Gbolade Adewole, coordinator, NatnuPreneur Scheme of AMO Group, the leader in Nigeria’s poultry industry. Adewole tells JOSEPHINE OKOJIE, in this interview that Nigeria can bridge its chicken demand-supply through the guarantee of farmers’ profitability.
Can you give an overview of Nigeria’s chicken market?
From available statistics, Nigeria consumes about 1.5 million tons of chicken annually, but it produces only 30 per cent of that. This is not that we do not have the capacity to produce 100 per cent of what we consume but culturally, imported smuggled have always been used to bridge the gap. The high importation of chicken into the country remains the major issue the industry is facing, and the impact cut across the entire value chain.
The opportunities in the broiler market are massive; all we need to do is to take a closer look at the value chain. Take, for example, the Feed Mills; if we are allowed to produce the 1.5 million tons of chickens consumed locally, the feed mills will have to supply about N700 billion worth of feeds, the hatchery N145 billion worth of day-old chicks (DOCs) and drugs and vaccines worth about N45 – N55 billion. The numbers I have given you – put together – is about N900 billion. And that is just on the input side of the business. 70 per cent of that money is not allowed to be made in our system due to imported chickens blocking the flow. Ideally, Nigeria has enough poultry farmers who are ready to breed broilers; they have space and the farm, but because of this constraint, they are unwilling to fully exploit that market.
In terms of figures, how much is Nigeria losing to imported poultry products?
We consume 1.5 million MT of chicken. That means 1.5 billion kilograms of chicken. The average dressed chicken weighs 1.4kg, so that gives us 1,071,428,000 birds consumed annually. Give or take, 20 per cent to 25 per cent, depending on whose statistics you are looking at. So, revenue to input suppliers alone will be about N900 billion if we were producing 100 per cent of what we consume. Since we are producing 30 per cent of N900 billion, that means we are losing N600 billion just on the input side of the business alone.
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In terms of revenue, how many farmers do we need to rear 1.5 million metric tons of chicken?
If we assume, for argument’s sake, that an average capacity farm supplies twenty thousand birds every circle – which is about 100,000 birds a year at 5 cycles per annum – if you divide 1,071,428,000 birds by a 100,000 that is approximately 11,000 broiler farms. These numbers are taken from a pessimistic perspective, given that the average Nigerian broiler farmer, based on our scheme, does about 5000 birds per cycle. That is approximately 25,000 birds per annum. On inputs alone, I easily calculated N900 billion.
Take another example – transportation – the movement of Day-old Chicks, Feed, and Live birds back to the processing plants. The average cost of transportation in a cycle is 6.9 per cent of the total cost of production, if we add the other nodes in the value chain, in terms of percentage, we get a revenue of about N1.3 trillion swirling around in this value chain. But, alas, we are doing the only 30percent of this. Thus, the revenue we are generating for the players in this broiler sub-segment of the poultry business is only about N430 billion. That is still minuscule compared to what we can do as a country. This is where we have a problem.
How can Nigeria bridge its supply and demand gap in local production?
The goal is to focus, as we have done on farmer profitability through the NatnuPreneur scheme, at AMO farms. As long as we can work out how the average broiler farmer can make and increase his profit, year by year, then we can be sure that the product will grow to fill this 70 per cent gap created by the importation of ‘cadaver chickens’.
The core focus on farmer profitability is the main building block of the natnuPreneur scheme. Based on the research we undertook at inception, it was discovered that a substantial number of broiler operations of various sizes around the country had failed. So, it was in a bid to unravel and solve the causes of these farm failures that we designed our system.
One of the major discoveries that have turned out to be our driving force is that the smallest unit in the whole value chain is the farmer. The farmer must be profitable for the scheme to be successful. So, when we did all that designing, experimenting, training extension officers, process optimization etc., we realized that farmer profitability was the key. To ensure that this happens consistently, we focused on getting our trained extension officers to enlighten them on the reasons why their farms should not fail and how they can ensure they make profit consistently.
How can the government deal with the rising cost of poultry feeds?
When you look at other countries that have done well in this regard, they have a way of encouraging farmers especially their crop farmers through a subsidy model. Farmers rear their crops and government buys at a price that is profitable to the farmers and then subsidizes. If the government can use this model in crop production, it will encourage the farmers and commercial institutions will be willing to give loans because there is a ready market. What this will do in the long run is that there will be a reduction in the cost of broiler production, as the price of feed will come down automatically, which will lead to a decline in the price of chicken sold to the consumer, thereby making the prices more competitive against the cheap low-quality chicken being smuggled into the country. As we all know, low prices are what drives the consumption of such unhygienic products.
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How successful has been the Anchor Borrowers’ Programme with NatnuPreneur?
What they have done is extensive because we rolled out our pilots at two poultry estates in Lagos state. Now we are about to launch a list of over 1,000 broiler farmers who are prepared to join the scheme across all geo-political zones outside the north-east. Thus, CBN is doing a lot for poultry just like they are doing for rice.
There are about 1,000 farmers who are prepared to breed a minimum of about 2,000 birds each. This will produce 1.96 million birds per cycle and they are ready because the funds are available. The farmers have gathered themselves together and they are running it through both CBN and NIRSAL. Apart from our own team, NIRSAL has also appointed project management teams across the whole country. The programme has been very successful and profitability has been very reasonable for our farmers. Another thing we need to address is that some of these farmers are just getting on board after many years of abandoning their farms so it’s taking the time to understand best practices. The CBN approached us because of the success we have recorded with the NatnuPreneur programme. So far, the Anchor Borrowers Programme (ABP) with NatnuPreneur scheme has been very successful.
Avian Influenza has been a reoccurring incident in poultry farming for some years now. What can be done to prevent recurrence?
We cannot stop the disease from occurring because it is a bird migration-related issue. However, what farmers can do is to have very sound biosecurity practices. Once that is done, the chances of the disease occurring on their farms will be minimal.
