Nigerian poultry farmers struggle to stay afloat amidst rising production costs

Onome Amuge

The poultry industry, considered the most commercialised sector of livestock in Nigeria, is facing a pressing challenge as economic hardships have forced an estimated 30 percent of poultry farms to close down in the first half of 2024, according to the Poultry Association of Nigeria (PAN). The mounting issues in the poultry sector have become an urgent concern, not only for the farmers but also for the millions of Nigerians whose livelihoods depend on the industry.

According to reports, Nigeria’s once-thriving poultry industry, with a value of $4.2 billion and a major role in the country’s agricultural and total gross domestic product (GDP), is now in crisis mode as farms shut down en masse.

Despite being a significant employer, providing jobs for 25 million people, the poultry industry’s numbers have taken a nosedive. A combination of various factors, including cost inflation and competitiveness from imports, has placed the industry under immense pressure, threatening its very survival.

Based on this, poultry farmers across the country  have expressed their grievances, warning that the sector is in danger of collapse, which could lead to massive job losses. This is as  they attributed the imminent crisis to the sharp rise in production costs, particularly the soaring prices of maize and soybeans, key ingredients in poultry feed production.

Godwin Egbebe, the national publicity secretary of the Poultry Association of Nigeria (PAN), who acknowledged the dire situation in the poultry farming sector, noted that over a quarter of farms have been forced to close due to unsustainable operational costs. This closure of poultry farms, he explained further, has directly contributed to a significant increase in egg prices across the country. Egbebe, therefore urged the government to take swift action to prevent the complete collapse of this vital sector of the country’s agriculture industry.

“About 30 percent of local poultry farmers nationwide have shut down their farms due to the hardship faced in the sector in the first half of the year.

“The government needs to know the severity of the situation poultry farmers are facing in the sector,” Egbebe stated.

The price increase is reflective of the ongoing economic hardships facing the country, with inflation rates spiraling upwards, particularly in the food sector, as reported by the National Bureau of Statistics (NBS).

The national publicity secretary of PAN, warned that the Nigerian poultry industry is teetering on the brink of collapse, with egg prices rising sharply from N2500-N3200 to N4200 in just six months, reflecting the escalating inflation rates in the country.

Egbebe also  cautioned that if the government fails to intervene, the sector could further deteriorate, exacerbating food shortages and inflation rates across the country.

The rising insecurity and adverse climate change effects, coupled with the recent subsidy removal by President Bola Tinubu in 2023, have dealt a devastating blow to the Nigerian economy, with staple food prices spiraling out of control.

In just one year, the prices of essential food items surged beyond the reach of the average Nigerian, as the sudden doubling of petrol prices following the president’s policy announcement triggered a chain reaction, driving up transportation costs, and, ultimately, the cost of goods and services across the country.

Barely eight weeks into President Tinubu’s administration, he took the drastic step of declaring a state of emergency on food insecurity. However, the impact of this measure on the escalating prices of staple food items, such as maize and soybeans, has been negligible, as Nigerians are still struggling with the high cost of food.

As the prices of basic food items spiral out of control, even the once affordable protein source of eggs has now become a luxury for many Nigerians. In a span of just one year, the cost of a single egg has doubled, from N100 to N200, creating a barrier to a nutritious diet for many low-income households.

Faced with the never-ending surge in prices, many poultry farmers have been forced to close their businesses, unable to keep up with the increasing cost of feed ingredients. This not only impacts the livelihoods of the farmers but also reduces the availability of affordable poultry products in the market.

The fear of feed producers compromising the quality of livestock feed due to the escalating cost of feed ingredients is adding to the woes of the poultry industry. With these economic pressures mounting, the future of poultry farming in Nigeria looks uncertain.

Sunday Ezeobiora, the chairman and CEO of Sunchi Integrated Farms Ltd, an integrated poultry farm in Enugu, including breeder farms, highlighted the high production costs in the poultry industry in Nigeria.

According to Ezeobiora, the poultry industry faces significant challenges, including limited access to funding, inadequate infrastructure, and limited marketing opportunities.

Ezeobiora stressed the urgent need to tackle the challenges plaguing the poultry industry in Nigeria, warning that failure to do so could lead to its demise.

In light of this, he called on policymakers to implement policies that would boost the operating environment for poultry farmers, attracting investment to the sector. Additionally, he urged the government and other stakeholders to provide greater support for the poultry industry, recognizing its vital role in the country’s food security and economy.

Gideon Oluleye, South-West zone chairman of the Poultry Association of Nigeria, also shared his perspective on the issues confronting the poultry industry in Nigeria.

According to Oluleye, the rising cost of poultry feed is among the many challenges facing the sector, significantly impacting its operations. He also pointed out the critical role of the poultry sector in the country’s economy, contributing over six percent to the GDP and providing employment opportunities for over 25 million people.

“We, on behalf of poultry Association of Nigeria, are therefore appealing to the Federal Government of Nigeria, the central bank and the federal ministry of Agriculture to intervene in this sector by; subsidising inputs cost, majorly maize and soya beans and ensure its availability within the economy and providing financial window of long term lending to farmers,” he said.

Oluleye recommended various proposals for the government to consider to support the poultry industry in Nigeria. Among these, he suggested that the government establish egg powder and chicken meat processing companies in all geopolitical zones of the country, which would help address the issue of egg gluts during certain periods of the year. He also recommended that the government create incentives to boost the local production of poultry feed, providing affordable inputs for poultry farmers.

Oluleye further underscored the importance of safeguarding the Nigerian poultry sector from harmful imports, stressing the need for a policy that limits the importation of poultry products to those not produced locally in adequate quantities.

In addition, he urged the government to ban the importation of contaminated or rejected processed chicken, stressing that Nigeria must not be used as a dumping ground for such products. He emphasized the importance of robust regulatory frameworks and strong enforcement mechanisms to ensure that imported poultry products meet the required safety and quality standards.

Joshua Onuche, a poultry farmer and CEO of Layonder Farms in Nasarawa State, shared his  experience of the struggles faced by poultry farmers in the country. He explained that despite the current high prices of eggs, they are still undervalued when considering the enormous expenses incurred by farmers during the production process, including the high prices of poultry feed, micro ingredients, electricity, transportation, water, and other costs.

Onuche also disclosed that his business has been severely impacted by the escalating prices of poultry feed over the past year. He pointed out that the cost of poultry feed has been driven by the continuously increasing prices  of key ingredients, including maize and soybeans, in the market. This has created a vicious cycle for poultry farmers like Onuche, who have to contend with the rising production costs while also facing stagnant or even declining returns on their investment.

Onuche pointed out that a single bag of poultry feed, which used to sell for N6,000, is now priced  between N15,000 and N19,000, an exorbitant amount that is severely eating into farmers’ revenues and profits. This, he argues, is a cause for grave concern among poultry farmers who are struggling to stay afloat in the face of skyrocketing costs.

Speaking to the government’s role in the poultry industry’s survival, Onuche identified the need for increased support for farmers, researchers, and extension agents to drive local crop production and, ultimately, improve the industry’s profitability.

The poultry farmer noted further that empowering these key stakeholders will lead to higher yields of maize and other crops used in poultry feed production, reducing farmers’ dependence on expensive imports and alleviating the burden of high feed costs.