Glut In Egg Production Triggers Call For Industrialisation, Value Chain Creation
• As PAN, scientists proffer solutions
Femi Ibirogba aggregates views of farmers, scientists and entrepreneurs in the poultry industry on the way out of low demand for eggs, industrialisation of the product and other issues around value chain development.
Farmers and input producers in the poultry industry have called on the government, investors and industrialists to save the sector that employs over 25 per cent of the total farm workforce in Nigeria from total collapse.Nigeria is one of the biggest producers of eggs, with an annual production of about 10.3 billion units, the Poultry Association of Nigeria (PAN) has revealed, but the sector is crisis-ridden due to challenges revolving around poor value chain development.
They listed, in an exclusive with The Guardian, egg glut as the most devastating challenge facing the poultry sector.Factors responsible for recurrent egg glut cycles include school holidays, poor purchasing power of Nigerians, lack of preservative technologies, and patronage of imported egg powder by confectionery giants, among others.
In April this year, the Standards Organisation of Nigeria (SON) had advised poultry industry operators to consider and invest in production of egg powder as one of the ways out of challenge.Production of egg powder requires huge capital on equipment that process eggs to powdery substances used in confectioneries. However, Director-General of SON, Mr Osita Aboloma had said egg remained an important food nutrient for consumers across the country. The SON boss also gave a glimpse of the effect on the country’s foreign exchange reserves, saying resources that could have been saved and used for developmental purposes if the country could produce egg powder were being squandered on importation.
Egg powder is included in the production of bread, cakes, biscuits, noodles and ice-cream, and doughnuts, apart from other domestic uses. However, Nigeria can boast of only one egg powder facility.Also, Mr. Emmanuel Iregbeyen, Chief Executive Officer of Emiraz Farms, has said lack of adequate poultry preservation technology has created a gap between demand and supply. He said eggs also become scarce occasionally, forcing price up. This, he said, happens once in a blue moon, while glut is a usual threat. Egg glut occurs in a period when eggs are surplus or in abundance with low purchase or demand.
Increase in the cost of poultry feeds, poor returns on investment, and lack of preservation technology were some of the challenges facing local poultry farmers.“Poultry farming is highly capital intensive and farmers do not have much access to funds. In practical terms, the cost of raw materials and poultry feed is on the increase. We are in a period of egg glut, a time where we have so much of our product and no market for them,” he said.
Causes of egg gluts
PAN Chairman in Oyo State, Mr. Banji Akanji, said to combat egg gluts and losses recorded by farmers, consumption pattern has to change through advocacy and awareness about the benefits of egg consumption.“In developed nations, a person consumes an average of 485 eggs per annum, but in Nigeria, some people take 10 eggs in a year. We do not eat enough eggs,” Akanji said.
He attributed the low consumption of eggs to very low per capita income, fuelling poverty and poor eating patterns.Former PAN Chairman in Oyo State, Mr. John Olateru, attributed the glut in the last two years to failure of the confectionery companies to patronise fresh local eggs for their industrial usage. He said the big players opted for imported egg powder while they had machines to convert fresh eggs for their use, leaving the local farmers stranded and the poultry sector stressed.He accused them of using importation to take the foreign reserves abroad, dehydrating the local economy in the process. Iregbeyen agreed with Akanji that “We are still at a level where we are yet to have factories that can turn poultry products into other uses like egg powder. We are lagging behind in preserving our poultry produce.
Effects on economy
NIGERIA’S inability to process eggs into egg powder costs it a minimum of a $2 billion yearly, according PAN, Oyo State chapter. Olateru said if they are forced to use locally produced eggs, egg production will be stimulated, more jobs will be created locally, eggs will become more affordable to all, and malnutrition and health burdens of Nigeria would reduce. More investors would, he added, take interest in producing egg powder locally if the market is guaranteed.
The commercial poultry investor said as of now, farmers are trapped in a challenge where they neither have control over the cost of production nor the price of their produce, describing the situation as discouraging to farmers. He added that confectionery giants such as Cadbury Nigeria and Nestlé Nigeria, among others, should make it a deliberate policy to source local contents as materials for their production.
“If the government policy harps on local content of eggs, they do have a choice but to buy from farmers, and if egg powder machines are available, more jobs will be created and the economy will go on well,” he said.Jobs, the poultry farmers and scientists said, are lost as farms close poultry operations due to high cost of production and low demand. Low demand, they argue, emanates from the recent economic recession, the attendant loss of jobs, and poor disposable incomes of households.
Establishment of egg powder facilities
ON conversion to powder, PAN National President, Mr Ezekiel Ibrahim Mam, said the association supports establishment of value chain development in the sector, saying it would revolutionise production in the country.He said PAN was in Ondo and Ogun states to attend the foundation laying ceremonies of egg powder facilities being put in place by the states.
Akanji, a chick and egg producer in Awe, Oyo State, said if salaries of workers were paid as at when due, they would consume balance diet, including eggs, and this would lubricate the economy. Egg powder production, Akanji admitted, is a big project that could be an effective solution to the recurrent challenge. He advocated government investments in egg powder machines, just as it does in the rice production sub-sector.
On the market for the egg powder, Akanji said about $2 billion worth of egg powder is imported to Nigeria annually, describing the market as having great potentialities. Supporting Akanji on the way forward, Olateru said the government should place restrictions on importation of egg powder by extremely high tariffs as a disincentive to the firms.Olateru also said the government had the resources to invest or facilitate investments into the egg powder production, as it was facilitating rice mills for states.
Corroborating the points made by others on the way forward, Iregbeyen said egg glut was seasonal and adequate preservation techniques would cut the losses of the local farmer and earn him export income.“Between April and October, most local poultry farmers face the challenge of glut, we have issues with sales and even as I speak, egg price is falling.”He noted that if Nigeria could process and preserve eggs, it would then export to neighbouring countries, resulting in an increase in demand.He also called for more egg processing plants in the country to ease the seasonal problem of egg gluts.
Chairman of PAN in Kwara State, Mr Oladapo Robinson, while suggesting ways forward, pitched his tent with others’, saying that PAN as a professional organisation of poultry farmers is not in a position to acquire machinery to produce egg powder, but the government could assist in facilitating resources for individuals or groups within the association that are interested in doing the business of egg processing into powder.He affirmed that imported egg powder amounts to job and profit losses at home, saying huge quantity of the powder is imported annually.And since the giants are using the product, Robinson added, it would be easier to prevent smuggling if the policy to support local content is enforced in this direction.
Institutionalising egg powder inclusion into flour.
Some stakeholders have also called for institutional approach to tackling the problem, advocating a strategic policy to include egg powder in locally made brands of flour.
As about 20% percent of cassava flour is mandatorily included in wheat flour, so it can apply to egg powder in flour. This, they claim, would have industrialization effect on the economy by stimulating not only production of more eggs but also investments in machinery to process raw eggs into powder. This will, in turn, lead to additional job creation in the poultry industry.
Dr Ademola Raji, former provost of the Federal College of Animal Health and Production Technology, who doubled as former Director of Livestock, Federal Ministry of Agriculture, supported the idea of flour fortification with eggs, saying it would bring a revolution of industrialisation in the sector as it has done to the cassava production.He also advocated government intervention in term of subsidisation that would make the government buy eggs if there is low demand. When there is a guaranteed minimum price, the farmer would not lose, he said.
Most of the confectionery makers use raw eggs in the informal sector, he added, but they could also use egg powder if it is readily available. “This would support egg powder production and packaging, and from this point we can think of exporting the excess,” Dr Raji said.The former director supported the idea of buying machines to the poultry association in a public-private-partnership arrangement.
Up-taking approach for school feeding schemes
EGG glut is common around July to September when schools go on long vacation, suggesting that the number of eggs consumed by school children is high. Nutritional requirements of children also support regular intake of eggs by this age bracket.And the school feeding programmes of the present government, if implemented honestly and sustained, could mop up eggs produced in Nigeria and help in revving up local production. This, it is argued, could catalyze the production of eggs, build a robust poultry sector, and create and sustain jobs.
Mam, while speaking with The Guardian, said with more states embracing the school feeding scheme, up-taking of eggs would be on the increase and local production of eggs might not be enough. This in turn, he added, would encourage more intensive production of poultry.He said Kaduna, Plateau, Kano and Yobe states had started school feeding, and eggs is part of the meals. This has boosted sale of eggs in those states.
The PAN national leader encouraged farmers who had not joined the association to do so to maximize the advantage of corporate marketing and sale.Robinson, Kwara PAN leader, also said school feeding project that had not been implemented in Kwara State had contributed to low demand in the state, urging the state government to commence school feeding in the next academic session.
Using all available means to stimulate more intensive poultry production through industrialization of egg is not on economically expedient, but also socially reasonable in terms of positive attendants of reducing foreign reserve burden on Nigeria, employment creation with intensive poultry production, poultry farming households’ improved income and nutritional benefits of making eggs available to the public.