Poultry production challenges, potentials and way forward pan-lagos 2011

EKO POULTRY SHOW- POULTRY ASSOCIATION OF NIGERIA (PAN) LAGOS: 26th OCT. 2011

POULTRY POTENTIALS
FOR
NATIONAL AGRICULTURAL REVOLUTION

26th Oct 2011
By
Dr. Babatunde Bello
CIO, PATRA CONSULT

PATRA CONSULT Reinforcing the power to excel


Objective
 To review current trend in the Nigerian Poultry industry.
 To enumerate ways for making the Poultry Industry a cornerstone of
National Agricultural Revolution.

Outline
 Historical Overview/Current Trend/Facts
 Challenges of the Poultry Industry

 The way Forward.

 Final Outlook



HISTORICAL OVERVIEW & CURRENT TREND /FACTS

 Agricultural Spending of 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.).
 Poultry has the greatest potential for growth - Growth projection:
Poultry – 10% annual G, Pig= 5%G, Fish=>100%G, Cattle=
Flat to 1% Growth.
 High cost of production, financing and low buying power slowing
growth.
 Demand for animal protein and by extension Eggs/poultry meat
will continue to increase.
 Research favors poultry production over beef/cattle production to
meet global protein needs (By economical, environmental and
logistic etc considerations).



HISTORICAL OVERVIEW & CURRENT TREND /FACTS

 The impacts of Poultry Research (e.g the moribond Shika Breed)
and Raw Material Research and Development Council
(RMRDC) is yet to be remarkably felt.
 Import Ban protected local industry from undue competition.
 Poor data/statistics culture stalls effective national planning.
 Commercial poultry population Estimates stands at 40 million.
 Per caput consumption of eggs in Nigeria is abysmally low.

 Egg Glut persists - Poor marketing activities and occasional
“Egg glut” limit growth.



GLOBAL EGG TOP 5 IN NUMBERS
 CHINA – 472.6 Billion
PRODUCTION  USA - 90.4 Billion
 INDIA - 57.8 (60.0) Billion

 MEXICO – 46.7 Billions

 INDONESIA- 23.5 Billions

COMPARATIVE INDICES- NIGERIA/INDIA
NIGERIA INDIA
 HUMAN POPULATION 155 1210 Millions
 LAYERS 40 200 Millions
 EGGS 9,600 60,000 Millions
 EGGS/CAPITA 61 50
 RECOMMENDED 180 180
 FEED PRICES /MT #75000(185%) #40500
 EGG PRICE FARM GATE #600 (266%) #225/crate of 30.
 EGG PRICE –CONSUMER #750 #275



AFRICA EGG /MEAT PRODUCTION – 2008 FAO SOURCE

EGG PRODUCTION MEAT PRODUCTION
QTY QTY ps
COUNTRY ( tonnes) RANK eggs hens COUNTRY ( Tonnes) RANK birds females

NIGERIA 552,800 1 9213.3 38.4 S.A 974,150 1 487.1 3.9

S.A 485,250 2 8087.5 33.7 EGYPT 559,500 2 279.8 2.2

EGYPT 240,000 3 4000.0 16.7 MOROCCO 440,000 3 220.0 1.8

MOROCCO 195,000 4 3250.0 13.5 ALGERIA 253,000 4 126.5 1.0

ALGERIA 190,000 5 3166.7 13.2 NIGERIA 243,250 5 121.6 1.0

TUNISIA 89,000 6 1483.3 6.2 TUNISIA 102,500 6 51.3 0.4

KENYA 69,000 7 1150.0 4.8 LIBYA 100,000 7 50.0 0.4

LIBYA 60,000 8 1000.0 4.2 ETHIOPIA 46,240 8 23.1 0.2

BURKINA FASO 48,650 9 810.8 3.4 TANZANIA 45,700 9 22.9 0.2

SUDAN 47,000 10 783.3 3.3 MAURITIUS 42,200 10 21.1 0.2



COMPARATIVE REVIEW OF THE GLOBAL INDUSTRY

Table 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 7.0B (End of
Oct. 2011)
Sources: Feed Industry Network, Defra National Statistics, Wikipedia Country by Country
Population, Feed International and PC



CHALLENGES OF THE POULTRY INDUSTRY
1. RAW MATERIAL LIMITATION: Average 500,000MT Maize, 250,000MT of Soya etc
currently required by the industry per Annum. Should be increasingly available from
figures below. But NO. Why not?
Table.–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:
 Suboptimal production with future requirement increasing exponentially.
 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 -



 2.LACK OF NATIONAL POLICY ON POULTRY:
 Narrow and inefficient focus
 Poultry deserve same public executive Species focus as Fish, Cassava etc.
 Can the Industry continue to depend on uncontrolled/poorly managed/ill-
motivated grain/cereal farming and ‘rogue’ supply chain?
 Lack of Subsidy
 3.CHANGES IN GLOBAL ENERGY STRUCTURE – Maize for
Biofuel and Soya for Biodiesel. International Wheat no longer
attractive. How do we cope.?
 4.COST OF FUND/INADEQUATE FUNDING – Lending rate must be
below 8-10% for Agriculture. How do we make cheap funds and the
existing Agric-targeted provisions available for real growth?.




 4. ECONOMIC CHALLENGES 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.
 Increased Cost of Production ANTICIPATED.
 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.



 5. POOR WORKABILITY AND IMPLEMENTATION OF REGULATORY AND FOOD
SAFETY PROVISIONS
 Streamlining and Harmonising the Implementation Standards in the Poultry 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 which is keeping the Industry planning process
down and regulatory bodies ineffective.


THE WAY FORWARD
 1. Central Planning and Collaborative Process
 “Failure to plan is planning to fail”- Brian Tracy
 All Poultry stakeholders must teamwork more intensely!
 Information System and Database for Planning Purposes
 Develop a National Strategic Poultry Plan and sell it to the Federal
Govenmnent or go ahead to implement on self regulated private Industry
basis. Strategic planning leaves little to chance. Where are we? Where are
we going?
 2. Strong Advocacy Policy
 Budget fund/plan for Influencing policies, Network building.
 Third Party Power Negotiation for Reserve Grain Stock Management and
Poultry Financing.
 3. SecureHeavy subsidy for contract maize and soya
production targeted for Poultry Industry.
 PAN to form maize farmers into Out-Growers and Cooperatives
 Stakeholders to take advantage of Government efforts. Feed-millers to
position body as partners to growers.


THE WAY FORWARD
 4.
Large Scale Funding and
Commercialization of production.
 National assembly to promulgate law to Mandate Banks,
Oil, GSM and Multinational Companies to invest 5 - 10%
of profit directly in Farming.
 Agricultural Financial (At less than 8%lending rate) should
be more robust to target reducing unemployment.
 Adjustment in Land Law to accommodate large scale
farming estates and protect Urban/Residential
Encroachment.
 5.
Private sector led and scientific research
driven local poultry breed.
 Government to establish a poultry development research
institute which is to work with PAN’s research unit to
coordinate a strategic objective of indigenizing our local
poultry breed as is being done in India.


THE WAY FORWARD
 6. Increase Budgetary Allocation to Agriculture
 Revolutionize funding of the Agric. Sector, up to 10% of budgetary allocation,
and by extension the commercial Poultry.
 7.
Setting up of Agricultural Commodity and Futures
Exchange Commission.
 Internalizes and liberalizes Agric. Commodity trading
 By/with Government, to domicile and stabilized global raw material market.
 Professional Agric/Egg marketing companies.
 8. Regulation and Standardization of Poultry Production for export drive
 Adoption of Standard Operating Procedure (SOP), Quality Standardization and Trade
Regulation, Good Agricultural Practices (GAP) and Inter-farm distances/location and
National/local Standards on Animal Disease Control.
 Food safety and 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.
 Improved the culture of Record Keeping and Record Disclosure must be tackled
headlong. All farmers and feedmillers must disclose data through standards format.


THE WAY FORWARD
 9. NATIONAL POULTRY DEVELOPMENT LAW
 PAN National (and possibly at state levels) should craft a
bill covering the pertinent issues to be presented to the
National Assembly.
 Self-Regulatory issues, registration, development and
surcharging of each stakeholder to fund marketing,
research, advocacy (etc) are expected to be captured in the
LAW.
 10. MARKETING:
 Blow your trumpet,
 Nobody will blow it for you.



FINAL OUTLOOK
 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. Rejuvenate PAN National,
regional, state and local networks, NOW!!!.
 Government and stakeholders must come up with an Agriculture policy on poultry
industry.
 A clear-cut policy position is required 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.
 The poultry industry must increasingly use biotechnology, more scientific
formulations, new molecules and natural and herbal products to improve animal
productivity.
 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 10% budgetary
allocation to Agriculture) and other stakeholders would be crucial.
 Government should forge closer working relationship with PAN and the private
sector to move the Industry forward.



My submission

Isee a bright future.
A future right in our hands to shape.

THANK YOU.
 Dr Babatunde Bello.
 Principal Consultant
 Patra Consult (Subsidiary of BB PATRA ASSOCIATES
LTD), 24 Olayiwola Street, New Oko-Oba. Lagos. Nigeria.
Phone: 08023540401. E-mail: bellob@patraconsult.com
 26th Oct 2011 at EKO POULTRY SHOW


BIBLIOGRAPHY

 Dr Kotaiah – India
 Dr Anand – Amo farm sieberer Hatchery Nig. Ltd

 Food situation in the Sahel and West Africa - Sahel and West Africa Club
(SWAC/OECD) Feb 2007 publication.
 CBN Statistical Bulletin, Vol 16, Dec 2005.

 FAO

 FEWSNET

 FMARD, Crop Department report
http://www.ministryofagric.gov.ng/display.php?link=crops
 Personal Communication (PC)/Desk Research/Market Estimates


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