Fish farmers at the mercy of traders
Sir: As part of efforts to combat youth unemployment and at the same time contribute to food security, many young Nigerians have taken to farming especially aquaculture and animal husbandry but many have found the business unsustainable. They plough in more money than the revenue from the venture.
On the farming industry cost scale, aquaculture ranks among the most capital intensive largely because of high costs of feed and energy. At today’s costs, a fish farmer may invest as much as N700 on 1kg of harvested fish. The harvest usually yields various sizes of fish – some weighing up to 2kg while the slow growers may not weigh more than 400 g. Farmers who do not add value beyond live fish stage find themselves at the mercy of traders who literally dictate ex-farm prices. The buyers operate in a cartel; they have associations whereas the farmers, out of lethargy, operate in isolation.
The buyers do not only dictate prices to the farmers, they combine physical size and weight in determining prices. For instance, they may offer N500 per kilogramme for the 400g size and N750 for the 2kg size. They come up with as many of 5 size gradings – big, medium, small, smallest and tiny all in order to rip off the farmer.
In order to appreciate how much the farmer has been short-changed, you need to visit the market. You will be shocked to find that the 2kg fish goes for as high as N1,500 while the 400g fish which was bought ex-farm at N200 (or N500/kg) goes for nothing less than N500.
The irony is that many of the buyers invest next to nothing in their business. They buy on credit and pay the farmers out of the proceeds of the sale of the fish carted away in the first instance. This is a case of reaping without sowing ala Nigeriana!!!
The mentality of combining physical size and weight in determining ex-farm prices is crude and indefensible. It is borne out of ignorance of weights and measures; the number of fish making up 1kg has already taken care of physical size. Unlike a situation where, for instance, egg is sold in crates and we all know that the number of eggs in a crate is fixed. In such a situation, it makes sense for different prices to apply to different sizes.
It is only the fish farmers that can redress the injustice being done to them by the traders. An umbrella association of fish farmers in a particular locality appears to be the way out. Such associations may also federate at local government, state and national levels. The objective is to (i) recover cost of production and (ii) make a decent return on investments so that the business becomes sustainable thereby contributing to food security and employment creation especially for the youths. Individual farmers need to re-assess their exposure to risk by offering credit to the buyers. Cash customers should be incentivized by making credit customers pay a premium.
They should borrow a leaf from the transformation of the cement market from ‘traders’ market’ to the ‘producers’ market’ thanks to the entry Dangote into cement manufacturing. Before the entry of Dangote into cement production, traders made stupendous profits often times selling cement to the end-user at double ex-factory prices. The story is different today. Dangote’s entry was the game-changer. The traders’ excesses have been curtailed. Today’s cement market can be best described as win-win for producers and traders!
Otunba Arobake is a fish farmer in Ogun State.
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