Causes and Effect of Poor Returns on Catfish Farming Investment on the Local Economy

I can still remember vividly when I started catfish farming. The inexperienced catfish farmer then can predict precisely the expected returns on his investment. The prices of inputs were relatively stable except for seasonal hike in prices of these inputs due to unavailability of good storage facilities. The sales value of table size catfish was fantastic. Many of us were proud to be called a FARMER. We always look forward to the day of harvest because we want to know if we were able to surpass our previous profit record. A lot of big boy farmers then were into catfish farming. Oh! What good business catfish farming was!

In fact, the story of catfish farming business can be compared to the period of Nigeria’s economic boom according to the story we heard. Can we still compare what was obtainable then to the reality of today? Those that have been in the business of catfish farming some ten years ago can tell the story. Even till two years ago, the return on catfish farming business was still very impressive. The sharp decline in profit margin was notice around the first half of year 2015. Most catfish farmers did not see it as a serious issue until the situation persisted. Poor returns in this business have now become a regular occurrence. Only few farmers make reasonable profit.

‘’Bring back our days’’ or else we quit is what catfish farmers in Nigeria are saying. We are earnestly waiting for the time when investment return is guaranteed. Bring back again a time when catfish farmers can boldly approach any financial institution for loan and pay back as at when due.

There is a question we need to ask ourselves: What actually went wrong in recent times that affected catfish farming so badly? Answers to this question will help stakeholders in catfish farming take steps towards solving the identified problems. Below are some of the identified changes or problems I noticed:

1. Sharp increase in cost of input: Perhaps this is the most critical of all problems facing catfish farming activities in Nigeria. In the past few years there have been up to 100 percent increase in the cost of most of the inputs used in catfish production. Since year 2008 till date, price of 72 percent fishmeal has increased by at least 20000 naira. 72 percent fishmeal was sold for 16000 as at 2008. There is also a sharp rise in cost of other imported feed ingredients like floating fish feed, lysine, methionine, premix, etc. Some experts believe that increase in price of catfish feed input is as a result of the decline in value of the Naira against the Dollar. In fact some of the locally produced inputs like Soya meal, Maize, GNC etc have also witnessed the effect of inflation on Nigeria’s local economy. For instance, Soya meal was sold for 75 Naira in January 2012 and the same commodity is sold for around 130 Naira as at the time of this report. It may interest you to know that the price of inputs is increasing at a geometrical rate while the value of table size catfish increases at arithmetic rate. The price of table size fish has only increased by 12.5 percent.
2. Decrease in crop farming: While demand for crop inputs in catfish feed increases, there has been significant decrease in supply of these inputs. This may not be unconnected with hostile farming environment created by the Boko Haram terrorist group. Excess demand has a way of pushing up the price of these inputs. In some cases soya meal and maize are imported from neighboring countries.
3. Significant increase in catfish farming activities in Nigeria and other African countries: Almost every sector of the Nigerian economy has failed. Few sectors that are performing relatively well have attracted influx of investment from money bags. Increase in awareness in catfish production has generated several millions of investment in the sector. In Nigeria of today, at least two ex-presidents are into the business of catfish farming. There are other billionaires in this business across the country. These well-to-do Nigerians have economic of scale working for them due to almost unlimited financial resources available for them. They can produce amass at cheaper cost and sell at an unbeatable price. This privilege other farmers may not have. There are massive productions even above demand hence subsistence catfish farmer are at the mercy of buyers.
4. Poor national economic performance: Increase in cost of living in the past few years have led to poor standard of living. The cost of pretty much everything has increased while workers’ salary remains constant. Purchasing power of Nigerians has drastically reduced; only the rich can afford to buy catfish. Due to high cost of production, catfish is out of reach of the poor populace. Of a truth, many would have loved to enjoy the delicious taste of catfish but their purchasing power is too low.
5. Poorly bred fingerlings /Juvenile: The average size of juvenile catfish my supplier supplied our farm when I started catfish farming was 15 grams of quality breed. Increase in demands for catfish seeds have caused some unprofessional breeders to breed with any fish, so far they can get their own share of the market. If I may say, the quality of breed has reduced compared to what was obtainable in some years past.
6. Adulterated Input: Recently, many farmers complain of poor growth in their fish stock. Some of these complaints have been traced to adulterated feed ingredient in Nigerian market. For instance, fake methionine is made from combination of sugar and flour. I have heard of soya meal mixed with sawdust. Sometimes ago, we were amazed at the result of so called 65 percent fishmeal which gave us 35 percent after analysis. Fake and adulterated inputs have done more harm to catfish farming in Nigeria than any other militating factors.
7. Problem of middlemen: Whether farmer loses or not, middlemen are not concerned. They are ready to make profit that farmers will not make in a season from a single transaction. They determine the price they will buy from farmers without due consideration to cost of production. Many farmers have been shortchanged by some of these middlemen.
8. Disorganized farmers associations: Catfish farmers’ associations are far from being effective. Many catfish towns are without catfish farmers’ associations. There is no unity that could have helped farmers to break the monopoly of middlemen. Each farmer is a lord of his own.
9. Increase in cost of local feed production: This could be attributed to poor electricity supply, increase in cost of machine procurement and maintenance, generator and cost of fuel.
10. Civil unrest across the country has done more harm to the distribution of fish to regional markets in Nigeria.

Effect on Local Economy

If urgent action is not taken by stakeholders in the catfish farming sector, Nigeria’s economy will begin to witness the following:

• Shift in investment from non-performing (catfish farming) to other performing sector of the economy. The subsistence catfish farmers will leave first followed by other big investors in the business.
• Food sector may experience more shortages leading to more decline in standard of living. Better proportion of workers’ salaries may be expended on food alone.
• Dependence on foreign fish at the detriment of development of local potential.
• It will definitely affect the balance of trade between Nigeria and other countries involved.
• Overdependence on foreign currency at the expense of local currency.
• Other affiliated sectors like crop farming and transportation will feel the effect.
• Increase in rate of unemployment due to failure of labor-intensive sectors affiliated to catfish farming. This could lead to more restlessness among the unemployed population.
• More cases of malnutrition may be experienced especially among the non-working population. A well-fed nation is a healthy nation.

Conclusion

Catfish farming is an important aspect of agriculture that must not collapse totally. Government and other stakeholders involved must come up with action plans to address the present situation in this sector of economy before it is too late.