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Story by Heifer China
On June 1, 2012, Hongyu Cooperative opened its first store in Shaxiba Market of Xiasi Township to sell pastured chicken. On an average day, the store sells 21 pastured chickens from its cooperative members and slaughters 16, charging customers four Yuan, or about .63 cents, each. The revenue each month is estimated to be around 54,000 Yuan, or $636, and the net profit is about 6,300 Yuan, or $1,001.
“The sales of our store are quite good, so we are planning to open another one within this year,” said Lin Fengcheng, the director-general of Hongyu Pastured Chicken Cooperative.
Hongyu Pastured Chicken Cooperative began in May 2010 in Sanfang Village with help from Heifer China’s Earthquake Rehabilitation Project. The cooperative sets uniform standards for raising pastured chicken and provides technical instructions, as well as baby chickens and vaccine services. It also purchases chicken feed in bulk to reduce costs.
With the services provided by the cooperative, the production of pastured chickens in the community increased quickly. The supply increased significantly in 2010, and there were about 40,000 chickens on the market, driving the price and profit down.
In order to solve this problem, Hongyu Cooperative began to make careful production plans and implement some initiatives in market development with Heifer's assistance. This year, 12 members decided to invest in opening a store to sell their own chickens, connecting the product with the customer and eliminating the middlemen. At the store, the price of the pastured chicken is 28 Yuan per kilogram, or about $4.45, instead of 24 Yuan, or $3.81, per kilogram traders previously paid.
The excellent performance of Hongyu Cooperative’s Pastured Chicken Store is due to the high quality of its products and the value-adding services provided by the store. These results prove that smallholder farmers can benefit from efforts in business development and other activities that upgrade the product along the value chain.