Friday, November 27, 2020 2:30 pm
* Experts warn against further job losses
Poultry farm stakeholders, under the aegis of Poultry Association of Nigeria (PAN), have decried millions of job losses in the industry and appealed for the quick intervention of the Federal Government and the Central Bank of Nigeria in the interest of Nigerians.
They said the prices of maize and soya beans, which are major components of animal feeds, had remained at the rooftops as a result of scarcity of the products, which posed further existential threats to thousands of poultry farms across the country and hundreds of thousands of their employees.
Earlier in July, the apex bank had through a memo directed all authorized maize/corn dealers “to discontinue the processing of Form M for the importation of maize/corn with immediate effect,” as part of the effort “to increase local production, stimulate a rapid economic recovery, safeguard rural livelihoods and increase job, which were lost as a result of the ongoing Covid-19 pandemic.”
But the decision led to astronomical rise in the price of maize, which reportedly drove thousands of small and medium holding poultry farmers with millions of their direct and indirect employees out of business. The CBN relaxed the policy once in September by allowing importation of 262,000 tons of maize in addition to the 5,000 tons released by the Federal Government, which experts described as a drop in the ocean.
In a press statement signed by Mrs Blessing Alawode, chairman, Poultry Association of Nigeria, Ogun State chapter, the stakeholders passionately appealed to the Federal Government for immediate ban on the export of processed soya beans and intervention to end the acute shortage of maize with its exorbitant price, occasioned by poor harvest and insecurity in parts of the country, where the product is largely produced.
“Poultry industry, estimated at ten trillion naira (N10 trillion), is the most capitalised in the agric sector. Such an industry employing about 20 millions directly and indirectly through its wide value chain must not be allowed to completely collapse. With the current astronomical prices of soya beans and maize, more poultry farmers with thousands of their workers across the country may soon be out of business as majority of Nigerians cannot afford the inevitable but exorbitant cost of poultry products. Over two millions of direct and indirect poultry farm businesses have closed down in the last five months as a result of acute shortage of maize and rising price of soya beans,” said the press statement.
The price of soya beans, which is a constituent of poultry feeds, has increased by 90 per cent. In comparison with the same period in 2019, the price of maize has increased by 80 per cent. Poultry feeds have increased by nearly 100 per cent. The profiteering tendencies of grain merchants need to be curbed by the Federal Government
It further explained that local production of maize and soya beans had never been able to meet the rapidly increasing demand and would not be in a position to do so in the nearest years to come due to many restraining factors.
“For the avoidance of any doubt, the Ogun State chapter of Poultry Association of Nigeria stands by President Muhammadu Buhari and is on the same page with the CBN on the need for self-sufficiency in food production in Nigeria. As a matter of fact, we want the Federal Government to assist the local maize growers with high-yielding seeds and fertilizer in order to increase their quantum of harvest per hectare, so that in the next seven to ten years, the huge gap between demand and supply of maize and soya beans can be filled. But the citizens have to survive and have food to eat before we reach the desired destination. Our appeal to CBN stems from the prohibitive costs of maize and soya beans. Poultry feeds have increased by nearly 100 per cent. The price of Soya beans has increased by 90 per cent, while maize in comparison with the same period in 2019 has increased by 80 per cent. Poultry farms cannot survive the current situation. Therefore, importation of maize and soya beans, in the short term, is the most pragmatic way to obviate further rising prices of the products and ameliorate the hardships of the citizens. We appeal to the government to ban the export of processed soya beans and Soya bean Meal, and check the profiteering activities of grain merchants,” concluded the statement.
The simple truth is that currently, we have millions of metric tons deficit in maize supply. The yearly demand for maize is about 17 million metric tons while local production is about 10 million metric tons
In a related development, a Lagos-based socio-economic researcher and policy analyst, Dr Clement Essien, had in reaction to the CBN ban in July, cavilled at the decision of the Central Bank of Nigeria to suspend maize or corn importation. According to Essien, “The simple truth is that currently, we have millions of metric tons deficit in maize supply. There is serious scarcity of maize in the market and its price is also prohibitive. Maize is a significant constituent of animal feeds. The scarcity poses a threat to poultry farms and thousands of their employees. The yearly demand for maize is about 17 million metric tons while local production is about 10 million metric tons. In the last two years, the country imported about a half a million metric tons of corn. That was when there was no pandemic. Currently, you have massive floods devastating farmlands. Except you want to further pauperize the people, the shortfall for this year and the next will likely double the previous years. Local production cannot meet the huge demand. Not even in the foreseeable future due to many inhibiting factors. ”
Essien posited that, “The argument by the apex bank is based on a false premise. Where there is obvious and yawning gulf between capacity of local farmers and huge demand by the population, no welfarist government will engage in outright ban on importation. As it stands today, the jobs of maize growers are not in any way threatened because they cannot even meet the huge local demand for maize. Yet the shortage of maize and its exorbitant price have put on the line the jobs of hundreds of thousands of poultry farm workers.”
According to Dr Ikechukwu Kelikume, the Programmed Director of the Lagos Business School Agribusiness Programme, the July directive by the CBN was “ill-timed”, with potential harmful consequences for the poultry sector.
“The situation spells doom for poultry farmers across the country, who are beginning to cut down on production because of the high cost of feed and imported medication for the birds. A negative spill-over effect of the high cost of feed is the scarcity of eggs and a consequent rise in its price across the country. The implications of the current challenges in the maize value chain are that the gains of employing more people in the agricultural sector will be rolled back in the coming months,” he said.
Kelikume further explained, “As it stands, there is no alternative for the poultry farmers, as the poultry sector will face a catastrophic shortage of feeds, a critical input in their business. This situation will render tens of thousands of them unemployed and undo all the gains made by this sector in the past five years. Thousands of poultry businesses will shut down in the face of high operating costs, leaving business owners and their employees without a means of livelihood. As a matter of necessity, the CBN’s decision to discontinue the processing of Form M for the importation of maize/corn must be revisited. It is expedient at this time for the Central Bank to allow importers of maize to import it through the CBN Foreign exchange window, to close the gap in maize shortage while preparing for a phased discontinuation of maize importation in the country.”
The jobs of maize and soya beans growers are not in any way threatened because they cannot even meet the huge local demand for the products. Yet their exorbitant prices have put on the line the jobs of hundreds of thousands of poultry farm workers
For his part, an economist and retired university don, Dr Yusuf Umar, described the CBN’s directive as “ill-conceived.” According to him, “I’m not sure the CBN governor was fully briefed on this policy. He’s quite an intelligent public servant. He knows President Muhammadu Buhari is passionate about employment creation and would not countenance a policy that will result in thousands of job losses across the country, which the acute scarcity of maize, now and soya beans and exorbitant prices will impose on poultry farms. At best, the ban on the cereal can only benefit political farmers who sneak into the system at a time like this, make maximum profit and then sneak out. The majority of local farmers do not have access to the high-yielding cereals for planting, which are not even available in the country. Hence the yield per hectare of plantation is so meager. In the midst of this, you have the flash floods and insecurity. The CBN should be realistic. Asking for a ban on a product that is so scarce in the market leading to unaffordable price in order to encourage local production will hurt the economy, especially when it is obvious the local production cannot bridge the gap while thousands of jobs are at the same time put at risk by the ban. ”
“The supply of dry maize in the market is at its lowest in recent years. The price of soya beans continues to sky rocket. Government is not in a position to subsidize the price of maize and soya beans. The CBN governor should support the welfarist policy of the Buhari administration by crashing the exorbitant prices of maize and soya beans through controlled importation of the products or granting of waivers. And that should be done now. The apex bank should be impressed upon to make foreign exchange available for grain merchants. As we enter another recession, we cannot afford to further wipe off thousands of poultry farms across the country with millions of their direct and indirect value chain workers in the hope of a possible increase in local production of grains at an indeterminable future,” Umar submitted.