Farmers face egg glut as coronavirus bites harder at poultry sector

The devastating impact of COVID-19 on the poultry sector, particularly market destruction continues to get worse in each passing day, resulting in egg glut across production areas like the Dormaa enclave in the Bono Region.

The consequential effects of COVID-19 pandemic in the country and its containment restrictive measures such as closure of schools, ban on social gatherings and hospitality business destruction wrought, have culminated to a drastic reduction in demand for eggs.

The disturbing situation, has left thousands of egg crates worth millions of Ghana cedis to rot at the various farms.

Prior to the outbreak of COVID-19 in March 2020, the chunk of eggs were supplied to schools, hotels, restaurants, food vendors like many noodles and fried-egg operators on the streets.

However, these off-takers have justifiably cut down demand significantly, leaving farmers to their fate with the excesses. Meanwhile, there are no egg storage facilities across the production areas.

The trickle-down effect of the situation, has manifested grave economic hardship on actors like farmers, farmworkers and input suppliers. The B&FT has learnt that farmers across Dormaa have resorted to credit sales to free their stores but the buyers are however hesitant to take the supplies from the helpless poultry farmers.

Dormaa is one of the poultry hubs in the country; the poultry value-chain is the leading economic activity in that part of the country. According to the farmers, they produce about 30 percent of the country’s total egg supply.

The effect of COVID-19 on the agribusiness has rendered majority of the poultry farmers financially incapacitated to meet obligations like payment of workers’ salaries, loan repayment, and settlement of indebtedness to input suppliers. The farmers have started selling the birds to ease their economic hardship.

Farmers’ account

National Best Farmer-2015, Ibrahim Musa, in an interview with the B&FT said: “Averagely, my farm produces about 1,500 crates daily, but there’s no guaranteed market for the eggs. I have about GH¢500,000 credit sales locked up and I’m struggling to pay the 70 workers here as well as feed the birds. We are at crossroads and requires swift intervention to salvage the situation or else we have to close the farm.”

On his part, Mumuni Musa who owns a farm with about 70,000 birds with 70 farmworkers, has been into the business for 23 years. His farm produces about 2,000 crates every day. He said: “this is the worst crisis in my farming life.

Despite the reduction of price from between GH¢16 to GH¢15/crate (before COVID-19) to GH¢13 to GH¢12, the market continues to drop at an alarming rate. The buyers used to chase farmers for eggs but now we [farmers] have to chase and beg them to buy. Poultry farming faces imminent collapse if we don’t see immediate turnaround.”

Financing

The farmers lamented that interest rate in the country is compounding the distress level of actors in the poultry sector. The 2015 National Best Farmer said banks and financial institutions have failed to appreciate the dynamics of poultry farming. “As it stands now, farmers are only working for the banks. How do you expect a poultry farmer to start loan repayment after three months when birds begin lay eggs after five to six months?” he quizzed.

He made a passionate appeal to the government to heed to the farmers cry and workout with banks to device modalities to give out agriculture-friendly facilities to address the age-long agribusiness financing challenge.

Value addition

The Chairman of Dormaa Poultry Farmers Association, Dei Kusi, said it is high time government and all other stakeholders explored existing opportunities and technologies for egg value addition to supplement fresh human consumption. He implored the government to create the enabling environment and court investors to help in that direction.

Source: B&FT Online