in the form of viscera (internal organs), feet, heads, bones, blood and feathers. The fundamental issue is not only producing enough food in a profitable way but also doing it in a sustainable manner which guarantees minimal impact on University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 23 the environment (Seidavi et al., 2019). Therefore harnessing agricultural by-products as manure, bio-fertilizers, raw materials for energy production amongst others improve the quality of the environment. 2.6 By-product from Poultry Production 2.6.1 Overview of Poultry By-products The increase in poultry production worldwide has led to higher generation in the quantity of poultry waste and until date, these waste materials are limited in use and usually end up in landfills (McGauran et al., 2021). Solid wastes obtained from poultry production and processing include the feathers, viscera (internal organs), blood, bones, and residual meat. Solid wastes from poultry production are one of the most important biomass solid wastes in the world (Zhu et al., 2010). Seidavi et al. (2019) suggested that, poultry industry players, mainly the producers and processors create these biomass wastes (excreta, feathers, eggshells, blood, bones, and internal organ) the most. These biomass solid wastes are made up of proteins. They consist of a variety of amino acid, which can be converted to very useful by-products such as blood meals, bone meal, organic fertilizers, gelatin, pillow filling, and biofuels amongst others. With the accelerated increase in waste generation from poultry production, utilization of this waste is key to adding value to the poultry production process through minimization of waste ending up in landfills and additional revenue generation (Odetoye et al., 2021). 2.6.2 Prospects for Products Poultry by-products have extraordinary importance in both developed and developing countries and present great prospects and opportunities for most poultry industry producers and processors (Seidavi et al., 2019). Some of these include; University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 24 Excreta; There are bulky volumes of poultry excreta produced in the world which are creating environmental problems (Zhu et al., 2010). Meanwhile, majority of soils especially in Sub-Saharan Africa (SSA) are significantly degraded and need of restoration to enhance sustainable food production (Omotayo & Chukwuka, 2009). This is a harder problem given that, the population is projected to increase with a corresponding increase in demand for food. Several studies have reported on different uses of poultry manure/ excreta and the results have proven that not only is poultry manure very useful, but it is more potential to be a commodity of higher economic value (Seidavi et al., 2019). Abelha et al. (2003) reported that, more than 90% of poultry excreta are used for agricultural purposes in the form of organic fertilizers. Currently, poultry excreta is used in feeding livestock and fish (Seidavi et al., 2019). Further studies by Seidavi et al. (2019) also have shown that, dried poultry excreta can be used in feeding cattles where about 30% of the dried poultry excreta is mixed with 30% cereal, 14.5% beet pulp, 25% straw and about 0.5% vitamin or trace mineral mix. A few countries such as India, China, and some African countries also produce biogas for household and institutions consumption using poultry excreta (Abelha et al., 2003). Poultry excreta has a high content of nitrogen containing about 18%-30% uric acid, 12-17% Ammonia, and about 2%-4% creatin (Martey, 2018). Therefore, its nutritive value is higher for use in livestock feeding or as a fertilizer. Martey (2018) has indicated that there is also very high demand for poultry droppings by organic fertilizer manufacturing companies as his studies on ‘‘welfare effect on organic fertilizer use in Ghana’’ has shown that the use of organic fertilizer significantly increases productivity and crop revenue by 1.43 and US$132 respectively. Feathers, Viscera, Head & Feet; Feathers from chicken constitute about 91% protein (keratin), 1% fat, and 8% water. The keratin proteins are binded by a more disulfide bond (S-S) indicating a strong covalent bond presence which stabilizes the protein structure making it difficult to break University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 25 (Saravanan & Dhurai, 2012). The amino acid component of chicken feathers also indicate high levels of serine, cystine, glutamine, and proline. Seidavi et al. (2019) has reported that chicken feathers can be transformed into feather powder which can be used as a protein and amino acid components in feed preparation for livestock. The breakdown of chicken feathers to a powdery state can be done using hydrothermal breakdown which utilizes high pressures under high temperature in theirbreakdown. However, Tiwary & Gupta (2012) have reported that this method makes the by-product more digestible but usually leads to the denaturing and loss of vital amino acids such as lysine, tyrosine, tryptophan, and methionine. Nitrogen fertilizers can also be produced using feathers from chicken through enzymic hydrolysis (Choi & Nelson, 1996). Chinta et al. (2013) has also indicated that chicken feathers can be used in the production of pillow stuffings, plastics and non-wooven textiles at relatively low cost. Thyagarajan et al. (2013) reported that an estimated 0.9- 1.3 million tons of chicken feathers are burnt, buried, or ground to be used as feed for livestock or as organic fertilizers during processing. Heads, blood, and viscera of chicken are good source of nitrogen whiles containing about 12% fat and can be processed together as feed for livestock or organic fertilzer (Singh & Singh, 2010). These can equally be used in the production of biodiesel for energy generation. Egg shells; Chicken Egg shells are composed of nearly 98.2%, 0.9%, 0.9% calcium carbonate, magnesium, and phosphate correspondingly. The calcium content in egg shell are more than calcium contents in lime and coral (Seidavi et al., 2019). Egg shell can be used to produce calcium based organic fertlizers, cosmetic product, animal feed, amongst others. 2.7 Empirical Studies On Poultry By-products Lasekan et al. (2013) examined the potential of chicken by-products as sources of useful biological resources. This research aimed to explore and discuss the various potential applications and value- University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 26 added uses of by-products generated from chicken processing plants. The study focused on investigating methods to utilize these by-products, which include heads, legs, bones, viscera, and feathers, for beneficial purposes. Specifically, the research aimed to uncover ways to convert these by-products into protein hydrolysates, enzymes, and polyunsaturated fatty acids. The goal was to identify alternative methods to effectively utilize these biological components from by-products, rather than merely discarding or using them as livestock feed, fertilizers, or pet foods. The study also addressed the environmental and resource challenges associated with inappropriate disposal of these wastes. Furthermore, the research discussed the functional and bioactive properties of protein hydrolysates derived from chicken by-products and their potential applications in various fields. Additionally, the study examined the production methods, microbiological safety, and future prospects of utilizing these by-products in innovative ways. Chuang et al. (2021) also investigated utilization of high-fiber agricultural by-products as potential feed additives to enhance animal performance and health. The study highlights the importance of considering factors like anti-nutritional elements and mycotoxin contamination when using these by-products. The solubility and fermentability of fiber significantly affect its availability. Contrary to previous beliefs, recent research indicates that dietary fiber and other functional compounds like polyphenols and flavonoids can contribute to improved health, antioxidant capacity, and microbiota stability in animals. High-fiber agricultural by-products offer an economical source of fiber that can potentially reduce animal feeding costs. The study emphasizes the need for a comprehensive evaluation of different fiber compositions' effects on animals, urging animal producers to consider using high-fiber agricultural by-products as both animal feed and feed additives. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 27 Mishra et al. (2015) investigated the efficient utilization of poultry by-products for economic sustainability. This paper addresses the growing demand for various poultry products in India, driven by factors such as affordability, nutritional value, and societal acceptance. However, the increased production of poultry meat and products has led to significant waste generation, pollution, health concerns, and microbial contamination. Poultry by-products offer a range of potential uses, including as energy sources, livestock feed, fertilizers, soil amendments, collagen, gelatin, and calcium sources. Proper processing can convert these by-products into valuable materials, such as poultry meal and hydrolyzed feather meal, contributing to higher-value products. Despite the benefits, improper handling of poultry industry waste not only results in lost revenue but also poses hazards. This paper reviews the various applications of poultry by-products, aiming to promote sustainability in the poultry industry and meet future consumer demands. The review emphasizes the need to manage waste effectively while maximizing the value of poultry by- products in an evolving poultry market in India. 2.8 Farm Income 2.8.1 Farm Income Generation Farm income generation is a vital component of agricultural sustainability and rural development. The ability to generate sufficient income from farming activities not only ensures the livelihoods of farmers but also contributes significantly to national economic growth. Several factors have been identified as influencing the financial performance and income generation of farmers. These include agricultural productivity, market access and prices, land tenure and ownership, government policies and support and finally climate and environmental factors. A study by Mishra et al. (2009) investigated the factors affecting the financial performance of new and beginning farmers. The study found that farm, operator, and household characteristics, as well as farm type University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 28 and regional location, significantly influenced the financial performance of farmers. The study also highlighted the importance of management strategies such as increasing the number of decision- makers, engaging in value-added farming, and having a written business plan in improving financial performance. Another study by Serra et al. (2004) examined the determinants of investments in non-farm assets by farm households. The study emphasized the influence of farm income variability on off-farm investments, suggesting that farmers' preferences and risk management strategies should be considered when analyzing non-farm investments. Contract farming has also been studied as a potential factor in farm income generation. Hoang (2021) reviewed empirical studies on the impact of contract farming on farmers' income in the food value chains. The majority of studies showed a significant positive impact of contract farming on income, highlighting its potential to improve farmers' financial situation. In addition to these factors, the involvement of farmers in non-farm income-generating activities has been explored. Ovwigho (2014) investigated the factors influencing the involvement of farm families in non-farm income-generating activities. The study found that demographic characteristics such as farm size, level of education, and household size significantly influenced the number of non-farm income-generating activities engaged in by farm families. The study also highlighted the relationship between involvement in non-farm income-generating activities and factors such as soil degradation, oil spillage, and income inequality. The literature suggests that various factors, including farm and operator characteristics, management strategies, income variability, contract farming, and involvement in non-farm activities, play significant roles in farm income generation. Understanding these factors can help University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 29 policymakers and farmers develop strategies to improve financial performance and income generation in the agricultural sector. 2.8.2 Poultry Production as an Income Generation Activity Poultry production as an income generation activity has gained significant importance in the agricultural sector due to its potential to provide a steady and profitable source of income, particularly in smallholder farming systems. Several studies have explored the role of poultry production in income generation and its impact on household nutrition and food security. Kuivanen et al. (2016) conducted a case study in the Northern Region of Ghana to characterize the diversity of smallholder farming systems and identify constraints and opportunities for innovation. They identified six types of farming systems, with Types 1 and 2 being relatively resource-endowed and oriented towards non-farm activities and crop sales, respectively. Types 3 and 4 were moderately resource-endowed and derived income primarily from on-farm activities. Types 5 and 6 were resource-constrained, with production oriented towards subsistence. This study highlights the different levels of resource endowment and income generation strategies among smallholder farmers engaged in poultry production. Poultry production has been found to have a positive impact on income diversification. A study by Sonaiya (2007) demonstrated that poultry farming played a significant role in diversifying income sources for rural households. The study highlighted that income from poultry production complemented income from other agricultural activities, providing a more stable and diversified income base. Another study by Benni et al. (2012) examined the economic benefits of poultry production. The study revealed that poultry farming contributed to increased household income, employment generation, and improved livelihoods. It also highlighted the potential for value University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 30 addition through the processing and marketing of poultry products, which further enhanced income generation opportunities. The literature suggests that poultry production can be a viable income generation activity for smallholder farmers. However, the success and profitability of poultry production depend on various factors, including resource endowment, integration with other farming activities, household size, labor availability, and resource constraints. Understanding the diversity of smallholder farming systems and the specific opportunities and constraints associated with poultry production can inform targeted interventions and innovations to support farmers in improving their income generation through poultry production. 2.8.3 Agricultural Income Diversification Income diversification in agriculture refers to the practice of generating revenue from multiple sources beyond traditional farming activities. It is a strategy that has gained significant attention in the literature as a means to enhance rural livelihoods, improve resilience, and foster sustainable agricultural development. It has been extensively studied in the literature, with several studies examining the factors influencing diversification strategies and the impact on household income and poverty reduction. Winters et al. (2002) conducted a study in rural Mexico to explore the relationship between assets, activities, and income generation. The study found that the asset position of households significantly influenced their participation in income-generating activities and the returns from those activities. Additionally, the study highlighted the role of social and public capital in income-generating activities, with the influence varying depending on the type of capital and the specific activity. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 31 Bellemare (2018) examined the effects of participation in contract farming on income from various sources. The study found that while participation in contract farming had positive spillovers on income from agricultural sources other than livestock and contract farming, it was negatively associated with income from labor markets and nonfarm businesses. This suggests that participating households may shift away from non-agricultural activities, potentially impacting structural transformation narratives. In Zambia, Bigstenn & Tengstam (2011) investigated smallholder diversification and income growth. The study revealed that education opened up opportunities for well-paid non-agricultural activities, while land shortage led to distress diversification into agricultural wage work. The study also found that the poor were more likely to rely on income from their own farms, indicating the importance of diversification as a means to improve income. Mat et al. (2012) examined the impact of non-farm income on poverty and income inequality among agricultural households in rural Kedah, Malaysia. The study highlighted that agricultural income was the main source of income for rural households. However, encouraging non-farm income activities, particularly value-added activities, was identified as a policy implication to raise income and reduce poverty among agricultural households. The literature suggests that income diversification in agriculture can contribute to income growth, poverty reduction, and improved livelihoods. Factors such as assets, social and public capital, education, land availability, and access to markets and finance play significant roles in shaping diversification strategies and outcomes. However, these and other studies have failed to University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 32 2.8.4 By-product Based Income Diversification The literature on income diversification in agriculture has indeed provided valuable insights into its role in enhancing rural livelihoods, improving resilience, and fostering sustainable agricultural development. Several studies have explored the factors influencing diversification strategies and the impact on household income and poverty reduction. However, one area that has received limited attention in the literature is income diversification through by-product commercialization. By-products generated via agricultural activities can be a valuable and often underutilized resource. Commercializing these by-products can create additional income streams for farmers, thereby contributing to income diversification. Unfortunately, only few studies have delved into the potential of by-product commercialization as a means to enhance rural income and address energy-related challenges. Wei et al. (2020) conducted a bibliometric analysis on the energy utilization of agricultural waste in China. The study identified energy utilization of slaughterhouse waste and cow manure as frontiers of research in this field. They also highlighted the importance of energy utilization of agricultural waste for environmental problem improvement (Wei et al., 2020). The same study by Wei et al. (2020) emphasized the advantages of energy utilization of agricultural waste in rural areas. They found that anaerobic digestion of agricultural waste through farm anaerobic digestion can strengthen the reduction of greenhouse gas emissions, particularly through increased methane production potential. This highlights the potential for income diversification through energy utilization of agricultural waste (Wei et al., 2020). University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 33 2.9. Theoritical Frameworks Underpinning the Study 2.9.1 The Production Theory The production theory is a fundamental concept in economics that explains the relationship between inputs (factors of production) and outputs (goods or services) in the production process. Production theory, in the context of poultry byproducts, revolves around understanding the relationships between various inputs, processes, and outputs involved in the generation and utilization of these byproducts. It seeks to elucidate how factors such as the quantity of poultry droppings sold, the price at which they are sold, affiliation to poultry farmers' associations, and other variables interact to influence the proportion of revenue derived from poultry byproducts. The theory suggests that the production of poultry byproducts involves a combination of inputs, including the quantity of droppings generated, processing methods employed, and market conditions. These inputs collectively contribute to the final outcomes, such as revenue proportions and overall economic viability. Production theory emphasizes the need for efficient utilization of resources and optimal decision-making to achieve desirable outcomes in the poultry byproduct market. Solow (1957) laid the foundation for the aggregate production function theory, which describes the relationship between inputs and outputs at the macroeconomic level. This theory has been widely applied in various sectors, including poultry production. Endacott et al. (2021) conducted a farm survey in Nigeria to assess poultry production and revenue generation. They found that live spent layers, eggs, and used beddings were the most frequently sold products for revenue. This study provides empirical evidence of the production function theory in the poultry industry. Furthermore, the revenue contribution of poultry by-products is influenced by various factors, including disease control, biosecurity measures, and market participation. Hafez & Attia, (2020) highlighted the challenges faced by the poultry industry, University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 34 including disease control and public health hazards. They emphasized the importance of considering economic, ethical, and social dimensions in the production of poultry by-products. Biswas et al. (2017) conducted a study on biosecurity and circulation of avian influenza virus in live-bird markets. Their findings demonstrated the significance of biosecurity measures in preventing the spread of diseases and ensuring the safety of poultry products. Moreover, market participation and integration with other agricultural activities can contribute to the revenue of poultry farmers. Habiyaremye et al. (2021) analyzed the economic profitability of integrated vegetable-poultry production systems in Tanzania. They found that the integrated system was more profitable than vegetable farming alone, highlighting the potential revenue contribution of diversifying agricultural activities. Onyeneke et al., (2020) examined the impact of poultry farmers' participation in modern food retail markets on household dietary diversity in Nigeria. Their study showed that participating in modern food retail markets improved poultry farmers' dietary diversity, indicating the potential for increased revenue through market integration. Understanding the cost structure and profit levels in the poultry industry is essential for assessing revenue contribution. (Oladeebo & Ojo, 2012) conducted an economic appraisal of small and medium-scale poultry egg production in Nigeria. Their study examined the factors that determine the revenue of poultry egg farmers and found that profit levels varied across different scale levels. This research provides insights into the economic aspects of poultry production and its revenue contribution. In conclusion, the production function theory is a crucial framework for understanding the relationship between factors of production and revenue contribution in the poultry industry. The literature review highlights the importance of disease control, biosecurity measures, market participation, and cost structure in assessing the market for poultry by-products and their revenue University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 35 contribution to poultry farmers' overall revenue. By considering these factors, policymakers and stakeholders can make informed decisions to promote sustainable and profitable poultry production. 2.9.2 Circular Economy Framework and Theory of By-product Synergy The concept of the circular economy and the theory of byproduct synergy play a crucial role in understanding the revenue contribution of poultry by-products in the context of a sustainable and efficient market. The circular economy framework emphasizes the importance of reducing waste and maximizing resource efficiency, while the byproduct synergy theory focuses on the potential value creation through the utilization of by-products. This literature review explores the linkages between these theories and their implications for the assessment of the market for poultry by- products and their revenue contribution to poultry farmers. The circular economy framework provides a holistic approach to resource management and waste reduction. Geissdoerfer et al. (2017) define the circular economy as a new sustainability paradigm that aims to decouple economic growth from resource consumption. They highlight the importance of closing the loop of material flows and promoting the reuse, recycling, and remanufacturing of products. In the context of poultry farming, the circular economy framework encourages the identification and utilization of by-products to minimize waste and maximize resource efficiency. Byproduct synergy theory complements the circular economy framework by focusing on the potential value creation through the utilization of by-products. According to this theory, by- products from one process can serve as inputs for another process, creating a symbiotic relationship between different industries or sectors. In the context of poultry farming, byproduct synergy theory suggests that the by-products generated, such as feathers, blood, and offal, can be utilized in various ways to generate additional revenue streams. For example, feathers can be processed into University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 36 feather meal for use in animal feed or as a raw material for the production of bio-based products. The revenue contribution of poultry by-products can be assessed by considering the potential markets and applications for these by-products. Kirchherr et al. (2017) conducted an analysis of 114 definitions of the circular economy and found that economic prosperity is considered the main aim, followed by environmental quality. This implies that the revenue contribution of poultry by- products can be significant, as they can be transformed into valuable products or inputs for other industries. For instance, blood can be processed into blood meal, which is a valuable source of protein for animal feed. Similarly, viscera (internal organs) can be used for the production of pet food or as a source of bioenergy through anaerobic digestion. Furthermore, the circular economy framework and byproduct synergy theory can contribute to the sustainability and resilience of the poultry industry. By reducing waste and maximizing resource efficiency, these concepts can help minimize the environmental impact of poultry production and enhance the overall economic viability of the sector. Additionally, the utilization of by-products can diversify revenue streams for poultry farmers, reducing their dependence on traditional products such as meat and eggs. The circular economy framework and byproduct synergy theory provide valuable insights into the assessment of the market for poultry by-products and their revenue contribution to poultry farmers. These concepts emphasize the importance of reducing waste, maximizing resource efficiency, and creating value from by-products. By considering the potential markets and applications for poultry by-products, policymakers and stakeholders can promote a sustainable and efficient market that contributes to the revenue and overall sustainability of poultry farming. University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 37 2.10 Economic Tools for the Study 2.10.1 Tobit Model (Censored Regression Model) The Tobit model, also known as the censored regression model, was first introduced by James Tobin in 1958. The model is used to analyze data in which the dependent variable is censored at some threshold. This can occur in a variety of situations, such as when revenue data is only available for individuals earning above a certain amount, or when response times in a study are only recorded for individuals who respond within a certain period. The Tobit model assumes that the data is censored at random, and that the underlying relationship between the independent and dependent variables is linear. The model can be estimated using maximum likelihood techniques, and the estimated coefficients can be used to make predictions about the population from which the sample was drawn. The Tobit model has been widely used in economics to analyze labor market data, where it is often used to study the relationship between wages and various individual characteristics, such as education and experience. It has also been used in finance to analyze stock returns, and in marketing to study consumer choice behavior. In recent years, several extensions of the Tobit model have been developed to address issues such as non-random censoring, non-linear relationships, and multiple thresholds. Some of the key references in literature on the Tobit model are Tobin, Amemiya and Wooldridge. They present a comprehensive introduction and cover various models estimation. Tobit model is a useful tool for analyzing censored data, and it has been widely used in a variety of fields, including economics, finance, and marketing. However, it is important to be aware of its assumptions and to check if those assumptions are met in the data. Tobin (1958) first introduced the Tobit model, also known as the censored regression model, in his paper "Estimation of Relationships for Limited Dependent Variables." In the paper, Tobin University of Ghana http://ugspace.ug.edu.ghUniversity of Ghana http://ugspace.ug.edu.gh 38 stated that the problem of limited dependent variables is one that arises in many branches of economics and other social sciences. He explained that, these variables are often censored in a way that makes it impossible to use traditional regression techniques to estimate the relationships of interest. Tobin then presented a method for estimating the relationships between such limited dependent