Producer response to retail egg price in Ogun State Nigeria: implications for increased egg production

Abstract

Much has been said about farmers’ responsiveness to price incentive with the inference that increasing producer price would be an effective incentive for increasing production. Against the backdrop that the nation’s animal protein consumption is 5 grams / caput / day which is a far cry from the recommended level of 35 grams / caput / day of Food and Agriculture Organization (FAO), this paper examined producer response to retail egg price which has been rising geometrically. This is to check whether there is price incentive for increased egg production to meet the nation’s animal protein need through increased egg production.

The study location is AdoOdo/ Ota LGA in Ogun State, an area with many commercial poultry farms. The exact study locations were Obasanjo, Oginni, Okegbenro, Kanmi and Evergreen farms, where the egg prices of five producers, five wholesalers and five retailers were collected weekly for a period of eight months and the average retail egg price. From the model, the producer average egg price elasticity with respect to the average retail egg price was estimated. Results showed that the only 33 per cent of the increase in retail egg price is passed to consumers. Producers are thus likely to run into financial difficulties in expanding their output particularly in the post SAP period when the costs of inputs for the poultry production have increased tremendously.

An attractive and adequate credit scheme with good moratorium period and concessionary interest rate than hither to available is suggested. In addition an overhaul of the marketing strategy to favour the producers is necessary.