Operational Cost… Poultry Industry Faces Imminent Collapse

Nigeria’s poultry industry is recognised as the most commercialised component of the livestock subsector, contributing over 25 per cent of the agricultural GDP. LEADERSHIP reports that approximately 25 million direct jobs are threatened in Nigeria’s poultry sector due to the high cost of poultry feed, which is now driving farmers out of business. Despite the federal government’s waivers for maize importation, the production cost for chicken feed remains prohibitively high, threatening a further collapse of the industry. Maize is a primary ingredient in feed production for birds.

In 2023, the Poultry Association of Nigeria (PAN) raised the alarm that the soaring cost of maize was forcing farmers to shut their farms due to their inability to feed their birds and sustain their businesses. Given the current market realities, it has been reported that more poultry farms have now closed as a result of a lack of market stability.

Onallo Akpa, the director-general of the Poultry Association of Nigeria, warned that should the industry collapse, Nigeria risks losing over 25 million jobs and billions of naira in the value chain. Stakeholders have predicted that the number of jobs lost could be even higher, particularly given the frequent increases in fuel prices.

LEADERSHIP learned that the federal government has permitted the importation of approximately 100,000 metric tonnes of maize from Argentina to support the poultry industry. Nevertheless, farmers assert that the cost of feed and poultry drugs remains the sector’s greatest challenge. The United Nations database indicates that in 2023, Nigeria imported maize worth $631.11 thousand from Argentina.

However, poultry farmers have expressed dissatisfaction with the current importation system, alleging that only a select few individuals are granted licences, and that these importers prioritise their profits over the needs of the farmers. Under pressure from escalating feed costs, farmers have requested that the federal government issue them direct licences to import maize, in order to alleviate the rising production costs faced by their members.

In a report, Mojeed Iyiola, chairman of the Poultry Association of Nigeria’s Lagos chapter, said, “The licences for maize importation are given to a select few, who import for selfish gains. Even when they sell to poultry farmers and feed processors, they offer the same prices as the open market.” Although Onallo Akpa could not immediately comment on the needs of poultry farmers, he expressed concern about potential job losses if the current trend continues.

Meanwhile, the President of the All Farmers Association of Nigeria (AFAN), Kabir Ibrahim, confirmed to LEADERSHIP that the sector had received assistance through the importation of about 100,000 metric tonnes to alleviate the market’s maize scarcity. Additionally, maize was among the grains recently granted a zero tax waiver on importation by the federal government.

But despite these interventions, the prices of chicken and chicken products have noticeably increased over the past two years. Current market prices indicate that a crate of eggs sells for between N5,000 and N6,000, while individual eggs, depending on their size, cost between N150 and N200.

Similarly, chicken feed prices have surged beyond expectations, ranging from N19,000 to N25,000 per 25kg. The price of Growers Mash (Hybrid Brand) has risen from N5,000 to N8,000.

Commenting on the ongoing challenges affecting the sector, AFAN President Kabir Ibrahim highlighted the escalating costs of feed production and poultry drugs as significant issues.

He called for sustainable subsidies on feed and drugs, as well as the reactivation of school feeding programmes to bolster the sector.

He stated, “The biggest challenge in poultry production is the cost of feed and poultry drugs, and sales. There is a support window around the importation of maize to impact feed costs. “Sustainable subsidies on feed and drugs, along with the reactivation of school feeding programmes, are essential for ensuring that children and nursing mothers have access to at least one egg a day as part of their right to a nutritionally balanced diet, leveraging the ‘Right to Food Act.'”

Jeremiah Emmanuel, a poultry farmer and chief executive officer of Jekulla International, lamented the lack of meaningful programmes currently benefiting the poultry industry.

He expressed disappointment with the previous administration’s Agri-Business/Small and Medium Enterprise Investment Scheme (AGSMEIS), calling it a “sham.”

Kucha noted that many poultry farmers are ceasing operations due to soaring costs and other factors such as poultry diseases, inflation, and declining consumer demand.

He expressed the belief that controlling the costs of raw materials like maize, soya beans, and groundnuts and making them more accessible to feed manufacturers could help reduce feed prices and sustain the industry.

He suggested that improving the exchange rate, strengthening the naira, and addressing high fuel costs would significantly lower farmers’ operational expenses.

“Many poultry owners are shutting down their businesses due to high running costs and losses caused by these factors, alongside diseases and low patronage due to inflation and the high cost of living.

“If the government can control the cost of producing essential raw materials like maize, soya beans, and groundnuts and facilitate access for poultry feed manufacturers at lower rates, this will drastically reduce poultry feed costs and sustain the sector,” he said.