Nigerian Feed and Poultry Industry challenges nias 2009

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A review of challenges in Nigeria's Feed and Poultry Industry, challenges and way forward...

A review of challenges in Nigeria's Feed and Poultry Industry, challenges and way forward...

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  • 1. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009PATRA CONSULTPOULTRY INDUSTRY CHALLENGES: THE WAY OUT 30TH June 2009 By Dr. Babatunde Bello CIO, PATRA CONSULT PATRA CONSULT Reinforcing the power to excel
  • 2. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 Objective To review the trend in the Nigerian Poultry industry. To review challenges of the poultry and feed industry in Nigeria and proffer some solutions. Outline Introduction/Overview of Feed and Livestock Industry Challenges of the Feed Industry The way out Final OutlookPATRA CONSULT Reinforcing the power to excel
  • 3. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 QUOTATION "The economy must improve, the salary must go up. The price of chicken must go down. A days salary will buy about 32 eggs here in Nigeria, while a minimum wage worker in America can buy 50 crates of eggs with a days salary." “….total quantity of feeds produced in South Africa is between eight and 10 million tonnes for a population of 40 million. That is 250 kg of compound feed per capita. In Nigeria , if we say one million tonnes for 100 million people, we have 10 kg of feeds per person. Feed production is low, prices of chicken and eggs are high.“  - Dr. Uzoma Acholonu, a nutritionist and chief executive of Bio- Organics Nutrients System in a recent publication.PATRA CONSULT Reinforcing the power to excel
  • 4. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 HISTORICAL OVERVIEW OF THE FEED AND LIVESTOCK INDUSTRY Two and a half decades of History of Agricultural Spending less than 5% of National Budget. The Livestock sub-sector accounts for about 25% of the Agricultural GDP and 5.83 % of the national GDP. (Min of Agric.). Feed is 70 – 80% of production cost. Commercial Feed milling debuted (the Pfizer story) in Nigeria in 1963 jumpstarting the growth of the poultry industry. Strong collaborations in the early days – Commercial feed millers Association (COFAN), Industrial Feed Millers Association (IFAN), Poultry Association of Nigeria (PAN) has given way to poor Network and poor Collaboration. High cost of production, low purchasing power and fixity in Pastoralist grazing/use of basic ingredients (characterized by Low Productivity) limit growth of the Feed Industry. Raw material trade dominated by Middle men/Speculators who cream all the profit.PATRA CONSULT Reinforcing the power to excel
  • 5. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 HISTORICAL OVERVIEW OF THE FEED AND LIVESTOCK INDUSTRY Cycles of Feedstuffs supply gaps – Protein crisis, Energy Crisis, Micro- nutrient Crisis. 1st Protein crisis -1986/87 and subsequent ones subject of poor planning by stakeholders in the feed business. Nigerian ANIMAL FEED MARKET (commercial and self-mix livestock/poultry/fish feed) is estimated at 1.0M metric tons finished feed equivalent, valued at over =N= 30 billion calculated from average =N= 30,000 per ton for cost of raw materials. (see Table 2) Poultry responsible for 80% of Feed. Subsequently, Feed and Poultry industry growth has been characterized by mixed fortunes in the last two decades. Import Ban protected local industry from undue competition Growth projection: Poultry – 10% annual G, Pig= 5%G, Fish=>100%G, Cattle= Flat to 1% Growth. Informal Feed Market – Use of Basic Ingredients/Subsistent Cattle Feeding is poorly defined. LARGELY UNAVAILABLE. The impact of Raw Materials Research and Development Council (RMRDC) is yet to remarkably felt.PATRA CONSULT Reinforcing the power to excel
  • 6. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 TECHNICAL OVERVIEW OF THE FEED AND LIVESTOCK INDUSTRYTable 1 LIVESTOCK POPULATION ESTIMATES (1991 – 2004)* Cattle Goats Sheep Pigs Poultry Camels Donkeys Fish 1990 13,947,000 34,495,000 22,104,000 3,210,000 72,480,856 88,000 936,000 1991 14,086,470 35,357,375 22,634,496 3,506,400 76,104,899 88,440 931,320 1993 14,369,608 37,147,342 23,733,989 3,835,786 83,505,651 89,327 922,030 1994 14,513,304 38,076,026 24,303,605 3,989,218 88,100,933 89,773 917,420 1995 14,658,437 38,027,926 24,886,892 3,148,786 92,505,980 90,222 912,833 1996 14,805,022 40,003,624 25,484,177 4,314,738 97,181,279 90,673 908,269 ? 1997 14,953,071 41,003,714 26,095,797 4,487,326 101,987,843 91,125 903,728 1998 15,102,600 42,028,806 26,722,096 4,666,817 107,087,235 91,519 899,187 1999 15,253,625 43,079,525 27,363,426 4,853,488 112,441,597 92,036 894,646 2000 15,406,153 44,256,487 28,020,130 5,047,624 105,294,410 92,431 890,237 2001/2 15,560,214 45,260,399 28,692,613 5,249,529 111,856,193 92,956 885,786 2003/4* 15,560,214 45,260,399 28,692,613 5,249,529 121,856,193** 92,956 885,786 ??? Source: Federal Department Livestock and Pest Control Service Departments, Abuja (2002/4) *Up-to-date Estimates for all species not available. **New estimates for poultry Note*: Includes the commercial Stock PATRA CONSULT Reinforcing the power to excel
  • 7. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009SECTORAL/ECONOMIC OVERVIEW OF THE FEED AND LIVESTOCK INDUSTRY ISSUES IN THE LIVESTOCK POPULATION ESTIMATES Are these figures tenable? Commercial Stock Range From 1% – 20% Of Official Population in Table 1. Commercial Poultry Population Estimates Of 30m In 2005, Up From <15m Pre 2000. Significant 5 -10% Decline In Population Early 2006, Due To Avian Influenza (AI). Compensatory >100% growth in Fish business & Fish Feed Local production and importation of commercial Fish Feed has risen from <5000MT in 90s to > 100,000MT in 2007. (Personal Communication). Poultry Industry Now Stabilizing After The AI Shock. Egg Glut persists - Poor marketing activities and occasional “Egg glut” limit growth.PATRA CONSULT Reinforcing the power to excel
  • 8. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 SECTORAL REVIEW – NIGERIAN FEED INDUSTRY ESTIMATE FINISHED FEED EQV. MARKET SHARE 2007/8*Table 2  COMMERCIAL/SELF-MIX FEED MARKET - METRIC TONNES - FFE AVE PER MONTH PER ANNUM SHARE % Top 11,000 130,000 13 ) Vital 8,500 102,000 10.2) LSF 4,000 48,000 4.8) BFFM 4,000 48,000 4.8) Animal Care 4,000 48,000 4.8) Amo Byng 2,500 30,000 3.0) Other Regional Compunders 8,000 96,000 10 ) 50% Toll Millers 25,000 300,000 30 On Farm Self-Mix 16,470 198,000 20 50% _______ ______ ______ Total 83,000 1,000,000 100% Estimate ________ _______ ______ ANNUAL OUTPUT FOR MAJOR COMMERCIAL FEED MILLERS = 400,000 MT FFE NOTE* - Personal Communication - 2008 Survey. *IFAN or COFAN or RMRDC should develop credible database for planning purposes. Source: PC- Desk Research/Market Estimates PATRA CONSULT Reinforcing the power to excel
  • 9. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 SECTORAL REVIEW – NIGERIAN PREMIX SUBSECTOR Table 4 ESTIMATE PREMIX MARKET SHARE 2007/8* AVE OUTPUT/MONTH OUTPUT /ANNUM % SHARE AGRITED 50MT 600 20? BIOORGANICS 3OMT 360 12? ATN 30MT 360 12? HI-NUTRIENT 15MT 180 6? AGRICARE 10MT 120 4? BIMBA, GODOMIX 90MT 1080 38? DARAM, VIVAX, ETC IMPORTED PREMIX 20MT 240 8? TOTAL 245MT 2940MT 100Source: PC- Desk Research/Market EstimatesPATRA CONSULT Reinforcing the power to excel
  • 10. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 COMPARATIVE REVIEW OF THE GLOBAL FEED INDUSTRYTable 3 COMPOUND FEED OUTPUT/PER CAPITA/ PER COUNTRY COUNTRY OUTPUT HUMAN FEED/ (MT)/ANNUM POPULATION CAPITA SOUTH AFRICA 8M 47M 170KG BRAZIL 6M 186M 32KG BRITAIN 9M 61M 147.5KG NIGERIA 1M 148M 6.7KG (UN Estimates) GLOBAL 680M 6.6B Sources: Feed Industry Network, Defra National Statistics, Wikipedia Country by Country Population, Feed International and PCPATRA CONSULT Reinforcing the power to excel
  • 11. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 CHALLENGES OF THE POULTRY/FEED INDUSTRYAverage 500,000MT Maize, 250,000MT of Soya etc currently required by the industryper Annum. Should be increasingly available from figures below. But NO. Why not? Table 5.–Commodity production output ‘000MT Maize Millet Sorghum Cassava Soya 2000/1 8188 5839 8365 28473 345 2005 10369 7394 10593 36057 1547 Source – Extract from CBN Statistical Bulletin ISSUES: ISSUES Suboptimal production. Animals and Humans increase competition for Energy sources/Convectional Feed Ingredients. “Poverty Syndrome”. Maize - Ogi/Akamu, Tuwo, Semovita etc, Soya - Soya Milk, Soya puff, Soya-Iru, Soya-Egusi, Soya meat, Soya-Garri. Population of Nigerian/Global and Poultry continue to grow: requires a minimum of 100% increase in supply in the out years. Current Level not meeting needs. Non-Convectional materials have limitation in Commercial quantity/localized availability. Seasonality = Inconsistency in Availability/Quality Fluctuating / Escalating Raw Material prices - PATRA CONSULT Reinforcing the power to excel
  • 12. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 CHALLENGES OF THE POULTRY/FEED INDUSTRY Regional Export – Brothers’ Keeper? The Tropical/Warm/Moist Climate/Vegetation Aids Infestations/Spoilage of Raw Materials.- Mycotoxin Binders called to action – additional cost. Post harvest losses sometimes run up to 5 -10% of production. Questions?..... Can we secure the supply of 1.0m MT of Maize and 400,000MT of Soya to the Industry in the out years? Can the Industry continue to depend on uncontrolled/poorly managed/ill- motivated grain/cereal farming and ‘rogue’ supply chain? Changes in Global energy structure – Maize for Biofuel and Soya for Biodiesel. International Wheat no longer attractive. How do we cope.? Lack of Subsidy: How do we make local agricultural production and economy more competitive?. Cost of Fund - still high for Agriculture. How do we make cheap funds and the existing Agric-targeted provisions available for real growth?.PATRA CONSULT Reinforcing the power to excel
  • 13. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 CHALLENGES OF THE POULTRY/FEED INDUSTRY Figure 3  CURRENT LENDING RATES:  ARE THEY AGRIC-FRIENDLY?  Minimum Rediscount Rate (MRR) -  Inter-bank -  Commercial Loan -  Agric Loan -  Micro-Credit –  Where do Feed millers fit in.?  FEEDMILLING should be treated as solely agricultural business.President Umaru Yar’adua.  Not Manufacturing!!!.Recently launched another N50B  So also its funding - to bring downAgric Credit Scheme. Favourable cost of animal protein production.to Agriculture? PATRA CONSULT Reinforcing the power to excel
  • 14. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 CHALLENGES OF THE POULTRY/FEED INDUSTRY FACTORS LIMITING GROWTH. Suboptimal Marketing/Conversion of poultry products limit growth. Sales surge limited to Seasonal/festive periods, Recurrent glut, low demand generation, elasticity of demand? – virtually inelastic. Poor funding of marketing functions Low buying power of average Nigerians limit market growth Poor coordination/collaboration among Stakeholders Poor processing and storage facilities Power outage: 20 – 30 % cost adverse. High unit cost of production. Can we overcome the cultural fixity and religious bias limiting cattle and piggery respectively.PATRA CONSULT Reinforcing the power to excel
  • 15. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 CHALLENGES OF THE POULTRY/FEED INDUSTRY MAKING REGULATORY AND HEALTH PROTECTION PROVISIONS WORK  Streamlining and Harmonising the Implementation of S and R in the Feed Industry is pertinent against the background of the following -  NAFDAC provisions give Pharmacists statutory roles for sales, distribution, manufacture and dispensing of Veterinary Pharmaceuticals. Including premixes.  Meat Edict empowers the Veterinary officer for meat health or meat hygiene.  Veterinary Surgeon Decree of 1969  The Animal Disease Control decree of 1988.  Animal Science Practice Law.  Sanitary and Phytosanitary Laws  SON Law  How do we streamline and harmonize for effect?  How do we handle the growing concern for Feed borne or Feed related animal and Human Health issues – Salmonella, Mycotoxins, Pesticides, Chemical Residues, Common Source infections etc.  Poor Record Keeping and Disclosure keeping the Industry planning process down and regulatory bodies ineffective. PATRA CONSULT Reinforcing the power to excel
  • 16. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 THE WAY OUT 1. Central Planning and Collaboration Process  Information System and Database for Planning Purposes  Forced or Self Regulation? – Registration, Monitoring and Standardization. Pursuance of legislative provisions for empowerment and execution of programs.  Strategic planning – Leaving little to chance. Where are we? Where are we going? 2. Advocacy  Influencing policies, Network building.  Third Party Power Negotiation for Reserve Stock Management and Financing. 3. Heavy subsidy and Assisted growth for Maize and Soya Farmers.  Form Farmers into Out-Growers and Cooperatives  Stakeholders to take advantage of Government efforts. Feed-millers to position body as partners to growers.PATRA CONSULT Reinforcing the power to excel
  • 17. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 THE WAY OUT 4. Large Scale Commercialization of grains and Cereals production.  National assembly to promulgate law to Mandate Multinational Coys to invest 5 - 10% of profit directly in Farming.  Oil Companies should invest in Alternative Energy through growing their grains.  Adjustment in Land Law to accommodate large scale farming. 5. Science-Led Cereals Production  Biotechnology assisted growth  Increased research into development and commercial production of Alternative protein and energy sources  A Challenge to RMRDC and other stake holdersPATRA CONSULT Reinforcing the power to excel
  • 18. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 THE WAY OUT 6. Increase Budgetary Allocation to Agriculture, particularly grains and food production.  Revolutionize funding of the Crop Department of FMARD.  i) Production and distribution of 1.72 tonnes of Foundation stocks of Groundnut to 16 groundnut growing States; ii) Production of 9 tonnes of Certified Seeds of Cotton (http://www.ministryofagric.gov.ng/display.php?link=crops)- CAN BE BETTER!!! 7. Setting up of Commodity and Futures Exchange should be considered  By/with Government, to domicile and stabilized global raw material market.  Professional Agric/Egg marketing companies. 8. Material substitution/Alternative Feed Ingredients Development– See Table 4  Heavy investment in research, breed improvement and commercialization.  Sorghum – research for improved variety?  Cassava – Flaking? Pre-Cooking? plus Binders such as oil, molasses?  Cotton Seed - Research for improved variety?  Cellulose Energy derivatives – Product of DRY STATE FERMENTATION of fibers? This is a Clarion call on RMRDC! Stakeholders!! And Government!!!PATRA CONSULT Reinforcing the power to excel
  • 19. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 THE WAY OUT 9. Regulation and Standardization of the Supply Chain and production  Registration of Supply Chain Operators, Quality Standardization and Trade regulation.  Comprehensive Poultry and Feed Industry Sanitation –  1oFocus/Primary Objective - Animal and Human Health/Well-being.  Introduction of HACCP as minimum standard in feed and poultry production  Standardisation and Regulation (S and R) of Feed Inputs and Products by (1). Standard Organisation of Nigeria (SON) –standard & quality of processes, materials and products (2). National Agency for Food, Drug Administration and Control (NAFDAC) - Pharmaceutical additives, premixes and chemicals. (3). Other supervisory bodies.  Feed Manufacturers – Commercial, Toll Mixers, On-Farm Producers  Feed standards and specifications: One Feed Quality Standard for ALL.  Nutritional Labeling, Certificate of analysis, Standardization of processes etc  Accreditation and Certification of Laboratory.  Harmonized efforts.  State and Individual Laboratories must be certified. May raise “Bar” above minimum national standard, but not below.  Culture of Record Keeping and Record Disclosure must be tackled headlong. All farmers and feedmillers must disclose data through standards format. – production records etc.PATRA CONSULT Reinforcing the power to excel
  • 20. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 THE WAY OUT Meeting and supporting regulatory bodies statutory demands/roles and certification processes.  Crop Planting, Harvesting and Storages level – S & S Measures, GMO regulation, Use of Herbicides, Pesticides – Phostoxin tainting of Maize  Feedstuff Production, Distribution, and Marketing – e.g. Affcots, Dalhatus & Middlemen  Feed and Premixes Production, Distribution and Marketing.- All Feed Mills, Distributors Toll mixers dilemma. Major Issues:  Child of circumstance created by cumulative failure of commercial feed-millers and economic pressure. And of course, failure of regulatory bodies.  Unregulated, Quality not guaranteed  Low to Non-existent Good Manufacturing Practices (GMP).  “Common source” factor in spread of epizootics: e.g. Soiled/Contaminated re-used feed bags circulating between farms. Must be compelled to use new bags/ washed, disinfected and dried bags/ bulk delivery systems among other quality process demand. Closing the Self-Mix gap  Control of self-mix to be integrated into the Quality, Health and Safety cycle. No stand alone.  Buy use only certified Raw Materials/Feed Inputs.  SON or NAFDAC or RMRDC’s “Monitoring and Laboratory Certification Program” BENEFITS – S & S Measures, GMO Regulation and HACCP facilitate export market, Protect Animal and Consumers’ Health. PATRA CONSULT Reinforcing the power to excel
  • 21. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 FINAL OUTLOOK The poultry and feed industry will need to encourage the current trend of increased crop production (In spite of the break in Progression) and deploy mechanism to secure stock of ingredients. The poultry industry must increasingly use biotechnology, more scientific formulations, new molecules and natural and herbal products to improve animal productivity. Stakeholders in the poultry and Feed Industry have hitherto left things to chance. The future belongs to those who take their fate in their hands. Revive COFAN!!!. Government and stakeholders must come up with an Agriculture policy on the use of biotechnology and genetically modified organisms (GMOs) to support the feed industry, which is entering a very exciting phase of growth for the 2020 economic and food security target. Increased regulatory activities and greater involvement of professionals and self regulatory will drive the new level of growth. Commercialization and large scale production (IRRIGATED/OFF-SEASON) to tip economy of scale towards lower cost of production would be crucial. More subsidy (to take care of at least 30% cost of production), More agric-friendly credits and Higher Agricultural spending by Government (minimum 15% budgetary allocation to Agriculture) and other stakeholders would be crucial. PATRA CONSULT Reinforcing the power to excel
  • 22. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 My submissionIsee a bright future. A future right in our hands to shape.Thank you. - Dr Babatunde Bello. Patra Consult. Lagos. Nigeria. 08023540401PATRA CONSULT Reinforcing the power to excel
  • 23. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 BIBLIOGRAPHY  Food situation in the Sahel and West Africa - Sahel and West Africa Club (SWAC/OECD) Feb 2007 publication.  Guardian Newspaper 19th Aug. 2007 - by Kayode Oyeleye .  Post-harvest technologies in Nigeria’s Livestock Industry: status, challenges and capacities by Olumide o. TEWE ph.D and Mpoko Bokanga Ph.D. 2001.  Federal Department Livestock and Pest Control Service Departments, Abuja  CBN Statistical Bulletin, Vol 16, Dec 2005.  FEWSNET  FMARD, Crop Department report http://www.ministryofagric.gov.ng/display.php?link=crops  Personal Communication (PC)/Desk Research/Market EstimatesPATRA CONSULT Reinforcing the power to excel
  • 24. NIGERIAN INSTITUTE OF ANIMAL SCIENCE (NIAS) : 30th JUNE 2009 * FINITO! * * QUESTIONS!! QUESTIONS * * * * * * DR BABATUNDE BELLO Managing Consultant PATRA CONSULT 24 LAYIWOLA STREET, NEW OKO-OBA. LAGOS. NIGERIA. 0802-354-0401, 0803-304-2626, 08033201272, 08037163447, 01-4707387, 01-7920621 patraconsult@yahoo.com www.patraconsult.com ON BEHALF OF WAPSA.PATRA CONSULT Reinforcing the power to excel