Ethiopia’s poultry industry faces a complex combination of struggles that endanger its long-term viability. While the government’s emphasis on domestic food security is laudable, the unofficial prohibition on exports has severely hampered the industry’s growth potential. Poultry producers face a perfect storm of issues, including growing costs from new tax legislation, FX rules, and security concerns.
This choice to give domestic supply priority over exports has had a big effect on the manufacturing industry. It may have guaranteed a sufficient supply of food for the home market, but it has also reduced the likelihood of producing foreign exchange and creating employment opportunities. Due to its primary focus on household markets, the industry is susceptible to changes in consumer demand and recessions.
The financial issues facing the sector have gotten worse as a result of recent changes to tax laws. Overhead costs increased significantly as a result of the removal of VAT exemptions for animal feed and other inputs. Lower demand for poultry products has resulted from producers passing on increased costs to consumers.
The foreign exchange market’s liberalization has also hurt the company’s bottom line. Maintaining profitability has become increasingly challenging for growers due to the increasing cost of imported feed additions. Moreover, the profit margins have decreased because of the increased costs of local feed suppliers like maize and soybeans.
For the industry, security issues have also presented significant challenges. The industry’s capacity to expand its customer base and generate more money has been impeded by the challenges associated with delivering chicken goods to nearby markets.
The Ethiopian poultry industry needs to adopt a more calculated strategy in order to address these problems. The government ought to think about lowering export restrictions, especially in nearby countries where there is a big market for chicken products. By doing this, producers would be able to reach a wider audience and rely less on the home market.
The government ought to think about measures to help chicken farmers with their production expenses. This could entail financing accessibility improvements, infrastructure investments to lower transportation costs, and subsidies for animal feed.
The sector should also prioritize becoming more competitive by adopting contemporary farming methods and funding research and development. As a result, manufacturers could produce goods of a higher caliber while spending less money.
The government ought to create a more favorable business climate in order to boost the chicken sector. This might entail lowering corruption, streamlining regulatory procedures, and making sure chicken farms have enough security. These steps will help the Ethiopian poultry sector overcome its present obstacles and realize its full potential. Food security and economic prosperity in the nation can both be significantly aided by a more profitable and sustainable chicken sector.
