Multinational firm bankrupts local poultry farmers - Report

Local poultry farmers are facing stiff competition posed by the sudden entrance of a multinational agro-giant into production of eggs and chicken, investigations have shown.

Poultry farmers, especially in the North, said they are threatened by the alleged entrance of Olam’s poultry feed mills and hatchery farms in Kaduna into production of eggs and chicken.

The N30bn Olam poultry feed mills and hatchery farms in Kaduna was commissioned in 2017 by President Muhammadu Buhari primarily to produce poultry feeds and chicks for local poultry farmers.

Prior to the commissioning, poultry farmers had expressed concern that the agro-giant would go into full chicken farming, which could force them out of business.

According to a document on Olam challenge seen by this newspaper, local poultry farmers feared that for the agro-giant company owning the Kaduna Breeder and Hatchery Company with a capacity higher than the prevailing total production in Nigeria and the Feed Mill, their complete monopoly is assured. “With such ownership, the entire supply of Day Old Chicks, Poultry Feed in the North is controlled by them while local hatcheries and feed mills currently operating in the region will face extinction,” local farmers said in the document.

According to the document, the Poultry Layer Farms proposed by Olam, with the objectives of becoming the largest egg producer in West Africa, would force out local producers in the north even though the zone has nearly reached self-reliant status in egg production.

Experts also expressed views then that it is a rare phenomenon for a country to have foreign investors in egg production. The farmers had expressed worry that foreign investment was not good in a sector in which the region is becoming self-reliant.

“The north could soon transform to a region having only Olam as the predominant producer and supplier of all poultry products including eggs,” the farmers said in the document.

But Olam’s management had then assured the farmers that they would only limit their scope to feed and chick production.

“How can we be in competition with our customers? We will only produce and sell feeds as well as Day-Old-Chicks for the local poultry farmers,” Mr Vinod Mishra, Olam’s General Manager Animal Feeds, had told journalists while responding to question on the fears being entertained then by local poultry farmers. However, poultry farmers are now alleging that Olam has swung into full production of chickens contrary to the assurances it gave them.

Aside that, the agro-giant is said to be hiring poultry farms, where it negotiates with the owners by giving them certain number of chicks. They will also provide feeds, medication and other expertise for such farms. However, during harvest Olam will collect the birds and deliver them to the markets. They will sell them and then give the farmer some money for this trouble, a poultry farmer in Kaduna, Mr Muhammad Musa said.

The company is alleged to be planning to hire one of the biggest poultry farms in the north and also open another farm in Panda, which will give them dominance in the entire poultry sector in the zone. “What this means is that the farmer is tactically chased out of business because even if he grows the same chicken, he cannot compete with Olam,” Musa said.

Musa added that poultry farmers are now at the receiving end because the agro-giant was crashing prices of chickens and eggs in the market, adding that no indigenous poultry farmer can compete with them.

“For example, a chicken you reared at the cost of N1000, Olam will sell the same size of bird at N800 or less in the market because they have economic advantage.” Another farmer, Mr Joseph Auta noted that Olam was going to make it a lot harder for poultry farmers to survive in the poultry given their financial muscle and the already wounded economy in which consumption of poultry products is dropping.

“If they [Olam] go into full production, they will dominate the market in a way that will create huge imbalance or gap between them and other smallholder farmers because they can afford to sell their products cheaper,” he said.

In a telephone interview, chairman of poultry farmers in Kaduna State, Mr Timothy Okunade, said the allegation against Olam farm competing with small scale poultry farmers in farming and selling chickens in the market was true and that the action was sending poultry farmers out of business.

Okunade said, “We as an association have confronted the company on two occasions, although they denied it but the truth of the matter is that poultry farmers are currently battling to survive the Olam farm challenge because some are already abandoning the business.” Okunade said Olam visits poultry farms, studies their facilities and gives them birds, feeds and medication, adding that at maturation, the company returns and collects the mature birds and give the farmers something for helping in rearing the birds.

“The Olam issue is a very big challenge to poultry farmers in the state; it is just like a powerful man coming to your house and deciding to take what belongs to you and you look helpless because you don’t have the strength to challenge him.”

Another farmer, Mr Danladi Ibrahim, said Olam farm is gradually pushing to take-over the entire poultry business right from the farming and selling of chicken and eggs in Kaduna and if care is not taken, the entire North. Ibrahim said the company was using its resources to manipulate the market and that soon many poultry farmers would close down because nobody will invest his or her resources and end up losing. He also accused the company of infiltrating the poultry farmers association in the state and attempting to weaken it against checkmating its activities.

Similarly, chairman of chicken sellers at Bakin-Dogo market in Kaduna, Mr Lawal Bebeji, said, “It is true that Olam farm is competing with other poultry farmers in selling their chickens in market.”

Another dealer at Kasuwan Kaji on Sokoto road in Kaduna, Mr Shamsudeen Dalhatu, also said Olam produced birds in large quantity and that whenever they released their birds in the market, the price of chicken dropped.

Dalhatu added that the same applied to eggs.

National President of the Poultry Association of Nigeria (PAN), Mr. Ezekiel Ibrahim, said he was aware of concerns being expressed because he has received complaint from farmers, particularly in Kaduna and Kano on the issue. He, however, said the farmers have nothing to worry about because he believed the company’s action will not last long given the circumstances they found themselves.

We are only helping moribund poultry farms, Olam reacts Reacting to an email sent to it on the issue via the company’s Vice President, Corporate and Government Relations, Mr Ade Adefeko, Olam’s General Manager Animal Feeds, Mishra, insisted that the company was still only producing day old chicks and feeds in Kaduna.

He, however, said the company was also helping farmer to revive their shut farms but did not explain further on how they were doing that.

India-managed farm giving sleepless nights

Karshi Agro Farms Ltd is another giant poultry farm located at Tafa, on Abuja-Kaduna expressway, which is also giving smallholders farmers around the area sleepless nights.

The farm, managed by an Indian, is said to be producing birds and eggs in large quantities at the detriment of local farmers.

An official of the farm, who spoke on condition of anonymity, said the farm produces 15,000 crates of eggs daily. He told one of our reporters the farm is currently under expansion, targeting 600,000 crates daily. At the moment, while other smaller farms in the area sell a crate of eggs at N850, as this reporter found out from buyers, Karshi Agro Farm sells for between N600 and N750 depending on size.

The price disparity, according to many farmers in the area, is making business extremely difficult for them. Although the farm does not hatch, it hopes to delve into hatchery in the future, a source said. Government should protect local farmers – Experts Commenting on the local farmers’ fears, an agriculturist, Mr Tajudeen Yusuf, says even though competition is sometimes healthy for the growth of any economic sector, government must ensure that local producers, who may not have much resource, are well protected. He said: “You can’t talk of healthy competition when your own producers are being driven away because of economic advantage of some multinational companies, it is dangerous.

“Remember, these local poultry farmers are already battling with smuggling of poultry products into the country. If you allow agro-giants to dominate the sector, you are technically sending them out of the business, and I don’t think any responsible government should give room for that,’’ he said.

But another agricultural economist, Mr Innocent Okuku, said though there might be a one-season pressure on the farmers in terms of competing for the market as a result of Olam going into full-scale production, there was nothing they should worry much about. “The thing is there’s still room for growth in the poultry business. Until import is completely substituted, I don’t think we should worry too much. The more people are involved, the higher the efficiency level that is required for people to stay in business and to be sustainable, is a competitive environment.

“I think what should be of interest to everybody is a nation that is accessing poultry products at affordable costs,” he noted.

 

Daily Trust

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