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Evaluating impact of CBN’s 300,000MT maize intervention on poultry industry

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A maize farm


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Availability and moderate price of maize – a major energy source in the poultry, fishery and livestock industries – would mean sustainability, job retention, circular flow of income, cheaper nutrition and poverty alleviation for investors and Nigerians.

Eggs and chickens as sources of protein would also become cheaper for most Nigerians if feeds are cheaper, as feeds take over 60 per cent of the cost in poultry operations, and consumers are either compelled to bear the cost or forced to abstain from protein sources.

Either of the consequences above deprives not only individuals but also households of adequate disposable incomes and recommended nutrition.

These were the submissions of industry players and animal scientists who spoke with The Guardian, as the Federal Government, through the Central Bank of Nigeria (CBN), begins the distribution of 50,000 of the 300,000 metric tonnes of maize announced in January to industrial users, especially in the poultry sector.

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In late January 2021, the CBN announced that about 300,000 metric tonnes of maize would be ready for supply from strategic anchors under the Anchor Borrowers’ Programme (ABP), which would ultimately reduce the then N155,000 per metric tonne.

The decision followed a move by critical stakeholders working with relevant government and security agencies to stop speculative activities of middlemen.

When the decision was taken, it was expected that the price of maize would drop significantly, thereby increasing demand for the crop and ultimately, enhancing the gains of maize farmers while bailing out the industrial sectors.

Also, the National President of the Maize Association of Nigeria (MAAN), Alhaji Bello Abubakar, in a chat with newsmen, had attributed the current shortfall in the quantity of maize to insecurity. He also identified activities of hoarders and middlemen who engage in hoarding of the grain.

Yearly, as maize grains in circulation gets depleted and demand roars from January to August (when new maize harvest begins), price of the crop rises frequently, upsetting the poultry industry significantly, except when there is mass storage or importation of maize in-between January and August. The same applies for soya beans, another major animal feed component.

Industry challenges
In the last few years, the poultry industry has been in crisis as cost of input becomes steadily high. Factors such as high inflation rate, restricted importation of grains and climate change interruption of maize and soy bean production have compounded the hurdles of farmers.

Insecurity in the grain-producing states, and by extension in all parts of the country, has worsened the demand-supply gap of inputs such as feeds ingredients, product movement and market penetration.

Farmer-herder crisis has also affected grain production, as population increase intensifies competition for grains between industrial food processors for humans/direct consumption and animal feeds producers, constantly pushing prices upward.

A commercial poultry farmer in Ilorin, Kwara State, Segun Olaitan, said a bag of layer mash feed costs about N6,000, while a bag of grower mash feeds costs about N5000, depending on the brand of the feed.

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President of the Poultry Association of Nigeria (PAN), Mr Ibrahim Ezekiel Mam, had earlier lamented that if the government failed to intervene by giving a concession to import maize and soy meal, the poultry sector might collapse.

“The price of feeds has gone up because we have a shortfall in supplies of soya beans, which are key in feeds formulation. This is a serious threat to the industry. I wish the government would quickly intervene by allowing importation of soya beans even though temporarily,” he had said.

Insurgencies, he added, had greatly affected crop production. “Most agricultural inputs should have zero tariff, but the custom imposes up to 20 per cent at times. That adds to the cost of production,” he said.

“The other factors are multiple taxations from both state and local agencies. Everybody knocks at your door, threatening to close down your operations if you fail to pay. Instead of being rewarded, you are threatened.”

He added that as of today, the day-old chick price in Nigeria is one of the most expensive in the world because of power and feeds.

The PAN boss said over 7 million to 10 million people were directly or indirectly engaged in poultry in Nigeria, and about 90 per cent of poultry activities are private sector-driven.

He added that it is the most capitalised of all the agricultural sectors because it is capital-intensive, having vacancies for all levels of manpower, from Doctors of Veterinary Medicine (DVM), animal scientists, animal production technologists to animal farm attendants and other professionals such as accountants and marketers.

Industrial users express impact, suggest other measures
General Manager, Premier Feeds Ltd, Austin Daylop, talking on the impact of the intervention, said: “We are encouraged with this intervention effort by the CBN and have witnessed how it has helped to ameliorate rising market prices for maize. This is a positive start in finding lasting solutions to critical national concern.”

He, however, said if the challenge of food prices would really be solved, stakeholders should come to the table and work out sustainable solutions.

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“If we are going to really solve these food prices, we all must come to the table to address the root cause of these challenges and work towards sustainable solutions for farmers, feed millers, fish & poultry farmers, and all other stakeholders,” Austin Daylop added.

Chief Executive of AFEX Commodities Ltd, one of the partners facilitating the distribution, Ayodeji Balogun, said by facilitating the release of the 300,000 tonnes of maize, leveraging support from credible players in the ecosystem, including its team at AFEX, the CBN would offer over 35,000 farmers and agro-processors a channel through which they could trade maize at a subsidized rate, and thereby reduce the adverse effect of the maize price hike, increase local demand, and improve farmers’ livelihoods.

“Being a core food basket, the allocation of the commodity to smallholder farmers, prime anchors such as the Poultry Association of Nigeria (PAN), Flour Mills, livestock and feeds processors would create a sustainable availability and pricing structure in the market, reducing maize prices and bridging the supply gap and scarcity in the national and local market regions,” he said.

Executive Director, Animal Care and Public Relations Officer (PRO) of the Ogun State chapter of the Poultry Association of Nigeria (PAN), Dr Opeyemi Agbato, said: “The direct allocation and release of maize to key feed millers under the CBN’s strategic maize reserve programme was a much-needed intervention. For it, we sincerely applaud their initiative. They made true their words and pronouncements of release.

“It was unfortunate that the release coincided with a time when the prices of soy beans seeds, which by-product is a critical source of protein in poultry feed, experienced an astronomical increase mostly due to rapid exportation.” He said export of soy beans is detrimental to local livestock businesses, particularly poultry farming.

“We hope that in the future, more strategic holdings and release facilities for maize would be made available in all regions for ease of accessibility and reduction in the cost of transportation. He expressed the hope that prices of subsequent maize releases would further reduce to as low as N135-145,000/MT or about 30-35 per cent lower than prevailing landing costs to consumers to force a drop in prices animal feeds and food. “Nevertheless, we deeply commend the initiative, as it keeps many afloat,” he said.

Managing Director, Amobyn Farm, Dr Ayoola Oduntan, affirmed that the release of the maize was ongoing, and would have impact on the price and availability temporarily. He, however, harped on stimulation of local production by improving on security, making improved seeds and production inputs accessible to farmers. Sporadic interventions like the CBN’s, he added, are one of several factors that could constitute long-term solutions to the challenges. He added that financial facilities, off-taking and storage arrangements should also be emplaced to maximise local production.

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A former chairman of the Poultry Association of Nigeria in Oyo State, Banji Akanji, also said the maize was being released N150,000 per tonne. Akanji said the intervention could keep many poultry farms operational before locally produced maize would be available by middle of the year.

Akanji said the nearest storage facility where farmers in Ibadan, Oyo State, could source the CBN maize is Niger State, which would translate into N175,000 per tonne, if N300,000 fare for a trailer-load of maize is sourced from Niger State. The cost, he added, would however reduce marginally, as a tonne costs N185,000 in the open market. He said it would have meant a great help if the strategic grain reserves in Ibadan could serve the purpose, but had been leased.

The chairman, Poultry Association of Nigeria (PAN) and National Public Relations Officer, Catfish and Allied Fish Farmers Association of Nigeria (CAFFAN), Uchegbu Chijioke Nicholas, Imo State chapters, commended the intervention of the Federal Government via the CBN, saying if well managed and implemented, would go a long way in alleviating the suffering of poultry farmers.

He, however, bemoaned that 10,000 metric tonnes were allocated to the south-west zone alone, while 3,000 tonnes were allocated to other zones. The 3,000 tonnes, he added, had not been made available as of the time of filing this report. He urged the government to allocate a minimum of 10,000 tonnes of maize to each zone in the first batch of the distribution to really make a positive impact on availability and cost, and make such available immediately.

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