Poultry Farming is one of the most lucrative farming businesses to start up in Nigeria, and in Nigeria, most poultry farmers focus on rearing Chickens, with chicken being the most preferred. This article explores the current state of egg production in Nigeria, its impact on the economy, and the challenges and opportunities within the poultry industry.
Nigeria's Poultry Industry: An Overview
A report released in 2020 on poultry production in Nigeria showed that Nigeria has the 2nd largest chicken population of about 180 million annually in Africa. About 85 million (42%) of Nigeria’s population, 4 in every 10 Nigerian, are into poultry production, primarily small scale to medium scale poultry farming. About 21 billion eggs are produced in Nigeria annually through poultry farming, making it the largest producer of chicken eggs in Africa. Despite the expansion of the poultry industry in recent years, poultry farming in Nigeria only caters to 30% of chicken eggs and meat needs of Nigerians, which amounts to up to 300 Mt of meat and 650 Mt of eggs per year. This has led to a spike in the import of poultry products in Nigeria.
Poultry farming has a significant impact on the country’s domestic revenue, contributing about 6-8% of Nigeria’s GDP annually. According to a report shared by the Governor of the Central Bank of Nigeria (CBN) Godwin Emefiele in 2019, the poultry farming industry in Nigeria is worth about N1.6trn, making it the most commercialized sub-sector of all Nigeria’s agricultural sub-sector. The Apex Bank Governor also stated that there is a massive potential for the poultry farming industry in Nigeria.
The Poultry Industry stands to benefit from the involvement of local players in combatting the aggressive imports of poultry products. The rapid reproduction rate of birds makes this a profitable venture. Most birds are seasonal, but there is constant value in egg production.
Nigeria stands as Africa’s leading egg producer and the second-largest chicken producer. The nation’s poultry industry encompasses approximately 180 million birds, with 80 million raised in extensive systems, 60 million in semi-intensive conditions, and 40 million under intensive management. Annual poultry output in Nigeria totals 300 metric tons of meat and 650 metric tons of eggs.
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Nigerians exhibit diverse egg consumption patterns. Common egg-based preparations include egg sauce, fried eggs, omelets, and boiled eggs.
Factors Affecting Egg Size and Production
Poultry farmers prioritize egg size as larger eggs command higher market values. Several factors influence egg size and overall production:
- Breed: Smaller chicken breeds typically produce smaller eggs, while others lay medium to large eggs. Individual hens may not consistently lay eggs of their breed’s average size.
- Nutrition: Proper nutrition during rearing helps hens reach optimal body weight, including energy sources like corn, sorghum, and wheat, along with methionine from whole wheat, sunflower, oats, fish meal, and earthworms, are essential.
- Water Consumption: Inadequate water consumption reduces egg size and production. Additionally, water quality and temperature are crucial factors.
- Age of Hen: The younger the hen, the smaller the egg size. As hens grow older their eggs gradually increase in size. Maximum egg size can be expected when birds reach about one year old.
- Bird Health: Disease and stress can reduce chickens’ feed intake and egg production rates. Disease prevention is a vital aspect of production. Good hygiene, biosecurity measures, and proper management practices reduce infection risks.
- Ambient Temperature: The ambient temperature significantly affects egg size. In hot conditions, hens consume less feed, leading to production of smaller eggs.
- Feed Intake: With all essential nutrients present in adequate quantities, increased feed intake leads to larger eggs.
- Body Weight: Chickens with higher body weights lay larger and more eggs throughout the production period, while those with smaller body weights produce smaller eggs.
About 60% of egg size variation comes from non-genetic factors like nutrition and management. During the laying period, diet adjustments, amino acids, linoleic acid from flaxseed and soy oil, and fats from sunflower seeds support nutrient absorption, energy storage, glossy feathers, and egg size. Adequate mineral intake prevents thin shells and cracking, particularly in larger eggs.
Challenges and Risks in the Poultry Industry
The poultry industry is vulnerable to various risks, including inadequate feed intake, unavailability of inputs, disease and mortality rates, price changes, unstable government policies, and new changes in technology. Farmers often cannot predict or manage these risks alone, necessitating risk-sharing strategies.
The decline in poultry output in Nigeria appears to be more of an inadequate investment in the agricultural sector, particularly in mitigating risks inherent in the poultry industry, as opposed to just inadequate production. For instance, while global poultry egg production increased from 15 to 93 million tonnes between 1961 and 2020, Nigeria’s production only rose from 75 thousand tonnes to 14.4 million tonnes during the same period (Food and Agricultural Organization of the United Nations, 2022). China, the United States, and India are the largest producers of poultry eggs, accounting for half of global production in 2018 (FAO, 2020). Nigeria, despite being the largest producer of eggs in Africa, only meets 30% of the country’s egg demand.
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In addition, poultry egg production is principally vulnerable to the risk of inadequate feed intake, unavailability of inputs such as feed and feed ingredients, disease cum mortality rates, price changes, unstable government policies, and new changes in technology. Farmers often cannot predict or manage these risks alone, necessitating risk-sharing strategies.
Extant studies have shown that high costs of poultry feed and feed ingredients, lack of access to credit facilities, insecurity, and poor infrastructure, are serious challenges affecting poultry egg production.
The Role of Agricultural Insurance
Agricultural insurance plays a cardinal role in cushioning the effects of these risks by indemnifying poultry farmers who might be adversely affected. Back home, agricultural insurance in Nigeria, particularly poultry insurance, is underdeveloped therefore, poultry (egg) producers in Nigeria are less equipped to mitigate production-related risks. The risk-bearing capacity of poultry farmers is low, and worse still, there are no existing mechanisms as poultry insurance, that indemnifies poultry egg farmers against the effects of these risks.
To ensure food security and sustainable poultry egg production, financial institutions should provide agricultural insurance services to support risk mitigation and small-scale poultry production.
The Agricultural Insurance Program was established in Nigeria to change farmers’ attitudes toward risk and improve food supply. The Nigerian government incentivized investment in the agricultural sector with tax exemption. Similarly, the Bank of Industry was established by the federal government in order to financially empower agriprenuers.
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Factors Affecting the Level of Use of Poultry Insurance
Several factors influence the extent to which farmers utilize poultry insurance:
- Educational Level: An increase in the educational level of insured poultry farmers increases the premium paid.
- Access to Credit: Farmers' access to credit positively and significantly affects their level of premium paid.
- Previous Mortality Rate: Poultry farmers’ adoption of agricultural insurance will increase based on past experience with risk.
- Sales Challenge: The rate of eggs sold to eggs produced reveals that the poultry farmer will pay more premium to insure the rate of egg sales.
- Net Farm Income: The coefficient of the Net Farm Income of poultry egg farmers is significant but negative.
This resonates with past findings that poultry farmers’ educational level, past mortality experience, access to credit, and flock size increased the level of use of insurance.
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Statistical Analysis of Poultry Farming in Oyo State, Nigeria
A study conducted in Oyo State, a major hub for poultry egg production in Nigeria, provides valuable insights into the characteristics of poultry farmers and the factors influencing their operations.
Demographic and Farm Characteristics
The mean age of both insured and uninsured farmers is around 51-52 years, indicating that most farmers are adults. The mean educational level suggests that both categories of farmers averagely have a tertiary level of education. Insured poultry egg farmers have a slightly higher mean farm experience compared to uninsured farmers. A significant percentage of both insured and uninsured farmers recorded mortality in the previous year.
The majority of insured farmers practiced poultry as a sole farming system, while only a smaller percentage of uninsured farmers did the same.
Tobit Regression Analysis
The Tobit regression model was used to analyze the factors affecting the level of use of poultry insurance. This was achieved by running the amount of insurance premium paid by each farm (the dependent variable) against other independent variables like access to credit facilities, access to insurance agents, et cetera.
The result of the Tobit regression reveals only six of the 16 variables used in the model to be statistically significant. The coefficient (0.0650) of educational level is positive and significant at 10% level. The marginal effect shows that an increase in the educational level of the insured poultry farmers will increase the premium paid by N36. Interestingly, the coefficient (0.0784) of the farmers’ access to credit positively and significantly affects their level of premium paid.
The marginal effect further reveals that an additional increase in the access to credit of the insured poultry farmers will increase their premium by N155. In addition, the previous mortality rate, which is a measure of the rate of the number of dead birds to the total number of birds, was found to be significant and positive. This is in tandem with (Akinola, 2014) that poultry farmers’ adoption of agricultural insurance will increase based on past experience with risk. Furthermore, the marginal effect (1267.7) of the sales challenge encountered with respect to the rate of eggs sold to eggs produced reveals that the poultry farmer will pay more premium of about N12,670 to insure the rate of egg sales. Lastly, the coefficient of the Net Farm Income of poultry egg farmers is significant but negative at the 10 % level.
Stochastic Production Frontier (SPF) Model
The Stochastic Production Frontier (SPF) Model was used to analyze the effect of poultry insurance on the efficiency of the Poultry egg business. Thus, following (Battese and Coelli, 1995; Awotide, 2007), the effect of agricultural insurance use on the production and technical efficiency of poultry egg farms was analyzed. The SPF model allows for the assessment of technical efficiency, which quantifies the extent to which a firm or industry utilizes its resources to produce outputs. γ = evaluates the total output variation at the frontier that may be linked to technical inefficiency.
Table 1: Socioeconomic Characteristics of Poultry Egg Farmers in Oyo State
| Variable | Insured Farmers (Mean) | Uninsured Farmers (Mean) |
|---|---|---|
| Age (Years) | 52 | 51 |
| Educational Level | 3.62 | 3.64 |
| Farm experience | 7.1 | 6.95 |
| Mortality in the previous year | 80% | 72% |
| Practiced poultry as a sole farming system | 74% | 35% |
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