• July 16, 2020

Farm investors lose as hotels, event centres remain closed

It is about three months now. COVID-19-induced inter and intra-state lockdowns have been affecting businesses of hoteliers, event centre owners, bar and clubbing joints operators and merry makers. These are paralysed businesses that have also directly burst their supply chains.

Supplies of chickens, vegetables, barbeques, catfish-based pepper soups, eggs and food to these outlets are totally, by collateral damage, disrupted not only by the closure but also by the extremely battered purchasing powers of most Nigerians whose means of livelihood have been locked down.

Chicken farmers/processors, catfish farmers, egg producers, crowd-funding platform operators and their investors are also counting losses not only on their interest but also on capitals as the off-takers (the closed businesses) remain unsure of when their businesses would be re-opened.

General Manager of Tuns Farms, Osogbo, Osun State, Mr Taofeek Badmus, disclosed to The Guardian that apart from inability to sell products because most off-takers are off business, the cost of feeds for the poultry is too costly, making production and sustainability a difficulty.

“The truth is that we are facing the brunt during this time. The cost of raw materials has seen a steady rise, while the cost of final product has been stagnant.

“The closure of hotels, event centres and functions has also affected sales of (farm) products with many of us having large stocks of finished products. Our experience was particularly painful during the lockdown as we kept on feeding birds and there was no market to sell them.

“The sale has reduced drastically. There is also a glut of products now, and has everybody is now forced to sell at lower prices,” he lamented.

Mr Ayoola Oluga, Managing Director, Agrecourse Ltd, a crowd-funding platform for agriculture, had earlier admitted that agriculture had gained a lot of traction in the last one year, especially since the Federal Government closed the land borders.

Many smallholder farmers, he said, had reaped the benefits of increased production and increased income.

However, he added, “With the advent of the coronavirus, another set of problems have risen. Some farmers have continued to find it difficult to sell their products, especially fish farmers. This is mainly due to the shutdown of the hospitality sector, where you find the major off-takers.”

He concluded that “We are experiencing low patronage.”

Similarly, Mr Rotimi Olibale Oloye, National President, Catfish and Allied Fish Framers Association of Nigeria (CAFFAN), relayed the gory experiences of the members, saying, “Our product is mostly used for social events, thus the lockdown has very serious negative effects on our business.”

He explained that there had been no sale beyond local consumption and their products were beyond local demand capacity.

“That is why it is essential for the government to work out a support for us because most of us are already out of jobs as our entire capital had gone to continuous loss of the past three months as the few sales made were a total loss.”

Mr Ayo Arikawe, Chief Technology Officer, ThriveAgric, another crowd-funding platform for agro-allied investments, explained to The Guardian that chickens from their farms are mostly sold to “processors, who, in turn, sell to restaurants and hotels, and we know this affects their sales, making them keep more stocks in cold rooms unnecessarily, and there is an increased logistics cost for them. We essentially reduce the birds stocked this period to match off-takers’ demand.”

He added that the firm raises funds based on farmers’ needs, “meaning it reduced the amount of farms that could be open for users (investors) to subscribe to.”

Chief Operating Officer, Agro Park, Mr Ayodele Alabi, said COVID-19 pandemic is the greatest challenge the company had ever faced, saying, it is much more than a health crisis, but it leaves deep scars on businesses and individual lives.

He said, “As a result of the restriction imposed because of COVID-19, a good number of our offtake partners have either reduced or totally shut down operations. This has led to the inability of off-take partners to fulfill their obligations to off take products, and has put pressure on our storage of which we had to lease other facilities at huge expenses.

“The increase in supply and decrease in demand has forced prices of products to drop. We have been forced to ask about 40% of our workers to stay at home. Our spices are export-dependent. The restriction has limited our market reach. We had to sell most of our spices without processing.”

Meanwhile, Franziska Gaupp, an International Institute for Applied Systems Analysis (IIASA) researcher working jointly with the Ecosystems Services and Management (ESM) and Risk and Resilience (RISK) programmes, while explaining the impact of COVID-19 on farmers globally, said, “Products cannot be moved from farms to markets. Food is rotting in the fields as transport disruptions have made it impossible to move food from the farm to the consumer. At the same time, many people have lost their incomes and food has become unaffordable to them.”

SOURCE: GUARDIAN

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