Poultry farmers blame N30bn loss on cash crunch and egg glut
March 20, 2023205 views0 comments
By Onome Amuge
The Poultry Association of Nigeria (PAN) has raised concerns that the poultry industry is at risk of total collapse and extermination as members lost over 15 million crates of unsold eggs worth N30 billion due to the lingering scarcity of naira notes in the country.
PAN, in a press release signed by Sunday Ezeobiora, the national president, and Onallo Akpa, the director general of the association, described the poultry industry in Nigeria as one of the most consolidated subsectors of Nigeria’s Agriculture contributing about 25 per cent of the agricultural gross domestic product (AGDP) of the economy and employing over 25 million Nigerians directly and indirectly.
They said the poultry industry has been a major employer of labour and a great source of financial empowerment and livelihood for many families, especially women and youths.
“Eggs being daily produced by poultry farmers since the first week of February 2023 till date have never been off taken by 20% because of the near absence and lack of the naira notes to buy basic food items and other necessary proteins like eggs and chickens,” the statement read in part.
To this end, the poultry association called for urgent intervention by the federal government to save the industry from imminent collapse.
The association asked the government to make available direct grants and financial support to the industry through the association.
They also appealed to the federal government to mop up the eggs through the association for distribution to the most vulnerable old populations as part of the social investment support to Nigerians.
“Encourage the Armed Forces in various peacekeeping operations, the Nigerian Prisons, the Internally Displaced Persons and primary schools (School Feeding Programme) to be immediate off-takers of the eggs,” PAN stated. .
They also urged the presidency to direct the National Emergency Management Agency (NEMA), the Directorate of Peacekeeping Operations of the Nigeria Armed Forces, and the social investment programme of the ministry of humanitarian affairs and disaster management, to work with the association on how immediate relief can be extended to poultry farmers across the country.
Business A.M gathered that despite the recent directive by the Central Bank of Nigeria which approved the simultaneous usage of both the old and new naira notes, commercial banks are still faced with limited banknotes. As a result, they are forced to apportion the limited banknotes at their disposals, further reflecting the intensity of the cash crunch.
On their part, the poultry farmers are struck with large quantities of eggs which remain unsold for longer periods than expected, while customers’ are unable to purchase the eggs in significant quantities due to the cash crunch which has weighed on demand.
Joshua Onuche, a poultry farmer and founder, Layonder Farm, Nasarawa State,confirmed that the cash scarcity has resulted in low sales of eggs due to the reduction in the number of customers. Onuche, who attributed the low patronage in his poultry business to the limited cash flow, explained that many of his customers only make purchases based on the level of cash in their possession.
Questioned on why he hasn’t been able to maximise the opportunities in digital/online transactions, Onuche explained that such transactions had been riddled with many glitches, hindering smooth transaction flow.
“A lot of digital transactions over here have been poor as some of the mobile apps and related services do not produce the desired results. There are times customers make money transfers which take hours to reflect in the payment account. Other times,they make transfers which are not successful despite being debited and this has caused more harm than good to my business,” he said.
Speaking in the same vein, John Apariola,poultry manager of Oladotun Farms, Ojo,Lagos State,bemoaned the fact that the persistent naira scarcity has dampened profit for most of the producers and traders involved in the sale and distribution of the product. He also stressed that asides, the recent decline in demand, poultry farmers who are the primary producers of eggs still have to contend with the rising cost of production- a double blow for any investor in the sector.
According to Apariola, the cash crunch has subjected many consumers to prioritising their expenditures, which is reflected in the low demand for eggs.
“Considering that many of the final consumers buy eggs in small quantities, paying in cash is the most ideal way such transactions can be made. But in the situation when there is not enough cash, most of them are forced to forfeit buying the eggs, resulting in poor sales for both retailers and producers,” he said.
He further noted that at the present moment, the poultry sector is experiencing what is “egg glut”, a situation where the supply of eggs is higher than the demand.
Nigeria is the largest poultry egg producer in Africa with an annual production of 650 tonnes, according to findings by the Nigerian Institute of Animal Science (NIAS). Though egg production has been a source of income for a significant number of the country’s populace, a poor management practice which has resulted in large disposals of egg shells rather than utilisation/recycling, has seen the industry lose millions of naira in revenue,industry analysts observed. With the cash crisis further worsening the situation, poultry farmers are left with no choice but hope that the situation improves sooner than later.
As Nigerian poultry farmers count their losses from the egg glut, experts assert that it actually presents a reality for the farmers and stakeholders in the sector to consider creating value out of a bleak situation.
Obaloluwa Akintola, managing director at Y2F Farms & Agro-services, Ibadan, Akintola added that the millions of egg shells produced in the country annually serve a number of beneficial applications and resultant value chains, one of which is the production of egg shell powder obtained through the crushing of egg shells into a valuable commodity.
According to Akintola, eggshell powder is a rich source of dietary calcium and various potential ingredients used as an additive in the preparation of foods such as noodles, ice creams, biscuits, doughnuts,cakes and other confectioneries.
He observed that a vast majority of Nigerians and even those engaged in the poultry sector consider egg shells as a waste product, whereas they offer a wealth of opportunities in need of exploitation.
Sharing the same sentiment, Juiiana Ibitoye,the chairperson, Erokorodo Poultry Farm Estate, Ikorodu, Lagos, called on the federal and state governments to set up egg powder production factories in the country.
Ibitoye opined that an egg powder factory would reduce the huge loss recorded in the value chain due to glut.
“Every year, we normally experience glut three times and whenever it happens, it is a huge loss to the farmers. We want the government to assist us either by buying the eggs off from the farmers or find a way of converting the eggs into powder form as done in developed countries,” she said.
According to the chairperson, Nigeria has the market for egg powder and the venture has the capacity to bring development and create more jobs for the youth. She added that the government could also support farmers by buying off eggs during the glut period to reduce the financial burden on them.
“We are still far off in the production of egg powder in the country; there are only about two companies that are into it in Lagos.
“The equipment is very huge and expensive; not everybody can afford it but the government can come in and help us,” she said.