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Article

Farm to Fork: Indigenous Chicken Value Chain Modelling Using System Dynamics Approach

by
Iffat Abbas Abbasi
1,*,
Hasbullah Ashari
1,
Ahmad Shabudin Ariffin
2 and
Ijaz Yusuf
3
1
Department of Management and Humanities, Universiti Teknologi PETRONAS, Seri Iskandar 32610, Perak, Malaysia
2
Department of Management Sciences, Kolej Universiti Islam Perlis (KUIPs), Kuala Perlis 02000, Perlis, Malaysia
3
Department of Operation and Supply Chain, University of Management and Technology Lahore, Lahore 54770, Pakistan
*
Author to whom correspondence should be addressed.
Sustainability 2023, 15(2), 1402; https://doi.org/10.3390/su15021402
Submission received: 22 November 2022 / Revised: 24 December 2022 / Accepted: 28 December 2022 / Published: 11 January 2023
(This article belongs to the Special Issue Sustainable Global Operations and Supply Chain Management)
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Abstract

:
Farm to fork strategy, advocated by the European Commission, aims for a ‘fair, healthy, and environmentally healthy food system. It requires a renewed mindset and an in-depth analysis of the intricate agricultural-based value- chain that forms the food system. Indigenous chicken micro-farming, the focus of this study, for example, is a highly potential candidate for the Farm to Fork strategy but requires a deep analysis of its disintegrated value chain to achieve the strategy. Indigenous chicken farming provides opportunities for the poor and marginal people for a steady income while at the same time being more environmentally friendly and a source of healthy food. These have motivated this study to analyse the indigenous chicken micro-farming value chain in Malaysia, with the objectives to evaluate the present status of the indigenous chicken farm value chain and develop an initial integrated model for indigenous chicken farms. This study uses qualitative system dynamics in data collection and analysis and model development to achieve the objectives. The proposed model is simulated to understand the dynamics of interaction and behaviour among the sub-systems. The findings lead to two outcomes of the study- the first is the dynamics model of the typical indigenous chicken value chain, and the second is the potential integrated value chain model for indigenous chicken farming. These findings are imperative for future research to enhance further the integrated model to be able to realise the farm-to-fork strategy and to contribute to the sustainable development goals.

1. Introduction

Indigenous chicken farming is one of the sustainable food systems that fit the F2F Farm-to-Plate Strategy, and it is imperative to promote it to reduce poverty and hunger. Agricultural products are disappearing from the fields due to unforeseen climatic variations, the current COVID-19 crisis and Ukraine Russian war. Cross-border agriculture exports are a new challenge for the world in the aftermath of COVID-19 and the Russian war in Ukraine. Against this backdrop, the Farm Fork (F2F) strategy presented by the European Commission is an opportunity to rethink our food system [1,2,3]. It also encourages ways to design value chains to ensure healthy food, social equality and more sustainable food production.
Indigenous chicken is a potential candidate for the F2F strategy as it meets the triple bottom line (TBL) criteria of being eco-friendly, a nutritional source and an income for rural and urban poor [4,5,6,7]. Elkington [8] has proposed a triple-bottom-line sustainability business performance construct that consists of economic, social and environmental. Hence, TBL is a pragmatic framework of sustainability. In term of social and economic contributions, indigenous chickens are cherished as an asset in many African countries such as Kenya, Zambia, Zimbabwe, Mozambique, Ethiopia, Botswana, Namibia, Tanzania, and Swaziland. This is because they play a vital role in empowering underprivileged groups such as the poor and HIV/AIDS patients by providing them with income, food security and social status. Indigenous chicken farming in Nigeria provides indirect and direct employment to almost 20 million people and the total contribution of the poultry industry in Nigeria’s GDP is about 10%. Additionally, in the Caribbeans region and Haiti 95% of the rural households rear indigenous chicken to earn livelihood [9,10,11,12,13,14,15,16].
Besides Africa, and the Caribbean region, indigenous chicken micro-farming has also contributed to poverty alleviation in many Asian countries such as Sri Lanka, India and Bangladesh. According to Landes et al. [17], in India, backyard poultry accounts for 15% of India’s total poultry production. Similarly, indigenous chicken contributes to about 11% of the Sri Lankan poultry industry [18,19,20]. Indigenous chicken micro-farming has also empowered women in Southeast Asian countries. According to Kryger et al. [21], South-East Asian countries such as Indonesia, Cambodia, Thailand and Vietnam also rear chicken for economic activity and the contribution of indigenous chicken in the poultry industry of these countries is about 26%, 90%, 10% and 70% respectively [22,23].
Malaysia, the focus of this study, faces different issues related to indigenous chicken farming. It has an established broiler industry that provides enough meats to the local market and exports the surplus to Singapore, the neighbouring country. The export value of poultry products was about RM583.94 million in 2018. However, the small farmers cannot share the cake since they cannot afford to be part of the contract farming in the broiler industry that requires high capital to join. It does not mean that small farmers do not have the opportunity to prosper. Indigenous chicken, which is mainly raised by farmers, is considered a high-quality chicken in the country. The contribution of the indigenous chicken to the poultry industry in the country as a whole is still low at about 15.3% [22,23].
The problems linked to chicken farming in Malaysia are the same as in many other countries of the world.
Despite the economic, social, and environmental contribution, the true potential of indigenous chicken cannot be realized due to constraints experienced by small-scale farmers. These constraints include the unavailability of a proper market, lack of infrastructure, high labor cost, limited knowledge, insufficient extension services, lack of technical knowledge about farm practices, predation, poor housing, high production and processing cost, price variation, variation in sales, and demand and supply gap [24,25] These constraints are due to unavailability of a proper and integrated value chain. The actors in the indigenous chicken value chain such as the farmers, the suppliers of the parent stock and the day-old chicks (DOC), and the middlemen, all work independently without synergy. [24,25]. Integrated value chain is a strategic alliance between business partners for achieving competitive advantage. Integration and collaboration among players in the value chain with established models such as contract farming or collaborative farming help to lessen the problems and uplift the constraints. Therefore, there is a need to develop an integrated and efficient value chain to support the primary producer and to ensure availability of indigenous chicken to attain the farm-to-fork strategy.
An in-depth analysis of the current indigenous chicken value chain is significant to effort to design the integrated value chain. To capture the dynamics of the value chain the method that is suitable is the system dynamics (SD) modelling. System dynamics (SD) modelling is an approach to solving complex issues that are related to policy analysis and system design. The primary goal of system dynamics modelling is to understand and describe the dynamic interaction of different system variables and to analyze their impact on policy decisions over a long-term horizon [26,27,28,29,30,31,32,33,34]. Therefore, this current study employs system dynamics modelling to evaluate the indigenous chicken farms’ operation and the interaction of various players in indigenous chicken farming. The application of system dynamics modelling helps to understand the dynamic interaction of farm operations, the gap between actual and ideal behaviour of indigenous chicken farms, loopholes and future improvement in the indigenous chicken value chain.
To the best of the researchers’ knowledge so far there is no optimal value chain model has been developed for indigenous chicken. Hence, this study aims to develop an integrated value chain model for indigenous chicken micro-farming to fill the gap in the literature. The main objectives which guide this study are (i) to examine the present indigenous chicken value chain and (ii) to develop an initial integrated model for indigenous chicken farms. This paper discusses literature related to the indigenous chicken value chain and constraints, the methodology to develop a based model, and the conclusion to achieve the stated objectives. Finally, this study concludes the paper with future directions. Three indigenous chicken farmers from a state in Malaysia are chosen as the samples of the study.

2. Literature Review

2.1. Indigenous Chicken Value Chain

As a part of the process model development using system dynamics, this study has reviewed the available literature to understand the various actors involved in indigenous chicken micro-farming and their activities. The value chain mapping through the literature review shows that the main actors in the indigenous chicken value chain are pre-producer, wholesalers, processors, retailers, and consumers. The first actor in the indigenous supply or value chain is a pre-producer. Pre-producers supply inputs such as Day-old chicken (DOCs), vaccines, feed, extension services, and equipment to producers. The producer is one of the main players in the indigenous chicken value chain. The Producer or a grower rears chickens to sell to middlemen. The producers supply chicken to the market via different channels. They sell live birds or eggs directly to customers, middlemen or wholesalers. Middlemen or wholesalers buy indigenous chicken from the grower to sell them to retailers and processors. Further, retailers sell birds to customers. Processors such as different restaurants and butchers add value to the chain by providing and serving chicken products to end customers. Additionally, some processors also have slaughterhouses to slaughter indigenous chickens. Slaughtered chickens are packed and processed to sell to frozen market [11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,34].
Figure 1 summarizes the various actors and their relationship in the value chain of indigenous chicken from previous studies [11,12,13,14,15,16,17,18,19,20,21,22,23,24,25].

2.2. Constraints in Indigenous Chicken Value Chain

Prior to developing the system dynamics model, the first step is to understand the constraints experienced by the actors in the system. The present literatures on indigenous chicken micro-farming explain that challenges in chicken micro-farming are due to the absence of a proper value chain [11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,34]. These challenges include limited capital that hinders the effective and efficient production and service delivery, high labour cost, insufficient knowledge, insufficient extension services, lack of technical knowledge about farm practices, predation, poor housing, price variation, and locally adaptable breed [11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,34].
Furthermore, chicken mortalities due to poor transportation facilities, poor infrastructure, lack of quarantine facilities, low-profit margins and high processing costs are few other constraints experienced by the farmers in the indigenous chicken micro-farming. The unavailability of a proper value chain has created a communication gap between channels in the indigenous chicken supply chain and poor management. Hence, there is a need to develop an integrated supply chain model for the indigenous chicken to overcome these challenges [11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,34].

2.3. Use of System Dynamics Approach to Model Value Chain

There are several reasons to employ system dynamics to model the value chain. These reasons include the ability to understand the system as a whole to analyze the interactions among components of the integrated system and to provide feedback without decomposing [35]. Jay w. Forrester [36] while working on General Electric projects introduced the basic idea of system dynamics by modelling a four-level supply chain [35,36]. According to Sterman [37], there are two components of the system dynamic modelling: (i) Stock and Flow structure for the attainment of the inputs and the process (ii) The management policies governing multiple activities [35,36,38].
System dynamics modelling has been used in much different research related to agriculture, for example, Gupta et al. [38] used the system dynamics modelling approach to evaluate different investment strategies for agriculture development and analyze the effects of these strategies to see the overall performance of the system [35,36,38]. Similarly, Oliva et al. [39] have employed system dynamics approach to model cold chain management in the food supply chain. Furthermore, Kumar, and Nigmatullin [40], use system dynamics to examine the supply chain performance of non-perishable food items. Tedeschi et al. [41] have also utilized the system dynamics approach as a management tool to develop a model for animal (such as goat and sheep) production. Teimoury et al. [42] have studied the supply chain of perishable fruits and vegetables to identify the best import quota policy. Stave et al. [43] have developed a model to transmit, amplify and reduce the effect of disturbance on the food system. Guma et al. [44], have used system dynamics to capture the association between the food security systems. Similarly, several studies have been conducted to assess various aspects of the chicken industry due to the development of the system dynamics tool. Naser Ranjbar [45] has investigated the oscillation of the chicken meat sector using a system dynamics approach. System dynamics modelling has been employed by Minegishi et al. [46] to simulate the complex logistics behaviour of the supply chain for chicken meat. Similarly, Vo et al. [23] have developed a model to analyze the chicken meat supply chain behaviour in France under bird flu using system dynamics. Additionally, Shamsuddoha [47], has developed an integrated commercial poultry supply chain by employing a system dynamics model. Based on the available literature on the indigenous chicken supply chain, this study aims to use system dynamics to study the indigenous chicken farm value chain.

3. Methodology

The current study employs qualitative thematic analysis and system dynamics modelling approach understand the current existing value chain and to model an early integrated model. Figure 2 illustrates the steps this study employs to develop the integrated value chain model.

3.1. Problem Identification

Problem identification is the first step in system dynamics modelling. As stated in the literature review section, indigenous chickens lack an integrated value chain. Numerous problems have arisen in indigenous chicken micro-farming due to the unavailability of the integrated value chain as discussed in the literature review. These problems will remain unsolved without proper analysis of the dynamic causes behind them. For example, the graph of historical data in Figure 3 captures the behaviour of two key variables in the value chain. The first graph illustrates the rate of mature chicken sold. While the second graph indicates the rate of DOC produced. These two variables are interrelated. The increase and decrease in one variable will influence the other variable. The fluctuation in the individual graph denotes the variation in production and sales. This fluctuation is due to the unavailability of information flow which is an important part of an integrated value chain.
These constraints cannot be addressed and understood without analyzing the value chain operations.

3.2. Data Collection, Thematic Analysis and Key Variables identification

This study used semi-interviews to gather data, and the interview questions are designed based on the available literature. Experts are consulted to review the interview questions, and modifications are made to the interview questions according to the suggestions of the experts. The current study employed the linear snowball technique to recruit respondents for the interview. The medium-scale indigenous farmer is approached by the digital platform, and two small farmers are referred by medium-scale farmers as indicated in the linear snowball sampling technique. The two small-scale indigenous chicken farmers are selected to understand the whole value chain and operations of indigenous chicken. A medium-scale farm is chosen for data collection, to develop and examine the future integrated value chain model for the indigenous chicken sector in Perak, Malaysia. Three farms are selected to develop initial integrated model value chain for indigenous value chain using system dynamics. System dynamics doesn’t specify any number to develop initial model. Thematic analysis is used to provide an in-depth understanding of systems and systems behaviour. Oluwasegun Oluyemi Aluko [47] has used thematic analysis and system dynamics to understand the safety performance of commercial motorcycles in urban transport in Nigeria. Similarly, this study has used thematic analysis to analyze interviews and to understand indigenous chicken farm structure and behaviour in Malaysia. Themes are developed based on interview analysis. In addition, variables as shown in Table 1 are determined based on the themes to be used in developing an integrated value chain model for indigenous chicken.

4. Results

Identified variables are classified into stock and flows based on their functions. A stock and flows are essential part of system dynamics. Stock represents a component of a system that accumulates over time by inflows and outflows that only change its value based upon flows. In other words, a stock is an accumulation or integration over time with the outflows subtracting from the stocks whereas flows cause the change in the stock. Flow represents the rate of change of stock that can either flow into or out of it at any particular time.

4.1. Causal Loop Diagram

A causal loop diagram is an essential component of system dynamics modelling because positive and negative feedback loops in a causal loop diagram are the building blocks of system dynamics modelling. A causal loop diagram in system dynamics leads to the conceptualization of a prospective model. A causal loop diagram makes it possible to visualize how interdependent variables affect one another. The diagram comprises a set of nodes showing how variables are connected [47]. Arrow represents the relationships between variables. A positive (+) or negative (−) sign near the top of the arrow indicates an increase or decrease in the variable at the end of the arrow. [47]. A causal loop diagram for the indigenous chicken value chain in study is developed using stella software is shown in Figure 4.
Figure 4 shows a causal loop diagram of small farm operations of indigenous chicken. Small-scale farm operations begin with the acquisition of DOCs, which increase DOC inventory and DOC inputs to the farm (farm inflow). Small-scale farmers on maturation sell these chickens in the market. The stock and flow model of small-scale farm explains behavior of small-scale indigenous farm.

4.2. Stock and Flow Model of Small-Scale Farm

The stock and flow model of the small-scale farm in Figure 5 shows that small-scale farmers buy DOCs from the integrator and rear them till chickens get maturity. The causal loop is transformed into a stock and flow diagram to enable the system to perform quantitative analysis. It helps in analyzing the system more quantitatively. Finally, mature chickens are sold by farmers to consumers. All conditions for the small-scale farm are kept ideas such as zero mortality, zero disease, all inputs and outflows are in equilibrium, and the model is simulated for 356 days. Small scale farm simulation is shown by different graphs in Figure 6a–c.
The simulation small farm behaviour shows that DOCs have entered the system. These DOCs are gradually increasing in the system. DOCs inflow is constant on the farm. DOCs take almost five months to transform into mature chickens. Further, there mature chickens are increasing in the system. The graph of mature chicken and mature organic chicken sold show similar behaviour which means all mature chicken are sold to the customers. The sudden decline in sales and DOCs shown in Figure 3 are not captured in the causal loop diagram and stock and flow model of indigenous chicken. Figure 7 below shows a causal loop diagram of the integrated value chain from a medium-scale farm.
The medium-scale indigenous chicken farm is more advanced as it has hatchery and processing systems whereas small farm lacks slaughtering and processing operations. The causal loop diagram in Figure 7 indicates the more comprehensive indigenous operations and value chain. This model is a potential integrated model to be further developed in future. The example below explains positive and negative feedback loops in the causal loop diagram of indigenous chicken.

4.3. Negative and Positive Feedback Loop

Mature parent buying increases mature parent supply in the system (positive), while death decreases the mature parents in the system (negative). Similarly, eggs in the hatchery increase the hatching rate in the system which leads to the increase of DOCs in the system.

4.4. Stock and Flow Diagram

Figure 8 below shows the stock and flow diagram of the medium-scale farm. This stock and flow model incorporates input, output and process information for individual constants, auxiliaries, and level variables. Stocks and flows simulate real-life conditions to develop an integrated value chain model. This study has divided stock and, flow into three sectors. The parent chicken sector deals with the purchase of parent chicken shown in Figure 8.
The mature chicken population behaviour in Figure 9 shows that initially mature parents are increasing then slightly decreasing due to death. The decline in mature chickens is also due to the transformation of mature parent chickens to egg-producing chickens.
The egg and DOC sector deals with egg and DOCs production as shown in Figure 10. Egg-laying chickens lay eggs. These eggs are transferred to the hatchery to hatch the DOCs. These DOCs are sold to small-scale farmers. Figure 11 explains the simulation of eggs and DOCs stocks.
The behavior of egg stock in Figure 11 shows that eggs gradually increase in the system. Similarly, the behavior of DOCs illustrates that there is a delay of 21 days and DOCs have entered the system after 21 days.
The third sector includes thein Figure 12 illustrates growing, processing and selling operations of indigenous chicken. Mature organic chickens are taken to the chicken collection center. These chickens are slaughtered, packed, and sold in the market. Figure 13 shows a simulation of the stocks in the third sector. The behavior of slaughterhouses and frozen chicken in Figure 13 shows indigenous chicken products are steadily increasing in the system. The slaughterhouse and frozen chickens’ behavior show a similar pattern which means all slaughtered chickens are sold to the frozen market.

5. Conclusions and Recommendation

This study has accomplished its objectives to understand the current state of the small farm indigenous chickens’ value chain in Malaysia and to develop an initial integrated model of the value chain. The findings are consistent with previous studies in various countries around the world that show a similar pattern of unorganized and unintegrated indigenous chicken value chains. Meanwhile, the analysis of the medium size indigenous chicken farmer results in the development of an initial integrated model of the value chain. It is a significant initial finding that opens the opportunity for further strategic research and development in this area towards the attainment of the farm to fork (F2F) strategy. The future study could further enhance the initial model by modelling this early initial model into an established collaborative approach of contract farming or co-operative farming. Collaborative integrated value chain will yield economic benefits to small-scale farmers by providing them stable market and income through higher-quality inputs, better access to the market, lesser overall cost, and higher production yields.

Author Contributions

Conceptualization, I.A.A.; writing—review & editing, A.S.A.; supervision, H.A. and I.Y. All authors have read and agreed to the published version of the manuscript.

Funding

We would like to express our gratitude to the Ministry of Higher Education Malaysia (MOHE) to support this study under the Fundamental Research Grant (FRGS) grant [grant number: FRGS/1/2019/SS01/UTP/02/2] and Yayasan Universiti Teknologi Petronas grant [grant number: 015LC0-203].

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Data can not provided for several reasons, privacy, initial model and its part of my thesis. I can provide data upon completion of my work.

Acknowledgments

Thank you to Universiti Teknologi PETRONAS for financial support.

Conflicts of Interest

The authors declare no conflict of interest.

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Figure 1. Summary of value chain for indigenous chicken micro-farming.
Figure 1. Summary of value chain for indigenous chicken micro-farming.
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Figure 2. The Steps Involved in System Dynamics Modelling. Note: The remaining section of the paper elaborates the steps in Figure 2 in more details.
Figure 2. The Steps Involved in System Dynamics Modelling. Note: The remaining section of the paper elaborates the steps in Figure 2 in more details.
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Figure 3. Key Variables and Their Behavior over Time (BOT).
Figure 3. Key Variables and Their Behavior over Time (BOT).
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Figure 4. A simple causal loop diagram of the value chain of small-scale farm.
Figure 4. A simple causal loop diagram of the value chain of small-scale farm.
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Figure 5. A Stock and Flow Value Chain of Small-Scale Farm.
Figure 5. A Stock and Flow Value Chain of Small-Scale Farm.
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Figure 6. (a) The Behavior of DOC in Farm; (b) The Behavior of Mature Chickens in Small Scale Farm; (c) The Behavior of Mature Organic Chicken Sold.
Figure 6. (a) The Behavior of DOC in Farm; (b) The Behavior of Mature Chickens in Small Scale Farm; (c) The Behavior of Mature Organic Chicken Sold.
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Figure 7. Causal Loop Diagram of Medium Scale Indigenous Chicken Farm.
Figure 7. Causal Loop Diagram of Medium Scale Indigenous Chicken Farm.
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Figure 8. Parent Chicken Sector: Stock and Flow Diagram of Indigenous Chicken Value Chain.
Figure 8. Parent Chicken Sector: Stock and Flow Diagram of Indigenous Chicken Value Chain.
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Figure 9. The Behavior of (a) Parent Chicken and (b) Egg Producing Chicken for Integrated Value Chain.
Figure 9. The Behavior of (a) Parent Chicken and (b) Egg Producing Chicken for Integrated Value Chain.
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Figure 10. Parent Chicken Sector: Stock and Flow Diagram of Indigenous Chicken Value Chain.
Figure 10. Parent Chicken Sector: Stock and Flow Diagram of Indigenous Chicken Value Chain.
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Figure 11. The Behavior of Eggs (a) and DOCs (b) for integrated Value Chain.
Figure 11. The Behavior of Eggs (a) and DOCs (b) for integrated Value Chain.
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Figure 12. Stock and Flow Diagram of Indigenous Chicken Value Chain in Farm Sector.
Figure 12. Stock and Flow Diagram of Indigenous Chicken Value Chain in Farm Sector.
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Figure 13. The Behavior of (a) Slaughterhouse and (b) Frozen Chicken for Integrated Value Chain.
Figure 13. The Behavior of (a) Slaughterhouse and (b) Frozen Chicken for Integrated Value Chain.
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Table
Table 1. The variables identified using the thematic analysis.
Table 1. The variables identified using the thematic analysis.
Variables
Parent Chicken and Mature Organic Chicken
Eggs and Hatchery
Day Old Chicken
Farm
Chicken Collection Center
Slaughterhouse
Frozen Chicken
Alive Birds
Death
Egg Production Rate
Hatchery Collection Rate
Unhatched Egg
Hatching Rate
Culled Rate
In farm Flow
Maturation Rate
Chicken Collection Rate
Chicken Moving to Slaughterhouse
Processed Chicken Inflow
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Abbasi, I.A.; Ashari, H.; Ariffin, A.S.; Yusuf, I. Farm to Fork: Indigenous Chicken Value Chain Modelling Using System Dynamics Approach. Sustainability 2023, 15, 1402. https://doi.org/10.3390/su15021402

AMA Style

Abbasi IA, Ashari H, Ariffin AS, Yusuf I. Farm to Fork: Indigenous Chicken Value Chain Modelling Using System Dynamics Approach. Sustainability. 2023; 15(2):1402. https://doi.org/10.3390/su15021402

Chicago/Turabian Style

Abbasi, Iffat Abbas, Hasbullah Ashari, Ahmad Shabudin Ariffin, and Ijaz Yusuf. 2023. "Farm to Fork: Indigenous Chicken Value Chain Modelling Using System Dynamics Approach" Sustainability 15, no. 2: 1402. https://doi.org/10.3390/su15021402

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