Why poultry farmers are leaving
What is the situation of the poultry sector?
I don’t have the statistics because I don’t want to quote wrong figures. The best way to confirm this fact is the reduction in the patronage of day-old chickens. Every farmer, either those producing egg or those producing meat must buy day-old chicks, either broiler or pullet.
The way to know poultries are closing down is when you go to the factories and you discover that their sales have come down.
Nearly every hatchery suffered last year, many stopped setting eggs, those are the signals. I don’t have the statistics, but taking a cursory look, I can tell you that most farms have closed down and when there is reduction in the volume of feed sales, then you’ll know farms have closed down, those are the indices.
What are the challenges?
The critical issues in the poultry industry cuts across the value chain from the feed milling, hatchery, manufacturers of animal medicament, processing and even the packaging of eggs. The issues are in every stage, but the most critical of all that affects other subsectors across the value chain is raw materials needed by the feed mills.
The raw material macro ingredients are the major issue and this is majorly maize and soybeans, which constitute 75 per cent of the rations of raw materials. Maize and soybeans are grown locally, but it is still a major challenge to the poultry industry.
The yield per hectare of maize and soybean in Nigeria is still low compared to other countries; the improved seeds varieties for farmers to boost production are lacking and the finance to increase production areas by farmers are not there. All these factors have made our cost of maize and soybean production higher and unable to compete with imported varieties.
Micro ingredients such as the amino acid, vitamins and minerals, enzymes are affected by the volatility of the exchange rates, and are not easily available because they are all imported. This put producers of feeds at a disadvantage because they cannot compete at the international market.
The cost of feeds has a multiplier effect across the entire poultry value chain because it is what determines the cost of day-old chicks, frozen chicken and the cost of egg.
The high rate of smuggling of frozen chicken into the country is another major challenge to the industry. A lot of farms have shutdown because of smuggling.
Government and the Customs Service have tried, but there is still room for improvement. Over one million tons of chicken is smuggled into the country yearly, if these smuggled products were produced here, it will create jobs. But now these jobs are exported to these countries.
The issue of yearly egg gluts has also become problem. What is responsible for this?
I will approach it in two ways- the industrial and consumer. Egg is a unique product because it is consumed by all. In Nigeria, there is low usage of eggs because the food and beverage industries use egg powder and this is not being produced in the country, but imported.
Egg powder is not being manufactured in Nigeria because of the inputs. If maize import including tariffs costs N80, 000 per ton and the one produced in Nigeria goes for N140, 000 per ton and the chickens that would lay these eggs are consuming these maize, there is no way egg powder produced in Nigeria will not be more expensive than the imported ones.
On the consumer aspect, there is a challenge also. Per capital income of Nigerians is low and people are not consuming eggs as expected. Nigeria per capital egg consumption is 65 eggs per person a year. In Spain its 340 eggs person in a year and in U.S. it is 305 eggs per year. This shows that Nigerians are not consuming eggs.
The northerners eat more eggs than the Southerners. The channel of egg distribution in the country is also faulty. Many of the channels sell egg are not certain and there are close substitutes to egg.
Also there is no serious advertisement on the importance of egg consumption in the country by farmers. Farmers must find a central way of promoting egg.
Minister of state for Agriculture Heiken Lokpobiri said investors are scared of coming into the sector because it lacks accurate data, how true is this?
He is very correct. You’ll discover that about three, four years ago, the rate at which the eateries, Quick Service Restaurants (QSRs) sprang up was very sporadic. Go and check them today, many have closed down their outlets because reliable data and statistics are not available. Everybody comes into the country, which has 190 million as the total market, but is 190 million the available market?
Then, talk of demography, how many people are between 0 and six years, how many are between seven and 10 years, how many people are dependent, the family size, occupation, family life cycle, all these information are key.
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