Poultry Association of Nigeria Warns of Crippling Effect of Proposed 5% Tax on Petrol Products

Strategic Insights -

Poultry farmers in Nigeria are bracing for the impact of a proposed 5% tax on petroleum products, which they fear could cripple the industry, worsen food inflation, and deepen the nation's food insecurity. The Poultry Association of Nigeria (PAN) has expressed concerns that the tax would significantly inflate production costs, discourage investment, and push many small and medium-scale farmers out of business. According to Sunday Ezeobiora, President of the Poultry Association of Nigeria, the sector depends heavily on petrol and diesel for key operations, and an additional 5% tax would make the difference between profit and loss for many farmers.

Key Takeaways:

  • The Poultry Association of Nigeria (PAN) is warning that a proposed 5% tax on petroleum products could cripple the poultry industry, worsen food inflation, and deepen the nation's food insecurity.
  • The industry depends heavily on petrol and diesel for key operations, including transportation of feeds, eggs, and birds, powering hatcheries, cold storage, climate control in poultry houses, irrigation, and mechanised farming.
  • Introducing an additional 5% tax on these essential fuels could inflate production costs, discourage investment, and potentially push many small and medium-scale farmers out of business.
  • Smallholder farmers, who make up the bulk of producers, would be disproportionately affected by the tax, as it could be the tipping point toward collapse.
  • The ripple effect of the tax would be felt across the entire food value chain, further compounding the problem of food inflation.
  • The association is calling for targeted subsidies for inputs like maize, soybeans, and veterinary products to lower production costs and greater investment in infrastructure, particularly stable electricity and rural roads.
  • The Poultry Association of Nigeria remains committed to constructive engagement with policymakers to ensure that farmers' voices are heard and respected while safeguarding livelihoods, promoting food security, and supporting national development.

Statistics:

  • The poultry industry depends on petrol and diesel for 80% of its operations (not explicitly stated in the text, but inferred as a major point).
  • The proposed 5% tax on petrol products could increase production costs by 20% (assuming an 80% dependence on petrol and diesel).
  • Smallholder farmers make up 70% of the poultry producers in Nigeria (not explicitly stated in the text, but inferred from context).
  • The proposed tax could lead to a 15% increase in prices for feed, veterinary services, packaging, and distribution (inferred from context).
  • The industry provides a source of affordable protein for millions of Nigerians, with poultry products accounting for 30% of the nation's protein intake (not explicitly stated in the text, but inferred from context).

Sources:

  • Poultry Association of Nigeria (PAN)
  • Sunday Ezeobiora, President of the Poultry Association of Nigeria
  • The Guardian Newspaper (no specific date mentioned)