Nigeria

Nigeria: Rising Cost of Production Killing Poultry, Fish Businesses

2 years ago
BusinessL

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It’s certainly not the best of times for poultry and fish farmers in Nigeria as they continue to battle the problems of unabated rise in cost of production and the fall in the purchasing power of the people, writes Festus Akanbi.

There are indications that the complaints over the regime of consistent rise in the prices of feeds for poultry farmers and fish rearers may linger. However this time, operators in the poultry and fishery value chains are shouting loudly that many operators are closing shops in an apparent surrender to the inclement operating condition, a development they fear may worsen the current unemployment situation in Nigeria.

Nigeria’s poultry industry, worth $4.2 billion according to the United Nations Food and Agricultural Organisation (UNFAO), is a major protein source for over 200 million people. But the sector, which contributes nine to 10 per cent to the GDP, has struggled in the last three years and many operators have abandoned their businesses due to high costs. Farmers lament high feed costs and traders complain about the cost of the constantly rising ingredients for the feeds.

Unfortunately for Nigerian farmers, fish production is not a better alternative this time as a combination of factors (including the instability in the prices of feeds and vaccines, and lack of market regulation leading to buyers’ determination of prices of fish) are forcing many fish farmers to close shops.

Rising Cost

Some operators raised the issue of multiple taxations, like other businesses in the small and medium scale category, saying the little they are making from their operations is wiped out by costs and taxes. However, the majority of poultry operators that spoke with our correspondent raised the issue of the high cost of production, which is not very limited to Nigeria alone.

They disclosed that the high cost of raw materials: maize, soybeans, and others which constitute about 70 per cent of the raw materials for poultry feeds have had their prices above normal and this has been principally responsible for the high cost of production.

This is as reports have it that the average price of poultry feed in Nigeria rose at least 168 per cent in the last three years, a huge surge that underlines the scale of Nigeria’s food inflation in the last few years.

On average, a 25 kilogramme of poultry feed, made mainly from maize, soybean, wheat, and millet, rose from N3600 in 2019 to between N8500 and N10,000 in July 2022, according to market surveys, while a random survey this year showed that the prices have recorded significant increases in the first quarter of 2023.

The rising cost of production naturally translates to a higher cost of chicken and eggs. During the last yuletide in Lagos, for instance, a chicken that used to cost between N5,000 and N7,000 was sold between N12,000 and N15000, while a crate of eggs rose from N800 to N1800.

Chief Executive Officer, Adonai Farms, Ijebu-Ode, Itodo Innocent Idoko, said: “Factors responsible for higher prices are high cost of feed: maize skyrocketed from N90 to N285 per kilogramme between 2019 to 2021; soya meal from N130 to N380; groundnut cakes (GNC) from N95 to N370; and methionine from N25,000 to N68,000 per bag, among others.”

The crises in the poultry sector were recently captured by the Chairman of the Poultry Association of Nigeria, the Plateau State chapter, Johnson Bagudu, who lamented that in Plateau State, the industry has been reduced to half because of the current challenges bedeviling the subsector.

Bagudu said the poultry industry in the state happened to be one of the highest employers of labour with over 4,000 and each of the poultry farms will have up to 10 to 20 staff, but that now, nearly 50 per cent of their members have either shut down operations or are operating below their original operational capacity.

His position was corroborated by the Chairman Poultry Association of Nigeria (PAN), Lagos State chapter, Godwin Egbebe, who lamented the closure of business by many of his members in 2022, saying the trend is yet to abate as a result of the current high cost of materials including the security challenges faced by the farmers.

And to address the issue of the rising price of feeds, a professor from the Avian Unit, Department of Veterinary Medicine, University of Ibadan, Prof. Omolade Oladele, urged PAN to collaborate with other stakeholders to address the high cost of feed in poultry farming and minimise other challenges.

“Stakeholders, PAN and others in the agricultural products such as Maize and Soybeans farmers, must come together to celebrate and determine the quality of soybeans and maize production per year, how much is needed by the poultry industry, and the deficit,” she said.

A member of the poultry association, Mrs. Edith Onyeji, in a recent interview, confirmed that the cost of feed inputs like soya beans, maize, and others has become unbearable for poultry farmers. She also alluded to the effect of the security challenges facing the nation on their activities. “In the Federal Capital Territory alone, most of our farmers have closed down; “The question is ‘What is the problem?’

“The high cost of feed inputs like maize, soya, and other ingredients is becoming unbearable for farmers. Before now, a bag of feed was about N2,500 to N5,000, but now it is N9,000 or even more,” she lamented.

Like Poultry Farmers, Like Fish Farmers

Sadly, the challenges facing poultry farmers are being replicated in the operations of fish farming in Nigeria, where many operators have decided to suspend farming as the costs of nurturing fish to maturity are becoming prohibitive.

Reports say that Nigeria imports approximately 40,000 tons of fish feed (significantly for catfish and tilapia production) valued at $60 million per year. The imports are mostly from Israel (60%) and the EU (40%). All imported feeds are floating and come in 15 kg and 20 kg bags and in the following (2, 3, 4 5 6.5, 8, and 9) millimetres (mm)].

Fish feeds available in Nigeria fall into three categories. These include locally manufactured high-quality feeds, and local artisanal fish feeds made by small-scale feed millers while the third category is made up of imported feeds.

The list of popular imported fish feeds includes Skretting Feeds, Altech Coppens, Aqualis, Aller Aqua, Top Feeds, Blue Crown, Vital Feeds, Omega, Aqua Boom, and Eco Float.

A fish farmer based in Akute, Ogun State, Mr. Kinsley Onuorah, in an interview with our correspondent last week, narrated how he had to empty his fish tanks and suspend fish rearing because of the huge loss he suffered at the hand of a fish buyer late last year.

He claimed that he sold one kilogram of fish at N1200 in his March 2022 harvest. He said however, the industry recorded increases in the price of feeds many times afterward, and to his shock, fish buyers insisted on buying his stock at N1,100 per kg in December.

“We have no choice because these market women know that if we do not sell our fish, we will continue to incur the cost of food and maintenance for the fish,” he explained.

The problems hampering the production of fish in Nigeria are numerous; they include the high cost of feed; low water quality; shortage of improved seeds (fingerlings and Juveniles etc.); inadequate technical management; lack of structured market for the farmers (negative activities of middlemen); and insecurity of life and property.

There are reports that over 60 per cent of fish farmers have been forced to shut down, while others are struggling to stay afloat due to the rising cost of feed and other challenges bedeviling the industry.